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Transocean Chief Admits Crew Shortcomings in Oil Spill

Source: NY Times

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Posted on 21 Mar 2013 by Neilson

TransoceanThe chief executive of the company that owned the Deepwater Horizon oil rig acknowledged in court on Tuesday that his crew should have done more to avert the 2010 oil well blowout that left 11 dead and soiled hundreds of miles of beaches along the Gulf of Mexico.

"Do I wish the crew had done more? Absolutely," said Steven L. Newman, chief executive of Transocean. "We acknowledged we should have done more."

Mr. Newman's measured and partial acknowledgment of accountability goes to the heart of the United States District Court trial, now in its fourth week, to assign responsibility for the disaster.

Mr. Newman said that while his company was responsible for a "narrow slice" of the drilling operations, including providing pressure tests that produced faulty readings shortly before the explosion, it was the oil company BP that "has everything under its umbrella."

The trial bundles suits brought by the Justice Department, several state governments, private businesses and individual claimants against BP and its contractors. Lawyers for tens of thousands of people and businesses seeking redress for damages claim that BP, Transocean and Halliburton were grossly negligent for mismanaging safety procedures.

The Justice Department is arguing that BP was grossly negligent and ultimately responsible for a series of mistakes because it designed the well, selected the contractors and managed the drilling operation. While BP has acknowledged mistakes, it says its contractors also made serious errors that caused the well blowout, and over the last two weeks, several trial witnesses appear to have helped make its case.

Geoffrey Webster, an expert witness in marine engineering for the plaintiffs, testified earlier that Transocean had neglected to properly maintain and operate the rig and its critical blowout preventer, and did not adequately train its crew.

The crew deliberately disabled the automatic functions of a gas alarm system that should have alerted the crew to hazardous gases rising from the well, Mr. Webster said. He also testified that the Transocean rig crew failed to use lines designed to divert the escaping oil over the side of the rig, using small, low-pressure tanks on the rig instead that were inadequate for the task.

Those errors, he said, contributed to allowing escaping oil to reach the rig deck and set it on fire, conclusions that had been documented in previous government reports.

Mr. Newman also acknowledged that he knew Transocean had problems assuring safety even before the Deepwater Horizon accident when four workers were killed in rig accidents in 2009. The company temporarily suspended operations and underwent a review of its safety practices. "I knew that as a result of the incidents we were experiencing we needed to do something," he said.

Mr. Newman testified for more than five hours with a steady voice. But at the end of his testimony, when asked how often he thought of the men who lost their lives in the accident, he choked up and fought back tears. "Every day," he answered. "Because I ask myself if there isn't something more I could have done."

Another contractor-defendant, Halliburton, which mixed the cement for the well, has also faced some embarrassing questions at the trial in recent days. Thomas Roth, a senior Halliburton executive who was in charge of cementing operations at the time of the spill, acknowledged that because of the well design and other factors, "the cement placement was going to be a job that would have a low probability of success."

Timothy Quirk, a Halliburton laboratory manager, testified on Tuesday that he conducted stability tests on cement samples from a similar blend that had been used in the Macondo well after the accident. Under instructions from a colleague, he said he did not prepare a laboratory work sheet. "It was a little unusual," he conceded. He then acknowledged that he had thrown out his notes. Subsequent investigations have shown that the cement was not stable.

The plaintiffs have accused Halliburton of conducting undocumented cement tests and then hiding the results. BP has accused Halliburton of destroying evidence of its cement testing.

"To shift responsibility to Transocean and Halliburton is good for BP," said Edward F. Sherman, a law professor at Tulane University. "They would like to argue that the primary actors were Halliburton and Transocean employees and BP was not responsible for their failures and, therefore, BP could not be grossly negligent."

The trial, which started in late February, is unfolding in two phases. The first will determine whether BP and its contractors were guilty of gross negligence - wanton and reckless behavior or disregard for reasonable care that is likely to cause harm or injury - in causing the accident. The second phase will determine how much oil actually spilled.

Together, the determinations by District Court Judge Carl J. Barbier will decide how much BP and the others will have to pay in fines. Under the Clean Water Act, fines could range from $1,100 for every barrel spilled through simple negligence to as much as $4,300 a barrel if gross negligence is found. The federal government has estimated that about four million barrels of oil were spilled, meaning liabilities of as much as $4.4 billion to $17.2 billion.

Talks to settle out of court appeared to have reached a stalemate.

"The window may have closed once the parties became entrenched in the litigation," said Blaine G. LeCesne, a law professor at Loyola University New Orleans. "At this point, BP is likely to take its chances and hope the allocation of fault is spread more equally among all the defendants."

BP has already pleaded guilty to 14 criminal charges, agreed to pay $4.5 billion in fines and other penalties and shaken up its management. It has also paid out roughly $9 billion in a partial settlement with businesses, individuals and local governments.

Because of their contracts with BP, Halliburton and Transocean are protected from most spill costs, aside from punitive damages, even if they are all found to have been grossly negligent. Transocean has already pleaded guilty to a single misdemeanor criminal charge of violating the Clean Water Act and agreed to pay $400 million in criminal penalties. It has also agreed to $1 billion in civil settlements. Halliburton has not settled with the Justice Department and claims that it was simply following BP's instructions.


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