• CEO: Gulf crew should have done more
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     | March 20,2013
     
    AP Photo

    Steve Newman, president and CEO of Swiss-based Transocean Ltd., leaves Federal Court after testifying in New Orleans on Tuesday.

    NEW ORLEANS — The chief executive of the company that owned the Deepwater Horizon oil rig acknowledged in court Tuesday that his crew should have done more to avert the 2010 oil well blowout that left 11 dead and soiled hundreds of miles of beaches along the Gulf of Mexico.

    “Do I wish the crew had done more? Absolutely,” said Steven L. Newman, chief executive of Transocean. “We acknowledged we should have done more.”

    Newman’s measured and partial acknowledgment of accountability goes to the heart of the U.S. District Court trial, now in its fourth week, to assign responsibility for the disaster.

    Newman said that while his company was responsible for a “narrow slice” of the drilling operations, including providing pressure tests that produced faulty readings shortly before the explosion, it was the oil company BP that “has everything under its umbrella.” The trial bundles suits brought by the Justice Department, several state governments, private businesses and individual claimants against BP and its contractors. Lawyers for tens of thousands of people and businesses seeking redress for damages claim that BP, Transocean and Halliburton are grossly negligent for mismanaging safety procedures.

    The Justice Department is arguing that BP was grossly negligent and ultimately responsible for a series of mistakes because it designed the well, selected the contractors and managed the drilling operation. While BP has acknowledged mistakes, it says that its contractors also made serious errors that caused the well blowout and, over the past two weeks, several trial witnesses appear to have helped make its case.

    Geoffrey Webster, an expert witness in marine engineering for the plaintiffs, testified earlier that Transocean had neglected to properly maintain and operate the rig and its critical blowout preventer and did not adequately train its crew.

    The crew deliberately disabled the automatic functions of a gas alarm system that should have alerted the crew to hazardous gases rising from the well, Webster said. He also testified that the Transocean rig crew failed to use lines designed to divert the escaping oil over the side of the rig, using small, low-pressure tanks on the rig instead that were inadequate for the task.

    Those errors, he said, contributed to allowing escaping oil to reach the rig deck and set it on fire, conclusions that had been documented in previous government reports.

    Newman also acknowledged that he knew Transocean had problems assuring safety even before the Deepwater Horizon accident when four workers were killed in rig accidents in 2009. The company temporarily suspended operations and underwent a review of its safety practices. “I knew that as a result of the incidents we were experiencing we needed to do something,” he added.

    Newman testified for more than five hours with a steady voice. But at the end of his testimony, when asked how often he thought of the men who lost their lives in the accident, he choked up and fought back tears. “Every day,” he answered. “Because I ask myself if there isn’t something more I could have done.”

    Another contractor-defendant, Halliburton, which had mixed the cement for the well, has also faced some embarrassing questions at the trial in recent days. Thomas Roth, a senior Halliburton executive who was in charge of cementing operations at the time of the spill, acknowledged that because of the well design and other factors, “the cement placement was going to be a job that would have a low probability of success.”

    The trial, which started in late February, is unfolding in two phases. The first will determine whether BP and its contractors were guilty of gross negligence — wanton and reckless behavior or disregard for reasonable care that is likely to cause harm or injury — in causing the accident. The second phase will determine how much oil actually spilled.

    Together, the determinations by District Court Judge Carl J. Barbier will decide how much BP and the others will have to pay in fines. Under the Clean Water Act, fines could range from $1,100 for every barrel spilled through simple negligence to as much as $4,300 a barrel through gross negligence. The U.S. government has estimated that about 4 million barrels of oil were spilled, meaning liabilities of as much as $4.4 billion to $17.2 billion.

    BP has already pleaded guilty to 14 criminal charges, agreed to pay $4.5 billion in fines and other penalties and shaken up its management. It has also paid out roughly $9 billion in a partial settlement with businesses, individuals and local governments.

    Because of its contracts with BP, Halliburton and Transocean are protected from most spill costs, aside from punitive damages, even if they are all found to have been grossly negligent. Transocean has already pleaded guilty to a single misdemeanor criminal charge of violating the Clean Water Act and has agreed to pay $400 million in criminal penalties. It also agreed to $1 billion in civil settlements. Halliburton has not settled with the Justice Department and claims that it was simply following BP’s instructions.

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