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BP drilled doomed U.S. well despite early problems-expert

Wed, 27th Feb 2013 17:58

By Kristen Hays

NEW ORLEANS, Feb 27 (Reuters) - BP Plc took chancesdrilling its doomed Macondo well long before it ruptured in2010, a well design and pressure expert said on Wednesday in thesecond day of testimony in the civil trial over the Gulf ofMexico oil spill.

Alan Huffman, chief technology officer for Fusion PetroleumTechnologies Inc, said BP forged ahead with drilling the well in2009 outside the margin considered safe in the industry and byregulators.

He said there was a "kick" in the well during one of manyintervals in drilling, which indicates pressure was unstable andthere could be a rupture or other problem. Rather than stopdrilling, the work forged ahead with another interval.

"It is truly egregious to drill that extra 100 feet knowingyou could lose the well in the process," Huffman testified.

He said the well was "dangerous and fragile" and "theyshould not have drilled ahead at all."

BP's legal team had yet to cross-examine Huffman, whotestified on behalf of the U.S. Justice Department, Gulf statesaffected by the spill, and plaintiffs suing BP and its partners.

In this first of the trial's three phases, U.S. DistrictJudge Carl Barbier will seek to allocate blame between wellowner BP, driller Transocean Ltd, cement servicesprovider Halliburton Co and others, unless a settlementcuts the trial short.

The April 2010 blowout caused an explosion that killed 11men and sent more than 4 million barrels of crude spewing intothe Gulf.

Earlier on Wednesday, plaintiffs played an excerpt of avideotaped deposition of Kevin Lacy, former senior vicepresident of Gulf drilling operations for BP, who resigned fromthe company a few months before the spill because of concernsabout BP's safety practices.

He testified that he was under heavy pressure from top BPmanagement in 2008 and 2009 to shave hundreds of millions ofdollars in costs and received bonuses for doing so. In 2009, histeam cut up to $300 million in costs and had pressure to keep itup in 2010.

"I was never given a directive to cut corners or to deliversomething not safely," Lacy said. "But there was tremendouspressure on costs."

Also on Wednesday, Lamar McKay, BP's global head ofexploration and production, finished his live testimony and heldfast that BP was partly, not wholly, responsible for the spill.

He resisted Transocean lawyer Kerry Miller's aggressivequestions seeking an admission of complete responsibility.

"We've agreed that we're part of the responsibility for thistragic accident. We've apologized for that. We've acceptedresponsibility for that in many different ways," McKaytestified.

Don Godwin, a lawyer for Halliburton, took a similar tackwith McKay. BP has held that Halliburton made substandard cementused to plug the well before the rupture.

Godwin pushed on whether BP would have known there was aproblem with the cement had the company's well site leadercorrectly interpreted results of a critical pressure test. BPhas acknowledged that a correct interpretation of the test wouldhave alerted those on the rig that the well was dangerouslyunstable.

"It was not an effective barrier," McKay said of the cement.

"Because the negative pressure test was misinterpreted?"Godwin asked.

"Potentially, yes," McKay replied.

Also on tap to testify this week is Mark Bly, global head ofsafety and operational risk who ran BP's internal probe of thespill in 2010.

The case is In re: Oil Spill by the Oil Rig "DeepwaterHorizon" in the Gulf of Mexico, on April 20, 2010, No.10-md-02179, in the U.S. District Court, Eastern District ofLouisiana.

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Trades   Bids     Offers   Prev.    Sellers  Buyers
(vol.) Trades
Ebob $727.50
Barges
MOC
Platts E5
(fob ARA)
<EUROBOB-
ARA>
Ebob $728
Barges
E10
Platts(fo
b ARA)
Ebob $735.50 Varo, Trafigu
Barges (4KT) Glencor ra
Argus e
E5(fob
AR)
Ebob $727 Shell, Varo,
Barges 11KT Exxon Totsa
E10 Argus
(fob AR)
Jan. swap $741.25 $725.25
fob ARA
Premium
Unleaded
(fob ARA)
<PU-10PP-
ARA>
Cargoes
(fob MED)
Cargoes
(cif NWE)
Naphtha Jan
(cif NWE) +$14
<NAF-C-NW
E>

Ebob crack (per barrel) $8.6 Prev. $9.7
Brent futures
Rbob
Rbob crack <RBc1-CLc1>
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