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Halliburton Admits Destroying Evidence

Wednesday, July 31, 2013

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Halliburton Energy Services Inc. will become the third corporation to acknowledge criminal misconduct in the 2010 Deepwater Horizon disaster that killed 11 offshore workers and unleashed the worst oil spill in U.S. history.

Halliburton has agreed to plead guilty to destroying evidence in connection with BP's Deepwater Horizon disaster, the Department of Justice announced Thursday (July 25).

The same day, the Justice Department filed a criminal information charging Halliburton with one count of destruction of evidence in U.S. District Court in the Eastern District of Louisiana.

Signed Guilty Plea

Halliburton has signed a cooperation and guilty plea agreement with the federal government, in which Halliburton has agreed to plead guilty and admit its criminal conduct, the Justice Department said.

Deepwater Horizon
U.S. Coast Guard

The April 2010 explosion of BP's Deepwater Horizon killed 11 rig workers.

If approved by the court, the plea agreement would require Halliburton to pay the maximum-available statutory fine of $200,000; to be subject to three years of probation; and to continue its cooperation in the government’s ongoing criminal investigation.

Separately, Halliburton made a contribution of $55 million to the National Fish and Wildlife Foundation that was not conditioned on the court’s acceptance of its plea agreement, the Justice Department said.

Recommendations and Investigations

The new plea relates to events that occurred during Halliburton's internal review of the disaster April 20, 2010. While stationed at the Macondo well site in the Gulf of Mexico, the Deepwater Horizon rig experienced an uncontrolled blowout, leading to explosions and fire.

Two weeks later, Halliburton began an internal review of multiple factors, include whether the number of centralizers used on the final production casing could have contributed to the blowout.

Use of centralizers—metal collars affixed at various intervals on the outside of the casing—can help keep the casing centered in the wellbore as it is lowered into the well. The centralizers can also "be significant to the quality of subsequent cementing around the bottom of the casing," the Justice Department said.

Top Kill operation
U.S. Coast Guard / Petty Officer 3rd Class Patrick Kelley

Crews work to plug the wellhead using a technique known as a "top kill" in May 2010. The procedure failed. The result was the worst oil spill in U.S. history.

Before the blowout, Halliburton had recommended that BP use 21 centralizers in the Macondo well. BP opted to use six, according to DOJ.

Simulations Destroyed

As detailed in the information, Halliburton directed a senior program manager to run two computer simulations of the Macondo well final cementing job: one using six centralizers and one using 21.

These simulations, using a program called Displace 3D, indicated little difference between using six and 21 centralizers, DOJ reported. The "Program Manager was directed to, and did, destroy these results," DOJ said.   

The following month, Halliburton asked a more experienced employee to run the same simulations. That employee (known as Employee 1) "reached the same conclusion and, like Program Manager before him, was then directed to 'get rid of' the simulations," the Justice Department said.

The government's Deepwater Horizon Task Force was unable to forensically recover the simulations during later civil and criminal investigations.

Spill cleanup worker
U.S. Coast Guard

Crews worked ceaselessly to contain and clean up the spill.

Cement failure was later blamed as a contributing cause of the explosion.

"In agreeing to plead guilty, Halliburton has accepted criminal responsibility for destroying the aforementioned evidence," DOJ said in a statement.

Halliburton Statement

Halliburton reported the settlement in a statement on its website. The company said it would plead guilty to "one misdemeanor violation associated with the deletion of records."

"The Department of Justice acknowledged the company’s significant and valuable cooperation during the course of its investigation," Halliburton added.

Other Pleas

Halliburton is the third major corporate player to plead guilty in the disaster.

In January, the Justice Department announced that Transocean, the world's largest offshore drilling contractor, would pay $1.4 billion in fines and plead guilty to environmental crimes to resolve federal civil and criminal cases stemming from the case.

In November, BP pleaded guilty to felony manslaughter, environmental crimes, and obstruction of Congress in the disaster. The company was fined a record $4 billion.

The Deepwater Horizon Task Force criminal investigation of the incident is continuing.



Tagged categories: BP; Cement; Enforcement; Explosions; Fatalities; Government; Health and safety; Laws and litigation; Offshore; Oil and Gas; Workers

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