First Criminal Charges Prepared in BP Oil Spill

Published December 28, 2011

| The Wall Street Journal

U.S. prosecutors are preparing what would be the first criminal charges against BP PLC employees stemming from the 2010 Deepwater Horizon accident, which killed 11 workers and caused the worst offshore oil spill in U.S. history, said people familiar with the matter.

Prosecutors are focused on several Houston-based engineers and at least one of their supervisors at the British oil company, though the breadth of the investigation isn't known. The prosecutors assert the employees may have provided false information to regulators about the risks associated with the Gulf of Mexico well while its drilling was in progress, these people said.

The felony charges-which might be disclosed early in 2012, if they are brought-could involve providing false information in federal documents, these people said. A conviction on such a charge carries a penalty of up to five years in prison as well as a fine.

The Department of Justice still could decide not to bring charges against the individuals, people familiar with the situation said. It's not unusual for prosecutors to use the threat of charges to pressure people to cooperate in investigations.

Legal experts say BP itself is expected to face broader criminal charges, including violations of the federal Clean Water Act; the company already is appealing what could amount to $36.6 million in administrative fines levied by U.S. regulators for safety violations. The size of the fines hasn't been finalized.

BP spokesman Daren Beaudo declined to comment on the potential for charges against employees or the company. The company has said it believed the accident was caused by a combination of events that involved multiple parties, not just BP.

A Justice Department spokeswoman declined to comment.

A federal task force based in New Orleans has spent the past 18 months investigating the April 2010 accident. Prosecutors have reviewed thousands of documents and conducted dozens of interviews, including bringing some individuals before a grand jury, according to people close to the investigation.

Prosecutors recently looked into a key safety measure in deep-water drilling: The difference between the minimum amount of pressure that must be exerted in a well's bore by drillers to keep the well from blowing out, and how much pressure would break apart the rock formation containing oil and gas. The narrower the margin between those two points, the more difficult a well is to control.

Federal regulations don't define what margin qualifies as safe, but companies are supposed to identify the margin in their applications for permits to drill. When a company cannot maintain that safety margin, it is supposed to suspend drilling and remedy the problem.

Among questions prosecutors are asking is whether information gathered during drilling that helped determine the safety margin in the Deepwater Horizon situation was properly reflected in amended drilling permit applications that had to be approved by federal regulators, said the people familiar with the investigation.

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