Belfast Telegraph

Monday 21 April 2014

US gulf oil disaster trial starts

The Deepwater Horizon rig burning after the accident (AP)

Oil giant BP has been accused of putting speed over safety in the run up to the Gulf of Mexico rig disaster because it was massively over-budget on the project.

On the first day of a hearing of a US trial that will decide on billions in compensation claims over the worst offshore oil spill in American history a lawyer said company executives applied "huge financial pressure" on its drilling managers.

Jim Roy, representing individuals and businesses hurt by the spill, said BP wanted to "cut costs and rush the job" before the blowout of its Macondo well triggered the explosion. The project was more than 50 million dollars over budget and behind schedule at the time of the blowout, Mr Roy said.

"BP repeatedly chose speed over safety," he said at the US Federal Court in New Orleans, quoting from a report by an expert who may give evidence later. Mr Roy said the spill also resulted from Swiss-based rig owner Transocean's "woeful" safety culture. He said the owner of the Deepwater Horizon rig failed to properly train its crew, calling it a "chronic problem allowed by Transocean management to go uncorrected."

US District Judge Carl Barbier heard opening statements by lawyers for the companies, federal and state governments and others who sued over the 2010 disaster that left 11 rig workers dead.

The trial is designed to identify the causes of BP's well blowout and assign percentages of fault to the companies. Months of negotiations have failed to produce a settlement that could have averted the trial. BP has said it already has racked up more than 24 billion dollars in spill-related expenses and has estimated it will pay a total of 42 billion dollars to fully resolve its liability for the disaster that spewed millions of gallons of oil over months.

But the trial lawyers for the federal government and Gulf states and private plaintiffs hope to convince the judge that the company is liable for much more.

Judge Barbier has promised he will not let the case drag on for years as has the litigation over the 1989 Exxon Valdez spill, which still has not been completely resolved. He encouraged settlement talks that already have resolved billions of dollars in spill-related claims.

In December he gave final approval to a settlement between BP and Plaintiffs' Steering Committee lawyers representing Gulf Coast businesses and residents who claim the spill cost them money. BP estimates it will pay roughly 8.5 billion dollars to resolve tens of thousands of these claims, but the deal does not have a cap.

BP resolved a government criminal probe by agreeing to plead guilty to manslaughter and other charges and pay 4 billion dollars in criminal penalties. Transocean reached a separate settlement with the government. But there is plenty left for the lawyers to argue about at trial, given that the federal government and Gulf states have not resolved civil claims against the company that could be worth more than 20 billion dollars.

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