Halliburton has admitted that it destroyed evidence during the 2010 Deepwater Horizon oil spill disaster, a criminal act designed to keep the blame—and the government's anger—squarely focused on BP and Transocean as an estimated 5 million barrels of crude oil leaked into the Gulf of Mexico. The surprising admission will bring with it a guilty plea to one count of criminal conduct, a $200,000 statutory fine, and three years probation for the oil services giant, the Justice Department announced Thursday evening.
A quick refresher on Halliburton's role on what turned out to be the infamous oil rig: The Houston-based company provided the cement that was supposed to seal the spaces on the outside of the well's steel drilling pipe. The quality of that concrete, and the process in which it was installed, received a decent amount of scrutiny from lawmakers and independent investigators at the time—but likely would have gotten a whole lot more if it weren't for the attention paid to the metal collars that were used to help stabilize the drill pipe in the center of the hole.
In short, BP opted to use only six of those so-called centralizers instead of the 21 that had been recommended by Halliburton, a time-saving decision by BP that gave Halliburton a noteworthy amount of cover on Capitol Hill as lawmakers blasted the decision-making that proceeded the blowout. But it turns out that Halliburton execs, while hiding behind the 6-vs-21 decision, had already figured out that the missing spacers likely didn't make any difference. The reason no one else knew that was simply because the company quickly got rid of the evidence making it clear. Here's the Washington Post with the wonky details:
On or about May 3, 2010, Halliburton established an internal working group to examine the Macondo disaster, including whether the number of centralizers used could have contributed to the blowout. According to the plea agreement, Halliburton’s cementing technology director instructed a senior program manager to run two computer simulations of the Macondo well’s final cementing job. When the simulations “indicated that there was little difference between using six and 21 centralizers,” the program manager “was directed to, and did, destroy these results,” the plea agreement said.
“In or about June 2010, similar evidence was also destroyed in a later incident,” the Justice Department said. Halliburton’s cementing technology director “asked another, more experienced, employee” to run simulations again comparing six vs. 21 centralizers, the department added; that employee “reached the same conclusion and, like the Program Manager before him, was then directed to ‘get rid of’ the simulations.”
The $200,000 fine is, obviously, unlikely to make a noticeable mark on Halliburton's balance sheet. But the admission of wrongdoing—along with the confirmation that BP's centralizer decision likely played a smaller role than once thought—will make it that much more difficult for Halliburton to avoid paying out large sums to settle civil suits.
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