BP Plc, Transocean Ltd. and Halliburton Co. are seeking to avoid billions of dollars in damages by proving in court that mistakes leading to the 2010 Gulf of Mexico oil spill didn’t amount to gross negligence.
Opening statements began this morning in New Orleans before U.S. District Judge Carl Barbier, who will weigh the evidence without a jury, to determine fault and whether one or more of the companies acted with willful or wanton misconduct or reckless indifference -- the legal requirement for establishing gross negligence.
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. The accident sparked hundreds of lawsuits against London-based BP, Vernier, Switzerland-based Transocean, owner of the rig, and Houston-based Halliburton, which provided cement for the well.
One reason for the disaster was the “willful failure of Transocean to give its Deepwater Horizon crew adequate training” on how to interpret safety tests on the well, Jim Roy, a lawyer for oil-spill victims, told Barbier in his opening statement. “The gross and extreme departure from good oil-field practice rests with the management of Transocean,” Roy said.
For BP, owner of the Macondo well that blew up in the Gulf, 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 finding of gross negligence would mean the companies can be held liable for punitive damages for all plaintiffs.
BP, over-budget and behind schedule for the Macondo well, cut corners and ignored tests showing unsafe pressure levels as it tried to complete the project, according to the plaintiffs. They also claim that Halliburton’s cement job was defective and that Transocean disabled safety systems and failed to maintain the rig and adequately train its crew.
BP lodged complaints against its contractors, with its own claims that Transocean failed to maintain the drilling rig and Halliburton provided defective cementing services and concealed problems with the cement before and after the explosion.
Transocean and Halliburton pointed fingers back at BP.
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.