BP Ignored Halliburton?s Blowout Risk Warning, Witness Says

BP Plc was warned days before its Gulf of Mexico well exploded that its decision to forgo 15 stabilizers meant the effort to seal gas leaks with cement could result in an increased blowout risk called “channeling,” a Halliburton Co. witness testified.

Nathaniel Chaisson, Halliburton’s cementing services coordinator, testified today in New Orleans federal court as part of a trial to determine fault for the disaster. Chaisson said he reminded BP’s well-site leader and drilling engineer that his company recommended 21 stabilizers to center the drill pipe in the well.

Chaisson said BP told him on April 16, 2010, four days before the blast, that there would only be six stabilizers, also known as centralizers. Jesse Gagliano, a Halliburton engineer, advised BP five days before the explosion that the well had a “severe risk” of natural gas leaks with only six of the devices, which could lead to an explosive blowout, according to court filings.

“They simply informed me that that decision has been made not to run the 15 additional centralizers,” Chaisson testified of his conversation with BP personnel. Asked for his response, he said, “I informed them that without the additional 15 centralizers the job would result in channeling.”

11 Killed

The blowout and explosion aboard the Deepwater Horizon drilling rig killed 11 workers and spilled more than 4 million barrels of oil into the Gulf of Mexico, the largest offshore oil spill in U.S. history. The accident sparked hundreds of lawsuits against London-based BP, owner of the Macondo well; Houston- based Halliburton; and Vernier, Switzerland-based Transocean, the owner of the Deepwater Horizon.

The trial over liability for the blowout and spill began Feb. 25. U.S. District Judge Carl Barbier will determine responsibility for the disaster and whether one or more of the companies acted with willful or wanton misconduct or reckless indifference -- the legal requirement for establishing gross negligence.

For BP, a finding of gross negligence would mean the company might be 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 with most private-party plaintiffs last year.

Transocean, Halliburton

Transocean and Halliburton could be held liable for punitive damages for all plaintiffs if the companies are found to have handled their duties on the rig in a grossly negligent manner.

Lawyers for U.S. and spill victims have argued BP was over budget and behind schedule on the deep-water Macondo well off the Louisiana coast, prompting the oil company to cut corners and ignore safety tests showing the well was unstable.

They also allege Halliburton’s cement job was defective and that Transocean employees made a series of missteps on the rig, including disabling safety systems, failing to properly maintain the installation and not adequately training its crew to handle crisis situations.

Chaisson, the Halliburton witness, testified he told BP he was concerned about the number of centralizers. He said under cross-examination today that he didn’t consider this a safety problem.

“No, this was not a safety issue,” he told Mike Brock, a lawyer for BP.

Chaisson said he didn’t raise any objections to the six centralizers beyond referring to the channeling prospect. He also testified he didn’t recall citing the centralizer issue in his April 21, 2010, post-cement job report.

The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).

Copyright 2013 Bloomberg.
Allen Johnson Jr. and Margaret Cronin Fisk --With assistance from Jef Feeley in Wilmington, Delaware. Editors: Michael Hytha, Peter Blumberg