BP, Weatherford In Settlement on Deepwater Horizon

- BP, Weatherford In Settlement on Deepwater Horizon

Monday, June 20, 2011
Dow Jones Newswires
by Drew FitzGerald

BP on Monday reached a settlement with Weatherford's U.S. subsidiary that indemnifies the oil-services company from future Deepwater Horizon-related disaster claims.

Under the deal, Weatherford agreed to pay BP $75 million to spend on its Gulf Coast recovery fund. The entire cost of the settlement is being funded by insurance policies Weatherford had in place when the disaster happened.

The deal ties up another end in a web of litigation for companies that worked on the drilling rig, which exploded last year and caused one of the largest oil spills in U.S. history. Weatherford provided BP with products and services for the Macondo oil well, along with rig-owner Transocean and contractor Halliburton.

Under the latest agreement, BP indemnified Weatherford from all current and future environmental, pollution, personal, business, property and economic loss claims arising from the accident.

Separately, Transocean said Friday that insurers of its sunken rig have asked a federal judge to decide if BP and other owners of the doomed Macondo well are entitled to any coverage for the accident.

Copyright (c) 2011 Dow Jones & Company, Inc.

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BP Signs Agreement to Restore GOM Projects

BP Signs Agreement to Restore GOM Projects

Thursday, April 21, 2011
BP plc

BP has signed a ground breaking agreement with federal and state agencies that will accelerate work starting this year to restore areas of the Gulf of Mexico that were affected by the Deepwater Horizon accident.


The agreement commits up to $1 billion to projects that will restore injured natural resources in the Gulf at the earliest opportunity. It allows projects important to the Gulf's recovery to begin now, as early restoration projects, rather than waiting for the Trustees to complete all of the Natural Resource Damage Assessment (NRDA) studies that are underway. The projects will undergo public review before they are funded, and priority will be assigned to projects aimed at improving areas that offer the greatest benefits to wildlife, habitat, and recreational use.

"BP believes early restoration will result in identified improvements to wildlife, habitat and related recreational uses in the Gulf, and our voluntary commitment to that process is the best way to get restoration projects moving as soon as possible," said Lamar McKay, chairman and president, BP America Inc. "Our voluntary agreement to accelerate restoration projects builds upon the cooperative approach BP has taken toward working with Gulf communities and regulators since the accident, and in assessing the potential injury to natural resources. We hope to work in partnership with the Trustee Council to address injured resources in the Gulf as soon as possible. We believe the early restoration projects to be funded through this agreement represent the best way forward in restoring the Gulf."

BP's commitment to early restoration is not required by the Oil Pollution Act (OPA) at this stage of the NRD process, and will have the effect of speeding up restoration work that otherwise likely would be deferred for several years, while the NRD assessment continues.

OPA directs the federal and state Trustees to study potential injuries, complete a report that identifies the injuries resulting from the incident, and develop restoration plans to address the identified injuries. The process typically takes years to complete. Shortly after the incident, BP began working with federal and state agencies to collect data needed to assess damages to natural resources, through the NRDA process. Over 100 cooperative studies are underway to evaluate the potential for injury to all types of wildlife and habitat in the Gulf of Mexico.

Under the expedited restoration framework made possible by this agreement, and to allow restoration to begin as quickly as possible, the Trustees will use the study data they have collected to date to identify injuries that are evident now and propose plans to restore those resources at the earliest opportunity, focusing on projects that can start in 2011 and 2012. According to the agreement, "the Parties intend to work cooperatively to seek to achieve significant, meaningful restoration of natural resources in the Gulf of Mexico."

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Key Agency to Miss Next Round of Tests

Key Agency to Miss Next Round of Tests

Thursday, April 21, 2011
Houston Chronicle
by Jennifer A. Dlouhy

Testing is set to resume next week on the blowout preventer that failed to stop gushing oil at BP's Macondo well, but an independent federal agency that has been probing the disaster will not be permitted to participate.

Under a federal judge's ruling, the only witnesses allowed during the examination at a NASA facility in New Orleans will be representatives of the Justice Department, oil spill victims in a broad class-action lawsuit and three companies linked to the disaster.

That shuts the door to the Chemical Safety Board, the latest setback for the U.S. agency that has been trying to get a foothold in investigating the spill since lawmakers requested the board's involvement last year.

A four-month probe of the blowout preventer concluded that after surging oil and gas pushed drill pipe askew, the device's powerful shear rams were unable to completely sever the drill pipe and seal the well.

On March 25, U.S. District Judge Carl Barbier granted BP's request for additional tests, which will be conducted by the same forensic analysis firm that examined the blowout preventer at the Michoud NASA facility from November through February.

Although the CSB was part of a "technical working group" that guided that testing, Barbier's ruling last week excluded the board -- along with anyone else not party to oil spill litigation -- from the additional analysis.

The ruling was not released, but it was described by several people with know-ledge of the case and connections to the oil spill litigation that Barbier is overseeing.

The CSB has limited recourses to gain access now, since it does not have independent litigating authority like other federal agencies.

The CSB has limited recourses to gain access now, since it does not have independent litigating authority like other federal agencies.

Justice Department

Instead, it is up to the Justice Department whether to enforce CSB subpoenas or fight for its access in court. Lawyers at the Justice Department concluded months ago that it would not assert CSB's jurisdiction in court, amid uncertainty about whether the agency was authorized to probe the accident.

Although the CSB has investigated more than 50 industrial accidents in its two-decade history -- including the lethal 2005 explosion at BP's Texas City refinery -- federal officials and companies linked to the Macondo well have questioned the board's jurisdiction to probe the Deepwater Horizon blast.

A stationary object?

The federal law that created the CSB says it is not authorized to investigate marine oil spills. The CSB has argued that applies to investigations of transportation-related spills and not its probe focusing on what happened on the rig itself.

The rig was tethered to the well in the seabed, effectively making it a stationary installation, CSB officials have said.

"The CSB continues to face significant challenges in its fact-gathering process, including companies and witnesses evading subpoenas for testimony and records," said CSB Chairman Rafael Moure-Eraso said in a statement.

Moure-Eraso said the agency is focusing on whether the evolving federal oversight of offshore drilling "can adequately prevent another major accident and protect offshore workers."

On Wednesday, the CSB asked the Obama administration to hand over potentially hundreds of thousands of documents amassed during a presidential commission's six-month probe of the spill.

Don Holmstrom, the CSB's investigations supervisor, said the commission's documents "would provide us the ability to have the fullest possible picture of what occurred."

Request to Chu

Moure-Eraso made the request in a letter to Energy Secretary Steven Chu, saying that the commission had seemed likely to approve an earlier request for the material, but that the document transfer could not be worked out before the presidential panel was disbanded last month.

The Energy Department is reviewing the letter and will consult with the Justice Department on the response.

Bob Graham, the co-chairman of the presidential commission, said in written responses to questions from the Senate in March that the CSB's earlier request for the commission documents involved "legal issues" that the Justice Department had to resolve.

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BP Files Suit Against Halliburton

BP Files Suit Against Halliburton

Thursday, April 21, 2011
The Wall Street Journal
by Guy Chazan

BP said it had filed a lawsuit against Halliburton, claiming its "misconduct" contributed to last year's Deepwater Horizon disaster that led to the worst offshore oil spill in U.S. history.

The lawsuit was filed Wednesday, the first anniversary of the blowout on BP's Macondo well in the Gulf of Mexico that destroyed the Deepwater Horizon rig and killed 11 men. It came shortly after BP filed suit against two other contractors, Transocean, the Deepwater Horizon's owner and operator, and Cameron, which manufactured a critical safety device called a blowout preventer.

Wednesday saw the expiration of a court-issued deadline to make filings preserving the right to sue companies involved in the spill.

Aside from BP, the main owner of the Macondo well, no company has faced more criticism over the disaster than Halliburton. It designed the failed cement seal that experts think allowed explosive gas to flow into the well and reach the Deepwater Horizon. Halliburton doesn't deny the seal failed but argues BP should have run tests that would have revealed the problem.

In the filing, BP said its action was to hold Halliburton accountable for "improper conduct, errors and omissions, including fraud and concealment." In a statement, it said the President Commission that investigated the Gulf disaster concluded that the cement slurry designed, mixed and pumped by Halliburton failed, that the company didn't provide BP with the results of failed cement tests and that its technicians "missed critical signals that hydrocarbons were flowing into the wellbore." "The record is clear that Halliburton's misconduct contributed to the accident and spill," it said.

Halliburton said it would "vigorously deny these claims."

A BP spokesman said the company wasn't suing Halliburton for a particular sum, but would ask for damages of up to the total cost of the spill. Last year, BP set aside $40.9 billion for spill-related costs.

Earlier, BP filed claims against Transocean and Cameron, maker of the blowout preventer, a huge set of valves designed to shut down a well in an emergency. BP contended that if the blowout preventer had functioned properly, the spill could have been largely avoided.

The BP complaint said Transocean was responsible for multiple failures of safety devices and well control procedures. It said BP was seeking at least $40 billion in damages. BP also seeks to force Cameron to contribute all or part of the damages that could be levied against the oil giant by the federal government.

Cameron said in a statement that it was "not surprising" that the companies are filing to protect their indemnity rights, adding that in order to protect itself it had filed counterclaims against other parties to the litigation. A Transocean spokesman called the BP lawsuit "specious and unconscionable." It said its contract with BP indemnified it against all claims related to pollution and environmental damage.

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