BP, Halliburton Go to War Over Deepwater Horizon Disaster

The legal battles surrounding the Deepwater Horizon 2010 drilling disaster promise to be just as messy—and more lengthy—than the spill incident itself.

The latest shots in this seemingly neverending exercise in passing the buck were fired last month when oil giant BP went to court in New Orleans claiming that US contractor Halliburton (yes, that Halliburton) botched the cement work on the doomed oil rig.

The lawsuit suit seeks “the amount of costs and expenses incurred by BP to clean up and remediate the oil spill, the lost profits from and/or diminution in value of the Macondo prospect, and all other costs and damages incurred by BP related to the Deepwater Horizon incident and resulting oil spill,” according to the BP filing.

BP did not put a specific number on the amount of damages it wants from Halliburton, but the oil major had previously estimated that the cleanup would cost about $42 billion. It has spent $14 billion in the Gulf coast region on spill cleanup and another $20 billion was set aside for economic claims and restoration work.

Halliburton, through a spokeswoman, was quoted saying that it “stands firm that we are indemnified by BP against losses resulting from the Macondo incident.”

The unfolding drama between the former partners is getting nasty. In another court filing Halliburton says BP should be forced to recognize a contractual agreement against potential cleanup costs.

In November, BP accused Halliburton of destroying evidence related to the Deepwater Horizon explosion which resulted in 11 deaths and the worst oil spill in US history. BP claims that Halliburton had destroyed evidence on cement testing and violated court orders by not producing “missing” computer modeling results. Halliburton responded that BP knew about these post-incident tests for some time and is now “mischaracterizing” the test results.

The continuing legal battles come as the US Department of Justice is preparing possible criminal charges against BP engineers, according to various reports. Charges against BP could be filed early this year. There is also suspicion that the US is assessing whether false information was given to regulators about the risks of drilling at the Macondo site. In addition, federal prosecutors are investigating ‍BP for potential criminal violations of the Clean Water Act and the Migratory Bird Treaty Act and may also decide to pursue charges against the company or individuals for manslaughter and obstruction of justice.

It’s a legal frenzy all right. Since the explosion and spill, more than 600 civil suits have been filed against BP.

The legal fireworks will kick off in earnest next month when a trial begins in a Louisiana district court to hear a consolidated docket of civil claims for spill damages from parties as diverse as federal regulators, Mexican states and small businesses. The trial is set to proceed in three phases covering blame for the disaster, the amount of oil spilled and the extent of the damage caused by the disaster.

It’s too soon to tell whether that means clarity or legal obfuscation will emerge. But given the sordid and tangled legal history of similar incidents, such as the 1989 Exxon Valdez spill, it’s likely it will take years or even decades before BP’s legal mess is cleaned up. The real losers won’t be BP or Halliburton, it will be those harmed most by what those companies did.

[Image credit: Burn Off Boom Burn by lumis via Flickr]