February 27, 2013 5:37 pm

BP misrepresented vital data, trial told

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BP misrepresented critical information to regulators and continued drilling in “dangerous” conditions while working on the Macondo well in the Gulf of Mexico, according to an expert witness called by the US government in the trial over the 2010 Deepwater Horizon disaster.

Alan Huffman, a petroleum geophysicist, said a comparison of BP’s internal records with the data submitted to the Minerals Management Service, the former oil industry regulator, showed a “consistent picture of misreporting” that would give a “very misleading impression” of the condition of the well.

He added that when it drilled down below 18,000 feet, the Deepwater Horizon rig was proceeding in a way that would have made him “very concerned for everyone on that rig”.

The US government, one of the plaintiffs in the trial in New Orleans over civil penalties and damages, is seeking to prove that BP acted with wilful misconduct in causing the disaster.

Mr Huffman said BP drilled the well in a way that “was not only unsafe, it violates every standard I can think of.” In particular, he highlighted the decision to continue drilling the well below 18,220 feet.

“This was in my view beyond imprudent. It was unsafe and dangerous,” he said.

“I would have been very concerned for everyone on that rig, because the condition of the well was fragile and dangerous at that point, and they should not have been drilling ahead at all.”

Earlier in the morning, the court heard video evidence from a former BP executive that its well-drilling operations in the Gulf of Mexico were under “tremendous pressure” to cut costs in the year before the disaster.

Kevin Lacy, who was BP’s vice-president for drilling and well completion in the gulf in 2008-09, said he had achieved a cost reduction of about $250m-$300m below budget in 2009, and was “pretty sure” he had been asked for further reductions for the coming year. He said: “I was never given a directive to cut corners or to deliver something not safely, but there was tremendous pressure on costs.”

The court was also shown 20 minutes of video with testy exchanges between Robert Cunningham, a lawyer for the private sector plaintiffs, and Tony Hayward, BP’s former chief executive.

Mr Cunningham raised articles and speeches by Mr Hayward setting out his plans to streamline BP’s structure and cut costs after he became CEO in May 2007.

At the 2010 AGM, five days before the Deepwater Horizon rig exploded on April 20, Mr Hayward said the group had cut cash costs by $4bn in 2009, and had reduced its headcount by more than 7,500. Mr Hayward pointed out that he had also said in 2009 there was an important caveat to the cost-cutting agenda: “Safe and reliable operations come first, whatever the cost.”

Mr Cunningham told him, however, that he was not allowed to volunteer additional information. “You’re just going to answer the questions,” Mr Cunningham said. “Would you do that, would you do that?”

The first phase of the trial, addressing responsibility for the accident, is expected to last until the end of May.

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