BP Faces More Citations, Halliburton Responds

BP was hit with five more safety citations from the U.S. government on Wednesday, while it also received the latest legal salvo from a major contractor, as it continues to deal with fallout from last year’s massive oil blowout in the Gulf of Mexico.

The explosion on the Deepwater Horizon rig in April 2010, which killed 11 workers and spewed more than 4 million barrels of oil into the Gulf, has sparked a slew of lawsuits and federal citations against the companies involved.

Halliburton Co on Wednesday filed a legal challenge to BP’s allegations that it had destroyed evidence of its cement work on the doomed Macondo well.

The latest set of government citations for BP come on top of seven “incidents of noncompliance” that the U.S. Bureau of Safety and Environmental Enforcement handed out to the company in October.

“Further review of the evidence demonstrated additional regulatory violations by BP in its drilling and abandonment operations at the Macondo well,” bureau director James Watson said in a statement.

The agency did not release details of the fines, saying it would consider civil penalties after the 60-day appeal period for the citations was completed.

By law, BP face fines of up to $35,000 a day, per incident for the violations.

The new citations for BP focus on the failure to conduct an accurate pressure integrity test and failure to suspend drilling operations when the approved safe drilling margin for its well was not maintained.

BP said in a statement that the issues raised in the citations on Wednesday “played no causal role in the accident.” The company said it plans to appeal these notices, as well as notices issued earlier.

DISPUTE OVER CEMENT

BP and its contractors are embroiled in various lawsuits blaming each other for the spill.

Citing recent depositions and Halliburton’s own documents, BP said on Monday that Halliburton “intentionally” destroyed the results of slurry testing for the well, in part to “eliminate any risk that this evidence would be used against it at trial.”

Halliburton said Wednesday that BP has been aware of post-blowout tests for some time, but has chosen this late date in the litigation to mischaracterize the results of such tests.

Contrary to BP’s assertions, Halliburton said the post-incident testing referred to in its motion was not conducted on rig samples.

Rather, the informal testing BP refers to in its motion used off-the-shelf materials that yielded results that Halliburton believes have little or no relevance to the case.

Halliburton said testing before the blow-out using rig samples and formal lab processes showed that the cement slurry was designed to be stable, a finding backed up by testing done by the U.S. Department of the Interior.

Halliburton has accused BP of fraud and defamation, among other claims.

BP has asked U.S. District Judge Carl Barbier in New Orleans, who oversees spill litigation, to sanction Halliburton by ruling that Halliburton’s slurry design was “unstable,” a finding of fact that could be used at the trial to assign blame and damages for the well.

The trial is scheduled to begin next year.