BP Profit Push ‘Root Cause’ of Gulf Oil Spill, Witness Says

The Deepwater Horizon

By Jef Feeley and Allen Johnson Jr.

(Bloomberg) — BP Plc’s push to maximize profits and cut costs at the Macondo well was a “root cause” of the explosion that led to the 2010 Gulf of Mexico oil spill, a safety expert who studied the disaster said.

BP executives pressured supervisors of the Deepwater Horizon rig to speed up drilling operations and hold down expenses as part of a corporate culture that put profit ahead of safety, Robert Bea, a retired engineering professor from the University of California, told the judge today who is hearing claims over the spill.

The Macondo well operators faced “intense pressure to save time and money” and because of that, the company “made sacrifices in safety,” Bea said. It was “tragic and egregious” that BP didn’t implement its safety system on the rig, he added.

U.S. District Judge Carl Barbier in New Orleans will decide who is liable for damages tied to the largest offshore spill in U.S. history and whether BP, Transocean or other companies that worked on the project were grossly negligent in their handling of the rig and well. His ruling on that issue will affect how much each company may have to pay.

The April 20 explosion aboard the Deepwater Horizon drilling rig killed 11 workers and sent more than 4 million barrels of oil spewing into the Gulf. The accident sparked hundreds of lawsuits against London-based BP, Vernier, Switzerland-based Transocean Ltd., owner of the rig, and Houston-based Halliburton Co., which handled cement work on the well.

Negligence Finding

For BP, the well’s owner, 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 last year. For Transocean and Halliburton, a gross negligence finding would mean they could be held liable for punitive damages.

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).

Copyright 2013 Bloomberg.

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