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Since that now infamous three-day period in April, when Transocean's (NYSE: RIG ) Deepwater Horizon rig -- operated by BP (NYSE: BP ) -- exploded and sank in mile-deep Gulf of Mexico water, I've spoken with numerous former energy colleagues.
I wasn't driven by idle curiosity, but rather by an effort to gather opinions regarding which company might have been more responsible for the tragedy that took 11 lives. After all, we Fools are investors, and as one who believes that energy shares should grace all of our portfolios, the question of spill culpability seems more than trivial. That's particularly true in the face of BP's history of mishaps, including its 2005 explosion at a Texas refinery where 15 died and dozens were injured.
Did my friends and a hearing held by an Interior Department-Coast Guard panel, along with another conducted by a Presidential Commission, help me form a comfortable opinion? The answer is a resounding yes and no. Clearly there seems to be enough blame to go around.
For instance, BP had ordered a change to the final test of the well's integrity before the rig could move to a new location. One of the keys to the change was the removal of far more drilling mud -- which prevents gas from leaking from the well -- than is typically the case. Indeed, even a BP manager, who happened to be on shore without telephone communication when the change was ordered, couldn't explain the reason for it. It seems clear, however, that the revised test went forward under protest from Transocean rig personnel.
In Transocean's corner, a key piece of rig equipment, the blowout preventer (BOP), which as its name implies, prevents the well from exploding, was clearly non-functional. While the company maintains that it had passed a host of tests leading up to the explosion, the BOP had nevertheless been altered by the driller following its manufacture by Cameron International (NYSE: CAM ) . Further a Transocean supervisor testified that the BOP was leaking and was overdue for maintenance at the time of the accident.
Someday we'll likely be able to assess blame more closely. In the meantime, as you probably know, the likes of ExxonMobil (NYSE: XOM ) , Chevron (NYSE: CVX ) , and ConocoPhillips (NYSE: COP ) are forming a rapid response unit to capture and contain oil from future spills.
Nevertheless, with blame not totally fixed, should Fools buy, sell, of waffle regarding BP and Transocean shares? I'll opt for the first choice, given each company's geographic diversity and the nosedive their shares have taken following the tragedy.