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By Kathy Finn
NEW ORLEANS, March 19 (Reuters) - The chief executive ofTransocean Ltd, owner of the rig destroyed after BPPlc's Macondo well blew out in 2010, testified on Tuesdaythat his workers made mistakes that day, but were notresponsible for overall safety at the site.
Steven Newman, who had been CEO for less than two monthswhen the blowout occurred, was emotional at times as he spoke ofthe company's responsibilities prior to the accident that killed11 people and caused the worst U.S. offshore oil spill.
"We acknowledge that we should have done more," he saidunder questioning by a lawyer for Transocean, in the fourth weekof a civil trial to determine blame for the spill.
Newman's voice shook as he spoke of the April 20, 1010disaster on the Deepwater Horizon rig, but he denied thatTransocean cut corners when it came to safety procedures.
The Justice Department, the U.S. Gulf states affected andother plaintiffs are suing BP, Transocean and other companiesfor economic and environmental damages related to the spill. BPaccepts its role in the accident, but believes Transocean andwell-cementing provider Halliburton Co share the blame.
Newman said Transocean was in charge of safely performingits own operations on the rig, but that overall responsibilityfor safety at the well site rested solely with BP.
In the same New Orleans federal court two weeks ago beforeU.S. District Judge Carl Barbier, a Transocean worker who was onthe Deepwater Horizon during the blowout acknowledged there wasa misinterpretation of trouble signs beforehand.
BIG KICK
Newman discussed how Transocean responds to potentiallydangerous situations such as a "kick," which results whenunexpected pressure forces fluids upward through the well.Company policy states a well should be shut in if a kick pushesas much as 20 barrels of hydrocarbons through the drill hole.
The kick size may be a key point in finger-pointing betweenTransocean and BP. In testimony on Monday, well control expertCalvin Barnwell, who reviewed the incident for Transocean, saidabout 39 barrels of fluid pushed up through the Macondo well inthe early afternoon on the day of the explosion.
Asked by a BP lawyer if he agreed BP was "entitled to relyon Transocean" to shut in the well after the 39-barrel kick,Barnwell answered yes.
Transocean has pleaded guilty to federal charges connectedwith Clean Water Act violations and agreed to pay $1.4 billionin criminal and civil fines and penalties.
As for the civil case before Barbier, the companies mustshow any mistakes do not meet the legal definition of grossnegligence required for the highest amount of damages. BP hasalready spent or committed $37 billion on cleanup, restoration,payouts, settlements and fines.
Barbier scheduled a hearing for April 5 to consider BP'sobjections to some of the "fictitious" and "absurd" oil spillcompensation claims addressed through a claims facility set uplast year.
On top of that, liabilities could stretch into the tens ofbillions of dollars if Barbier determines BP or other defendantswere grossly negligent.
Establishing management responsibility could be important inproving gross negligence. Robert Cunningham, a lawyer for theplaintiffs, finished grilling of Newman by asking: "So you haveidentified no management failures that caused or contributed tothe blowout?"
"No," Newman said.
Newman has been well compensated for Transocean's verypublic struggles over the past three years. According to acompany filing on Monday, his total 2012 pay package of $14million is more than double the level of 2010, lifted by stockand option awards and non-equity incentives.
Transocean shares, which traded in the $80 range prior toMacondo, hit a seven-year low of $38.22 in late 2011, and havestaged a relatively dramatic recovery from that trough sincethen. The stock closed at $52.22 on Tuesday.
Newman was on the stand in New Orlesan a day afterpresenting at the Howard Weil energy conference across town,where much of the talk was about the dramatic post-Macondorevival of drilling in the deepest waters of the Gulf of Mexico- described as the world's fastest-growing deepwater market.
"If a typical deepwater well is like going to the moon, thenthe Gulf of Mexico ultra-deepwater frontier is like going toMars," Martin Craighead, CEO of oilfield services company BakerHughes Inc, said in a speech at the conference.
The court 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.
