3 BP executives indicted over Gulf oil spill

Rick Jervis and Kevin Johnson, USA TODAY | USA TODAY

NEW ORLEANS -- Two employees of the British oil giant BP have been indicted on manslaughter charges in connection with the 2010 Gulf oil rig blowout that killed 11 workers.

A third executive was charged with lying to authorities about his work estimating the rate oil was flowing during the disaster.

The federal indictment unsealed on Thursday names BP well site leaders Robert Kaluza and Donald Vidrine, claiming they acted negligently in their supervision of key safety tests performed on the Deepwater Horizon drilling rig before the deadly explosion in April 2010.

The indictment says Kaluza and Vidrine failed to phone engineers onshore to alert them of problems in the drilling operation.

The indictment also charges David Rainey, who was BP's vice president of exploration for the Gulf of Mexico, with obstruction of Congress and making false statements.

The indictment claims that Rainey lied to federal investigators when they asked him how he calculated a flow rate estimate for BP's blown-out well in the days after the April 2010 disaster.

The charges come as BP announced that it has agreed to pay $4.5 billion in a settlement with the U.S. government to plead guilty to felony counts related to the deaths of the 11 workers and lying to Congress.

"All of us at BP deeply regret the tragic loss of life caused by the Deepwater Horizon accident as well as the impact of the spill on the Gulf coast region," said Bob Dudley, BP's Group Chief Executive in a statement on the company's website.

"From the outset, we stepped up by responding to the spill, paying legitimate claims and funding restoration efforts in the Gulf. We apologize for our role in the accident, and as today's resolution with the U.S. government further reflects, we have accepted responsibility for our actions."

Attorney General Eric Holder joined federal and local officials in New Orleans for an announcement on the deal, which is still subject to court approvals. Holder called the workers' deaths "unnecessary," adding that the federal investigation continues into the 2010 Deepwater disaster and the nation's biggest offshore oil spill. "Our work is far from over."

The explosion and fire aboard the Deepwater Horizon rig, 50 miles off the Louisiana coast, set off a spill that continued for 87 days, fouling large areas of the Gulf Coast of the United States with 206 million gallons of crude oil.

"Thirteen of the 14 criminal charges pertain to the accident itself and are based on the negligent misinterpretation of the negative pressure test conducted on board the Deepwater Horizon," said a BP news release announcing the settlement.

The test was aimed at determining whether drilling fluids had enough pressure to block the flow of gas to the surface, which is believed to be the cause of the explosion that killed 11 workers and injured many others.

"BP acknowledged this misinterpretation more than two years ago when it released its internal investigation report," the news release said. "Today's agreement is consistent with BP's position in the ongoing civil litigation that this was an accident resulting from multiple causes, involving multiple parties, as found by other official investigations."

The settlement includes payments of nearly $2.4 billion to the National Fish and Wildlife Foundation, $350 million to the National Academy of Sciences and about $500 million to the Securities and Exchange Commission.

Keith Jones, father of Gordon Jones, who died aboard the Deepwater Horizon during the blowout, said news of criminal charges was welcomed by the families of those killed aboard the rig.

"For 2-1/2 years, we've wondered when anyone was going to be brought to justice for what happened," Jones said. "If in fact this involves somebody being charged or taking responsibility for the blowout itself, then I think we see it as progress."

He said he expected to see multiple people charged and punished in the case.

"This is not a murder case where somebody intentionally killed 11 men," Jones said. "Many decisions were made, all motivated by money, and each of which made the blowout more likely."

The $4.5 billion fine would dwarf the largest previous corporate criminal penalty assessed by the Department of Justice — the $1.2 billion fine imposed on drug maker Pfizer in 2009.

The cost of BP's spill far surpassed the Exxon Valdez spill in 1989. Exxon ultimately settled with the U.S. government for $1 billion, which would be about $1.8 billion today.

The criminal settlement between BP and the federal government is just one of a slew of lawsuits and settlements facing the British energy company for their role in the oil spill, said Blaine LeCesne, an associate law professor at Loyola University in New Orleans who has been closely following the case.

Even after Thursday's announcement, BP still faces fines from the Clean Water Act and other federal environmental laws, payouts to thousands of fishermen and businesses hurt by the spill, fines under the Natural Resources Damage Assessment process and payouts to impacted states, he said.

Those fines and settlements could total more than $40 billion if BP is found "grossly negligent" by a federal judge, LeCesne said. A federal judge in New Orleans will hear a trial to assess fault in the case in late February, he said.

"BP is facing a very daunting potential financial bill for the remainder of this case," LeCesne said.

BP, which made a profit of $5.5 billion in the third quarter, has booked provisions of $38.1 billion to cover its liabilities from the incident, but the company has said the final cost remained highly uncertain. BP also recently announced that it expects to make the final payment this year to a $20 billion trust fund to cover damage from the blowout.

In March, BP announced a settlement estimated at $7.8 billion with more than 100,000 individuals and businesses for medical and economic losses.

In January 2011, a U.S. presidential commission found that the spill was caused by time-saving, cost-cutting decisions by BP rig owner Transocean and cement contractor Halliburton.

In September last year, a team of Coast Guard officials and federal regulators concluded BP bears ultimate responsibility. Their report found BP violated U.S. regulations, ignored crucial warnings and made bad decisions during the cementing of the well a mile beneath the Gulf of Mexico.

The $4.5 billion fine would dwarf the largest previous corporate criminal penalty assessed by the Department of Justice — the $1.2 billion fine imposed on drug maker Pfizer in 2009.

The cost of BP's spill far surpassed the Exxon Valdez spill in 1989. Exxon ultimately settled with the U.S. government for $1 billion, which would be about $1.8 billion today.

Contributing: Associated Press