Bloomberg News

BP Says It Didn’t Hide Information About Gulf Well Blowout

September 20, 2011

(Updates with scientists starting in 13th paragraph.)

Sept. 20 (Bloomberg) -- BP Plc said it didn’t hide information about a possibly dangerous condition in the Macondo oil well before or after it blew out in April 2010, killing 11 people and triggering the biggest U.S. offshore oil spill.

BP personnel determined that a sand layer above the target zone was water-bearing rather than a gas-containing “hydrocarbon zone” and provided supporting data to its well partners before the blowout, the company said yesterday in a court filing. BP investigators reported publicly after the explosion that this may have been gas-containing sand, while determining it wasn’t a cause of the incident, the company said.

A Halliburton Co. unit that provided cementing services for the well asked a federal court in New Orleans Sept. 1 to allow it to add a claim of fraud in its lawsuit against BP over the spill, alleging the hydrocarbon zone was concealed.

Halliburton shouldn’t be allowed to add the new claim, BP said in its filing.

“There is no evidence that BP held the pre-incident belief that the sand was hydrocarbon-bearing, or that it had any intent to conceal,” the company said. BP distributed information about the shallower sand within days of the incident, it said.

Tara Mullee Agard, a spokeswoman for Houston-based Halliburton, didn’t immediately comment on the BP filing.

The Macondo blowout and spill led to hundreds of lawsuits against London-based BP and its partners and contractors. The lawsuits over economic losses and personal injuries are combined before U.S. District Judge Carl Barbier in New Orleans.

Other Defendants

Also sued were Transocean Ltd., the Switzerland-based owner and operator of the Deepwater Horizon drilling rig that exploded; Halliburton; Cameron International Corp., which provided blowout-prevention equipment; and BP’s minority partners in the well, Anadarko Petroleum Corp. and Mitsui & Co.’s Moex Offshore LLC unit.

Halliburton alleges slander and business disparagement in a separate suit against BP in Houston federal court, contending that the oil company “knew or should have known about an additional hydrocarbon zone in the well that BP failed to disclose” before Halliburton designed the cement program for the well. Halliburton said it wouldn’t have pumped cement had it known of the zone.

BP failed to disclose this after the blowout as well, in an effort to blame others for the explosion of the Deepwater Horizon, Halliburton said. Halliburton filed a proposed amendment in its suit against BP in federal court in New Orleans, seeking to add fraud claims.

BP Motion

BP asked Barbier to reject the fraud claims because Halliburton filed them months after a deadline for cross- complaints and they would prove a disadvantage to the company in preparing for trial. A trial on liability is set for Feb. 27 before Barbier.

“At this late stage, Halliburton’s undue delay would severely prejudice BP if the new claims were allowed,” the company said. “Halliburton’s proposed amendment brings ten pages of new allegations after the close of fact discovery.”

Halliburton contended it learned of the additional hydrocarbon zone in a July deposition of Galina Skripnikova, the BP petroleum scientist who determined before the incident the sand was water-bearing, BP said.

“Halliburton had knowledge of facts and arguments underlying its new claims regarding the alleged concealed hydrocarbon zone for fourteen months before the deposition of Ms. Skripnikova,” BP said.

BP Argument

Halliburton’s corporate representative Richard Vargo was “sufficiently confident in this theory that he testified under oath in March 2011 that BP had withheld information about the hydrocarbon zones from Halliburton,” BP said in yesterday’s filing.

Skripnikova and other BP petroleum scientists met to review Macondo data at their Houston operations center the day after the blowout, BP said. They magnified digital subsurface data from the Macondo and detected for the first time a “slight” indication that the shallower zone might have contained gas, BP said.

Before the blast, Skripnikova believed this data indicated that oil-based drilling fluids used in the well had soaked into a shallower rock layer containing ground water, BP said. The company said she confirmed this before the blast by examining rock cuttings from the well and conferring with the oilfield- services company Schlumberger Ltd., which conducted the Macondo digital tests.

Company’s Analysis

Schlumberger’s analysis concluded that the shallower zone was “water-bearing, not gas-bearing,” BP said. The cement job was planned based on those conclusions.

BP said its internal Macondo investigation team fully examined data concerning the shallower sand layer and ruled it out as a cause of the incident. The team didn’t disclose the shallow zone in its final public report “because it believed that inclusion would cause confusion on an issue that was unrelated to the cause of the incident,” BP said.

The federal case is In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL- 2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

-- Editors: Andrew Dunn, Stephen Farr

To contact the reporter on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus