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UPDATE 1-Halliburton pleads guilty to destroying Gulf spill evidence

Thu, 19th Sep 2013 18:29

* Halliburton agrees to fine, probation

* Former manager facing charge of destroying evidence

NEW ORLEANS, Sept 19 (Reuters) - Halliburton Co pleaded guilty on Thursday to federal charges of destroyingevidence, stemming from its role in the 2010 BP oil disasterthat killed 11 men and sent more than 4 million barrels of oilspewing into the Gulf of Mexico.

A former Halliburton cementing technology director in Texasalso was charged on Thursday with destroying evidence.

U.S. District Judge Jane Triche Milazzo in New Orleansaccepted the company's guilty plea from Halliburton legalcounsel Marc Mukasey, imposed the agreed-upon maximum fine of$200,000 and placed the company on a three-year probation term.

Mukasey did not make a statement on the company's behalf.

The Macondo disaster, the worst-ever offshore oil spill inU.S. history, so far has cost BP about $42.4 billion in chargeson its balance sheet from payouts, cleanup and restoration costsand ongoing litigation.

The plea deal with Halliburton was first announced by thecompany and the U.S. Department of Justice on July 25. The U.SJustice Department revealed the single count of destroyingevidence filed against the former Halliburton manager, AnthonyBadalamenti, of Katy, Texas, on Thursday.

In its plea, Halliburton admitted to the misdemeanor chargeof "intentionally causing damage without authorization to aprotected computer."

Halliburton provided cementing services for BP at theill-fated Macondo drilling operation. Those services includedplacing "centralizers," or huge plugs, at various points inpiping as it was placed inside the drilled well. Centralizershelp ensure cement properly seals a well.

Halliburton had recommended BP use 21 centralizers in theMacondo well, and BP chose to use six. Halliburton later claimedthat if BP had followed its recommendation to use more, the wellwould have been more stable.

According to court documents, the government alleged that inMay 2010, as part of Halliburton's review of the disaster,Badalamenti directed another manager to run computer simulationscomparing performance of 21 centralizers with that of six. InJune that year, Badalamenti allegedly directed a second managerto run a similar comparison.

Both times, the simulations indicated there was littledifference between use of 21 centralizers as opposed to six.Prosecutors allege that both times, Badalamenti ordered themanagers to delete the simulation results from their computers,and both complied.

The judge noted that a company executive had directedemployees to preserve material related to Macondo.

In an ongoing, multi-phase civil trial over the cause of thewell explosion in federal court in New Orleans, both thegovernment and BP contend that faulty cement work by Halliburtoncontributed to the disaster.

BP also contends that Halliburton destroyed computerevidence that would have shown those errors.

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