About that BP report

What is the thrust of BP’s internal investigation on what went wrong at the Macondo oil well last April? That as the company has suggested from the beginning, it is only at fault in the sense of shared culpability. It’s a risky strategy that badly backfired from a public relations standpoint — by appearing to be pointing fingers elsewhere in order to escape blame, outgoing CEO Tony Hayward offended American tradition, in which sins are confessed, then forgiven. But BP is betting that its bigger threat is elsewhere, specifically in the courtroom. BP knows that Hayward lost the PR battle and the battle for hearts and minds in Washington last spring and summer; its black eye can’t get any worse. As Ian Urbina writes in the New York Times, the company is aiming to reduce its legal exposure.

In the bare facts of what happened in the Gulf of Mexico, yesterday’s report isn’t materially different from a leaked version that we posted in June. In a nutshell, the well blew because of a perfect storm of faults. 

But it does signal with whom BP wishes to share the blame. BP knows that other investigative reports are under preparation, and by coming out of the gates with its version first, it gets to “shape the narrative,” as the Financial Times writes in an editorial. The Wall Street Journal‘s Russell Gold suggests that, in the courtroom, BP intends to point its finger at a reliable punching bag, Halliburton, the contractor for the well’s crucial cement job.

The stakes are high. BP, which has already paid out $8 billion in cleanup and other costs, may be on the hook for many more billions in legal judgments. That would be a burden to the company’s ledger and, though it could bear the costs, it would like to tamp down the size wherever it can. But the risk is higher for others in the mix: Depending on what happens in the courtroom, Transocean and Anadarko could end up sold, bankrupt or both.