Thursday 8 December 2011

BP Faces More Citations in Gulf Spill

U.S. regulators issued additional violations to BP PLC for its role in the Deepwater Horizon oil spill, raising the level of fines that the company is likely to pay.

The move came as Halliburton Co. fired back at allegations from BP questioning the oil-field-services company's conduct in the wake of last year's rig explosion in the Gulf of Mexico that killed 11 people and led to the largest offshore oil spill in history. BP made the allegations Monday in a federal civil-court filing in New Orleans.

The rule violations announced Wednesday represent the second set of charges issued to BP. The first set, also identifying violations by contractor companies Transocean Ltd. and Halliburton, was issued in October.

BP said Wednesday it plans to appeal both sets of charges by U.S. regulators that the company violated several rules during the Deepwater Horizon oil spill. Separately, a BP spokesman in response to Halliburton said the Monday filing "speaks for itself" and the company has no further comment.

The Bureau of Safety and Environmental Enforcement said Wednesday it issued five noncompliance violations to BP, saying the company failed to conduct pressure integrity tests at the Macondo well and suspend drilling operations when safety became compromised.

"Further review of the evidence demonstrated additional regulatory violations by BP in its drilling and abandonment operations at the Macondo well," BSEE Director James Watson said in a statement.

The violations lay the foundation for civil penalties that are likely to be imposed by the federal government.
Meanwhile, BP on Monday alleged that Halliburton destroyed evidence in the weeks following the explosion that showed that the cement formula Halliburton recommended for the drilling operation was flawed.

The allegation is the latest in a spate of accusations between the companies as they face potentially huge civil and criminal penalties stemming from the 2010 accident.

Halliburton said Wednesday that BP's allegations mischaracterize tests conducted following the explosion.
"Rather, the informal testing BP refers to used off-the-shelf materials that yielded results which Halliburton believes have little or no relevance to the case," the company said in a statement.

Halliburton has previously said that it believed the cement mix it recommended that BP use on the well was stable, an assertion that it reiterated Wednesday.

read more: Olympus Wealth Management

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