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U.S. set to sanction BP, contractors

By Reuters
Friday, September 16, 2011 7:13 EDT
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WASHINGTON (Reuters) – The U.S. offshore drilling regulator could issue sanctions as early as next week against BP and the major contractors involved in last year’s Gulf oil spill, an agency official said on Thursday.

Michael Bromwich, the head of the Bureau of Ocean Energy Management, told reporters at a congressional hearing the agency was preparing official notices for violations uncovered by a government probe of the spill.

Bromwich said companies could be notified of infractions next week. The notices would kick off an administrative process that would likely conclude with civil fines against the companies.

In its final report on the causes of the largest offshore oil spill in U.S. history, the Bureau of Ocean Energy Management outlined a series of rule infractions committed by BP, Transocean and Halliburton related to the drilling disaster.

The report, released on Wednesday, detailed violations of seven federal regulations by BP. Transocean, the owner and operator of the Deepwater Horizon rig used to drill the Macondo well, was also implicated for violations of three of those regulations.

Halliburton, which was responsible for cementing on the well, was deemed jointly responsible for not adhering to three of those regulations.

The companies face fines of up to $35,000 a day, per incident for the violations.

Calling the penalties “pathetically” inadequate for companies that can pay as much as a $1 million a day to rent rigs, Bromwich reiterated his call for Congress to raise the maximum fines for offshore drilling rule breakers.

“The fine structure has got to be increased,” Bromwich told reporters. “I think meaningful dollars need to be associated with fines. It’s got to start in the six figures, not five figures.”

The department did not provide details on the total amount of fines BP and its contractors may incur for their violations, which included failing to take measures to prevent the spill and failing to keep the well under control at all times.

Any civil penalties doled out by the drilling agency would be separate from the ongoing Justice Department lawsuits against BP and Transocean.

(Editing by David Gregorio)

(This article has been modified to indicate the U.S. agency corrects to show Transocean implicated for violations of three regulations rather than four in paragraph 5)

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