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Halliburton Stays In Spill Trial's Glare As Two Other Firms Escape Blame

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(This article is published in "The Louisiana Weekly" in the March 24, 2013 edition.)

In the fourth week of the 2010 Gulf spill trial, U.S. District Judge Carl Barbier dropped claims Wednesday against contractors M-I LLC and Cameron International while Halliburton came under increased scrutiny for concealing cement at its Broussard, La. lab.

In the New Orleans-based trial without a jury, Barbier dismissed all claims against M-I LLC, BP's drilling fluids contractor and a subsidiary of Houston-based Schlumberger. The judge saw no evidence that M-I made decisions that led to the Macondo well blowout. In a civil trial that began on Feb. 25, he is assessing blame in the April 2010 explosion off coastal Louisiana that took eleven lives.

Barbier also ruled out punitive damages against Cameron, the manufacturer of the rig's blowout preventer, saying he'd heard nothing in the trial to indicate gross negligence or willful misconduct by that Houston-based company. Two M-I employees died in the Macondo blast but no Cameron staff were on the rig that day.

Barbier said Wednesday it was too soon to rule on requests by BP, Transocean and Halliburton that gross negligence and other claims against them be dismissed in the trial. BP was the Macondo leaseholder and well operator while Transocean owned the Deepwater Horizon rig.

For the second week in a row, questions swirled about cement contractor Halliburton--with dual headquarters in Houston and Dubai--holding back evidence. In a court filing late Thursday, BP lawyers asked Barbier to sanction Halliburton for concealing some cement from the Kodiak well that appears to have been used at the Macondo site too. Sanctions could affect how Halliburton defends itself in court and might reduce BP's and Transocean's liabilities.

On March 13, Halliburton attorney Donald Godwin said the company found Kodiak cement samples that day at its Broussard lab. In Thursday's filing, BP attorneys wrote "this rig sample was responsive to subpoenas, and Halliburton should have produced it years ago so that it could have been tested on a timely basis for use at trial and before it deteriorated further."

In late 2011, BP claimed Halliburton had destroyed test results on lab cement samples. But Halliburton argued back then that the tests weren't done on cement used at the Deepwater Horizon rig.

Last Tuesday, Timothy Quirk, Halliburton's Broussard lab manager from 2008 to mid-2012, testified he had isolated Macondo cement lab samples on April 30, 2010 as instructed. But he later removed Kodiak well samples from that group and placed them on a warehouse shelf.

Quirk said "I gathered all the Transocean rig samples" following the disaster at the request of Tony Angelle, a Halliburton manager. "And when I gave him a list of everything I'd inventoried, he said we just need to secure the Macondo well samples." Quirk listed the Macondo samples and safeguarded them in a locker at the lab. "Everything else I put back into the storage area in our warehouse" in Broussard, he said. Quirk said he didn't know the Kodiak samples were related to the Macondo well.

BP and its contractors drilled the Kodiak in 2008, and leftover materials from it were later used at the Macondo site. Kodiak cement held at Broussard was the same blend as the material used on the Deepwater Horizon on April 17.

BP attorneys contend that at least some of the Kodiak materials in Broussard were not just off-the-shelf or Kodiak-specific lab samples. They wrote late Thursday that "Halliburton admitted the 'Kodiak well cement' had in fact been brought onshore from the Deepwater Horizon when the rig was at the Macondo well."

Additionally, Quirk testified Tuesday that in May 2010 he threw away handwritten notes on cement stability tests related to the Macondo well, after reporting them by phone to Halliburton colleague Ronnie Faul. And Quirk discarded pieces of cement he had tested. The tests were done on lab stock, he said.

Testimony continued last week on other factors that led to the Macondo well explosion. Petroleum engineer Calvin Barnhill, a Transocean expert witness, said Monday "there are three basic, $64 billion questions in this case. Number one, why was the negative pressure test deemed a success?" That test, done on April 20, 2010 to determine whether cementing had sealed any leaks in the well, was interpreted to show the procedure was successful. But the test was inconclusive, Barnhill said.

"Number two, why wasn't the the operation stopped at around 9:00 p.m. and the test repeated?," he asked. "And why wasn't the well shut in at 9:32 or 9:33 p.m. when there was an anomaly?"

Without a successful pressure test, "there was a significant question here as to whether the operation should go forward," Barnhill said. When asked who on the rig decided if the pressure test had passed, he said "the ultimate authority would have rested with BP. They would have made the call whether to accept or reject the test and move forward."

On Tuesday morning, Steve Newman, Transocean president and chief executive officer, told the court "our people failed to follow through on the pressure anomaly that existed on the drill pipe. They accepted BP's assessment that the pressure test had been successful and they accepted BP's instruction to continue on with the displacement of the well."

When questioned about whether Transocean's higher-ups had contributed to the blowout, Newman said "no, we have not identified any failures within the responsibility of management."

Transocean engaged Lloyd's Register Group, a maritime and risk-management organization, to study five of its drilling rigs, including the Deepwater Horizon, in September 2009 following four deaths on four of its rigs over 92 days. In a subsequent July 2010 report, Lloyd's pointed to "a fundamental lack of hazard awareness" within Transocean's North America division.

In testimony Monday, marine safety expert Geoff Webster, the plaintiffs' expert witness on the Deepwater Horizon's seaworthiness, said rig audits revealed that delayed maintenance had been a growing problem. The audits "clearly show that there were not enough people on board, there was not enough equipment for spares and that the rig was going downhill," he said.

Maintenance was behind on everything from pumps and alarms to lifeboats, Webster said. The rig's blowout preventer hadn't been recertified after nine years though certification was required every five years by the federal Mineral Management Service and by Cameron, the BOP's manufacturer.

When asked how he'd characterize the vessel's maintenance history, Webster termed it "reckless neglect." He said "this rig should have gone to a shipyard, at which time all these items could have been taken care of. The vessel had been running for nine years without any major overhaul or any dry dock period."

Webster was asked about a comment from a Transocean employee, included in Lloyd's analysis of the company's North American rigs. The employee had said "run it, break it, fix it. That's how they work."

Those remarks indicated Transocean was more interested in production than safety, Webster said. "When the rig is idle, it's not making money," he explained. "When the rig is in dry dock, it's not making money. So they try to keep it out there as long as they can. They were running it, things were breaking and they were fixing it the best they could."

In another development, federal prosecutors in New Orleans filed an indictment Wednesday against former BP engineer and Texas resident Kurt Mix, alleging that he deleted over fifty phone voice mails about his company's response to the 2010 spill. Last spring, he was charged with deleting text messages related to the spill.

Judge Barbier's Poydras St. trial, which is open to the public, could continue to late April or longer--barring a settlement before then. end