Lawsuit: BP Vice President Resigned Before Spill Over Safety Concerns

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February 15, 2011

WASHINGTON -(Dow Jones)- A BP PLC (BP, BP.LN) vice president in charge of drilling operations in the Gulf of Mexico resigned over safety concerns just months before the Deepwater Horizon disaster, according to a lawsuit filed Monday in U.S. District Court.

The suit said Kevin Lacy, a former Chevron official BP hired in 2007 to ” improve and standardize its drilling policies and protocols,” agreed to resign in December 2009 because he felt BP “was not adequately committed to improving its safety protocols in offshore drilling to the level of its industry peers.”

An explosion occurred on the Deepwater Horizon rig on April 20, 2010, killing 11 workers and causing the worst offshore oil spill in U.S. history.

Pension funds in Ohio and New York are the lead plaintiffs in the class-action suit filed on behalf of investors in BP. They claim the company, which had a record of other safety mishaps before the spill, misled investors when it said it had adequate safety plans in place as a result of previous safety issues.

A BP spokesman declined to comment. The company is facing a host of other lawsuits and an ongoing criminal investigation by the Justice Department. It has set aside $20 billion to pay liability claims.

The 182-page suit offers evidence that the Ohio attorney general’s office said shows BP executives made “misstatements” about safety precautions that “lowered the company’s risk profile and inflated its stock.”

After the rig sunk, BP’s stock price dropped precipitously.

Lacy was not the only official to leave BP’s Gulf of Mexico operations in late 2009, according to the lawsuit.

Citing a confidential witness, the suit says an internal reorganization before the spill led to cutbacks and layoffs that “hit their height” in 2009.

Other senior engineers in the Gulf were transferred around late 2009, meaning that when the Deepwater Horizon incident occurred, four out of five BP senior drilling officials in the region “had only been in their posts for a few months” the suit said.

In Washington, the legal filing prompted Sen. Robert Menendez (D., N.J.) to renew his call for legislation that would remove a $75 million cap on liability for oil companies following a spill. Menendez said he was optimistic that he could reach a compromise with other lawmakers on the issue.

-By Ryan Tracy, Dow Jones Newswires

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