China fishermen sue US firm for oil spill: lawyer

Πηγή: Terra Daily
By AFP
July 4 2012

A group of Chinese fishermen have sued ConocoPhillips in a US court, seeking over $130 million in compensation for an oil spill off China's coast last year, a lawyer advising them said Wednesday.

Thirty fishermen from the eastern province of Shandong this week filed the lawsuit against ConocoPhillips in the US city of Houston, Texas, where the oil giant is headquartered, Beijing-based lawyer Guo Chenxi told AFP.

Another 470 are also preparing to lodge suits, said Guo, one of the advisers to the fishermen.

The spill in June last year at the offshore Penglai field, jointly developed by ConocoPhillips and state-owned China National Offshore Oil Corporation (CNOOC), allowed more than 3,000 barrels of oil and oil-based mud -- used as a lubricant in drilling -- to vent into the sea.

ConocoPhillips said Wednesday it had not received any official notice of the lawsuits but that it was inappropriate for any such claims to be handled by US courts.

"(The suits) are not appropriate for US courts and should be dismissed," the company said in a statement sent to AFP.

Guo said the exact amount of compensation had yet to be set, but the 500 fishermen have initially claimed they suffered 870 million yuan ($137 million) in direct economic losses.

"The compensation they will demand will be much higher than that because it will take into account losses in the next decades and a punitive fine according to US laws," she said.

In the United States, the fishermen have retained lawyers from three firms including the Houston-based Bilek Law Firm, she said.

"We are confident... because the US lawyers specialise in oil-related pollution. They are very experienced," Guo said.

The two oil firms previously said they would pay a total 1.0 billion yuan in compensation for the spill. The funds were paid to the Ministry of Agriculture in March.

But Guo said that compensation package did not cover the fishermen in Shandong.

Environmental groups and local fishermen have accused ConocoPhillips and CNOOC of initially covering up the spill, saying it was discovered in June 2011 but only made public nearly a month later.

Both firms deny those allegations. ConocoPhillips says it cooperated with authorities as soon as the accident occurred.

BP in $7.8bn settlement of gulf claims

Πηγή: FT
By Ed Crooks
March 3 2012

BP and the lawyers representing more than 100,000 victims of the 2010 Gulf of Mexico oil spill have reached an estimated $7.8bn out-of-court settlement over damages, delaying the trial that had been due to start on Monday.

The settlement, which BP said was “not an admission of liability”, will be funded out of the $20bn that BP promised as compensation for the damage caused by the spill.

The $7.8bn value of the deal, estimated by BP, includes a dedicated $2.3bn for gulf fishermen and a separate settlement for people who say they have fallen sick as a result of contact with the oil and dispersant chemicals, with $105m to pay for healthcare in the coastal region.

The settlement covers only claims against BP for damages from individuals affected by the spill. Legal action against other companies involved in the disaster, and between those companies, and claims by the US authorities, are still continuing, and will come to trial unless the can also be settled out of court. Lawyers from all sides will meet the judge to set a new trial date.

Bob Dudley, BP’s chief executive, said: “This settlement reflects our commitment not only to the gulf region, but also to the United States as a whole. BP has operated in America for more than 100 years, employs nearly 23,000 people in the US and invests more in the US than in any other country.”

The company said it did not expect the deal to add to the total cost it expects to face as a result of the spill, which it has estimated at $37.2bn.

In a statement, the plaintiffs’ lawyers said the settlement would be fully funded by BP, “with no cap on the amount BP will pay”.

They added: “BP is obligated to fully satisfy all eligible claims under the terms of the Court supervised settlement, irrespective of the funds previously set aside.”

Steve Herman and Jim Roy, the leaders of the plaintiff’ lawyers, said, “This settlement will provide a full measure of compensation to hundreds of thousands in a transparent and expeditious manner under rigorous judicial oversight. It does the greatest amount of good for the greatest number of people.”

BP could still proceed to trial with the US Department of Justice and states from the Gulf of Mexico region, which are seeking civil penalties and damages that could run into the tens of billions of dollars.

The DoJ issued a statement saying it was “open to a fair and just settlement,” but also “fully prepared to try the case.”

It added: “The United States is prepared to hold the responsible parties accountable for the damage suffered in the Gulf region.”

It promised to ensure that any resolution of government claims would be “just, fair and restores the Gulf for the benefit of the people of the Gulf states.”

Garret Graves, the chair of Louisiana’s Coastal Protection and Restoration Authority, described the settlement of the private claims as “a good first step,” but said it was “pretty clear that BP feels that they are above the law.”

He added: “We are looking forward to an expedited trial plan to fast track justice and recovery. We have been preparing for trial for over 18 months and are very anxious to get into court as soon as possible.”

BP and the private plaintiffs have set a deadline of 45 days to reach a final definitive agreement, which also need to be approved by the federal district court in New Orleans where the litigation is being heard.

In a statement, Judge Carl Barbier said that “because such a settlement would likely result in a realignment of the parties in this litigation and require substantial changes to the current phase I trial plan,” he would postpone the trial in the Deepwater Horizon case, which had been due to start on March 5.

The trial, originally planned for February 27, had already been put back once after BP and the plaintiffs’ lawyers said they were nearing a deal.

Lawyers representing an estimated 116,000 plaintiffs, including fisherman, restaurant owners and others hurt by the spill had focused on a plan for a settlement using about $13bn remaining from the $20bn that BP pledged for victims of the spill in June 2010, two months after the accident.

BP resisted committing the full amount, arguing that the $13bn was also needed to pay other costs, including restoring the coastline and meeting claims from state and local governments.

The estimated value of the settlement works out at an average of about $67,000 for each of the plaintiffs. Lawyers’s fees are likely to be 15 per cent or more of the value of any money paid out.

However, the plaintiffs have succeeded in getting access to the fund. Ken Feinberg, the Washington lawyer who had been administering most of the payments from the fund through the Gulf Coast Claims Facility, will lose that role, and the GCCF will be replaced by a new process.

Mr Feinberg had been criticised for imposing excessive burdens of proof on claimants seeking redress for losses resulting from the spill, and many of the claimants in the legal action were people who felt they had not been offered adequate compensation.

Although claimants will still have to show proof of losses, there will be new rules governing pay-outs, based on factors such proximity to the coast and type of business.

Many fishermen had been particularly unhappy with the GCCF because they work in cash and had been unable to show tax returns to prove loss of income, and they are being specifically looked after with their guaranteed $2.3bn.

The terms of the new settlement seem certain to be more generous than those set by Mr Feinberg. For example, losses suffered by businesses and individuals in close proximity to the Gulf Coast, or in the seafood industry, will be presumed to have been caused by the oil spill “without further proof”, the plaintiffs’ lawyers said.

Businesses will also be able to choose the months used to measure their lost income or profits, and also make claims for lost growth potential that could have materialised had the spill not intervened.

BP remains in dispute over responsibility for the disaster with other companies working on the Deepwater Horizon drilling rig, including Transocean, which owned and operated the rig, and Halliburton, which provided cement to seal the well.

As part of its settlement, BP has agreed to cede to the private plaintiffs some of its legal claims against Transocean and Halliburton, putting those companies directly in the line of fire.

Transocean said in a statement it was still ready to go to trial. “Delays or deals made by other players do not change the facts of this case and we are fully prepared to argue the merits of our case based on those facts,” it said.

Separately, the DoJ is investigating BP and other companies for possible criminal charges.

David Uhlmann, a former head of the environmental crimes section at the DoJ, said: “Tonight’s settlement announcement is good news for the victims of the Gulf oil spill who will see their losses compensated much more quickly than the victims of the Exxon Valdez oil spill. It also paves the way for BP to negotiate agreements with the federal and state governments.”

Talks have been held over a possible resolution of those actions. BP has said it is willing to do a deal, providing it believes the price is fair.

Given the importance of the US to BP, as highlighted in Mr Dudley’s statement, it has seemed to many legal experts to be implausible that the company would want a prolonged court battle with the authorities.

One issue of concern about a settlement with the private sector plaintiffs has been uncertainty about the number of eligible claimants, as claimants have three years from the accident in April 2010 to come forward, or more than a year remaining to come forward.

Speaking before the settlement was announced, Brent Coon, a Texas-based lawyer with clients in the case said: “We won’t know until April 2013 how many claimants there are.”

However, another lawyer involved in the case, also speaking before the deal announcement, said it should be possible to come to an estimate of the number of potential claimants and the value of their claims.

“It’s not really that hard’” said Gerry Nolting, who was one of the attorneys who led the fight against Exxon for damages from the 1989 Exxon Valdez spill.

“In the state of Louisiana, people get certified to catch shrimp. You can count the number of shrimpers, oyster-fishers, crabbers, restaurant owners, and so on. We’ve made estimates based on looking at the data. It’s not this great mystery.”

BP is offering to start paying claims under its system immediately and to take over claims not being considered by the GCCF; a move that will help reduce uncertainty by encouraging people to agree a deal, get a cheque and sign a piece of paper saying their action at BP is now at an end.

The issue now will be how many of the plaintiffs choose to sign up in that way.

If any plaintiffs do not like the look of the overall settlement, they have the option of opting out of the process and refusing to be part of the settlement. There could be a succession of mini-trials across the southern states.

“There may be multiple trials, as there have been over asbestos,” said Mr Coon. “Putting it all together with a bow on top may be a convenient resolution, but it may not be an appropriate resolution.”

However, the legal hurdles facing such plaintiffs would be higher than they were for the original plaintiffs in the litigation.

If BP can now agree a deal with the US authorities, it may stand a chance of not coming to trail at all over the spill, thus avoiding hearings that could do damage to the company’s image and reputation.

Chevron, Transocean in $11bn Brazil oil suit

The Chevron corporate logo is displayed at a Washington D.C. gas station January 11, 2010.

Πηγή: Business Report
By Reuters
Dec 15 2011

Brazilian prosecutors sued Chevron Corp, the No. 2 US oil company, and top offshore oil rig operator Transocean Ltd for 20 billion reais ($10.6 billion) over their alleged roles in a November oil spill near Rio de Janeiro.

The civil suit filed by federal prosecutors in Rio de Janeiro state also seeks to suspend the companies from operating in Brazil, the prosecutor's office said in a statement on its website on Wednesday, a move that could halt operations of the 10 Transocean offshore drilling rigs operating in the country.

“During investigations the prosecutors found that Chevron and Transocean were not capable of controlling the damages caused by the leakage,” the statement said. “This is evidence of a lack of planning and environmental management by the companies.”

Some legal experts said the action may be a politically motivated suit that could be difficult to win given Brazil's extensive oil regulations, the case's technical complexity and the lack of evidence to date of serious negligence or wrongdoing.

The case will add to already-large legal headaches for both companies. Chevron has already faced years of litigation over alleged pollution by Texaco, a company it bought, in Ecuador's Amazon region decades ago.

Chevron was ordered by Ecuadorean courts in February to pay damages of $18 billion. The suit is now under appeal in Ecuador, and the dispute is also being reviewed by an international arbitration tribunal. Transocean was the rig operator in the giant four-billion-barrel Deepwater Horizon spill in the Gulf of Mexico in 2010.

The suit could also jeopardise oil companies' plans to step up their presence in Brazil after the discovery of huge offshore reserves several kilometres (miles) beneath the ocean floor estimated at 50 billion barrels or more.

Reaching that oil will be technically challenging but Brazil expects it will push its crude output to 7 million barrels a day by 2020. That could see it challenge the United States for the rank of world No. 3 oil producer after Russia and Saudi Arabia.

It also risks alarming foreign oil companies eager to expand in one of the world's fastest-growing oil frontiers, where state-controlled oil company Petrobras accounts for more than 90 percent of the output, and government leaders are moving to assert even greater control of natural resources.

Chevron, which has said it takes full responsibility for the spill, said it has not received any formal notice of the suit and that the spill was staunched in four days with minimal or no damage to the environment.

Transocean had similar comments.

“We have not received a formal notice of this action. At present, our rigs are operating in Brazilian waters and we continue to cooperate with the authorities,” it said in a statement to Reuters.

Chevron shares ended nearly 3 percent lower on Wednesday while Transocean stock fell 3.9 percent, both on the New York Stock Exchange.

“NEW TERRITORY”

“We are really entering new territory here,” said Marilda Rosado De Sa Ribeiro, a lawyer and former official at Brazil's oil agency, the ANP. “There are high hurdles to make a technical case like this work, but the public prosecutors are professional and serious.”

The government of Brazilian president Dilma Rousseff has been expanding the funding and training of the public prosecutors' office, helping the prosecutors realise their constitutional role as national watchdog and win more high-profile cases against corruption and environmental wrongdoing, said the lawyer, a partner at Doria, Jacobina, Rosado, Godinho in Rio de Janeiro.

On the other hand Brazil's legal system allows a large number of appeals and few major cases are settled quickly, meaning that even if successful, Chevron and Transocean could operate for years before facing any fine or sanction.

San Ramon, California-based Chevron has already assumed responsibility for leaking what it estimates at 2,400 barrels of oil into water off the coast of Rio de Janeiro. It has been fined $28 million by environmental authorities for the spill, and its local president has made a public apology before Congress.

The public outrage at Chevron, which did no damage to beaches and has left less than a barrel of oil on the ocean according to Chevron, has led some to suggest the prosecution may be based more on politics than the law.

“The lawsuit sounds like politics. If you have an inadequate contingency plan in place then maybe you can be suspended from operating or face an administrative fine, but how do you get to $10.6 billion in damages here?,” said John Lowe, energy law professor at SMU Dedman law School in Dallas, who has studied Brazilian energy.

“It's a government with strong Populist ties and they may feel political pressure to take some kind of action. We did not take this kind of action in the United States against BP during the Macondo spill.”

The document outlining the prosecutor's case did not give a breakdown of how it arrived at the 20 billion reais figure but said the fine was to compensate for environmental and social damage.

The November spill came from the Frade Field northeast of Rio de Janeiro, which produces nearly 80,000 barrels of oil a day and is owned 52 percent by Chevron, 30 percent by Brazil's state-controlled Petrobras and 18 percent by Frade Japao, a Japanese group.

The well involved in the spill was being drilled by Transocean aboard its SEDCO 706 rig.

Suspending Transocean's operations could stop drilling in some of the country's most promising oil fields including the 8 billion-barrel Lula and Cernambi complex, a Petrobras-led area part-owned by BG Group Plc and Galp, which is one of world's largest discoveries in three decades.

BP: Halliburton destroyed key oil spill evidence

Πηγή: cbsnews
By AP
Dec 6 2011




NEW ORLEANS - BP, in a high-stakes court filing, is accusing Halliburton of destroying damaging evidence about the quality of its cement slurry that went into drilling the oil well that blew out last year and caused the nation's worst offshore oil spill.

On Monday in a New Orleans federal court, BP accused Halliburton of having intentionally destroyed evidence about possible problems with its cement slurry poured into the deep-sea Macondo well about 100 miles off the Louisiana coast. An oil well must be cemented properly to avoid blowouts.

Also in the court documents, BP accused Halliburton of failing to produce incriminating computer modeling evidence. Halliburton says the modeling is gone.

BP asked a judge to penalize Halliburton and order a court-sponsored computer forensic team to recover the missing modeling results.

BP won't address oil spill report findings at committee hearing

Πηγή: The Hill
By Ben Geman

Oct 13 2011

BP and its major contractors are warning that they won’t have much to tell Congress about last month’s federal report that detailed missteps by the companies that led to the 2010 Gulf of Mexico oil spill.

Officials from BP, Transocean and Halliburton are appearing Thursday morning before the House Natural Resources Committee, which is reviewing the joint Interior Department-U.S. Coast Guard report that followed a nearly yearlong probe that included scores of subpoenas.

“As we have communicated to this committee, while we respect and appreciate the committee’s attention to the release of the Joint Investigative Team Report, we cannot discuss and comment on the report’s findings in any detail because the facts regarding the causes of the accident are the subject of ongoing litigation and investigations regarding the accident,” states BP America Vice President Raymond Dempsey Jr. in prepared testimony to the committee.

Similarly, an official for Transocean — which owned the now-sunken Deepwater Horizon rig that drilled BP’s Macondo well — warns in prepared testimony that he will be unable to respond to “specific findings” and cited active litigation.

The Halliburton witness, a vice president with subsidiary Sperry Drilling, also warns that he will be “very limited” in his remarks. Halliburton performed the cement work on BP’s well.

The federal report casts blame on all three companies, but is toughest on BP.

Interior on Wednesday sent the companies formal notices that they have violated offshore drilling regulations.

The industry witnesses will testify after the co-chairmen of the Interior-U.S. Coast Guard team and other Interior and Coast Guard officials.

BP’s Dempsey does, however, emphasize that the federal probe “makes clear” that the accident has multiple causes involving all three companies.

“BP has consistently acknowledged its role in the accident. BP continues to encourage other parties to acknowledge their roles in the accident and to step forward to fulfill their obligation to Gulf communities,” Dempsey said.

The industry statements, while steering clear of the report’s specific claims, address several other areas. BP, for instance, touts the safety reforms it has implemented since the April 2010 accident that killed 11 people and ultimately dumped several million barrels of oil into the Gulf. The testimony is available here.

Gulf spill blamed on poor management decisions

Πηγή: AP
By HARRY R. WEBER and DINA CAPPIELLO

Sep 14 2011

A key federal report puts ultimate responsibility on BP for the catastrophic failures leading to the worst offshore oil spill in U.S. history and the deaths of 11 rig workers, especially regarding the cement seal that was put in place the day before the explosion that triggered the spill.

The report, released Wednesday, said in the days leading up to the disaster, BP made a series of decisions that complicated cementing operations, added risk, and may have contributed to the ultimate failure of the cement job.

Other companies also shared some of the blame, according to the report, which noted that rig owner Transocean, as owner of the Deepwater Horizon, was responsible for conducting safe operations and for protecting personnel onboard.

The details were contained in the final report from an investigation team of the U.S. Coast Guard and the agency that regulates offshore drilling. The panel held hearings in the year following the April 20, 2010, Deepwater Horizon tragedy. The Coast Guard-Bureau of Ocean Energy Management Regulation and Enforcement investigation was among the most exhaustive.

Other investigations spread around the blame rather evenly, faulting misreadings of key data, the failure of the blowout preventer to stop the flow of oil to the sea and other shortcomings by executives, engineers and rig crew members. The joint investigation team laid considerable blame on BP's shoulders.

The report said the decisions included using only one cement barrier and BP's choice to set the production casing in a location in the Macondo well that created additional risk of influx of oil or gas. The casing is a steel pipe placed in a well to maintain its integrity.

The panel said BP failed to communicate these decisions and the increasing operational risks to Transocean.

While the report recognizes that other companies had roles in the disaster, the panel said that BP was the final decision maker.

"BP, as the designated operator under BOEMRE regulations, was ultimately responsible for conducting operations at Macondo in a way that ensured the safety and protection of personnel, equipment, natural resources, and the environment," the panel concluded.

In the report's 57 findings about the disaster, only one person - BP engineer Mark Hafle - is mentioned by name. The report said Hafle's failure to investigate or resolve anomalies detected during a critical test possibly contributed to the failure of the crew to detect the initial influx of gas and oil. Hafle also chose not to run a cement log, a test that evaluates the quality of the cement job, in violation of BP procedures, the report found.

Hafle - a key decision maker on the doomed rig - refused to testify before the federal panel in August 2010, citing his constitutional right against self-incrimination.

The panel recommended further changes to offshore drilling practices, including requiring at least two barriers to be placed in a well - one mechanical, and one cement. The Macondo well had a single barrier, the cement seal at the bottom, so when the blowout happened the only thing to stop it was the blowout preventer. That didn't work, the panel says, because the kink in the pipe caused by the force of the blowout kept it out of reach of the safety device's shearing rams. The team also said BOEMRE should standardize testing procedures on oil and gas wells.

BP said in a statement that the British company accepts the report's conclusion that the accident was the result of multiple causes involving multiple parties. BP did not address the report's specific conclusions about the cement.

"From the outset, BP acknowledged its role in the accident and has taken concrete steps to further enhance safety and risk management throughout its global operations, including the implementation of new voluntary standards and practices in the Gulf of Mexico that exceed current regulatory requirements and strengthen the oversight of contractors," BP said. "We continue to encourage other parties to acknowledge their roles in the accident and make changes to help prevent similar accidents in the future.

Transocean and cement contractor Halliburton did not immediately respond to requests for comment.

The report paints a dark portrait of the final hours aboard the Deepwater Horizon, where the workers in the most danger - on the drilling floor at the center of the rig - were unaware of the anomalies being detected by engineers looking at data coming from the well. The federal team also charges that BP made decisions blindly, without assessing risk, and in some cases skipping internal processes the company relied on to evaluate the potential dangers of decisions.

While this report and others blame BP for jeopardizing safety to cut costs, the federal panel went further and examined the 2009 performance evaluations of 13 BP employees involved on the Macondo well. All but one of the reviews cited cost savings when evaluating the employee's work.

In addition to the rig worker deaths, the resulting oil spill off Louisiana spewed more than 200 million gallons of crude from an undersea well owned by BP. The disaster caused billions of dollars in damage to hundreds of miles of coastline and wreaked havoc on the Gulf economy.

The report pins the causes for the disaster on many of the same faulty decisions found by previous probes, including those by the president's independent oil spill commission, Congressional committees and the companies themselves. But it is likely to carry more weight in Congress, where Republican lawmakers in particular have said they are unwilling to adopt reforms until the federal investigation was complete.

Since the disaster, the Obama administration has reorganized the offshore drilling agency and boosted safety regulations. But Congress has yet to pass a single piece of legislation to address safety gaps highlighted by the disaster.

While the federal investigative team lays blame on decisions made by the companies, it does not address the government's own role in approving some of the questionable decisions. The federal agency that oversees offshore drilling signed off on many of the calls made by the companies, sometimes in minutes, and accepted an outdated and erroneous oil spill plan for the well that discussed protecting species that did not even exist in the Gulf of Mexico.

Congressional leaders immediately scheduled hearings to discuss the report's findings.

House Natural Resources Chairman Doc Hastings, R-Wash., who has pushed legislation to vastly expand offshore drilling since the disaster, said he hoped the federal government's conclusions would give lawmakers a clearer picture about what happened.

"We have waited far too long for this report, but the Committee is ready to take action," Hastings said. "I'm confident that with a far more complete reporting of the facts, we will be able to take a thoughtful approach to real reforms to ensure continued safe American energy production."