BP Plans to Appeal Spill-Related Charges by US Regulators

Deepwater Horizon Gulf of Mexico Oil Spill

WASHINGTON (Dow Jones Newswires), Dec. 7, 2011

BP plans to appeal charges by U.S. regulators that the company broke federal rules during the Deepwater Horizon oil spill.

BP made its intentions known Wednesday after regulators issued the company a second set of charges for its role in the April 2010 spill, the worst offshore oil spill in U.S. history. The first set of charges had been issued in October.

The Bureau of Safety and Environmental Enforcement said BP failed to conduct pressure integrity tests at the Macondo well and suspend drilling operations when safety became compromised.

Responding to Wednesday's charges, BP said that "the issues raised in today's [incidents of non-compliance, or INCs] regarding drilling margins and related integrity testing played no causal role in the accident. BP intends to appeal these INCs, as well as those issued several weeks ago."

A spokeswoman for the Bureau of Safety and Environmental Enforcement, or BSEE, declined to comment on BP's plans.

U.S. officials issued a first set of spill-related charges in October, delivering citations to contracting companies Transocean and Halliburton, in addition to BP. The move shocked the contracting industry, which typically avoids liability in such cases.

Transocean has already said it would appeal those citations and Halliburton has said it believes it is fully indemnified by BP against penalties resulting from the violations.

Federal regulators issued the citations after a months-long investigation into the cause of the Deepwater Horizon disaster.

The citations are likely to carry fines. Under the Outer Continental Shelf Lands Act, the government can collect $35,000 per day per violation. The Macondo well leaked oil into the Gulf of Mexico for 87 days before it was sealed in July 2010.

Since the spill occurred, the fines have been raised to $40,000.

The fines themselves are unlikely to hurt the companies' bottom lines. But the citations brand the companies as rule violators, which could weaken the companies' position against victims of the spill.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Hocine | Dec. 9, 2011
BP has actually been operating in Algeria for more than a decade in Onshore drilling sites and the risk in well integrity tests is almost the same. Such "incidents" have never occurred so far. It is reputed to be the emblem of Excellence in Safety and Environment. Cheeers guys

Hocine | Dec. 9, 2011
The US government has always striven to downsize and keep at the bottom every "great thing". That's not a surprise :-)

brent mcelwee | Dec. 8, 2011
if ya play ya gotta pay! bottom-line is that they BP elected to do business under those conditions. hellllooooh! they ought to be glad they got it under control and didn't do more damage. I heard an executive decision to use seawater instead of drilling mud lead to the fatal kick. again a cost cutting business decision that back fired sorry but pay up shut up or go somewhere else. and I am in the oil business

randy comeaux | Dec. 8, 2011
Good for BESE, its high time federal regulators realized service companies and their presonnel bear just as much responsibility for criminal activity and negligence as do the operators and their personnel. For years incompetent personnel have plagued the offshore industry, those individuals as well as the companies they work for should be held accountable and prosecuted by the Department of Justice in equal measure. Doing this will make the GOM a much safer place to work There is a famous saying in the offshore industry, what happens offshore stays offshore, does that not sound so catchy. Its time for companies who wish to work in the offshore industry and earn the huge incomes and profits from their efforts step up and obey ALL of the laws which govern the offshore industry, else get out !

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