Halliburton Denies Destroying Evidence in BP Oil Spill Case

Halliburton Co. (HAL) denied BP Plc (BP/)’s accusation that engineers destroyed testing evidence to keep it from being used in litigation over the Gulf of Mexico rig blast that triggered the worst offshore oil spill in U.S. history.

BP and Halliburton are suing each other over whose actions caused the Macondo well to explode off the Louisiana coast in April 2010. BP asked U.S. District Judge Carl Barbier of New Orleans to sanction Halliburton last month, alleging the cementing services firm hid or destroyed unfavorable testing evidence.

Halliburton said in a filing today that engineers followed company policy to discard the testing results and materials because the tests were “performed on lab stock that remains available today.” Halliburton also said tests on cement samples like those used in the well showed the formula was stable.

Halliburton’s engineers turned over notes and testified under oath that tests showed “a stable foam was observed after the slurry was conditioned -- a critical fact that BP continues to ignore,” Donald Godwin, Halliburton’s lead trial lawyer, said in a filing in federal court in New Orleans.

“At most, the post-incident testing showed how non-rig ingredients performed when tested under lab conditions, not how rig stock performed when pumped downhole,” Godwin said.

The companies jointly face more than 500 lawsuits by thousands of coastal property owners and businesses claiming damages from the massive oil spill.

Spill Litigation

In seeking sanctions, BP cited a Halliburton employee’s testimony that the Macondo well’s cement formulation looked “thin” when recreated during post-blowout lab tests.

“In fact, a ‘thin’ slurry can still be a stable slurry,” Godwin said in today’s filing. Noting that the engineer testified that the slurry might have been thin by design, Godwin said the worker also “stated unequivocally that the slurry he tested foamed all the way to fill up the container, and there were no signs of gas break out, free fluid or streaking.”

Halliburton employee Rickey Morgan didn’t testify that he intentionally avoided recording certain test results to prevent lawyers from using the data against the company in court, Godwin said. Those “are not even Morgan’s words,” Godwin said.

‘What Morgan Feared’

“BP is doing exactly what Morgan feared: taking his words and work out-of-context and manipulating them to serve BP’s purposes in litigation,” Godwin said in the filing.

Halliburton also volunteered to give BP or third-party forensic investigators duplicates of hard drives used to run computer models of Macondo cement formulations that BP claims were unfavorable to Halliburton. Godwin said the company offered to provide all data inputs and employees to help BP recreate the computer models, if needed.

“We stand by our motions and the arguments we made in prior papers,” Daren Beaudo, a spokesman for BP, said in an e- mail in response to Halliburton’s filing.

BP and Halliburton have been fighting about the cement job Halliburton provided to seal the well against leaks, based on BP’s design specifications. Halliburton used an innovative foaming cement formulation that critics claim wasn’t right for the Macondo formation. As a result, BP claims the contractor’s work was flawed, while Halliburton maintains BP provided faulty information.

Government investigators have said both companies are partly to blame for causing the blowout, which killed 11 workers.

The 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).

To contact the reporters 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 in San Francisco at mhytha@bloomberg.net.

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