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Halliburton pleads guilty in spill case

Oil services giant admits evidence was destroyed

The oil services giant Halliburton agreed Thursday to plead guilty to destroying evidence during the Deepwater Horizon oil spill disaster in 2010, admitting one count of criminal conduct and agreeing to pay the $200,000 maximum statutory fine, according to the Justice Department.

In a startling turn in the three-year-old criminal investigation, Halliburton said that on two occasions during the oil spill, it directed employees to destroy or “get rid of” simulations that would have helped clarify how to assign blame for the blowout – and possibly focused more attention on Halliburton’s role.

The explosion at BP’s Macondo oil well on April 20, 2010, killed 11 people, destroyed the Deepwater Horizon drilling rig and ultimately leaked nearly 5 million barrels of crude oil into the Gulf of Mexico.

Halliburton, which has repeatedly denied responsibility and pointed fingers at BP, will be placed on probation for three years. It also agreed to pay $55 million to the National Fish and Wildlife Foundation even if the U.S. District Court in the Eastern District of Louisiana does not accept its plea agreement.

The admission will likely complicate Halliburton’s efforts to avoid damage payments in civil suits linked to the Deepwater Horizon spill. During the first quarter of this year, the company took a $637 million charge against earnings to increase to about $1.3 billion a reserve set aside for possible Macondo settlement costs.

On or about May 3, 2010, Halliburton established an internal working group to examine the Macondo disaster, including whether the number of centralizers used could have contributed to the blowout. According to the plea agreement, Halliburton’s cementing technology director instructed a senior program manager to run two computer simulations of the Macondo well’s final cementing job. When the simulations “indicated that there was little difference between using six and 21 centralizers,” the program manager “was directed to, and did, destroy these results,” the plea agreement said.

Efforts to recover the original computer simulations were unsuccessful, the Justice Department said.

“In or about June 2010, similar evidence was also destroyed in a later incident,” the Justice Department said. Halliburton’s cementing technology director “asked another, more experienced, employee” to run simulations again comparing six with 21 centralizers, the department added; that employee “reached the same conclusion and, like the Program Manager before him, was then directed to ‘get rid of’ the simulations.”

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