Halliburton admits destroying vital evidence
Halliburton said on Thursday it would plead guilty to suppressing crucial information which BP wanted to use in its legal battles over the disaster off the Louisiana coast.
The Deepwater Horizon explosion killed 11 men and caused billions of dollars worth of damage to fishing and tourism businesses in the region. So far, it has also cost BP more than $US40 billion ($43 billion) in legal costs and compensation payouts, which are still mounting, as up to 10,000 new claims are filed each month.
Halliburton, based in Houston, Texas, admitted destroying computer simulations, in a twist of events which will raise new questions over America's treatment of BP.
The simulations showed that there was no difference between certain technical specifications which Halliburton recommended to BP, and the structure which the British oil giant ultimately opted for.
Halliburton had advised BP to include 21 "centralisers" in the oil well being drilled by Deepwater Horizon. However, BP chose to use six of the metal protrusions, which are fixed to the outside of a long metal pipe lowered into the well, and used to keep it centred so it does not crash into the walls of the well.
BP had asked Halliburton for the simulation numerous times, and in 2011 resorted to legal action.
It claimed in a lawsuit that Halliburton had "intentionally" destroyed evidence in order to "eliminate any risk" that it would be used against Halliburton at trial.
Halliburton's guilty plea must be approved by the courts before it is formally accepted, or before the Department of Justice can impose the maximum fine of $US200,000.
Frequently Asked Questions about this Article…
Halliburton admitted destroying evidence related to the 2010 Deepwater Horizon explosion and said it would plead guilty to suppressing crucial information that BP wanted to use in legal battles over the disaster.
Halliburton destroyed computer simulations that showed there was no meaningful difference between certain technical specifications it recommended and the configuration BP ultimately used. Those simulations were relevant to litigation about whether equipment choices contributed to the disaster.
Halliburton had advised BP to include 21 centralisers — metal protrusions attached to the casing to keep it centred in the well — but BP chose to use six. The destroyed simulations related to comparisons between the recommended and actual centraliser setups.
The Deepwater Horizon explosion killed 11 men and caused the biggest oil spill in US history, leading to extensive damage to fishing and tourism businesses in the Gulf region.
According to the article, the spill has cost BP more than US$40 billion (reported as $43 billion) in legal costs and compensation payouts, and those costs were still mounting as up to 10,000 new claims were being filed each month.
Yes. BP repeatedly requested the simulations and in 2011 resorted to legal action, claiming Halliburton had intentionally destroyed evidence to eliminate the risk it would be used against Halliburton at trial.
Halliburton’s guilty plea must be approved by the courts before it is formally accepted. The Department of Justice could impose a maximum fine of US$200,000 related to the charge described in the article.
The case highlights how legal, reputational and financial risks from major incidents can affect oil companies and their contractors. For investors, it underscores the importance of monitoring ongoing litigation, large compensation costs and regulatory outcomes when assessing energy-sector investments.
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