BP Gulf of Mexico Spill, From Disaster to Trial: Timeline
The trial that will determine the extent of any liability London-based BP Plc (BP/) and its partners must face for the April 2010 Gulf of Mexico oil spill is set to begin today in federal court in New Orleans.
The following is a timeline of the events leading up to the destruction of the Deepwater Horizon offshore drilling rig, which killed 11, the subsequent spill of millions of barrels of oil and resulting litigation. All dates and events are from court, agency and securities filings, or company and government statements.
Jan. 30, 2010: The Deepwater Horizon moves onsite about 45 miles south of the Louisiana coastline to resume drilling the Macondo well after another rig withdrew due to storm damage.
April 1: ModuSpec USA Inc. begins a two-week condition assessment of the rig at the request of Vernier, Switzerland- based Transocean Ltd. (RIG), which operates the Deepwater Horizon.
April 15: One of two BP well-site leaders assigned to the rig leaves to attend a conference on well-control techniques. His replacement lacks any experience as a well-site leader on the Deepwater Horizon, according to a U.S. Coast Guard investigation.
An employee of Houston-based Halliburton Co. (HAL), designer of a cement job meant to seal the well against leaks, advises his contact at BP by e-mail that 21 centralizers are needed to center the drill pipe in the well, according to court filings. The Halliburton engineer warns the well has a “severe risk” of natural gas leaks with only six of the devices, which could lead to an explosive blowout, the court filings state. A BP well engineer orders 15 additional centralizers flown out to the rig, which has only six on hand.
April 16: A BP manager overrules the well engineer’s decision and orders the job to proceed with six centralizers, according to court papers. BP operations engineer Brett Cocales sends an e-mail to the Macondo drilling engineer, Brian Morel, saying six centralizers should be adequate to obtain a proper cement seal in the well.
“Who cares, it’s done, end of story, will probably be fine and we’ll get a good cement job,” he wrote, according to a copy of the e-mail cited in court papers.
April 18: Halliburton tests an innovative cement formula for the well and doesn’t provide all of the results to BP. Halliburton engineer Jesse Gagliano again advises BP the well is at risk for leaks if fewer than 21 centralizers are used, according to court filings.
April 19: Drilling is completed to target depths. Casing is installed and cement pumped.
April 20: Drilling and completion operations are finished. The well subsequently fails, resulting in blowout and explosion.
At 7:30 a.m. BP decides not to run a “cement bond log,” a test that determines whether the cement has properly sealed the sides of the well against leaks. In the afternoon, crews continue well-completion tasks in preparation to move the rig to another location. About 5:30 p.m., engineers debate the results of a critical pressure test conducted to ensure the well isn’t leaking. The test is ultimately declared successful.
In the evening, visiting company officials and rig supervisors hold a “leadership meeting” which culminates with some guests on the bridge of the rig, taking turns practicing controlling the Deepwater Horizon’s positioning system in a training simulator.
At 9:41 p.m. drilling mud shoots out of the pipe connecting the rig to the well on the seafloor. The first of two explosions comes about nine minutes later, and the rig is quickly engulfed in flames. Workers, unable to contain the blowout or fight the fire, abandon the Deepwater Horizon. Eleven die.
April 22: BP and Transocean are sued by the family of Shane Roshto, one of the 11 workers killed.
April 29: A Louisiana fishing charter boat operator sues on behalf of the state’s $2.6 billion industry, one of the first of thousands of litigants against companies involved in the rig project, including states and the federal government.
May 6: The U.S. Justice Department asks the companies to preserve evidence, a signal that the government had begun an investigation into possible criminal acts.
May 10: A BP investor sues the company’s directors claiming its alleged pursuit of profit at the expense of safety led to the explosion and resulting spill, the first of many such suits.
May 13: Transocean asks a court to cap its liability at $26.7 million under an 1851 law designed to protect the shipping industry from catastrophic legal awards.
June 1: U.S. Attorney General Eric Holder formally opens a criminal and civil investigation into the spill.
June 16: BP agrees to put about $20 billion into a fund to pay damages resulting from the Gulf spill, with claims administered by Kenneth Feinberg, the lawyer who oversaw executive compensation for the U.S. government’s financial bailout. Less than two months after the spill began, more than 225 lawsuits in 11 states had been filed by businesses, individuals and investors over the disaster.
July 15: BP and the Coast Guard successfully cap the blown- out well, stopping a geyser of oil that gushed more than 4 million barrels of crude into the Gulf of Mexico over 85 days. Lawsuits tied to the disaster exceed 300.
Aug. 3: Bloomberg News reports the U.S. is examining whether BP made misleading statements after the spill, and whether company executives traded stock based on inside information about the accident. It’s revealed that the Justice Department is investigating possible criminal wrongdoing and the Securities and Exchange Commission is probing potential civil violations, according to a person familiar with the matter.
Aug. 10: A panel of judges orders that all claims tied to the disaster be consolidated before one judge, U.S. District Judge Carl Barbier in New Orleans.
Sept. 19: The Macondo well is permanently sealed with cement pumped in through an emergency relief well drilled nearby.
Oct. 20: Environmental groups sue BP, saying it should pay damages and create a fund to restore wildlife and habitats harmed by the spill. At least 27 federally protected species inhabiting the Gulf region were harmed by the spill, the groups said.
Oct. 27: Halliburton is ordered by the judge overseeing the spill suits to turn over cement used on the Deepwater Horizon project to investigators from the Coast Guard and the Department of the Interior in connection with a probe of the spill.
Oct. 28: The National Oil Commission reports that Halliburton cement used on the BP well in April was unstable.
Dec. 15: The Obama administration sues BP and four other companies for violating environmental laws, seeking damages under the Clean Water Act. The suit seeks a declaration that four of the defendants are liable under the Oil Pollution Act for all removal costs and damages caused by the oil spill, including damages to the environment. In addition to London- based BP, the owner of the well, defendants include units of Transocean, which owned the rig, as well as Anadarko Petroleum Corp. (APC) and MOEX Offshore 2007 LLC, part owners of the well.
BP shares fall the most in almost four months.
Jan. 13, 2011: The family of Karl Kleppinger Jr. becomes the first to settle a lawsuit against rig owner Transocean over the deaths of the 11 crew members of the Deepwater Horizon.
March 3: Louisiana sues BP and its partners in the well, seeking $1 million a day for damages caused by the spill.
April 15: Cameron International Corp. (CAM) said in a court filing that it isn’t to blame for the rig explosion because oil and gas were surging toward it when workers tried to activate blowout-prevention equipment. Plaintiffs suing the companies claim Houston-based Cameron’s blowout preventer wasn’t designed to handle the extreme environment and thicker drill pipes found in ultra-deep wells such as the Macondo.
April 19: Mitsui & Co. (8031)’s Moex Offshore LLC unit, a 10 percent partner with BP in the blown-out well, sues BP for economic losses as a result of the project’s failure and the spill that followed. Moex, claiming BP broke its partnership agreement, asked the judge in the case to declare it isn’t responsible for damages and cleanup costs.
April 20: BP sues Transocean, blaming the owner and operator of the Deepwater Horizon for the accident and seeking to recover costs for billions of dollars in damages. BP said that without Transocean’s “misconduct” there wouldn’t have been any explosion, fire, deaths or oil spill. BP also sued Halliburton, contending the contractor provided defective cementing services and concealed problems with the cement before and after the explosion.
Aug. 23: The Gulf Coast Claims Facility, which draws on the $20 billion set aside by BP after the spill, has received more than 947,000 claims from 50 states and 36 nations, according to a summary by claims administrator Feinberg. BP has paid more than $5 billion to 204,434 claimants in the past year from the fund, created to compensate victims of the spill. In total, about $6.7 billion has been drawn from the fund, which also pays for clean-up costs and restoration projects through payments provided to local governments.
Aug. 26: Businesses and individuals suing BP and other companies involved in the spill win the judge’s approval to seek punitive damages in pursuing claims of economic and environmental losses. BP and the other companies claimed the U.S. Oil Pollution Act prevented plaintiffs from collecting punitive damages. Barbier rules the statute is “silent as to the availability of punitive damages” and plaintiffs can pursue such claims under maritime law. Barbier dismisses economic loss claims by individuals and businesses filed under state law.
Sept. 15: BP won’t have to face some lawsuits filed by institutional investors on behalf of the company, a federal judge in Houston rules. U.S. District Judge Keith P. Ellison agrees with BP’s argument that the claims should be filed in U.K. courts because the company is based there.
Sept. 30: Barbier rules Anadarko won’t have to face personal injury claims arising from exposure to oil and other chemicals in the cleanup of the spill. Anadarko and Moex can’t be held responsible for these claims under maritime law, he said.
Nov. 1: A Transocean unit asks the judge to order BP to honor a blanket indemnity against oil spill damages that the rig owner claims was part of its drilling contract.
Nov. 14: The judge rules BP must face claims over the spill by Louisiana and Alabama. The states can sue for negligence and product liability under general maritime law and are eligible for punitive damages, Barbier said. He dismisses claims brought under state environmental laws, including demands for civil penalties, finding they were pre-empted by federal law governing the Outer Continental Shelf. The states and parishes are appealing Barbier’s dismissal of the state-law environmental claims.
Dec. 9: Mexican states and Alabama cities that are deemed too far removed from the spill to have been physically harmed by it are barred by the court from bringing some claims against BP. Barbier throws out state law claims by six Louisiana parishes seeking penalties over wildlife killed or injured by the spill. He said the parishes, as counties in the state are called, can still sue BP and other spill companies under U.S. law to recover wildlife losses, spill damages and removal costs.
Jan. 2, 2012: BP seeks to have Halliburton pay all of the oil company’s related costs and damages tied to the spill. BP has paid more than $21 billion in cleanup costs and economic damages to individuals, businesses and governments harmed by the spill as of Dec. 1, the company said. BP reserved more than $40 billion to cover costs related to the sinking of the Deepwater Horizon.
Jan. 26: BP can’t collect from Transocean part of the $40 billion in cleanup costs and economic losses caused by the 2010 oil well blowout and spill, Barbier ruled. He also holds that BP must indemnify Transocean for pollution-related economic damage claims under its drilling contract. Any awards for punitive damages against Transocean or civil penalties under the U.S. Clean Water Act won’t have to be covered by BP, the judge wrote.
Jan. 31: BP is ordered to cover some of any direct damage claims awarded against Halliburton for the $40 billion in cleanup costs and economic losses caused by the spill. BP must indemnify Halliburton for compensatory damage claims under its drilling contract, Barbier ruled. BP had sued Halliburton to recover a share of any damages and costs from the spill. Any punitive damages awarded against Halliburton don’t have to be paid by BP, the judge said.
Feb. 9: Bloomberg News reveals BP is negotiating with U.S. officials to settle the pollution claims tied to the oil spill. The U.S. seeks fines of as much as $4,300 for each of the more than 4 million barrels spilled after the rig explosion.
BP wins a ruling barring the introduction of evidence at trial of previous accidents involving the oil company. Barbier grants a BP motion blocking the introduction of exhibits pertaining to prior industrial accidents, including the 2005 explosion at its Texas City, Texas, refinery and a 2006 oil spill at its Prudhoe Bay field in Alaska.
Feb. 13: BP is told it must face fraud claims by investors who said the company lied before and after the 2010 spill about its accident response capability. Judge Ellison in Houston allows holders of BP American depositary receipts to pursue claims alleging violations of U.S. securities law. He dismisses claims by investors who bought ordinary shares of London-based BP, saying his court has no jurisdiction over them.
Feb. 17: MOEX agrees to pay $90 million to the U.S. and five states to settle pollution violations related to the spill while BP and its drilling fluid provider for the Macondo well agree to dismiss claims against each other. The U.S. files a consent order outlining the MOEX settlement of Clean Water Act violations. The agreement requires MOEX to pay $45 million in civil penalties to the U.S. and about $25 million total to Alabama, Florida, Louisiana, Mississippi and Texas. MOEX will also pay $20 million for land acquisition projects.
Feb. 24: Transocean claims BP officials overseeing the Macondo well ignored questions about whether safety tests done hours before a fatal blast on the drilling rig were flawed. Donald Vidrine, the senior BP manager on the Deepwater Horizon on April 20, 2010, talked with an engineer about unsatisfactory well tests less than an hour before the explosion aboard the rig, Transocean’s attorneys say in a filing. While Mark Hafle, a Houston-based BP drilling engineer, warned Vidrine in a phone call that stability tests on the well might be flawed, “neither man stopped work” at the facility, Transocean said.
Feb. 26: The scheduled Feb. 27 trial is delayed by Barbier until March 5 to allow settlement negotiations to continue.
March 2: BP and a steering committee of lawyers representing spill victims reach an estimated $7.8 billion settlement to resolve most private claims for property damage, economic loss and medical injuries, postponing the March 5 start of the trial to apportion liability for oil-spill damages. The settlement doesn’t resolve BP’s risk of pollution fines under the U.S. Clean Water Act, natural resources damages assessments, claims by state and local governments, casinos, financial institutions, individuals or by companies located in Florida and Texas. BP also still faces claims by those harmed by the deep- water drilling moratorium imposed by the U.S. after the spill. BP said the settlement is uncapped, except for the portion designed to cover losses by the Gulf seafood-processing and fishing industries, which are collectively limited to $2.3 billion.
March 30: BP employees can’t sue managers of the company’s retirement savings plan over multimillion-dollar losses the plans suffered when BP shares plunged after the spill, Ellison rules. The workers alleged that BP retirement-plan managers should have known the company’s stock was an “imprudent investment” given BP’s safety and compliance record before the Macondo spill. The cases were brought under the federal Employee Retirement Income Security Act, or ERISA.
April 11: The U.S. agrees to give BP about 100 government documents detailing Macondo’s flow rate after the company complained in court that the papers were being improperly withheld. The government claims more than 4.9 million barrels of oil flowed into the Gulf, while BP posited a lesser number.
April 18: BP and the plaintiff lawyers’ committee submit their proposed settlement agreement to Barbier, who sets a Nov. 8 fairness hearing on the accord. Under terms of the deal, lawyers will be paid $600 million for their work on the settlement, all of which will be paid by BP instead of spill victims.
April 25: Mississippi Attorney General Jim Hood asks Barbier to throw out settlements by victims who accepted early, cheap offers from BP so they can participate in the settlement accord. Hood claims these victims signed away their rights to sue BP under “economic duress” caused by intentional claim- payment delays by the BP-sponsored Gulf Coast Claims Facility. Individuals who took early deals received $5,000, while businesses that agreed to release their claims to avoid protracted litigation received $25,000 each.
Kurt Mix, a former BP engineer who worked on the Macondo well control team, is arrested and charged with obstruction of justice for allegedly deleting text messages from his mobile phone in violation of an evidence-preservation order from U.S. prosecutors investigating BP’s spill response.
His is the first criminal case resulting from the spill.
May 3: BP wins preliminary approval of its $7.8 billion economic and medical settlement from Barbier, who sets a January 2013 date to restart the postponed trial over liability for remaining spill-damage claims.
Ex-BP engineer Mix pleads not guilty to obstruction of justice at an arraignment in New Orleans federal court, as U.S. Attorney General Eric Holder said additional charges may result from the Justice Department’s continuing spill investigation.
Sept. 5: The U.S. reiterates in court papers its intention to seek a gross-negligence finding against BP, which could quadruple pollution fines the company might have to pay under the Clean Water Act. The $1,100 per-barrel fine BP faces could jump to $4,300 per barrel if Barbier determines BP acted with reckless indifference in causing the spill. If BP is determined to have been grossly negligent, the maximum pollution fine could exceed $21 billion, depending on the quantity of oil spilled.
Sept. 11: Spill victims ask Barbier to reject BP’s settlement accord as premature after Hurricane Isaac strikes the Gulf Coast near New Orleans and reveals continuing oil contamination in coastal waters. BP had urged Barbier to approve the accord on claims that significant future contamination from the spill was unlikely.
Sept. 19: The U.S. National Marine Fisheries Service said Gulf of Mexico fisheries are rebounding from the spill, with fishermen landing larger catches during the 2012 fishing season than they did in 2009, the year before the spill. The report claimed some species are recovering better than others in the Gulf, which provides about a fifth of the seafood caught in U.S. waters. The fishing industry disputes the report, saying large areas of the Gulf remain affected by the spill, which is causing fishing boats to travel further at greater cost for the same catch.
Oct. 1: BP won’t have to face millions of dollars in spill- damage claims by recreational users, company-branded gasoline stations and businesses alleging loss of reputation, Barbier rules. He determined these claims for “emotional, non-pecuniary damages” weren’t covered by applicable law.
Oct. 17: Halliburton urges Barbier to reject BP’s proposed economic and medical settlement because it alleges the deal creates an unfair “collusive alliance” between the oil company and plaintiffs’ lawyers against Halliburton.
Oct. 26: Barbier delays the start of the liability trial until Feb. 25 so that lawyers won’t lose their hotel accommodations to Super Bowl and Mardi Gras crowds.
Nov. 1: Lawyers for as many as 10,000 potential spill claimants report their clients will opt out or reject the company’s $7.8 billion proposed settlement. Victims choosing not to participate in the deal must pursue their claims individually.
Nov. 8: BP’s exploration unit is ordered to pay Alaska $255 million in damages for a 2006 oil pipeline spill at its Prudhoe Bay field, according to the state attorney general’s office. The state won an arbitration award against BP for damages for oil production shortfalls caused by leaks and pipeline replacements.
Nov. 15: BP agrees to pay $4 billion to settle all criminal charges stemming from the Deepwater Horizon rig explosion and oil spill, including the largest criminal penalty in U.S. history. BP agreed to plead guilty to 11 felony counts of seaman’s manslaughter for the rig workers who died, two counts of violating environmental-protection laws, and one count of obstructing justice by lying to Congress about the size of the spill. The settlement includes designated sums for wildlife and drilling-safety initiatives. BP agrees to pay an additional $525 million to resolve civil securities violations with the U.S. Securities and Exchange Commission. The accord doesn’t address potential fines BP faces under the Clean Water Act or natural resources damages claims. The U.S. Environmental Protection Agency temporarily suspends BP from future fuel-supply and oil lease contracts with the U.S. government until independent safety and ethics monitors agree the company has sufficiently improved its safety performance.
Separately, three present or former BP managers are criminally charged on counts tied to the rig explosion and resulting spill. BP well-site leaders for the Deepwater Horizon, Robert Kaluza and Donald Vidrine, are charged with manslaughter and environmental violations on allegations they recklessly disregarded multiple signs that a Macondo well blowout was imminent. David Rainey, BP’s former vice president of exploration for the Gulf, is charged with obstructing Congress and lying about the size of the spill.
Nov. 28: BP’s two well-site leaders from the Deepwater Horizon, Kaluza and Vidrine, and former deputy Gulf operations chief Rainey enter pleas of not guilty to criminal charges stemming from the fatal rig explosion and resulting spill.
Separately, Barbier dismisses claims against Ecolab Inc.’s Nalco unit by individuals claiming medical effects from exposure to oil spill dispersants manufactured by the firm.
Dec. 21: Barbier gives final approval to the economic portion of BP’s $7.8 billion settlement with the plaintiffs’ steering committee, resolving most business and individual-loss claims from the spill.
Jan. 3, 2013: Transocean agrees to pay more than $1.4 billion, including a $400 million criminal fine, to settle all Justice Department criminal and civil allegations from the rig explosion and oil spill. Under terms of the deal, the drilling contractor will pay $1 billion in civil penalties and plead guilty to one misdemeanor count of violating the Clean Water Act.
Jan. 11: Barbier gives final approval to the medical portion of BP’s estimated $7.8 billion settlement with plaintiffs lawyers, resolving most of the medical injury claims stemming from the spill.
BP asks Barbier to officially recognize that the company recovered and pumped to the surface more than 810,000 barrels of the oil that spewed from Macondo’s damaged wellhead, effectively preventing that oil from escaping into the Gulf. The company asks to subtract those barrels from the Justice Department’s 4.9 million barrel spill calculation. The difference could shave as much as $3.4 billion off BP’s potential maximum fine, as the company’s fine under the Clean Water Act will be determined by the number of barrels spilled.
Jan. 18: Lawyers representing more than 10,000 spill claimants appeal Barbier’s approval of BP’s $7.8 billion settlement accord. They claim the deal is unfair and has too many technical problems to effectively resolve most economic and medical-injury claims from the spill.
Jan. 29: BP wins final approval of its guilty plea to resolve 14 criminal charges tied to the Deepwater Horizon explosion. The company agrees to pay $4.5 billion in penalties and fines, including $525 million to the SEC for securities violations, and submit to intensive oversight of its drilling and safety practices for five years. The company’s plea deal doesn’t affect separate criminal cases against four former company managers accused of either negligently causing the accident or misleading Congress and investigators about the rate of oil gushing from the blown-out well.
Feb. 5: BP increases the estimated cost of its economic and medical settlement by $680 million to $8.5 billion, based on increased costs for administering the settlement and on the claims administrator’s interpretation of some terms that were “contrary to some of BP’s previous assumptions,” according to BP’s fourth-quarter earnings report. The company says in the same SEC filing that it had received more than $34 billion in spill-related damage claims from state and local governments, which the company believes “substantially overstate” BP’s exposure to this type of claim. BP says it has spent about $23 billion so far on the aftermath of the spill, including cleanup and payment of claims.
Feb. 6: BP investors led by the state pension funds of New York and Ohio can add statements to their multimillion-dollar securities-fraud claims against the company and two top officers, Ellison rules. The investors say BP lied about its commitment to and implementation of drilling safety and spill-response capabilities before and after the spill. BP American Depository Receipts plunged after the spill, wiping out billions in shareholder value. Former BP Chief Executive Officer Tony Hayward and former Chief Operating Officer Doug Suttles remain in the lawsuit while other officers and directors are dismissed. The litigation is limited to investors who bought shares on the U.S. stock exchange.
Bloomberg News learns that BP’s Pentagon contracts have more than doubled since the Gulf spill, surging to $2.51 billion in the year ended Sept. 30, up from $1.04 billion in fiscal 2010. BP’s share of the military petroleum market jumped to 12 percent from 8.5 percent during the period, according to Bloomberg data. The company was temporarily suspended from winning new government work after it agreed in November to plead guilty to criminal charges.
Feb. 14: U.S. District Judge Jane Triche Milazzo accepts Transocean’s guilty plea to a misdemeanor count of violating the U.S. Clean Water Act.
Feb. 19: BP wins approval of an agreement for the U.S. government to not count 810,000 barrels of oil captured before they became part of the 2010 Gulf of Mexico spill, reducing the potential maximum fine under the Clean Water Act by $3.4 billion.
Transocean wins court approval of its $1 billion settlement of the lawsuit brought by the U.S. on pollution claims.
Feb. 21: Barbier rules lawsuit plaintiffs can’t use as evidence in the civil trial certain documents related to the criminal case, including the so-called criminal information, which spells out federal prosecutors’ allegations against the company, as well as the indictments of three BP employees.
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).
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