05/12/10 Pittsburgh, Pennsylvania – Transocean (NYSE:RIG) shares hit $65 last week, and I think that’s a near-term bottom. Yes, there’s a lot of finger-pointing at Transocean, mostly by people who are immensely ignorant of how the drilling business works. Or they have a vested interest in shifting the blame.
At the end of the day, BP hired Transocean to drill a well that BP designed. If Transocean followed the specs, you can’t pin the donkey-tail on these guys. The worst anyone can say – and they’re saying it – is that Transocean had a bad blowout preventer (BOP) that didn’t function.
To which I say, ‘Oh really?’ We’ll find out, eventually, when the well is dead and they pull that BOP off the bottom. But let’s not beat up too hard on Transocean or the BOP. Not yet. I’m inclined to think that there’s something – some foreign object – jamming the BOP. Even the best of equipment is not designed to withstand every insult…
It all comes back to human error. Yes, some equipment and technology should’ve worked better. But it’s mostly human factors and bad risk management. People should’ve caught what was going on. They didn’t. A series of cascading events led to a chain of failures and disaster.
Byron King
for The Daily Reckoning
Byron King
Byron King is the managing editor of Outstanding Investments and Energy & Scarcity Investor. He is a Harvard-trained geologist who has traveled to every U.S. state and territory and six of the seven continents. He has conducted site visits to mineral deposits in 26 countries and deep-water oil fields in five oceans. This provides him with a unique perspective on the myriad of investment opportunities in energy and mineral exploration. He has been interviewed by dozens of major print and broadcast media outlets including The Financial Times, The Guardian, The Washington Post, MSN Money, MarketWatch, Fox Business News, and PBS Newshour.
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You stated:
“‘Oh really?’ We’ll find out, eventually, when the well is dead and they pull that BOP off the bottom”
tell that to the Louisianans out of their fishing industry. Just wait till its done huh?
No one will be standing tall after this “sinks” in a bit more. Pun intended. Im interested in watching your long on RIG. I might short it the other way!
Hey Byron – do you have any other investing advice so that I can do the exact opposite… i am beginning to think you are a shill for big oil or at least BP… i love this site and i am BB’s biggest fan but i am beginning to have doubts about Byron King…. also not sure about anything related to the Peterson Foundation
Short, sweet, to the point, FREEexactly as inofrmation should be!