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* Efforts to settle case seen as part of capital strategy
* Halliburton shares rise 3.7 pct on share buybacks
* Prospect of global settlement of liability deemed remote
By Braden Reddall and Mica Rosenberg
July 26 (Reuters) - BP Plc appeared to gain an edgein the battle over liability for the 2010 Gulf of Mexico spillon Friday, after Halliburton abandoned one of itsarguments that tried to paint the British major as unconcernedabout well safety.
Halliburton, which did the cementing work for BP's well, onThursday pleaded guilty to destroying evidence of internal testsit conducted showing there was no difference between theeffectiveness of putting six or 21 casing centralizers on thewell.
Centralizers help stabilize the well bore during cementingand, prior to the settlement with the U.S. Department ofJustice, Halliburton had sought in court proceedings to pinblame on BP for the blowout because of its decision to save"time and money" by using only 6 centralizers.
A payment of just $200,000 to the Department of Justice endsthe DOJ's case against Halliburton. At the same time, the pleaseems to hurt Halliburton as it seeks to settle its share ofprivate claims over the disaster, currently estimated at $1.3billion.
John Coffee of Columbia Law School said it would now be lessplausible for Halliburton to argue in any litigation between thetwo companies that it had warned BP about something for whichthe evidence was destroyed.
"This is a zero sum game between BP and Halliburton,particularly when it undercuts (Halliburton's) argument they hadan honest theory of why the cement wouldn't hold," Coffee said."If it's an honest theory, why would you destroy all theevidence?"
Nonetheless, Halliburton shares rose nearly 4 percent onFriday, since its plea announcement late on Thursday coincidedwith it unveiling a $3.3 billion share buyback.
Scott Gruber, analyst at Bernstein Research, said thecompany appeared more confident its oil spill liability wasmanageable in making a repurchase offer that would represent 8percent of its outstanding shares at current prices.
James West at Barclays believed Halliburton could even issuenew debt to accelerate its buyback program. "Though we think aresolution of the Macondo liability is likely required before(Halliburton) makes any significant changes to its capitalstructure," he added in a note to investors.
Halliburton, BP and rig owner Transocean Ltd are alldefendants in a federal civil trial that began in February toapportion blame and set damages for Macondo. The trial isscheduled to resume in late September.
The disaster caused 11 deaths and triggered the largest U.S.offshore oil spill. BP and Transocean previously entered guiltypleas and agreed to pay respective criminal fines of $1.26billion and $400 million. Both declined to comment on theHalliburton plea.
The civil fines and damages are expected to run into themany billions of dollars, on top of what BP has already spent onclean-up and compensation.
BP is struggling through a separate legal battle over thepayment of claims to people and businesses for spill-relatedlosses. A federal appeals court is considering the case, andHalliburton said this process was impeding its push to settleits own liability through talks.
"The pace of those settlement discussions has recentlyslowed as we understand BP is challenging certain provisions ofits settlement," Halliburton said in a quarterly filing with theSecurities and Exchange Commision on Friday.
The prospects of a global settlement of the civil litigationby all parties seems remote. The judge in charge of it, CarlBarbier, has not yet ruled on the question of whether BP or itsco-defendants were guilty of gross negligence.
Some observers believe Barbier will not issue findings onnegligence until the next stage of the trial - slated to beginSept. 30 - comes to a close, probably in early 2014.
The trial is in re: Oil Spill by the Oil Rig "DeepwaterHorizon" in the Gulf of Mexico, on April 20, 2010 in the samecourt, No. 10-md-02179. The evidence case is U.S. v. HalliburtonEnergy Services Inc, U.S. District Court, Eastern District ofLouisiana, No. 13-00165. (Reporting by Braden Reddall in San Francisco, Mica Rosenbergin New York, Kathy Finn in New Orleans and Andrew Callus inLondon; editing by Andrew Hay)
