The US Department of Justice this week announced that Halliburton will plead guilty to charges of destroying evidence related to the 2010 Deepwater Horizon oil spill in the Gulf of Mexico. The Houston-based oil company will pay a statutory fine of $200,000 — the maximum allowed under the law — and has agreed to three years of probation.
The April 2010 drilling rig explosion killed 11 people and left miles of shoreline drenched in oil, marking the largest offshore oil spill in US history. BP owned a 65 percent stake in the Macondo oil well that ruptured, and Halliburton was responsible for sealing it with cement. BP finally stemmed the flow of oil on July 15th, 2010 — 85 days after it first erupted.
“a low probability of success”
According to the Justice Department, Halliburton advised BP to use 21 centralizing metal collars to help secure the cementing, but BP decided to use six. Following the explosion, Halliburton ordered its employees to destroy internal simulations showing little difference between using six and 21 centralizers, which helped bolster the company’s argument that BP was negligent in not following its recommendation.
Thomas Roth, a Halliburton executive who was in charge of cementing when the explosion occurred, testified in a civil trial earlier this year that he knew the cementing process “would have a low probability of success” due to more serious structural problems with the well’s design. As the New York Times reports, a presidential commission that investigated the spill found that Halliburton knew its cementing likely wouldn’t provide much stability, but went ahead with it anyway. “There is no indication that Halliburton highlighted to BP the significance of the foam stability data or that BP personnel raised any questions about it,” the commission’s report stated.
“This could impact how the civil litigation is resolved.”
A federal civil trial is ongoing in New Orleans, as authorities determine how to allocate blame and damages across BP, Halliburton, and Transocean, which also operated the rig. Last year, BP agreed to pay a $4.5 billion penalty, while Transocean later agreed to a fine of $400 million.
Halliburton’s $200,000 fine is hardly significant — the company saw nearly $600 million in profits last year — but experts say it could impact the trajectory of the civil trial. In previous statements, BP has insisted that it should share blame for the incident with both Halliburton and Transocean.
“This could impact how the civil litigation is resolved, potentially imposing more liability on Halliburton than we originally thought,” Carl Tobias, legal professor at the University of Richmond, told the Times.
Halliburton’s plea agreement is still subject to court approval. The New Orleans civil trial is scheduled to resume in September.