Bloomberg News

BP Oil Well Dumped 4.2 Million Barrels Into Gulf, U.S. Says (1)

October 07, 2013

BP Plc (BP/)’s doomed Macondo well dumped 4.2 million barrels of oil into the Gulf of Mexico in 2010, a lawyer for the U.S. told a judge who is assessing the size of the spill and how well the company reacted to the disaster.

The U.S. contends 5 million barrels of oil were released from the well, while agreeing with BP that 810,000 barrels were captured by a siphoning device at the wellhead before they could spill into the sea.

“The question for you, your honor, is not how much oil was collected but how much was not,” Steven O’Rourke, a lawyer for the Justice Department, told U.S. District Judge Carl Barbier in New Orleans today in the second phase of the trial over the largest offshore oil spill in U.S. history.

Barbier is already weighing whether the London-based company’s actions in causing the April 20, 2010, blowout and subsequent spill reached the level of gross negligence, which would lead to higher fines and punitive damages. His decision on the size of the spill may mean billions of dollars to BP.

The blowout of the Macondo well off the coast of Louisiana in April 2010 killed 11 people aboard the Deepwater Horizon drilling rig. The accident sparked hundreds of lawsuits against BP, as well as Transocean Ltd. (RIG:US), owner of the rig that burned and sank, and Halliburton Co. (HAL:US), which provided cement services for the project.

$18 Billion Maximum

The judge’s endorsement of the U.S. spill estimate could trigger a maximum fine of $18 billion under the Clean Water Act if he finds gross negligence. A finding affirming BP’s assessment that the spill was 40 percent smaller than the government says might shave as much as $7.5 billion from the maximum payment.

The “quantity of the oil released” may also help determine how much BP will have to pay for natural-resource damage claims, Justice Department lawyers said in a Sept. 5 filing. Under U.S. law, BP still faces unspecified billions of dollars in additional expenses to restore the gulf coast environment.

BP has countered that the U.S. assessment is flawed and the government hasn’t used the most accurate data.

“The defense will nitpick our experts, but they’re not going to tell you the actual flow rate,” O’Rourke, the government lawyer, told the judge today.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).

To contact the reporters on this story: Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net; Allen Johnson Jr. in federal court in New Orleans at ajohnson182@bloomberg.net

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


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Companies Mentioned

  • RIG
    (Transocean Ltd)
    • $42.31 USD
    • 0.28
    • 0.66%
  • HAL
    (Halliburton Co)
    • $73.39 USD
    • -0.02
    • -0.03%
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