BP tells U.S. panel Halliburton should have warned of well hazard


HOUSTON – BP this week is taking public its strategy for spreading the blame for the April 20 explosion that killed 11 people on the Deepwater Horizon and led to the nation’s worst oil spill.

In a new twist in the case, BP has declared that Halliburton, which had warned that the cement job on the Macondo well might not function properly, should have stopped the operation outright. If Halliburton knew the cement process was unsafe, it had an obligation to refuse to proceed – and to do otherwise would be, BP said in a statement, “morally repugnant.”

BP’s strategic maneuver emerged as a federal investigatory panel holds hearings in a hotel conference room here into the causes of the disaster. The panel intends to write a report at the end of an inquiry already in its fourth month. But lawyers for the major players in the disaster – including BP, rig owner Transocean and the contractor for the cement job, Halliburton – are using the proceedings as a kind of test run of what are sure to be many civil trials to come, with a Justice Department criminal probe lurking in the background.

“The 900-pound gorilla in the room is the criminal investigation,” said Pat Fanning, the attorney for one of the top Transocean managers on the rig.

(Photo gallery of BP oil spill impact and cleanup)

On Wednesday morning, a Halliburton cementer, Vincent Tabler, testified briefly about the cement job on the well, and managed to be on his way within half an hour, a Houdini escape given that the room is jammed wall-to-wall with high-priced lawyers from Houston, Dallas, New Orleans, Washington and Chicago.

Jesse Gagliano, a Halliburton technical adviser to BP’s Deepwater Horizon team, on Tuesday delivered the most potent testimony this week. He said that five days before the blowout, he warned BP engineers explicitly, in person, that the well had a potential problem.

He said it was April 15, while he was studying a model of how the cement job would work with only seven of the centralizers used to position the casing in the well, that he concluded that “this well is considered to have a SEVERE gas flow problem,” as he stated in a subsequent document.

Gagliano said he ran into two BP engineers in the hallway that day, telling them, “Hey, I think we have a potential problem here, there’s a potential for flow.”

They worked together, late into the night, trying to resolve the problem. Gagliano ultimately recommended that BP use 21 centralizers to keep the casing properly positioned in the hole. But even though an additional 15 centralizers were flown to the rig, BP chose not to install them. The cementing job proceeded with only six centralizers.

Now, however, BP is turning the tables on Halliburton, saying that Gagliano didn’t provide sufficient warning of a well-control problem and that in some of the documents he sent to the company, he made no mention of his concern. BP lawyer Rick Godfrey, in a long cross-examination of Gagliano, demanded to know why in an April 18 report to BP he had not mentioned the potential gas flow.

“Is it your testimony, sir, that you recommended a job to BP that you thought was going to fail?” Godfrey asked.

Gagliano stood his ground and said he told BP engineers “verbally” about the problem April 15. Gagliano said it wasn’t until April 18 that he heard, from a Halliburton colleague, that BP officials on the rig had chosen not to install the additional centralizers.

Shaun Clark, the attorney for Robert Kaluza, a BP well site leader on the rig, pointedly asked Gagliano why he didn’t say anything in an April 19 conference call that might have warned the people on the rig that their lives were potentially in jeopardy.

“BP had made their decision,” Gagliano said. “They had decided not to follow my recommendation.”

BP’s corporate communications operation jumped into the fray after Gagliano testified.

“If Halliburton had significant concerns about its ability to provide a safe and high-quality cement job in the Macondo well, then it had the responsibility and obligation to refuse to perform the job. To do otherwise would have been morally repugnant,” BP said in a statement e-mailed to reporters.

The oil giant has never said it was blameless in the April 20 incident and will give its version of events more fully when it releases, in coming days, the results of a four-month internal investigation. But it has also tried to focus attention on Transocean, which owned the rig and the all-important blowout preventer that failed to choke the runaway well when gas surged from the deep reservoir. Now BP has taken its most direct shot at Halliburton.

Outside the hearing room, several lawyers representing other companies and individuals gave dim assessments of BP’s blame-Halliburton strategy.

“This is smoke and mirrors,” said Ned Kohnke, who represents Transocean. Kohnke pointed to an extended e-mail chain showing that BP engineers Brian Morel, Brett Cocales and Gregory Walz extensively discussed Gagliano’s concerns about the number of centralizers.

“There has been a lot of discussion about this and there are different opinions on the model accuracy,” Walz wrote to a BP superior, John Guide, after midnight April 16, explaining his decision to order more centralizers flown to the rig.

But later that day, Guide objected to the new plan, questioning the type of centralizers being added to the job and saying, “Also it will take 10 hrs to install them. . . . I do not like this.”

Still later on April 16, Cocales wrote to Morel: “Even if the hole is perfectly straight, a straight piece of pipe even in tension will not seek the perfect center of the hole unless it has something to centralize it. But, who cares, it’s done, end of story, will probably be fine and we’ll get a good cement job.”

Guide testified last month. Cocales is scheduled to testify later this week. Morel was subpoenaed but did not show up Tuesday, with his lawyer appearing instead and saying Morel would invoke his Fifth Amendment right against self-incrimination.

In other testimony Wednesday, a BP executive said that as BP and Transocean officials struggled to contain the oil gusher, they discovered that the plumbing on the blowout preventer was connected improperly.

“It would mean that the pipe rams could not be closed,” said Harry Thierens, BP executive vice president for drilling and completions. “I was frankly astonished that this could have happened.”

Thierens said a plumbing line that was supposed to be connected to one of the rams meant to cut off a runaway well was actually connected to a test ram that would be of no use in containing the well.

“It would mean that test ram would close in an emergency but it would not be capable of withstanding pressure from below,” Thierens said.

Some time after the plumbing problem was discovered, technicians used a work-around method to try to activate the proper ram. That effort also failed to contain the well.

The blowout preventer is a stack of heavy equipment that sits on the bottom of the ocean and serves as the last line of defense against a gusher. The preventer on BP’s Macondo well failed, leading to months of contamination in the gulf.

BP owned the well and directed the drilling operation. The rig and the blowout preventer were under contract from Transocean.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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