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Transocean Worker Misinterpreted Well Test, Witness Says

A Transocean Ltd. (RIG) supervisor on the Deepwater Horizon oil rig that blew up in the Gulf of Mexico in 2010 testified that a worker misinterpreted a key test before the incident.

Randy Ezell, a Transocean drilling supervisor on the rig, said in federal court in New Orleans that he wasn’t informed about problems with the negative pressure test before the explosion by his assistant, Jason Anderson, who died in the blast.

“All I can tell you is Jason was misinterpreting what he was seeing,” Ezell said. He spoke to Anderson shortly before the blast. “He said it was a good test,” Ezell testified.

The missed test was a key cause of the explosion and sinking of the Deepwater Horizon, the U.S. and plaintiffs suing BP Plc (BP/), Transocean and other defendants contend. Ezell is the first live witness at the trial over liability for the incident who was on the rig at the time the well blew.

The blowout and explosion aboard the Deepwater Horizon killed 11 workers and spilled more than 4 million barrels of oil into the Gulf of Mexico. The accident sparked hundreds of lawsuits against London-based BP, owner of the well, Vernier, Switzerland-based Transocean, owner of the Deepwater Horizon, and Houston-based Halliburton Co. (HAL), which provided cement services.

Reckless Indifference

The nonjury trial over liability for the disaster began last week. U.S. District Judge Carl Barbier will determine responsibility and whether one or more of the companies acted with willful or wanton misconduct or reckless indifference --the legal requirement for establishing gross negligence.

For BP, a finding of gross negligence would mean the company is 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 the $8.5 billion settlement the company reached with most private party plaintiffs last year. For Transocean and Halliburton, findings of gross negligence would mean the companies can be held liable for punitive damages for all plaintiffs.

BP also faces a jury trial next year in federal court in Houston over claims by investors that the company hid the true size of the spill to limit the effect on its stock price. U.S. District Judge Keith P. Ellison, who is overseeing the shareholder suit, set an Aug. 25, 2014, trial date in a one-page order yesterday.

Investors Sue

The investors, led by Ohio and New York pension plans, sued BP and certain officers in 2010, alleging violations of U.S. securities law. The investors also claim the company publicly claimed a commitment to and implementation of expanded safety measures while internally cutting budgets and rejecting employees’ safety warnings.

Ellison has limited the lawsuit to claims brought by investors who bought BP’s American depositary receipts, which trade on the New York Stock Exchange. BP has denied fraud or any lack of attention to safety in court filings.

In the trial in New Orleans, lawyers for the government and spill victims contend BP was over budget and behind schedule on the Macondo deep-water drilling project off the Louisiana coast, prompting the company to cut corners and ignore safety tests showing the well was unstable.

Defective Cement

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 leaving the crew untrained for crisis situations.

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

BP pleaded guilty to 14 federal charges in November, including 12 felonies, and admitted it misinterpreted the critical pressure test just before the explosion. The U.K. company agreed to pay $4 billion in fines and penalties, plus $525 million to settle a U.S. Securities and Exchange Commission claim that the company underestimated the size of the spill.

Transocean pleaded guilty to a misdemeanor Clean Water Act violation and agreed to pay $1.4 billion, including $400 million in criminal penalties.

Misinterpreted Results

The U.S. and plaintiffs claim BP and Transocean misinterpreted the results of a negative-pressure test, a check for an increase in the pressure or flow of oil or gas up the well, deeming it a success when it wasn’t.

After two unsuccessful tests, BP began monitoring negative testing on an additional pipe, called a kill line. The test showed pressure on the drill pipe and zero pressure on the kill line, an anomaly that indicated the well wasn’t secure, the U.S. said in court papers.

“I think there was definitely a misinterpretation” of the negative pressure test, Ezell testified yesterday.

Plaintiffs’ attorney Paul Sterbcow asked Ezell if the Transocean crew missed danger signs in the hours before the blast.

“I’m sure there were,” he replied. “I don’t really like to think about it very much.”

‘Was Disoriented’

Ezell, who had worked on the Deepwater Horizon for nine years, was off duty the night of April 20, 2010, when he heard a loud noise. “It was like a 747 on the rig floor,” Ezell said. This was followed by the explosion, he said.

The blast “blew me against the wall,” covering him with debris, he testified. “I was disoriented. The place I lived for nine years didn’t look” anything like it did before, Ezell said.

Ezell helped evacuate injured co-workers from the burning rig. “I stayed because it was the right thing to do,” he said.

Nine Transocean workers, including Anderson, were among the 11 killed in the explosion. The other two worked for a subsidiary of Schlumberger Ltd. (SLB)

“We were a family. We were a team,” Ezell, 57, said of his Transocean Deepwater Horizon rig crew. Anderson “was one of the best of the best. He was one of the rocks of the Horizon.”

The Deepwater Horizon crew conducted a weekly blow-out drill and a weekly well control drill among the safety programs pursued before the explosion, Ezell said.

‘Very Effective’

“In my opinion they were very effective,” he testified. “We did have seven years without a lost-time incident.”

Transocean lawyer Rachel Clingman asked Ezell if he considered the Macondo the “well from hell.”

“I never viewed it as that,” Ezell said. All deep-water wells are “very difficult,” he said.

Ronnie Sepulvado, a BP manager who was assigned to the Macondo project, testified yesterday that a rotary table on the floor of the Deepwater Horizon was broken for about three years. A rotary table is a section of the drill floor that provides power to turn the drill bit.

The crew would “work around it,” Sepulvado testified. The broken table was a safety concern which he raised “with just about everybody on the rig,” he said.

Sepulvado, who had worked on the Deepwater Horizon for eight years, was a well site manager on the rig until four days before the blast, when he left because his well-control certificate was about to expire.

No Waiver

“Did you try to get a waiver or something like that?” plaintiff’s attorney Conrad “Duke” Williams asked him yesterday.

“BP wouldn’t give” a waiver, Sepulvado answered.

BP lawyer Carrie Karis asked Sepulvado if he considered the Deepwater Horizon to be a safe rig.

“Very safe,” Sepulvado said.

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 federal court in New Orleans; Margaret Cronin Fisk in Detroit at mcfisk@bloomberg.net

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

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