BP trial turns a stark eye on Halliburton and Transocean

US Coast Guard

Publish date: March 18, 2013

Written by: Charles Digges

The massive civil trial to determine liability for the 2010 Gulf of Mexico oil spill shifted its focus last week from BP, the owner of the Macondo well, to its partners in the ill-fated drilling operation that led to the explosion of the Deepwater Horizon rig in April 2010, killing 11 and causing the largest oil spill in US history.

Turning the spotlight on Transocean and Halliburton, say legal experts, is likely to take BP out of the hot seat for a few days. The oil giant ­ has repeatedly insisted that all companies involved share blame for the blowout.

At the center of last week’s proceedings were newly discovered samples of the unstable cement that Halliburton used to seal the Macondo well.

But questions remain as to whether Halliburton will take the fall for supplying substandard cement, or whether BP will be targeted, it was ultimately responsible for ensuring the safety of the seal job.

“That Halliburton’s cementing job was unreliable is now a matter of record,” said Bellona President Frederic Hauge. “BP bears ultimate responsibility for using the cement, but Halliburton’s attempt to dodge responsibility is cynical.”

“They must bear a great portion of responsibility for that as an example to any consortium of oil drillers and field suppliers working anywhere in the world,” Hauge added. “It is our hope that the trial shows the responsibility of each company involved.”

Additionally, it was discovered during testimony that a Halliburton worker was on a cigarette break when the well experienced a ‘kick’ – or an instability of gas within the well – and failed to report it to coworkers. The Macondo well had been experiencing such kicks as far back as 2009, an indication to Bellona Adviser Erlend Fjosna that the well should immediately have been shut down.

Gross negligence

The focus of the trial, which started February 25 and could last for months, absent a settlement, still remains whether BP acted with “gross negligence under the US Clean Water Act in its handling of the spill, but the more the court hears about Transocean and Halliburton role in the disaster, the less BP may seem like the primary villain in the tragedy.

Barring a settlement, BP could be on the hook for $17.6 billion in penalties for spilling some 4.1 million barrels of oil. Should the trial support acts of gross negligence, BP will be forced to pay $4,400 per barrel spilled as opposed to $1,100, which would be the result under normal circumstances.

Much Halliburton testimony from last week could go a long way toward averting the gross negligence penalty for BP as it was revealed Halliburton knowingly supplied substandard cement for sealing BP’s Macondo well.

Timothy Probert, who headed Halliburton’s safety program in 2010, answered questions on Monday, March 11, about whether Halliburton employees had conducted “off-the-record tests” on the cement used to seal the well following the blowout, which for 87 days belched oil and gas into the Gulf of Mexico, the New Orleans Times-Picayune reported.

Plaintiffs’ attorney Jeffrey Breit said during questioning that Halliburton employees discarded notes from the tests, which federal court filings indicate occurred in the weeks after the spill. Breit, while questioning Probert, suggested “a series of two, three, four, five tests that had been done and that all had irregularities with the mistake cement,” though did not specify what these irregularities were, the Associated Press reported.

Cement had ‘low probability of success’

On Tuesday, Thomas Roth, who served as head of Halliburton’s cementing operations at the time of the accident, testified that the cement slurry “had a low probability of success,” and was not designed to standards consistent with best practices, acknowledging that “subsequent reviews show we’ve identified gaps in that,” according to court transcripts.

Roth’s admission to the New Orleans court was in line with findings investigators with the national Oil Spill Commission – the seven-member panel appointed by President Barack Obama – found in 2010: that Halliburton used unstable cement to seal the well, and that the mixture had failed multiple tests in the weeks leading up to the disaster, the Times-Picayune reported.

Halliburton has samples of bad cement

In continuing testimony Thursday, Halliburton’s lead attorney, Don Godwin, told the federal court that the oil field services giant had discovered leftover samples of a cement slurry at its lab in Lafayette that could be from the same mixture used to seal the Macondo well.

Godwin had made the disclosure in an email to the court late Wednesday, and said Halliburton is investigating whether the cement samples should have been turned over in response to subpoenas.

“The lab was immediately instructed to photograph the materials and to continue to hold them,” Godwin wrote, according to AP.

Godwin said in his email to US District Court Judge Carl Barbier, Jr, who is presiding over the case, that Halliburton used a dry cement blend left over from an earlier drilling operation, on BP’s Kodiak No. 2 well, another Gulf oil field, to make the mixture that was used at BP’s Macondo well. But Godwin stressed Thursday that it’s unclear whether the samples found Wednesday are from the Kodiak No. 2 well or from the blend used at Macondo, court transcripts showed.

The Kodiak cement contained an additive, a defoamer that “destabilizes and is incompatible with foam cement,” said Jim Roy, an attorney for the plaintiffs.

Judge Barbier ordered Halliburton in 2010 to turn over to federal investigators samples of the cement mix the company used to try to seal the Macondo well before it exploded. After a number of delays, tests on the cement mix were completed in August 2011.

Godwin on Thursday downplayed the significance of finding the new samples. “Our judgment is they have nothing to do with this trial, but I was simply giving the court full disclosure, ” he said as quoted by the Times-Picayune.

Halliburton has dug itself a hole

Blaine LeCesne, a tort law professor at Loyola University in New Orleans, told the paper that testimony in the third week “took clear aim at Halliburton and Transocean, and I think they hit their mark particularly well with Halliburton.”

“I think it spells some real trouble for Halliburton down the line,” he said.

LeCesne said the discovery of the cement samples and the alleged destruction of the notes “revealed those irregularities.”

“When you take all of those things together, that could result in a significant attribution of fault to Halliburton, which is probably something that many have not foreseen, but I think they have a bit of a hole to dig themselves out of at this point,” he said Friday.

Legal hot potato still in BP’s lap

Despite the revelations that Halliburton’s cement job may have been substandard, LeCesne nonetheless pointed out that it was the job of BP, who owned the well, to oversee that the cement measured up, something that may offer Halliburton some cover.

“Let’s face it: The largest environmental disaster in history, and [Halliburton’s] cement job is at the potential center of causation,” said LeCesne.

David Uhlmann, the former head of the Justice Department’s Environmental Crimes Section and a law professor at the University of Michigan, agreed, AP reported. He said he was mystified that the US government has yet to pursue criminal charges against Halliburton even two years after the government commission revealed it had used faulty cement.

“The revelation that Halliburton may now have found samples of the cement serves to emphasize Halliburton’s role in causing the spill and its lack of forthrightness in the aftermath of the spill,” said Uhlmann.

Ignored kick

Joseph Keith, a mud logger for Halliburton’s Sperry Sun unit, testified Wednesday that he took a brief smoke break and missed a kick of natural gas an hour before the blowout of the Deepwater Horizon well on April 20, 2010.

Though Keith testified during direct examination that he believed he did nothing wrong, he acknowledged taking little action when he returned. After observing a 100 pounds per square inch pressure increase in the drill pipe in the well, Keith testified he did not view it as an indication of a kick, and did not notify workers on the rig’s drilling floor of the change, court transcripts show.