The US Government has accused BP's management of gross negligence and launched a blistering attack on the oil giant for the failures that led to the Deepwater Horizon explosion two years ago.
The Department of Justice filed a sharply worded brief with a court in New Orleans yesterday that accused BP of systematic management failures and a "corporate-driven, profit over safety" culture.
BP has sought to prove that the Deepwater Horizon explosion, which killed 11 rig workers and caused the largest oil spill in US history, was an accident caused by multiple technical failures, including the failure of blowout prevention equipment and of the cement used to seal the well.
If Deepwater Horizon is determined to have been an accident, BP could be fined $4.5 billion for violations of the Clean Water Act.
The DoJ has argued, however, that BP and its employees were grossly negligent in allowing the explosion to occur. If gross negligence is proven, it could land BP with a fine of up to $21 billion, followed by almost unlimited punitive damages.
BP has been negotiating with the DoJ with a view to settling out of court in return for a fine of up to $15 billion. Lawyers said yesterday that the harsh language and evidence presented in the DoJ's latest filing suggested that the Government was escalating the dispute. BP's share price fell 12 3/4p to 423.85p in response.
The DoJ's submission included an e-mail from a BP engineer that described the Deepwater team as "flying by the seat of our pants". His warning about the "insanity" of the project went unheeded.
The DoJ said: "The behaviour, words and actions of these BP executives would not be tolerated in a middling company manufacturing dry goods for sale in a suburban mall. Yet they were condoned in a corporation engaged in an activity that no less a witness than Tony Hayward [BP's former chief executive] himself described as comparable to exploring outer space." The DoJ's filing focused in particular on a stress test performed hours before the explosion that should have revealed that pressure levels in the Macondo well were too great.
"That such a simple yet fundamental and safety-critical test could have been so stunningly, blindingly botched in so many ways, by so many people, demonstrates gross negligence," the DoJ said.
BP conducted a lengthy investigation, called the Bly Report, into the failures that led to the Deepwater Horizon disaster and detailed a series of failures by the company and its contractors, including Transocean, the rig operator, and Haliburton, which supplied the cement to seal the well.
The DoJ sought yesterday to shift the emphasis away from technical failures to human failures in its attempt to prove gross negligence by BP. It said: "What is most striking about the Bly Report is the utter lack of any semblance of investigation of the systemic management causes deeply implicating the corporate managers and leadership who caused and allowed the rigbased mechanical causes to fester and ultimately explode."
BP responded: "BP believes it was not grossly negligent and looks forward to presenting evidence on this issue at trial in January."
Dancing with danger
April 17, 2010
E-mail from John Guide, the well team leader for Macondo, to his boss David Sims:
"David, over the past four days there has been so many last minute changes to the operation that the WSLs [BP's rig-based well site leaders] have finally come to their wits' end. The quote is 'flying by the seat of our pants'.
Everybody wants to do the right thing, but this huge level of paranoia from engineering leadership is driving chaos ... What is my authority? With the separation of engineering and operations, I do not know what I can and can't do. The operation is not going to succeed if we continue in this manner."
April 17, 2010
E-mail from David Sims to John Guide:
"John, I've got to go to dance practice in a few minutes. We need to remind him [another engineer] that this is a great learning opportunity, it will be over soon, and that the same issues -- or worse -- exist anywhere else. I'll be back soon and we can talk. We're dancing to The Village People."
April 20, 2010
Blowout of the Macondo well and explosion of the Deepwater Horizon rig, 11 people killed.
Credit: XXXXX XXXXXon New York
Caption: The Department of Justice contends that the explosion on the Deepwater Horizon rig in the Gulf of Mexico was the result of "gross negligence" by the company