BP barred from winning US contracts

2012-11-29 09:09

(File, AP)

New Orleans - Two BP supervisors pleaded not guilty on Wednesday to manslaughter charges in the 2010 oil spill disaster in the Gulf of Mexico, as the British energy giant was barred from winning US government contracts.

The Environmental Protection Agency (EPA) said it had temporarily banned BP from obtaining new contracts - which include exploration or drilling leases on government land - until it can prove it meets US government business standards.

"EPA is taking this action due to BP's lack of business integrity as demonstrated by the company's conduct with regard to the Deepwater Horizon blowout, explosion, oil spill, and response," the agency said in a statement.

The decision came two weeks after BP reached a $4.5bn settlement with the US Justice Department and agreed to plead guilty to 11 counts of manslaughter, one count of felony obstruction of Congress and two criminal environmental violations.

The 20 April 2010 blowout killed 11 people and sank the BP-leased Deepwater Horizon drilling rig, unleashing the worst environmental disaster in US history.

It took 87 days to cap the runaway well, which spewed some 4.9 million barrels of oil into the Gulf of Mexico and blackened beaches in five states.

Spreading the blame

Defence attorneys said Robert Kaluza, aged 62, and Donald Vidrine, aged 65 - the highest-ranking BP supervisors onboard the rig - are being unfairly targeted.

A presidential commission tasked with investigating the environmental catastrophe spread the blame for the deadly blast, citing BP and its subcontractors for shoddy work, poor management and risky shortcuts.

"The problem with this is that Congress and others demand human flesh to pay for terrible casualties like this," Kaluza's lawyer, Bob Habans, told reporters on the courthouse steps.

"This time they chose Donald Vidrine and Bob Kaluza as the scapegoats for this prosecution."

Prosecutors said the on-site managers - who ignored "glaring red flags that the well was not secure" and failed to take "appropriate action" to prevent the blowout - should pay for their negligent actions.

Kaluza and Vidrine, who both pleaded not guilty in the New Orleans court on Wednesday, face up to 10 years in prison on each of 11 counts of seaman's manslaughter and eight years in prison on each of 11 counts of involuntary manslaughter.

Existing contracts unaffected

Meanwhile, former senior BP executive David Rainey pleaded not guilty to obstruction of justice charges for allegedly lying about how much oil was gushing out of the runaway well. He faces five years in prison if convicted.

The EPA said the ban on BP and its affiliates from receiving federal contracts will continue "until the company can provide sufficient evidence to EPA demonstrating that it meets federal business standards."

The order does not affect existing contracts.

It came hours before the Bureau of Ocean Energy Management announced the sale of exploration rights to 20 million acres in the western Gulf of Mexico. BP did not bid for any of the leases. The next sale is scheduled for March.

BP said in a statement that it hopes to have the ban lifted as quickly as possible and has been working with the EPA to prove it can meet federal standards.

"As BP's submissions to the EPA have made clear, the company has made significant enhancements since the accident," BP said.

Far from over

"In the two-and-a-half years since the Deepwater Horizon accident, the US government has granted BP more than 50 new leases in the Gulf of Mexico, where the company has been drilling safely since the government moratorium was lifted," it added.

However, BP's legal woes are far from over. It must still resolve a civil case on environmental fines that could amount to as much as $18bn if gross negligence is found. It also remains on the hook for economic damages, including the cost of environmental rehabilitation.

Earlier this year, BP reached an agreement to settle claims from fishermen and others affected by the disaster for $7.8bn, but it must be approved by a federal judge.

BP has signalled it will continue to aggressively pursue damages from rig operator Transocean and well operations subcontractor Halliburton, which BP blames for faulty work leading up to the blowout.

- AFP