Halliburton admits to destroying oil spill evidence

A support ship related to the collection of oil from over the site of the BP Deepwater Horizon oil well transitions through a sheen of oil as workers tried to stem the flow of the oil spill in the Gulf of Mexico on June 12, 2010.

Bad news for Halliburton this morning -- the oil services company has admitted to destroying evidence connected to the Gulf spill in 2010. The business will pay a $200,000 penalty, but says it will not face any criminal prosecution for the act.

Halliburton recommended to its client -- energy giant BP -- that they use 21 so-called collars to securely install a well pipe. BP went with six. Halliburton’s models showed that there was little difference, and that is the evidence Halliburton destroyed.

“Destroying evidence in my view, it’s really a cut above the other charges,” says Fadel Gheit, a senior oil analyst at Oppenheimer. Gheit says he’s not surprised that Halliburton tried to cover its tracks, particularly given the magnitude of the catastrophe.

“It resulted in the deaths of 11 people and the worst environmental disaster in history, so a company like Halliburton, or any other company…will try to distance itself as much as possible,” he says.

Today BP probably has a big smile on its face.

Stanley Reed, who co-wrote the book In Too Deep, about the company and the oil spill, says Halliburton’s involvement bolsters BP’s court case. 

“I think it will make it look like BP was not the only company at fault,” he says. Reed adds BP is facing a payout of anywhere from several to $20 billion in an on-going federal suit in New Orleans.

Halliburton’s admission could potentially save BP billions.

About the author

Dan Gorenstein is the senior reporter for Marketplace’s Health Desk. You can follow him on Twitter @dmgorenstein.

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