March 19 (Bloomberg) -- BP Plc’s Atlantis platform, its second-largest oil producer in the Gulf of Mexico, should be shut down until it’s proven to comply with U.S. safety and environmental laws, a whistle-blower’s lawyer told a judge.
BP misled U.S. offshore regulators to win operating permits for the platform, located about 150 miles (240 kilometers) south of New Orleans, according to the whistle-blower. The facility produced an average of 60,000 barrels of oil daily last year and is capable of producing as much as 200,000 barrels a day, according to data on London-based BP’s website.
“Atlantis is presently not fit for service under normal engineering standards,” David Perry, a lawyer for Kenneth Abbott, a former BP contractor, said at a hearing today in federal court in Houston. “We ask the court to take action to oversee remediation to make it fit for service.”
Abbott, who sued BP on behalf of the U.S. government in 2009, has asked U.S. District Judge Lynn Hughes to move quickly to halt production and appoint a special master to oversee measures to ensure the platform is brought into compliance. Abbott also seeks $7.8 billion from BP, which he estimates is the value of oil and gas BP has pumped through Atlantis since the facility came online in 2007.
Perry told Hughes there’s a specific pressure-relief valve “that is protecting a 16-inch pipeline” connecting Atlantis to shore and “that is undersized by a factor of 20 to 1.” A failure in that valve “could cause catastrophe at any time,” Perry said.
“There is no urgency on this, Atlantis is safe,” BP’s lawyer, Lynne Liberato, told Hughes. “The Interior Department said it was safe after an extensive investigation,” which included looking into Abbott’s allegations, she said at today’s hearing.
Abbott, who worked as an engineering documentation supervisor on Atlantis, testified before the U.S. Congress in June 2010 that almost 90 percent of the facility’s design and construction drawings weren’t approved by licensed professional engineers, as required by regulators. BP lied to regulators about its engineering certifications to obtain operating permits for the platform, Abbott’s lawyers said in a March 15 filing.
“Immediate court action is needed to remedy unsafe conditions on Atlantis,” attorney Mikal Watts said in the filing. “These unsafe conditions are a direct result of shoddy engineering by unlicensed personnel and the absence of reliable drawings that match the ‘as-built’ construction of the facility.”
BP said in its own court filings that Atlantis is safe and that Abbott’s complaints were dismissed by federal regulators who investigated the issue after the 2010 blowout of BP’s Macondo well, drilled by the Deepwater Horizon. Atlantis is located about 100 miles south of where the Deepwater Horizon disaster occurred.
“Based on years of intensively regulating Atlantis, the Department of Interior has affirmatively determined that Atlantis is safe, that BP is in compliance, and that there is no basis to shut it in,” Otway Denny, BP’s lawyer, said in a January court filing. “The court should not substitute its judgment for the judgment of DOI’s engineers, inspectors and regulatory experts.”
‘Serious’ Safety Risks
The U.S. Interior Department in March 2011 said that BP’s deficiencies in documentation for the platform posed no “serious” safety risks, following its investigation of Abbott’s allegations.
“Although we found significant problems with the way BP labeled and maintained its engineering drawings and related documents, we found the most serious allegations to be without merit, including the suggestion that a lack of adequate documentation created a serious safety risk” on the platform, the Bureau of Ocean Energy Management, Regulation and Enforcement said in an e-mailed statement March 4, 2011.
Abbott’s lawyers asked Hughes to exclude the agency’s investigative report, which they said in court papers was “obtained by fraud.”
The Interior Department regulator assigned to lead the Atlantis investigation “was appointed to investigate his own conduct, and he is now BP’s witness to the safety of Atlantis,” according to the March 15 filing. “His training was to rely on BP’s certifications without verifying their accuracy. He and his inspectors never discovered the major safety violations now documented.”
Pressure Relief Valves
Perry said today that a BP “service and operations audit,’ which is under seal in the case, showed that 150 of 500 pressure relief valves on Atlantis never received proper sizing calculations to determine if they were the right size. Some of the valves were “under-sized by very large amounts,” Perry said.
“All the pressure relief valves are in compliance,” Damond Mace, BP’s attorney, said at the hearing.
Atlantis has already experienced multiple well-control lapses, during which subsea well valves opened and closed on their own and platform operators temporarily lost the ability to control some wells, Perry said today. Abbott has accused BP of hiding this information from Interior Department regulators to keep production flowing from Atlantis.
“We fundamentally disagree with plaintiffs’ claims in this lawsuit,” Daren Beaudo, a BP spokesman, said in a March 15 e-mail. “The Department of Interior conducted a thorough investigation of Mr. Abbott’s lawsuit allegations and concluded that Mr. Abbott’s allegations are unfounded and the Atlantis platform is safe and should continue to be operated by BP.”
Beaudo had no immediate reply to questions last week concerning Abbott’s allegations of unreported well-control incidents on Atlantis.
Abbott’s lawyers have told Hughes he shouldn’t take BP’s word that Atlantis is safe given the company’s track record, which includes the Deepwater Horizon blast, which sparked the largest offshore oil spill in U.S. history. They also called Hughes’s attention to BP’s largest Gulf oil platform, Thunder Horse, which almost sank in 2005 after an improperly installed valve allowed hurricane storm water to pour into the floating platform’s ballast tanks instead of out.
“Thunder Horse was designed and fabricated by the same Korean shipbuilding firm as Atlantis, a firm BP admits does not employ registered professional engineers,” Watts said in court papers.
The case is U.S ex rel. Abbott v. BP Exploration and Production Inc., 4:09-cv-01193, U.S. District Court, Southern District of Texas (Houston).
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