BP faces billions of dollars in new fines over the massive 2010 Gulf of Mexico oil spill after a New Orleans judge Thursday ruled it was guilty of “gross negligence”.
Federal court judge Carl Barbier said that the April 20, 2010 Deepwater Horizon drilling rig blowout, which killed 11 and spilled 4.2 million barrels of oil into Gulf waters, happened because BP’s US subsidiaries, along with oil-services company Halliburton and rig owner Transocean, did not take adequate care in drilling the highly risky well.
Barbier said that the British oil giant knew the Macondo well it was drilling, called by some working on it the “well from hell”, was particularly dangerous because of the high risk of a blowout.
BP’s decisions throughout the drilling process qualified as “gross negligence” because they were “an extreme departure from the care required under the circumstances or a failure to exercise even a slight care.”
He also said BP’s role involved “willful misconduct”, adding to the penalties that, based on a maximum fine of $4,300 per barrel spilled, could take the entire fine in the civil case to $18 billion.
The court said BP was 67 percent responsible for the accident, Transocean was 30 percent responsible and Halliburton three percent responsible.
“The Court concludes that each defendant engaged in conduct that was negligent or worse and a legal cause of the blowout, explosion, and oil spill,” the judgement said.
BP said it would “immediately” appeal the decision to a higher court, saying Barbier’s ruling was “not supported by the evidence at trial.”
“The law is clear that proving gross negligence is a very high bar that was not met in this case,” the oil giant said. “BP believes that an impartial view of the record does not support the erroneous conclusion reached by the District Court.”
BP says that it has already spent more than $26 billion in claims payments and spill response in the wake of the disaster, which layered crude oil onto popular beaches and forced the shutdown of fishing industries along the US Gulf coast.
It has also commuted $1 billion to fund Gulf restoration projects.
But the oil giant continues to struggle to further limit its exposure. In August, it filed an appeal with the US Supreme Court challenging a lower court ruling that required it to pay settlements to claimants BP says were not directly harmed by the spill.
In June the high court already turned back BP’s request to freeze required payouts to claimants while it seeks to narrow the definition of who qualifies for payments.
Barbier said in his ruling Thursday that BP was warned about the dangers of numerous unexpected pressure “kicks” on the Macondo well ahead of the disaster.
BP’s decision to keep drilling was “dangerous” and “motivated by profit,” Barbier wrote.
BP also erred when it concluded that a well test conducted on the day of the explosion implied the site was safe, ignoring evidence that suggested possible looming disaster.
The judge faulted BP for continuing to drill without ordering additional tests as the situation would normally have required.
Barbier’s ruling is the culmination of the first phase of a New Orleans trial that took place over two months beginning in February 2013. A second phase later that year calculated the amount of oil spilled, a key component in determining total damages.
In early afternoon New York trade, BP shares were 4.9 percent lower at $45.36, Halliburton was down 0.5 percent at $67.31, and Transocean down 1.0 percent at $37.66.