Posted on 29 Dec 2011
According to the Wall Street Journal, which is citing people familiar with the matter, U.S. prosecutors are preparing what would be the first criminal charges against BP PLC employees stemming from the 2010 Deepwater Horizon accident, which killed 11 workers and caused the worst offshore oil spill in U.S. history.
Prosecutors are focused on several Houston-based engineers and at least one of their supervisors at the British oil company, though the breadth of the investigation isn't known. The prosecutors assert the employees may have provided false information to regulators about the risks associated with the Gulf of Mexico well while its drilling was in progress, these people said.
The felony charges—which might be disclosed early in 2012, if they are brought—could involve providing false information in federal documents, these people said. A conviction on such a charge carries a penalty of up to five years in prison as well as a fine.
The Department of Justice still could decide not to bring charges against the individuals, people familiar with the situation said. It's not unusual for prosecutors to use the threat of charges to pressure people to cooperate in investigations.
Legal experts say BP itself is expected to face broader criminal charges, including violations of the federal Clean Water Act; the company already is appealing what could amount to $36.6 million in administrative fines levied by U.S. regulators for safety violations. The size of the fines hasn't been finalized.
BP spokesman Daren Beaudo declined to comment on the potential for charges against employees or the company. The company has said it believed the accident was caused by a combination of events that involved multiple parties, not just BP.
A Justice Department spokeswoman declined to comment.
A federal task force based in New Orleans has spent the past 18 months investigating the April 2010 accident. Prosecutors have reviewed thousands of documents and conducted dozens of interviews, including bringing some individuals before a grand jury, according to people close to the investigation.
Prosecutors recently looked into a key safety measure in deep-water drilling: The difference between the minimum amount of pressure that must be exerted in a well's bore by drillers to keep the well from blowing out, and how much pressure would break apart the rock formation containing oil and gas. The narrower the margin between those two points, the more difficult a well is to control.
Federal regulations don't define what margin qualifies as safe, but companies are supposed to identify the margin in their applications for permits to drill. When a company cannot maintain that safety margin, it is supposed to suspend drilling and remedy the problem.
Among questions prosecutors are asking is whether information gathered during drilling that helped determine the safety margin in the Deepwater Horizon situation was properly reflected in amended drilling permit applications that had to be approved by federal regulators, said the people familiar with the investigation.
The prosecutors' questions appear to mirror concerns raised earlier this year in public filings by the Bureau of Safety and Environmental Enforcement, the new U.S. enforcement division spun out of the former Minerals Management Service in a reorganization after the accident.
The agency in publicly disclosed citations has accused BP, rig owner Transocean Ltd. and Halliburton Co., the company responsible for cementing the well after it was drilled, of violating several offshore drilling rules. BP faces four violations of a rule that requires a company to stop drilling when the safe drilling margin is violated. BP is contesting the civil charges.
Criminal charges have been brought in previous oil spills, most notably the 1989 Exxon Valdez accident, in which an Exxon oil tanker hit a reef off the Alaskan coast and spilled 11 million barrels of crude. Exxon, now Exxon Mobil Corp., faced five criminal charges, including two felonies for placing an incompetent crew on the ship and three misdemeanor charges of violating the Migratory Bird Treaty Act and the Clean Water Act.
The company later reached a settlement under which it pleaded guilty to four misdemeanors and paid $100 million in restitution. The company also paid $900 million to Alaska and the federal government for damaging natural resources.
The only individual charged in the Valdez case was captain Joseph Hazelwood, who was accused of three felonies—criminal mischief, operating the ship while intoxicated and reckless endangerment—and a misdemeanor charge of negligently discharging oil. A jury found him guilty only of the misdemeanor, and he was sentenced to 1,000 hours of community service and $50,000 in restitution.
The Deepwater Horizon criminal investigation is separate from a group of civil cases under way in U.S. District Court in New Orleans. The first trial, to determine the level of liability BP and other companies will face over the spill, is scheduled to begin Feb. 27, barring a settlement among the companies and the plaintiffs. BP has said it wasn't negligent and plans to mount a vigorous defense.
The judge in that case, Carl Barbier, also is set to conduct another trial to determine how much oil actually escaped from the well before it was sealed and to what degree the companies controlled the release. The third phase will cover how the companies did in containing and cleaning up the spill.