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BP’s Macondo Well Drilling Proper, Defense Witness Says

BP Plc (BP/) followed proper safety procedures in drilling the well that ultimately exploded in 2010 and sent millions of barrels of oil spewing into the Gulf of Mexico, an expert hired by the company testified.

The crew and managers of the Deepwater Horizon oil rig followed “standard industry practices” in drilling the Macondo oil well and performing safety tests on it, Adam Bourgoyne, a retired petroleum engineering professor, told a judge as the opening witness in BP’s defense to claims it was grossly negligent in its handling of the well.

A review of the rig’s operations found supervisors and crew members took “extreme care to follow all the safety procedures,” Bourgoyne told U.S. District Judge Carl Barbier in New Orleans today.

The testimony comes as BP starts its seventh week of a trial over a push by oil spill victims and the U.S. for Barbier to decide liability for the Deepwater Horizon explosion, which led to the worst offshore spill in U.S. history.

The blast killed 11 workers and sent waves of oil into the Gulf, killing fish and waterfowl. The accident sparked hundreds of lawsuits against well owner BP; Houston-based Halliburton Co. (HAL); and Vernier, Switzerland-based Transocean Ltd. (RIG), the Deepwater Horizon’s owner.

The liability trial began Feb. 25. Barbier must determine whether one or more of the companies acted with willful or wanton misconduct or reckless indifference -- the legal requirement for establishing gross negligence.

Punitive Damages

For BP, a finding of gross negligence would mean the company might be liable to the U.S. for more than $17 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.

Transocean and Halliburton could be held liable for punitive damages for all plaintiffs if the companies are found to have handled their duties on the rig in a grossly negligent manner.

Lawyers for the U.S. and spill victims have argued BP was over budget and behind schedule on the deep-water Macondo well off the Louisiana coast, prompting the oil company to cut corners and ignore safety tests showing the well was unstable.

They also allege Halliburton’s cement job was defective and that 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.

Drilling Margins

Lawyers for the government and spill victims produced witnesses earlier in the trial to testify BP officials misled federal regulators about conditions at the Macondo well and forged ahead with “unsafe and dangerous” drilling operations before the fatal explosion.

Alan Huffman, a a Houston-based petroleum geophysicist hired by the government to review the disaster, testified BP officials misreported well pressures at the Macondo site to government regulators and misled them about the safety of the project. He also found the company didn’t keep safe “drilling margins” and that contributed to the fatal blast.

Bourgoyne was hired by BP to do an internal probe of the Macondo drilling operations and his findings countered those of Huffman and other experts hired by the government and spill victims.

‘Appropriate Tests’

BP’s expert said the company conducted “appropriate tests” as it drilled farther into the Gulf floor and reported the results to the government. He added that questions about the drilling margins BP employed played no role in the explosion.

“I don’t think that it’s related at all,” Burgoyne told the judge.

Still, Bourgoyne acknowledged BP supervisors and Transocean employees who staffed the Deepwater Horizon botched safety tests on the well just hours before the fatal blast.

Richard Heenan, a Canadian engineer who has supervised off- shore drilling projects, testified on behalf of the government and spill victims the rig’s crew misinterpreted a negative- pressure test that showed the well was unstable.

Heenan told Barbier his investigation of the disaster showed Transocean’s second-highest ranking crewman convinced the rest of the installation’s staff that the irregular test results could have been the result of extreme pressure on valves rather than an indication of leaks.

‘Group Decision’

“They called it a pass when it was a fail,” Bourgoyne said. The former engineering professor added he was surprised that a group of such experienced oil-rig workers and supervisors “bought into” the crewman’s explanation for the anomalous pressure readings.

“I think it was a group decision,’ he said. ‘‘They had a lot of confidence in one another, and once they made the decision, they were convinced they were right.’’

The misinterpreted safety test played a role in criminal guilty pleas entered by both BP and Transocean, as well as in criminal charges pending against two BP well-site leaders who were on the rig.

BP agreed in November to pay $4 billion and plead guilty to 14 criminal counts, including 11 for felony seaman’s manslaughter, to resolve a federal criminal probe of its role in the spill. The company also paid $525 million to settle the U.S. Securities and Exchange Commission’s claim that the company misled investors about the rate of oil flowing into the Gulf.

Transocean agreed in January to pay $1.4 billion and plead guilty to one misdemeanor water-pollution charge to end the U.S. investigation into its actions regarding the spill.

‘Off Guard’

James Roy, an attorney for spill victims in the case, asked Bourgoyne during cross examination if Transocean’s crew maintained adequate training for ‘‘dangerous but very rare events” that could only be averted by automatic reactions to the threat.

“They didn’t get it done so it implies they either were not trained or were disregarding their training,” Bourgoyne replied. “This unusual situation caught them off guard.”

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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