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Judge hears testimony from BP executive who led company's internal probe of Gulf oil spill

By: Michael Kunzelman, The Associated Press

Wednesday, Feb. 27, 2013 at 6:37 PM | Comments: 0

Lamar McKay, former president of BP America and current chief executive of BP's Upstream unit, leaves Federal Court after testifying in New Orleans, Monday, Feb. 25, 2013. McKay testified Tuesday that BP and its contractors share responsibility for preventing blowouts like the Macondo well blowout and rig explosion off Louisiana that killed 11 workers on April 20, 2010, spawning the massive spill. (AP Photo/Bill Haber)

NEW ORLEANS - Once the object of ridicule and focus of outrage after the 2010 oil spill in the Gulf of Mexico, former BP chief executive Tony Hayward made a cameo appearance Wednesday in a trial to decide how much blame the company must shoulder for the disaster.

Hayward didn't attend in person. Instead, he showed up just briefly on a videotape in what may be his only appearance in the courtroom.

Hayward, who famously said "I'd like my life back" at the height of the spill, isn't expected to take the witness stand in the high-stakes trial. Hayward did testify in person before Congress and gave a videotaped deposition for this trial, but his role may be limited here by his lack of direct knowledge of the drilling operations on the Deepwater Horizon.

Still, attorneys for the U.S. government and Gulf Coast residents and businesses showed a 20-minute snippet of his deposition, projecting the video on a large white screen in the courtroom. The attorneys have said the London-based company bears most of the blame for the spill and they accused BP of putting profits ahead of safety by cutting corners on a project that was over budget and behind schedule.

"I believe that the role of leaders is very important in shaping the culture of an organization," Hayward said in the videotape.

He also said cost-cutting measures in the years before the 2010 spill did not have an effect on drilling operations, comments that differed from excerpts of a videotaped deposition from Kevin Lacy, who served as BP's senior vice-president for drilling operations in the Gulf before resigning several months before the spill.

Lacy said BP slashed between $250 million and $300 million from its Gulf drilling budget from 2008 to 2009 while at the same time its production rose by more than 50 per cent.

"I was never given a directive to cut corners or deliver something not safely, but there was tremendous pressure on costs," Lacy said.

U.S. District Judge Carl Barbier is presiding over the trial designed to identify the causes of BP's Macondo well blowout and assign percentages of fault to the companies involved. If BP is found guilty of gross negligence, it could be on the hook for nearly $18 billion.

The rig explosion killed 11 oil rig workers and the busted well dumped an estimated 172 million gallons (651 million litres) of oil into the Gulf.

Barbier listened to the videotape that featured a lawyer asking Hayward about a speech he gave just five days before the blowout.

Hayward spoke about the company's "drive to increase efficiency and reduce costs." The deposition was taken over several days in London in June 2011.

A year earlier, Hayward was photographed at a yacht race and criticized for saying the amount of spilled oil was relatively small given the size of the Gulf. He was also accused of directing his employees to downplay the disaster to keep stock prices afloat.

Hayward told Congress he was personally devastated by the spill and that it never should have happened. He stepped down as CEO and eventually left the company.

Rig owner Transocean Ltd. and cement contractor Halliburton also are defendants and their lawyers have tried to minimize their roles in the disaster. BP attorneys have said the drilling was a team effort and that all of the companies share responsibility for the disaster.

Meanwhile, a witness for the federal government testified BP withheld critical information from industry regulators and continued drilling despite clear signs of trouble before the blowout.

Alan Huffman, a well design expert and geophysicist who has worked for Conoco and Exxon, said BP continued drilling in dangerous deep water conditions without keeping the Minerals Management Service fully informed.

Huffman said his review of internal BP documents and MMS records showed the oil giant engaged in a "consistent pattern of misreporting" to the federal agency and gave it a "very false impression" of what was happening on the drilling project.

"And this happened on multiple occasions ... not just on one or two," said Huffman, the second expert witness at a trial that started Monday and, barring a settlement, could last several months.

The day ended with testimony from a BP executive who led the company's internal probe. Mark Bly, who was until recently BP's executive vice-president for safety and operational risk, said the internal investigation wasn't intended to look at the disaster through the "lens of responsibility."

BP pleaded guilty in January to 14 criminal counts, including 11 felony counts of manslaughter, and agreed to pay $4 billion in criminal penalties to resolve a Justice Department probe. Transocean pleaded guilty earlier this month to one misdemeanour count of violating the Clean Water Act and agreed to pay $400 million in criminal penalties.

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Follow Kunzelman at https://twitter.com/Kunzelman75

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