Sep 042014

A federal judge has issued a decision finding "gross negligence and willful misconduct" on the part of BP Exploration in the Deepwater Horizon explosion and oil spill (In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, MDL 2179).

Findings of Fact and Conclusions of Law

"Conducting a new negative pressure test is a precaution that imposed an extremely light burden compared to the foreseeable consequences that could, and did, result from the misinterpretation," U.S. District Judge Carl Barbier said in his Findings of Fact. "Consequently, [BP Well Site Leader Tom] Vidrine’s misinterpretation of the negative pressure test and subsequent failure to order a new one following his conversation with [fellow well site leader Mark] Hafle constitutes an extreme departure from the care required under the circumstances."

Both Vidrine and Hafle "acted 'recklessly' with respect to the negative pressure test, which satisfies both parties’ definitions of 'willful misconduct' as well as BP’s definition of 'gross negligence' under the CWA," Barbier said

Regarding Transocean's role in the disaster, the judge said, "BP’s failures up to and including the negative pressure test created the catastrophic situation. Transocean’s failures, by contrast, largely concern its inability (due in part to further failures by BP) to stop the catastrophe BP set in motion."

BP contracted with Transocean to drill the Macondo well.

Barbier found that "Transocean’s conduct was negligent and that Transocean’s share of liability is considerably less than BP’s."

In addition, the conduct of Halliburton, which was contracted by BP to provide cementing services and mudlogging services, "was negligent," but "Halliburton’s share of liability is considerably less than both Transocean and BP."

All three companies are "liable under general maritime law for the blowout, explosion, and oil spill. BP’s conduct was reckless. Transocean’s conduct was negligent. Halliburton’s conduct was negligent." The judge apportioned fault as follows:

BP: 67%
Transocean: 30%
Halliburton: 3%

Some excerpts:

505. BP, as the operator, was ultimately responsible for interpreting the negative pressure test and declaring it a success or failure. Don Vidrine, the BP Well Site Leader on the rig, concluded the test was successful and instructed the Transocean rig crew to fully displace the well to seawater, despite the fact that he would later tell investigators that the results looked “squirrely” to him. All of the experts—even BP’s—agree that Vidrine’s interpretation was erroneous and that the test could not be deemed successful. A reasonable company man in Vidrine’s situation would have concluded that the test was a failure and that it needed to be reconducted based on the anomalous pressure reading.

506. Moreover, about an hour after the test concluded, Mark Hafle, BP’s senior drilling engineer in Houston, told Vidrine essentially that the test could not be considered a success given the inconsistent pressure readings. At this point, Vidrine should have been well-aware that the negative test had failed. Significantly, when that conversation ended at 9:02 p.m., there were approximately 36 minutes before the critical moment when hydrocarbons rose above the BOP—plenty of time for Vidrine or Hafle to halt the displacement and order a new negative pressure test.

507. At 9:08 p.m., the displacement did stop, not because anyone wanted to re-conduct the negative pressure test, but for a sheen test. Vidrine had to approve the sheen test before displacement would resume. Thus, the sheen test provided a perfect opportunity for Vidrine to order a new negative pressure test. Instead, at 9:14 p.m., Vidrine—having the benefit of Hafle’s crucial observation about the negative pressure test—affirmatively ordered that displacement resume.
508. Mark Hafle also did not order that the negative pressure test be reconducted. Granted, Hafle may have lacked some context given that he was in BP’s Houston office. To the extent this was the case, Hafle could have easily informed himself of either the current state of the well or the earlier readings from the negative pressure test by merely looking to his computer, and then called the rig and ordered the displacement stopped and the test reconducted. Hafle did not do this, which is inexplicable considering not only his statements to Vidrine but also the fact that he felt there was little chance the cement job would succeed.

509. The last sentence illustrates another point: context. As discussed, a negative pressure test conducted as part of a temporary abandonment of a deepwater well already demands a high level of care, but the actual circumstances surrounding the Macondo well pushed the standard of care even higher. Vidrine and Hafle, as well as other BPXP operational and engineering personnel, were well-aware that the Macondo well had been particularly troublesome to drill,200 and difficulties continued throughout the temporary abandonment process. Notably, BPXP personnel, including but not limited to Vidrine and Hafle, were aware of the problems with converting the float collar.201 A foreseeable risk of these issues is that the cement would fail to achieve zonal isolation, either because the cement might u-tube back into the casing from the annulus (due to an unconverted float collar) or would not be placed in the appropriate place in the annulus (due to a casing breach). Vidrine and Hafle’s knowledge of these difficulties and associated risks should have heightened their vigilance during the negative pressure test, given that it tests whether the cement and casing are providing a barrier to flow.