Friday, September 10, 2010

BP Lawyers Reviewed Report on Accident

The Wall Street Journal

 
LONDON—BP PLC, which billed its Deepwater Horizon inquiry as an independent look at the disaster, said its lawyers were allowed to "review" the long-awaited report before it was published.

A BP spokesman said its lawyers provided "legal advice and counsel to the [investigative] team," but wouldn't elaborate on what exactly that entailed. He also declined to characterize the nature of the review, and what changes, if any, the lawyers made to BP's 193-page report on the April accident that triggered the worst U.S. offshore oil spill. But he said the BP lawyers "were walled off from the rest of the company."

The spokesman also said some "internal and external" lawyers for BP worked with investigators "in order to interact with lawyers for other companies to obtain evidence for the investigation," and to "assist in the preservation of evidence for litigation and ongoing investigations."

The disclosure raises questions about the extent of the independence of BP's report, which was released Wednesday and assigned much of the blame for the accident to BP's contractors, Transocean Ltd. and Halliburton Co. The U.K. oil giant has said its four-month investigation on the causes of the accident, which killed 11 workers, was carried out without interference from senior management.

Transocean, Halliburton and others quickly blasted the report for not being tough enough on BP itself, with some legal analysts suggesting the report served as a preview of BP's future legal strategy. As operator of the Deepwater Horizon rig, BP faces many lawsuits over the accident.

For BP, the stakes are high as it tries to dodge accusations of gross negligence stemming from the disaster. Under the Clean Water Act, BP might have to pay fines of at least $1,100 a barrel of oil spilled. But if the government finds the spill resulted from gross negligence, the fine could be $4,300, potentially boosting the total to more than $20 billion.

Houston-based Anadarko Petroleum Corp., which owns a 25% stake in the well, has said its contract with BP stipulates that BP is responsible for all damages caused by "its gross negligence or willful misconduct."

In the executive summary of the report, BP said its investigators worked "independently from other BP oil spill response activities and organizations." BP's head of safety, Mark Bly, who spearheaded the investigation, reiterated the independence of the report on Wednesday.

BP said its investigation team involved 50 specialists both from BP and outside the company, and from a variety of fields, such as safety and drilling, though legal affairs was not included in that list.

"It certainly raises a question of whether [the lawyers] considered the legal implications of the report," Mark Brown, a partner at Bristows, a U.K. law firm, said. "But we just don't know. What is important is that if there is relevant information not included in the report available to BP which surfaces later, that could hurt the company," Mr. Brown added.

Bristows has business with one of the three main companies involved in the Deepwater Horizon accident—BP, Transocean and Halliburton—but Mr. Brown wouldn't disclose which one for confidentiality reasons.

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