The U.S. Justice Department has just announced that the oil company Halliburton will plead guilty to criminal charges after admitting that they destroyed evidence in the Deepwater Horizon oil spill disaster in the Gulf of Mexico.
The spill was the largest in U.S. history, with around 5 million barrels of crude oil pouring into the Gulf and killing 11 rig workers. The plea agreement requires the company to pay a maximum fine of $200,000 and continue to cooperate with the Justice Department’s criminal investigation.
According to Halliburton, the violation is a misdemeanor associated with the elimination of records after the accident. The company said “the Department of Justice has agreed that it will not pursue further criminal prosecution of the company.”
A company statement said that the Justice Department “acknowledged the company’s significant and valuable cooperation during the course of its investigation, and the company has agreed to continue to cooperate … in any ongoing investigation related to or arising from the incident.”
Halliburton designed and made the well for BP. Before drilling began Halliburton recommended BP to use 21 “centralizers” – metal structures that keep the well pipe centered – but BP only used six.
The company carried out computer simulations in May and June 2010 to determine whether there were any differences between using 21 centralizers as opposed to 6. However, the outcome of the two scenarios weren’t that different and company employees were instructed to delete the simulations.
Last year BP paid over $4.5 billion in penalties related to the explosion. BP has been blaming Halliburton for the faulty cement job at the Macondo well.
The news could significantly worsen Halliburton’s already “damaged” reputation. The company was recently accused of bribing Nigerian officials to win energy contracts.
According to Fadel Gheit, a senior oil analyst at Oppenheimer: “It’s another bad day for Halliburton and a very good day for BP.”
Halliburton made a voluntary contribution of $55 million to the National Fish and Wildlife Foundation as part of an effort to restore its public image. The company said:
“Sustainability is at the core of the Company’s long-term success and is embedded throughout our business. Our contribution to NFWF demonstrates our commitment to making a positive environmental impact on our world and a strong commitment to our local communities.”