Halliburton to plead guilty to destroying Deepwater Horizon evidence, pay $200,000 fine | NOLA.com
Halliburton Energy Services Inc., the company that oversaw cement pouring during the drilling of the BP Macondo well, has agreed to plead guilty to destroying evidence connected to the Deepwater Horizon disaster, and to pay a $200,000 fine, the U.S. Justice Department announced Thursday. Government attorneys filed a criminal bill of information charging Halliburton with one count of destruction of evidence.
Company officials twice destroyed computer simulations of the effects of using six instead of 21 "centralizers," protruding metal collars placed around the casing inside the BP well to keep it centered in the drill hole while cement is poured, according to the bill, filed in U.S. District Court in New Orleans.
"Prior to the blowout, defendant Halliburton had recommended to BP the use of 21 centralizers in the Macondo well," according to the bill of information. "BP opted to use six centralizers instead."
The number of centralizers was one of several details highlighted in the civil trial against BP and its contractors, including Halliburton, by plaintiff attorneys. They said decisions made by BP led to an improper cement job that let natural gas enter the casing and flow to the deck of the Deepwater Horizon, where it ignited and exploded, killing 11 and injuring dozens more.
However, according to the bill of information, the deleted tests found little difference between using six or 21 centralizers.
In a news release, Justice officials said Halliburton has signed a cooperation and guilty plea agreement, in which the company agrees to plead guilty and admit its criminal conduct. A date for the court proceeding where the guilty plea would be heard was not announced.
Halliburton also agreed to pay the maximum statutory fine of $200,000, to be subject to three years of probation and to continue its cooperation in the government's ongoing criminal investigation.
The company has also agreed to make a voluntary contribution of $55 million to the National Fish and Wildlife Foundation. That is not conditioned on acceptance of the plea agreement by the court.
In a statement released late Thursday, Halliburton said the Justice department "has agreed that it will not pursue further criminal prosecution of the company or its subsidiaries for any conduct relating to or arising out of the Macondo well incident."
"The Department of Justice acknowledged the company's significant and valuable cooperation during the course of its investigation, and the company has agreed to cooperate with the Department of Justice in any ongoing investigation related to or arising from the incident," the statement said.
The company's stock closed at $44.34 on Thursday, down 1.07 percent.
According to the bill of information, Halliburton and others conducted an internal investigation into whether the number of centralizers played any role in the blowout. "Use of centralizers can help keep the casing centered in the wellbore away from the surrounding walls as it is lowered and placed in the well," the government document said. "Centralization can be significant to the quality of subsequent cementing around the bottom of the casing."
On May 14, 2010, Halliburton's cementing technology director told a senior program manager for the company's cement product line to run two computer simulations of the cementing job for the Macondo well. The simulations used "Displace 3D," a new program that was being developed to model the way fluids move through the wellbore and the annulus, the space between the casing and drilling pipes.
Those simulations found little difference between using six or 21 centralizers, according to the bill of information. The results were shown to one or possibly two Halliburton senior managers, and the company's cementing techology director directed that the results be deleted. The bill of information does not name any of the employees.
However, the cementing technology director had earlier been told by another Halliburton executive that material related to the Macondo well was to be preserved. "Program manager felt uncomfortable deleting the simulations, but nonetheless followed the direction of defendant Halliburton's cementing technology director to delete the simulations ... ." He later told another employee about the deletion, saying "I did what I was told."
Later in May and continuing into June 2010, Halliburton asked the cementing technology director to ask that other worker, identified as "Employee 1," to re-run the simulations. Those simulations also showed little difference between using six or 21 centralizers, the government's court filing said.
Employee 1 also was ordered to "get rid of" the simulations, the bill of information said. "Because Employee 1 felt uncomfortable destroying the simulations, Employee 1 delayed destroying the simulations for some time but, ultimately, like program manager before him, deleted them from his Halliburton computer," the filing said.
During the civil litigation and a continbuing federal criminal investigation by the Justice Department's Deepwater Horizon Task Force, efforts were made to recover the simulations. They were unsuccessful.
"In agreeing to plead guilty, Halliburton has accepted criminal responsibility for destroying the aforementioned evidence," the Justice news release said. It also pointed out that a bill of information "is merely a charge and a defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt."
The case is being prosecuted by Deepwater Horizon Task Force Director John Buretta, deputy directors Derek Cohen and Avi Gesser and task force prosecutors Richard Pickens II, Scott Cullen, Colin Black and Rohan Virginkar.