Federal judge finds BP E&P negligent in Macondo crude oil spill
A nearly 5 million bbl crude oil spill following the 2010 Macondo deepwater well blowout in the Gulf of Mexico was the result of operator BP Exploration & Production Inc.’s gross negligence and willful misconduct, a federal district court judge ruled in New Orleans.
In his Sept. 4 decision, Judge Carl J. Barbier of US District Court for Eastern Louisiana also found subsidiaries of offshore drilling contractor Transocean Ltd. and oil field services supplier Halliburton Co. liable under general maritime law for the well’s blowout, explosion, and spill. The judge found BP’s conduct reckless, and Transocean and Halliburton’s conduct negligent. He said BP was 67% at fault, Transocean 30%, and Halliburton 3%.
BP PLC, which Barbier exempted from his decision with the two other companies’ corporate parents, immediately said it strongly disagreed with the ruling and would appeal it to the US Fifth Circuit Court of Appeals.
Findings that its subsidiaries were grossly negligent with respect to the incident and activities at the well amounted to willful misconduct were not supported by evidence at the trial, the multinational oil, gas, and chemical company said in a Sept. 4 statement from its London headquarters.
“The court has not yet ruled on the number of barrels spilled and no penalty has yet been determined,” it said. “The District Court will hold additional proceedings, which are currently scheduled to begin in January 2015, to consider the application of statutory penalty factors in assessing a per-barrel Clean Water Act penalty.”
The CWA’s maximum statutory penalty is $1,100/bbl where the court finds simple negligence and $4,300/bbl where it finds gross negligence or willful misconduct, BP said. “During the penalty proceedings, BP will seek to show that its conduct merits a penalty that is less than the applicable maximum after application of the statutory factors,” it said.
In a separate statement, Halliburton said it was pleased with Barbier’s ruling. “Coupled with our earlier announced settlement with the plaintiffs’ class (OGJ Online, Sept. 3, 2014), [this] means the Macondo case is essentially over for Halliburton,” it indicated.
It said the court also held that, pursuant to the parties’ contract, BP must indemnify and release Halliburton with respect to compensatory damages claims. “In addition, the lack of a gross negligence finding against Halliburton should resolve all remaining punitive damages claims against the company,” the company said. “Halliburton is continuing to evaluate the various aspects of the rulings and will act appropriately to defend its interests in any further proceeding.”
Transocean also considers Barbier’s decision “a favorable and welcome ruling for Transocean, its employees, and all offshore drilling contractors, as the court has again ratified the industry-standard allocation of liability between drilling contractors and the owners and operators of oil wells,” a spokeswoman for the company told OGJ in a Sept. 4 e-mail.
Contact Nick Snow at [email protected].
Nick Snow
NICK SNOW covered oil and gas in Washington for more than 30 years. He worked in several capacities for The Oil Daily and was founding editor of Petroleum Finance Week before joining OGJ as its Washington correspondent in September 2005 and becoming its full-time Washington editor in October 2007. He retired from OGJ in January 2020.
