Breaking News

Australia Raises Almost US$5 Billion as Abbott Sells Medibank in IPO
Tweet TWEET

BP Sued by Watchdog Group Over Atlantis Platform

(Corrects to say that claims on behalf of the government were brought by the whistleblower, not Food & Water Watch, in 11th and 12th paragraphs of story published Sept. 10.)

BP Plc’s Atlantis oil and gas production platform in the Gulf of Mexico should be shut until the company can prove it meets U.S. safety and engineering standards, an environmental watchdog group said in a lawsuit.

Food & Water Watch sued BP in federal court in Houston today. The group revised a lawsuit that it filed against U.S. regulators in May, accusing them of failing to investigate Atlantis after a whistleblower warned that the platform lacks critical safety documentation.

The group withdrew the initial lawsuit in June, after London-based BP won court permission to intervene in the case. BP had asked the court to require opponents to post a $15 billion bond to cover the company’s damages if Atlantis’s production was halted.

“We have evidence that Atlantis is unsafe and is in danger of creating an even worse spill than the one caused by the Deepwater Horizon explosion,” Wenonah Hauter, Food & Water Watch’s executive director in Washington, said today in a statement.

Former BP contractor Kenneth Abbott, who is participating in the lawsuit, previously sued Interior Secretary Kenneth Salazar and his agency for ignoring safety concerns raised since 2009. The agency began investigating Atlantis after a group of U.S. congressmen asked Salazar to do so in February, about two months before the Deepwater Horizon rig exploded, causing the worst oil spill in U.S. history.

Atlantis Production

The Deepwater Horizon, owned by Transocean Ltd., was under contract to BP about 100 miles (161 kilometers) north of the Atlantis platform. The damaged well leaked more than 4 million barrels of crude oil into the Gulf.

BP insists the Atlantis, its second-largest Gulf production platform, is safe and in compliance with federal regulations. The Atlantis can produce 200,000 barrels of oil and 180 million cubic feet of gas daily from waters ranging from 4,400 feet to 7,200 feet deep.

“BP thoroughly investigated these claims when they were first made by a former contract worker in 2009 and found them to be without substance,” BP said in a statement on May 17 in response to the first Atlantis lawsuit. The company said two investigations, including one by BP’s ombudsman, produced only minor “procedural changes” in the Atlantis project execution plan, which “had no bearing on operating or regulatory issues.”

Full Access

“The investigation found that the operators on the platform had full access to the accurate up-to-date drawings necessary to operate the platform safely,” BP said in the May 17 statement.

Daren Beaudo, a company spokesman, said in an e-mail today that he had no additional comment.

The lawsuit includes a claim filed by whistleblower Abbott on behalf of the government, for which he seeks to recover “billions of dollars in oil and gas profits that BP unlawfully acquired by falsely certifying to the Department of Interior that it was in compliance with all environmental and safety regulations,” Mikal Watts, an attorney for the environmental group, said in today’s filing.

Abbott claims BP acquired more than $10 billion in oil and gas profits by “falsely certifying” to federal regulators that Atlantis was built according to engineer-certified designs. The lawsuit seeks treble damages for the violations, or roughly $30 billion.

Internal E-Mails

Abbott, who supervised BP’s Atlantis engineering documentation database in 2008, took what he said are internal BP e-mails and a copy of the platform’s documentation database when he left the company in February 2009. He supplied his materials in March 2009 to the environmental watchdog group, which pressed federal regulators to investigate Abbott’s concerns.

One of Abbott’s e-mails, dated about a year after the platform went online in 2007, showed a BP manager warning that incomplete and unapproved design specifications had been given to platform operators in violation of federal law and the company’s own safety policies.

“This could lead to catastrophic operator errors due to their assuming the drawing is correct,” Barry Duff, then an Atlantis project manager in BP’s Houston operations headquarters, said in an Aug. 15, 2008 message.

Subsea Documents

“There are hundreds if not thousands of subsea documents that have never been finalized, yet the facilities have been turned over” to operators who rely on the design specs to safely operate Atlantis, Duff said in the BP internal memo.

The U.S. Bureau of Ocean Energy Management, which oversees offshore drilling, will decide after its ongoing investigation is completed whether to shut down Atlantis. Kendra Barkoff, the agency’s spokeswoman, had no comment today on the lawsuit or the investigation, which Salazar said in June might be completed by mid-September.

The case is United States of America Ex Rel. Abbott, 4:09- cv-01193, U.S. District Court, Southern District of Texas (Houston).

To contact the reporter on this story: Laurel Brubaker Calkins in Houston at o laurel@calkins.us.com.

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.