By Steve Gelsi, MarketWatch
NEW YORK (MarketWatch) -- BP, Transocean and Halliburton loomed in the energy sector on Tuesday as executives from the energy giants were scheduled to testify in Congress about the uncontained oil spill in the U.S. Gulf of Mexico.
Also on the government front, the Obama administration reportedly set plans to break up the Minerals Management Service into two agencies: one that collects royalties from oil and gas companies, and the other charged with safety enforcement.
Meanwhile, energy stocks gave back some of their big gains from the previous session, as euphoria over a European bailout package quickly faded.
BP (BP 48.10, -0.65, -1.33%) shares dropped 0.5% to $48.50 ahead of hearings in the U.S. Senate. Transocean (RIG 65.99, -0.35, -0.53%) rose 0.4% to $66.60. Halliburton (HAL 27.67, +0.08, +0.29%) dropped 0.8% to $27.38.
In the broad energy sector, the NYSE Arca Oil Index (XOI 1,030, -9.66, -0.93%) fell 1.1% to 1,028. The NYSE Arca Natural Gas Index (XNG 534.21, -2.72, -0.51%) dropped 0.7% to 533. The Philadelphia Oil Service Index (OSX 194.72, -1.29, -0.66%) fell 0.4% to 195.
BP blamed the failure of a the blow-out preventer, which essentially are a large set of valves on the sea floor to halt the deadly escape of gas that led to the blast, according to prepared testimony.
Halliburton and Transocean both pointed to the failure to place a cement plug within the well to prevent gas from escaping up the pipe to the surface. That responsibility ultimately rests with BP, they argued in prepared testimony. See story about Senate hearings.
Meanwhile, the oil leak moves into its 20th day since Transocean's Deepwater Horizon rig sank in the Gulf of Mexico, following an explosion killed 11 workers. About 5,000 barrels a day are leaking into waters off the coast of Louisiana.
Among stocks in the spotlight, Chesapeake Energy Corp. (CHK 23.40, +0.30, +1.30%) plans to raise up to $5 billion by selling assets and other measures.
The company said it plans to sell a 20% stake in its Marcellus gas holdings within a year and seek a joint venture partner to develop its Eagle Ford shale acreage by the end of the third quarter.
Shares of Chesapeake Energy rose 2% to $23.58.
Dallas-based Energy Transfer Equity L.P. (ETE 32.46, +0.33, +1.03%) , the owner of the general partner of Energy Transfer Partners, L.P. (ETP 46.53, -0.35, -0.75%) , said it will pay $300 million in preferred units to buy the general partner of Regency Energy Partners LP (RGNC 22.31, +0.94, +4.38%) , from an affiliate of GE Energy Financial Services, a unit of General Electric (GE 17.91, -0.13, -0.72%) .
Energy Transfer Equity L.P. will own the general partner of both ETP and Regency, both of which will remain a separately operated partnership.
