Halliburton 'destroyed' evidence after Gulf oil spill, BP charges

The allegation by oil giant BP that Halliburton, a subcontractor on the doomed Deepwater Horizon drilling rig, destroyed data about a cement slurry operation is a glimpse into a nasty corporate court battle set to go to trial in federal court in New Orleans in February.

BP has assumed responsibility for the explosion, which killed 11 workers and eventually spewed more than 200 million gallons of oil into the Gulf of Mexico. But it is fighting Halliburton and rig owner Transocean in court over liability for damages. Next year's trial is BP's attempt to get a federal court to impose sanctions against Halliburton, which has refused to admit liability for the explosion and spill. So far, BP has shelled out $40 billion to cap the damaged well and clean up the Gulf and soiled coastline.

In asking the court to sanction Halliburton over the missing data, BP has played its most powerful card yet. The legal tussle has been a contentious one all along, prompting President Obama to describe it last year as “executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else.”

In court papers filed Monday, BP alleges that Halliburton, an oil field services corporation once run by former Vice President Dick Cheney, destroyed data from tests on a cement slurry that the firm uses in drilling operations. Several investigations have identified a similar slurry as a root cause of the Deepwater Horizon accident. BP also wants the court to order a third-party inspection of a key Halliburton computer to determine if any of the test data can be recovered.

As the rig's crew worked in April 2010 to wrap up operations at the Macondo well, a series of managerial mistakes and safety equipment failures compounded the failed plug and exacerbated the accident and ensuing spill, congressional investigators have found.

Monday's court filing by BP charges that two Halliburton employees said, under oath, that they destroyed notes and samples that gave insight into the stability of a cement slurry similar to the one that was used in the Macondo wellhead. One reason for discarding the data, one Halliburton employee testified, was concern that the data would be misinterpreted during a legal proceeding, according to the BP documents.

"Halliburton intentionally destroyed the evidence related to its nonprivileged cement testing, in part because it wanted to eliminate any risk that this evidence would be used against it at trial," the BP filing says.

“Halliburton's role is at once the most limited – it was only doing a small piece of the job – but is also critical to the blowout that occurred,” says David Uhlmann, former chief of the Justice Department's environmental crimes unit and now a law professor at the University of Michigan.

Aside from civil liability questions, the bigger worry for Halliburton, he says, is that BP's allegations, if substantiated in court, raise the possibility of criminal charges. “If evidence is destroyed in the aftermath of the nation's worst environmental disaster … that only increases the likelihood that they would face criminal charges and may also mean that they face additional obstruction of justice charges from the Justice Department,” says Mr. Uhlmann. 

Halliburton, for its part, said Monday it disagrees with BP's assertion and will rebut the allegations in court. BP's filing is an attempt to “incorrectly attribute operation decisions to Halliburton,” the company told CNN on Monday.

"Every contributing cause where Halliburton is named, the operational responsibility lies solely with BP. Halliburton remains confident that all the work we performed with respect to the ... well was completed in accordance with BP's specifications for its well construction plan and instructions," Zelma Branch, a Halliburton spokeswoman, told CNN.

BP has gained some ground on its contention that Halliburton and Transocean share legal responsibility for the spill. In October, the US government found liability with BP, Transocean, and Halliburton, citing all three companies for violating oil industry regulations – a move expected to result in massive fines for a deadly spill that soiled hundreds of miles of Gulf coastline and temporarily devastated the region's fishing and tourism industries.

In its final report in January, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling said a "root cause" of the explosion was "insufficient controls in place" at Halliburton to ensure that "test results were vetted rigorously." 

"On the cement, they did the test, but they didn't communicate the result of that test," commission member Frances Beinecke, president of the Natural Resources Defense Council, told The New York Times in January. "There were some real communication gaps, a lot of management errors, a lot of lack of information offshore and onshore, and among contractors."