BP accepts role in spill at trial, aims to spread blame

After hearing claims that BP put profits above safety in the first day of court testimony over the 2010 Gulf of Mexico disaster, a senior executive for the oil company insisted the blame should be shared.

Lamar McKay, BP’s global head of exploration, production and development, said the company’s role as designated operator on the doomed Macondo well did not mean it was the only company at fault.

“The key point to me is it doesn’t mean sole exclusive, it means shared responsibility,” said McKay, called by plaintiffs in the federal civil trial in New Orleans centreed on the spill and its aftermath.

Recently promoted from president of BP America, McKay is a member of the company’s executive committee, alongside chief executive Bob Dudley.

He was just the second witness for the plaintiffs, the US Justice Department and coastal states, which are suing BP, rig owner Transocean and well cement provider Halliburton. The three companies have been lobbing accusations at each other over the well blowout ever since it happened on April 20, 2010.

McKay’s testimony followed that of a noted forensic engineer, Bob Bea, who said BP had fostered a culture that put cost-cutting over safety before the accident.

“There is ample evidence of intense pressure within the system to save time and money,” said Bea, co-founder of the Center for Catastrophic Risk Management at the University of California, Berkeley. “With stress and pressure come sacrifices to safety.”

Bea consulted with a White House commission that investigated the spill and prepared a report faulting BP for the plaintiffs in the case. He also had consulted with BP on risk management prior to 2005.

He said BP cut its Gulf of Mexico costs by 22 per cent from 2008 to 2009 while increasing oil and gas output by 55 per cent.

A plaintiffs’ lawyer showed Bea a transcript of a deposition of Tony Hayward, who was BP’s chief executive at the time of the disaster. Hayward was asked if the deadly April 20, 2010, blowout could have been averted if BP had implemented the safety management program in the Gulf.

“There is possible potential,” Hayward responded. “Undoubtedly.”

Bea said BP’s “culture of every dollar counts” was reflected in a May 2009 email sent by BP well team leader John Guide: “The DW Horizon embraced every dollar matters since I arrived 18 months ago,” Guide wrote. “We have saved BP millions and no one had to tell us.”

“Financially, BP had the resources to effectively put into place a process safety system that could have prevented the Macondo disaster,” Bea testified.

But on cross examination, BP lawyer Mike Brock pointed out that in 2008 BP spent US$205 million (HK$1.6 billion) on work on its Thunder Horse and Atlantis oil and gas platforms, compared with US$43 million (HK$333.6 million) in 2009. The work on Thunder Horse meant output in 2008 was just a fraction of its level the following year, Brock said.

Thunder Horse only began pumping oil and gas in mid-2008 after a three-year delay to fix design flaws on the platform and repair leaks to seabed equipment.

While Bea agreed that public statements about safety from BP executives were positive, they were not enough on their own. “The statement of the talk has to be backed up with effective walk,” Bea said.

The April 2010 blowout at the Macondo well caused an explosion that killed 11 men, sank a rig and spewed more than 4 million barrels of crude oil into the Gulf of Mexico.

Bea is well known in New Orleans, site of the trial, because he was a key witness in litigation over failed levees when Hurricane Katrina hit in 2005, flooding much of the city and leaving more than 1,800 people dead.

Bea conceded to Brock that, in the years leading up to the blowout, BP had invested in training programs and set aside budgets to increase process safety - as the safe operations and handling of hazardous materials are known.

The plaintiffs later sought to contrast BP’s claims of a safety culture with its own acknowledgment internally that it worked in a risky business.

One of their lawyers, Robert Cunningham, presented McKay with a document - labelled BP/Amoco - about other companies’ disasters, including the 1989 Exxon Valdez oil spill in Alaska, that said those “organisations provide cultures that invite excessive risk taking, demand superhuman performance, or develop complacency that result only in reactive safety management.”

The document was used in Bea’s report for the plaintiffs finding fault with BP’s safety practices, though McKay said he was unfamiliar with it and did not know if it was authentic.

The non-jury trial before US District Judge Carl Barber is split into three phases, with the first focused on allocating blame among the defendants and the severity of their negligence.