BP Report Didn’t Mention Safety-Test Talk, Witness Says

BP Plc (BP/)’s report about its investigation of an oil spill that fouled the Gulf of Mexico didn’t mention a conversation between two company officials about a key safety test the night of the blast, an executive testified.

BP investigators failed to cite a discussion between BP executives Donald Vidrine and Mark Hafle about well pressure safety tests on the Deepwater Horizon drilling rig just before it exploded April 20, 2010, in the final report laying out the reasons for the disaster, Mark Bly, the BP executive who led the probe, testified in a trial over spill claims.

Federal prosecutors and lawyers for spill victims contend the call between Vidrine and Hafle was evidence that BP officials botched the interpretation of the pressure test and that helped cause the explosion, which killed 11 rig workers and sent millions of gallons of oil spilling into the Gulf. The test indicated the well was unstable, but neither Vidrine nor Hafle took steps to shut down drilling operations after discussing the results, plaintiffs in the case allege.

Failing to mention the conversation in the final report wasn’t a part of BP’s strategy to blame the explosion on contractors working on the rig, Bly added. “The intention was to understand what happened and what came together that allowed it happen,” he added.

Liability Trial

After hearing evidence in the three-month trial, U.S. District Judge Carl Barbier in New Orleans will decide who is liable for damages over the largest offshore spill in U.S. history. He’ll also rule on whether BP, Transocean Ltd. or other companies were grossly negligent in their handling of the rig and well. His ruling in the nonjury trial will affect how much each company may have to pay.

The Deepwater Horizon blast resulted in more than 4 million barrels of oil fouling the Gulf and the shoreline of surrounding states. The accident sparked hundreds of lawsuits against London-based BP, Vernier, Switzerland-based Transocean, owner of the rig, and Houston-based Halliburton Co. (HAL), which handled cement work on the well.

If well owner BP is found grossly negligent, it may be liable to the U.S. for as much as $17.6 billion in Clean Water Act fines, as well as unspecified punitive damages to claimants who weren’t part of a $8.5 billion settlement of lawsuits. For Transocean and Halliburton, a similar finding would mean they could face punitive damage awards.

Corners Cut?

The government and spill victims say BP was over budget and behind schedule on the deep water Macondo well located off the Louisiana coast, prompting the company to cut corners and ignore safety tests showing the well was unstable.

They also allege Halliburton’s cement job was defective and Transocean employees made a series of missteps on the rig, including disabling safety systems, failing to properly maintain the installation and not adequately training its crew to handle crisis situations.

BP sued its contractors, claiming Transocean employees’ miscues were the main cause of the explosion and Halliburton concealed flaws with the drilling project’s cement work. Transocean and Halliburton countersued, pointing the finger back at BP on liability issues.

Bly, the BP executive responsible for safety and risk- management issues, testified last week the company’s final report on the Macondo disaster identified eight key causes of the rig explosion, including missteps by Transocean (RIG)’s crew on the platform and a faulty cement formulation provided by Halliburton officials.

No Warning

Under cross-examination yesterday, Bly acknowledged the report didn’t pinpoint the call between Vidrine, a BP manager on the rig the time of the blast, and Hafle, who was in the company’s onshore drilling center in Houston, as a key factor in the explosion and subsequent spill

In their conversation, Hafle told Vidrine a successful pressure test wouldn’t have yielded the readings Vidrine reported if it had been properly conducted, according to court documents.

Transocean officials have claimed in court filings there is no evidence that either Hafle or Vidrine warned the drilling crew that safety tests indicated the well was unstable or stopped work at the installation.

Experts who had studied the disaster have said there was a 30-minute period after Vidrine and Hafle ended their call when the crew might have been able to activate emergency systems designed to stop explosions and avoid the disaster.

In their court filings, BP officials have said any mistakes by Vidrine, Hafle or other BP personnel shouldn’t be held against BP and can’t be considered gross negligence.

Cement Approved

Both Vidrine and Hafle have invoked constitutional rights against testifying on the grounds they might incriminate themselves. Vidrine is facing manslaughter charges and one count of violating U.S. pollution laws as a result of the explosion and spill. Vidrine has pleaded not guilty. Hafle hasn’t been charged.

Under questioning by Donald Godwin, one of Halliburton’s lawyers, Bly acknowledged that BP officials approved the cement formula used on the rig before it was poured. Godwin also pointed to e-mails from BP employees praising the Halliburton cement crew’s work on the installation.

Geophysicist Testifies

A geophysicist also testified yesterday that BP drilled the Macondo well in the Mississippi Canyon area of the Gulf of Mexico, which was hit by a Mag 6.0 earthquake in 2006. That seismic event occurred three years before BP and Transocean began drilling in the area.

Andrew Hurst, a professor at the University of Aberdeen in Scotland, said earthquakes, like the one that struck the Gulf in April 2006, leave subsea rock formations “more fragile.” That makes such areas potentially more productive for oil drillers, he added.

“You would also expect there to plenty of oil there,” Hurst said. On cross-examination by BP’s lawyers, the professor conceded that the well’s blowout wasn’t caused by the area’s history of earthquakes.

Hurst added that the Macondo well was drilled in an area known as the “Golden Zone,” a theory about an oil-rich basin of the Gulf of Mexico. He said there are “particular challenges and hazards of drilling” in the Mississippi Canyon because of a risk of underground mudslides and earthquakes. “One has to be be very careful, particularly about drilling through an area that has this kind of activity,” he said

Rig Survivor

Randy Ezell, one of the rig’s crew who survived the explosion, told Barbier yesterday that he followed Transocean’s guidelines for drilling the Macondo well.

When asked with BP officials ever furnished him with procedures for drilling the deep-water well, Ezell said “not to my knowledge -- no.”

Ezell, one of the Deepwater Horizon’s drilling supervisors, helped BP managers perform safety tests the night of the well’s explosion. Federal prosecutors said those test results were misinterpreted by both BP and Transocean officials and that helped cause the blowout.

The oil driller said in his deposition that he was off duty when he was blown off his feet by the blast. He later helped rescue colleagues trapped in the damaged rig, according to the pretrial testimony and other survivors’ accounts.

The trial started its second week as the U.S. and Gulf states continue talks with BP about a possible settlement of pollution claims over the spill, a person familiar with the negotiations said Feb. 26.

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: Allen Johnson Jr. in New Orleans at allenmct@gmail.com; Jef Feeley in Wilmington, Delaware at jfeeley@bloomberg.net

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

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