Halliburton Pleads Guilty For Destroying Evidence In BP Oil Spill

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The United States Department of Justice (DOJ) said Halliburton Company (NYSE:HAL) admitted that it destroyed evidence connected to BP plc (NYSE:BP) (LON:BP)’s Deepwater Horizon Oil Spill in the Gulf of Mexico in 2010.The energy company agreed to plead guilty on the criminal case filed against it.

Halliburton Pleads Guilty For Destroying Evidence In BP Oil Spill

Under the cooperation and guilty plea agreement signed by Halliburton Company (NYSE:HAL) with the Justice Department, the energy company agreed to pay a maximum statutory fine, to be subject to three years of probations, and will continue to cooperate with the government’s ongoing criminal investigation on the oil spill. These conditions will be subject to court approval.

Halliburton contributes $55 million to NWF

In addition, Halliburton Company (NYSE:HAL) voluntarily contributed $55 million to the National Wildlife Foundation, which is not part of the conditions on the acceptance of its plea agreement by the court.

According to the DOJ, Halliburton Company (NYSE:HAL) conducted its own investigation on the different technical aspects on the Deep Horizon rig at the Macondo well site after the uncontrolled blowout and related explosions and fire that killed 11 rig workers. The oil spill was the largest in the history of the United States.

Halliburton trying to blame BP

Halliburton Company (NYSE:HAL)’s own internal working group examined whether the number of centralizers used on the final production casing (a long, heavy metal pipe set across the area of the oil and natural gas reservoir) contributed to the blowout.

Before the blowout happened, Halliburton Company (NYSE:HAL) recommended to BP plc (NYSE:BP) (LON:BP) to use 21 centralizers in the Macondo well, instead BP decided to use six centralizers.

Centralizers are protruding metal collars attached at various intervals on the outside of the casing, and help in keeping the casing centered in the wellbore away from the surrounding walls as it is lowered and placed in the well.  The centralization is important to ensure the quality of cementing around the bottom of the casing. Halliburton Company (NYSE:HAL) provided cement work for the Macondo well.

Halliburton Company (NYSE:HAL)’s conducted two computer simulations on the final cementing job made for the Macondo well using its Displace 3D simulation program to compare the impacts of using six  and 21 centralizers. The simulations showed that there was a slight difference between six and 21 centralizers. Halliburton ordered its program manager to destroy the results of the simulation. The company also destroyed a similar evidence in a later incident.

The DOJ said, “Halliburton’s Cementing Technology Director asked another, more experienced, employee (“Employee 1”) to run simulations again comparing six versus 21 centralizers.  Employee 1 reached the same conclusion and, like Program Manager before him, was then directed to “get rid of” the simulations.”

The Deep Horizon Task Force failed to recover forensically the original Displace 3D computer simulations during the ongoing civil litigation and federal criminal investigation on the case. The DOJ accused BP plc (NYSE:BP) (LON:BP) of gross negligence over the Deepwater Horizon Oil Spill.

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