BP: U.S. hiding evidence on size of Gulf oil spill

NEW ORLEANS, Fri Mar 30, 2012 – BP Plc has accused the U.S. government of withholding evidence that may show the 2010 Gulf of Mexico oil spill was smaller than federal officials claimed, a key issue in determining the oil company’s liability.

A reduction in the size of the spill would lower the maximum civil fine BP could be forced to pay under the U.S. Clean Water Act, a sum now estimated as high as $17.6 billion.

The government is one of many plaintiffs suing BP over the April 20, 2010 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and triggered the largest U.S. offshore oil spill.

In a filing late on Thursday with the U.S. District Court in New Orleans, BP said more than 10,000 documents the government is refusing to turn over “appear to relate to flow rate issues” at the company’s ruptured Macondo well.

BP said the documents, which the government considers privileged because they reflect policy deliberations, may show that an August 2010 estimate that 4.9 million barrels of oil spilled from the well is too high.

“The United States’ invocation of the deliberative process privilege here sweeps too broadly,” because it shields evidence concerning “a factual issue, namely, the amount of oil discharged,” wrote Don Haycraft, a lawyer for BP.

“Fundamental fairness” requires that BP get access to this evidence for its defense, he added.

Wyn Hornbuckle, a U.S. Department of Justice spokesman, did not immediately respond to a request for comment.

BP settles with spill blow-out preventer maker Cameron

HOUSTON ― Cameron International Corp. agreed a $250 million settlement with BP to help pay for costs associated with the Gulf of Mexico oil spill, raising hopes that deals between the British oil major and two other contractors could follow.

The settlement with Cameron, which made the blow-out preventer that failed at BP’s doomed Macondo well, is the fourth BP has reached with parties involved in the accident which caused the biggest offshore oil spill in the United States.

Settlement agreements with two remaining parties, Transocean and Halliburton, have to date, however, proved elusive.

Transocean, the owner and operator of the Deepwater Horizon rig, and Halliburton, which supplied cement to cap the well, are both being sued by BP to share the cost of the spill and cleanup, while the two have launched lawsuits of their own.

The settlement with Cameron will put pressure on the two remaining contractors to follow suit, analysts said.

“It shows that BP is prepared to be reasonable when settling with contractors – this ought to raise hopes that settlements with Halliburton and Transocean are more, rather than less likely to follow,” JP Morgan analyst Fred Lucas said.

Cameron International said BP had agreed to indemnify the company for current and future compensatory claims associated with the spill.

Investors, relieved that the deal removes uncertainty over Cameron’s financial obligations, pushed the oilfield service company’s shares up 7 percent.

“Cameron is the fourth company to settle with BP and contribute to economic and environmental restoration efforts in the Gulf. Unfortunately, other companies persist in refusing to accept responsibility for their roles in the accident and for contributing to restoration efforts,” BP chief executive Bob Dudley said in a statement.

Analysts at UBS said the settlement was positive for BP.

“It indicates Cameron has probably judged BP is unlikely to be found grossly negligent. We also note Cameron is the second oil service contractor to settle despite theoretically being protected by indemnity clauses,” UBS said.

Transocean said in November that it sees maintaining its contractual indemnity as the base for any potential settlement with BP.

The U.S. government in September assigned most of the blame for the disaster to BP, the operator of the well.

The settlement agreement between BP and Cameron is not an admission of liability by either party, the two companies said, acknowledging that the Gulf of Mexico oil spill resulted from “complex and interlinked causes involving multiple parties”.

The cases between the companies are among hundreds of claims set to go to trial before a federal judge in New Orleans in February to assign blame and damages for the Macondo blowout.

Cameron expects to take a charge in the fourth quarter for any amounts not covered by insurance, the company said, adding that its insurers are expected to fund no less than $170 million of this agreement.

Transocean report pins Gulf of Mexico oil spill blame on BP

NEW YORK ― Transocean Ltd., the owner of the oil drilling rig that exploded and sank in the Gulf of Mexico last year, blamed BP Plc. in a report released Wednesday for decisions that led to the disastrous oil spill.

Transocean and BP are locked in a legal battle over which company was responsible for the worst-ever maritime oil accident, which killed 11 workers and poured crude oil into the Gulf for three months.

The report issued by Transocean said BP failed to properly assess the risks around the troubled well and did not communicate the danger to Transocean.

BP also used a poor well design which led to the failure of cement around the well casing, allowing gas to escape and reach the rig, causing the explosion, the report said.

Transocean also said its blow-out preventer, a device designed as a last resort to close off a well, was properly maintained, but the extreme pressure from the well forced drill pipe to bend, preventing the shears from cutting the pipe.

BP declined to make an immediate comment on the report.

BP has struck deals to cut its liability for the spill with partner Mitsui & Co, which will pay $1.1 billion toward the clean-up, and oilfield services company Weatherford International Ltd, which will pay $75 million.

BP has said it is seeking deals with other partners in the well, including Anadarko Petroleum Corp, Transocean and Halliburton Co, to also contribute to clean-up costs.

Hundreds of spill-related lawsuits are expected to come to trial in February 2012.