Judge hears claims BP lied to feds about oil spill by Michael Kunzelman, The Associated Press, October 1, 2013, Global News
The trial’s second phase opened Monday with claims that BP could have capped the well much sooner if it hadn’t ignored decades of warnings about the risks of a deep-water blowout or withheld crucial information about the size of the spill from federal officials. BP attorney Mike Brock denied those allegations and said the company’s efforts to stop the flow of oil were guided by an overriding principle: “Don’t make it worse.”
“It was what the government instructed us to do,” Brock told U.S. District Judge Carl Barbier. The April 20, 2010, blowout triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and spawned the nation’s worst offshore oil spill. BP used a capping stack to seal the well July 15 after other methods failed. Brian Barr, an attorney for residents and businesses who claim they were hurt by the spill, said BP treated the Gulf like its own “private laboratory” as its engineers tried in vain to stop the flow of oil. BP had a 600-page oil spill response plan that only included one page on “source control,” but it simply called for assembling a team of experts to devise a way to stop a blowout, Barr said. “BP’s plan was nothing more than a plan to plan,” he said.
The second phase is divided into two segments: The first, scheduled to last four days, centres on BP’s efforts to cap the well. The second, expected to last three weeks, is designed to help Barbier determine how much oil spilled into the Gulf. The government’s estimate is some 70 million gallons more than what BP says spilled. Establishing how much oil leaked into the Gulf will help figure out the penalties the oil company must pay. Billions of dollars are at stake. In May 2010, BP tried in vain to use the “top kill” method to stop the flow of oil by pumping mud and other material into the blowout preventer. Plaintiffs’ lawyers claim BP knew the strategy was doomed to fail based on higher flow rate estimates that the company didn’t share with federal officials at the time. “Nevertheless, BP pressed ahead and falsely claimed that it was a slam dunk,” said Brad Brian, an attorney for rig owner Transocean.
A week after the spill started, high-ranking BP official Doug Suttles [now Encana CEO] told Coast Guard Rear Adm. Mary Landry that the company estimated oil was flowing at a rate of 1,000 to 5,000 barrels per day. But the company’s adversaries at the trial say BP’s own internal documents and emails show an effort to conceal much higher estimates. “BP’s policy of not releasing the flow rate information was enforced at the highest levels of the company,” Brian said, pointing to an email that a BP employee sent to BP Exploration and Production CEO Andy Inglis and his assistant on May 15. The employee, Mike Mason, warned them that they should be “very cautious” standing behind the lower estimate because his team’s models showed estimates that were up to 20 times higher. Mason said he was called in for a meeting the following day with Inglis’ assistant, who suggested he should not have put his warning in writing. When Mason asked what the problem was, the assistant replied, “It’s the big number,” Mason recalled in videotaped testimony that was shown in court Monday.
Using the government’s figures, a maximum penalty if the company is found negligent could total $18 billion. Using the company’s figures, that maximum penalty would be around $10.5 billion. In late July, BP reported a second quarter net profit of $2 billion as lower oil prices, higher taxes and a drop in income from its operations in Russia took their toll on the company. The company has already set aside more than $42 billion for the oil spill, including damage claims from residents and businesses. [Emphasis added]
Encana restructures senior management as ‘old guard’ leaves by Reuters, October 1, 2013, Financial Post
Among five senior managers leaving the company is Encana USA President Jeff Wojahn, who headed the unit when it was accused of colluding with Chesapeake Energy Corp to suppress land prices in Michigan when the two companies were bidding for oil and gas rights in 2010. A major Michigan landowner is currently suing the two energy giants in a civil antitrust action. The new structure amalgamates Encana’s Canadian and U.S. senior management into one team reporting directly to Suttles, who was named Encana CEO in June after leading BP Plc’s response to the Gulf of Mexico oil spill. … Mike Dunn, analyst at FirstEnergy Capital in Calgary, said the appointment of a new chief operating officer overseeing both Canada and the United States would help unify the company. Encana has not had a COO since 2006, when former chief executive Randy Eresman was promoted from that role. “What they have had since is the Canadian division and the U.S. division, and the head of those two divisions were perhaps duelling each other for capital,” Dunn said. “In terms of departures, it’s not really surprising in a company that has struggled over the last few years, has brought in an outsider as CEO and is going through a strategic review, that some of the old guard is choosing to retire,” he added. Encana has been hurt in recent years by a collapse in natural gas prices and a series of strategic missteps. [Emphasis added]
Encana chops executives to simplify organization, Five senior managers gone by Dan Healing, October 1, 2013, Calgary Herald
New CEO Doug Suttles said Thursday “bold” changes are coming at Calgary-based Encana Corp. Encana Corp. is starting its vowed transformation to a smaller, quicker company with sweeping changes that will result in the departure of five senior executives. In a news release Tuesday, president and chief executive Doug Suttles unveiled a new simpler organizational structure that eliminates some duplicate Canada and U.S. roles. “The new organizational structure aligns with the core competencies needed to get Encana back to winning,” said Suttles in the release. “We are at a point where we need to involve a much wider group of people to determine the next steps in our strategy development process.”
Five senior executives with a combined 116 years of experience working for Encana and its predecessor companies are leaving. They include four retirees: Jeff Wojahn, president of the U.S. division (23 years); Bill Stevenson, chief accounting officer (21 years); Bob Grant, executive vice-president, corporate development (28 years); and Bill Oliver, chief corporate officer (31 years). Eric Marsh, executive vice-president, natural gas economy and senior vice-president, U.S. division, is leaving Encana after 13 years, the company said. Encana said Mike McAllister, previously president of the Canadian division, is appointed chief operating officer, Analyst Greg Pardy of RBC Dominion Securities said the changes are a good step but the company still must prove itself. … “This is a simpler organizational structure with clear accountabilities across the company that are directly tied to the areas we need to focus on to be successful,” said Suttles, who was not available for further comment. Continuing in their roles are Sherri Brillon, chief financial officer; Renee Zemljak, executive vice-president, midstream, marketing and fundamentals; Terry Hopwood, general counsel; and Ryder McRitchie, vice-president of investor relations. The company had a town hall meeting with staff in downtown Calgary on Tuesday morning to explain the moves. [Emphasis added]
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Judge rejects oil, gas lease bid collusion settlement by Dennis Webb, December 14, 2012, The Daily Sentinel
Citing the “unrepentant arrogance” of one of the defendant companies, a federal judge has rejected a proposed settlement involving alleged collusion by two energy firms in bidding on federal oil and gas leases…. [Emphasis added]
BP Asks Judge to Deny Investors’ Class-Action Spill Suit Bid by Insurance Journal, August 15, 2013
BP Plc asked a federal judge to deny U.S. investors the right to pursue a class action, or group, lawsuit claiming the company misled them before and after the 2010 Gulf of Mexico oil spill. The investors, led by the New York and Ohio pension funds, sued BP and certain officers in 2010, alleging violations of U.S. securities laws. The investors claim the company lied about the size of the worst offshore spill in U.S. history and its ability to contain a deep-water blowout to prop up its share price. Shareholders also claim BP’s senior management publicly proclaimed a commitment to safety improvement while internally cutting budgets and rejecting employees’ concerns about safety.
“Plaintiffs must demonstrate that the alleged misrepresentations were publicly known, that the stock traded in an efficient market, and that the relevant transaction took place between the time the misrepresentations were made and the time the truth was revealed,” BP’s lawyers said yesterday in a filing in federal court in Houston. BP has denied fraud or any lack of attention to safety in court filings. “A commitment to safety is not a guarantee that no future accidents will occur,” the company said in an earlier court filing. Richard Mithoff, a lawyer for the plaintiffs, said BP’s bid was a routine maneuver seen in all class-action suits. “I expect at the end of the day we’ll be able to convince the court this case should proceed to trial,” Mithoff said today in a telephone interview. … The judge in March refused to dismiss the bulk of the claims while ruling that only investors who purchased shares on the U.S. stock exchange were eligible to participate in the litigation. …
The investors also sued BP ex-Chief Executive Officer Tony Hayward and Doug Suttles, ex-chief operating officer of BP’s exploration unit, over statements they made about the spill. … Both men lied publicly about the size of the spill, according to the complaint.
The company also pleaded guilty to obstruction of Congress related to its spill size estimate, part of a $4 billion resolution of criminal charges brought by the U.S. BP pleaded guilty to 11 other felony counts…. [Emphasis added]
Encana wants embarrassing audio file erased from Internet ….the audio clip was posted on Chirbit by a reporter at the Globe and Mail and the world heard a microphone pick up a male voice call an analyst a “f—ing a-hole” after a question about a potential takeover. [Emphasis added]
Screen capture above taken October 1, 2013. 60,616 listens.