A US federal district court judge ruled on Thursday that the Macondo blowout, which killed 11 workers, and spilled millions of barrels into the US Gulf of Mexico was the result of BP’s gross negligence and willful misconduct. BP’s contractors Transocean and Halliburton were both found negligent.
Image: Deepwater Horizon/USCG
In a 153-page ruling, Judge Carl Barbier, of the Eastern District of Louisiana, ultimately found plenty of blame to go around, but assigned BP with the most liability (67%). Transocean and Halliburton were assigned 30% and 3%, respectively.
“The court finds that BP’s conduct was ‘reckless’ under general maritime law and a substantial cause of the blowout, explosion, and oil spill,” Barbier wrote. He stated further that while the court had identified several examples where Transocean’s conduct “fell below the standard of care,” Barbier wrote that “BP had a hand in most of these failures.”
Those failures included:
The drill crew’s misinterpretation of the negative pressure test, the drill crew’s failure to detect the pressure anomaly between 9:08 p.m. and 9:14 p.m., the drill crew’s failure to perform a flow check followed by immediately shutting in the well at 9:31 p.m., the drill crew’s failure to divert flow overboard, the master’s failure to timely activate EDS, and Transocean’s failure to properly maintain the BOP.
BP is now subject to stiff penalties under the Clean Water Act. The maximum penalty under the act is US$1100 per barrel for simple negligence and $4300 per barrel for gross negligence or willful misconduct.
The amount of oil spilled into the Gulf of Mexico, when the Macondo well blew out on 20 April 2010, has not yet been agreed upon. Lawyers for the US Department of Justice say the Macondo well spilled 4.2MMbo into the Gulf of Mexico. However, BP stated that the quantity is lower, 2.45MMbo. Penalties could be upwards of US$18 billion. The penalties will be decided in a third trial set to begin 20 January 2015.
In a statement, BP said it strongly disagreed with the decision, and plans to appeal to the US Court of Appeals for the Fifth Circuit.
“BP believes that the finding that it was grossly negligent with respect to the accident and that its activities at the Macondo well amounted to willful misconduct is not supported by the evidence at trial,” the company said. “The law is clear that proving gross negligence is a very high bar that was not met in this case. BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court.”
Contractors welcome ruling
While both were assigned a portion of liability by the court, both Transocean and Halliburton said on Thursday that the ruling relieves the companies of further financial risks.
"This is a favorable and welcome ruling for Transocean, its employees, and all offshore drilling contractors, as the court has again ratified the industry-standard allocation of liability between drilling contractors and the owners and operators of oil wells," said Steven Newman, President and Chief Executive Officer. "As we remember the 11 men who died in this tragic accident, we appreciate the court's observation that the Deepwater Horizon crew was attentive and serious and acted bravely in the face of chaotic circumstances, committing multiple heroic acts that saved many lives on April 20, 2010."
Halliburton, in a statement, said it was pleased with the court’s decision. Barbier wrote in his ruling that, “the court finds that Transocean’s and Halliburton’s contractual indemnities and releases are valid and enforceable against BP.” Halliburton said in its statement, “BP must indemnify and release Halliburton with respect to compensatory damages claims.”
On Tuesday, 2 September, Halliburton agreed to settle claims related to the 2010 oil spill for $1.1 billion.
The company said that the settlement, which includes legal fees, will be paid into a trust in three installments over the next two years, until appeals are resolved. The settlement is subject to approval by the US District Court for the Eastern District of Louisiana.
In January 2013, Transocean agreed to pay $1.4 billion in criminal and civil fines. It also plead guilty to one misdemeanor violation of the Clean Water Act for negligent discharge of oil into the Gulf of Mexico and received five years’ probation in addition to the fines.
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