Former BP engineer arrested on U.S. criminal charges related to gulf oil spill

A former BP drilling engineer was arrested Tuesday on charges of intentionally destroying text messages sought by federal authorities as evidence in the wake of the April 20, 2010, Deepwater Horizon oil spill disaster, the Justice Department said.

The two charges of obstruction of justice filed against Kurt Mix, in the Eastern District of Louisiana, are the first criminal charges connected to the oil spill caused by a blowout on BP’s Macondo well. If found guilty, Mix could face up to 20 years in prison and up to $250,000 in fines for each count.

Attorney General Eric H. Holder Jr. held out the possibility of further criminal charges — a key uncertainty hanging over the London-based oil giant as it tries to settle claims and move past the disaster, which was the largest oil spill in U.S. history. Eleven men were killed in the explosion that sank the drilling rig. The massive leak destroyed thousands of birds and other wildlife in the region.

“The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history,” Holder said in a statement.

The charges against Mix are not related to the multiple errors that led to the blowout or the design of BP’s botched attempts to stop the spill later. Nor do they allege any wrongdoing by the company as a matter of policy.

But the charges do point to the question of what BP knew about the flow rate from the Macondo well and whether it covered up any of that information. Knowing exactly how fast the oil was leaking into the Gulf of Mexico is important because BP is subject to fines based on the amount of oil spilled. Those fines are still being negotiated but could run from $5 billion to more than $15 billion.

The Justice Department complaint says that immediately after the blowout, Mix told his supervisor that his own spill estimates ranged from 64,000 to 138,000 barrels a day, far higher than any figure BP ever reported publicly. He subsequently sent much lower estimates to an outside contractor.

Seth Pierce, a partner and corporate litigation expert at Mitchell Silberberg & Knupp, said that “it is extremely rare . . . to bring obstruction-of-justice charges in connection with the destruction of evidence” and that he believed the Justice Department was making “a pressure play” and was “trying to turn this guy in the hope that he’ll rat out other people and say that he was pressured to do it.”

Mix, 50, from Katy, Tex., was a drilling and completions project engineer for BP. The company declined to say how long Mix had been with BP or why he resigned in January.

While it is unclear who was exchanging text messages with Mix, an industry source said that Mix reported to John Sprague, a drilling engineer in charge of BP’s gulf operations, who in turn reported to Pat O’Bryan, the vice president for drilling and completions for the Gulf. O’Bryan was one of two BP executives who flew to the Deepwater Horizon rig hours before the blowout and who later escaped the burning rig.

In the case against Mix, the Justice Department said that the former engineer allegedly ignored instructions from unidentified BP officials and lawyers to preserve evidence. The Justice Department said BP “sent numerous notices to Mix requiring him to retain all information concerning Macondo, including his text messages.”

BP said in a statement Tuesday that it is cooperating with the Justice Department and that it “had clear policies requiring preservation of evidence in this case and has undertaken substantial and ongoing efforts to preserve evidence.”

But the case against Mix raises further questions about who knew what, and when.

The Justice Department said that after the blowout, Mix worked to estimate the amount of oil leaking from the well and was involved in the company’s efforts to plug the leak. Among other strategies, those included the “top kill” technique, BP’s failed attempt to pump heavy drilling mud into the wellhead to try to stop the oil flow.

On or about Oct. 4, 2010, after Mix learned that his electronic files were to be collected by a vendor working for BP’s lawyers, he deleted from his iPhone “a text string containing more than 200 text messages with a BP supervisor,” the Justice Department alleged in its statement. “The deleted texts, some of which were recovered forensically, included sensitive internal BP information collected in real-time as the Top Kill operation was occurring, which indicated that Top Kill was failing.”

Mix deleted a text he had sent on the evening of May 26, 2010, at the end of the first day of top kill, the Justice Department said. In the text, Mix stated, among other things, “Too much flowrate — over 15,000 and too large an orifice,” according to the complaint. Before the top kill effort, Mix and other engineers had concluded internally that top kill probably wouldn’t work if the flow rate was greater than 15,000 barrels of oil a day.

At the time, however, BP had not changed its public estimate that the flow rate was about 5,000 barrels a day. Earlier that day, BP then-chief executive Tony Hayward had said that “the operation is proceeding as we planned it.” The company did not announce that the top kill effort had failed for three more days, on May 29. And when it did make that announcement, BP stock plunged about 15 percent.

Eventually, federal regulators estimated that the average flow rate during the 87-day spill was more than 50,000 barrels a day.

In the other charge against Mix, the Justice Department alleged that the engineer later deleted a text string containing more than 100 messages between him and a BP contractor he had worked with “on various issues concerning how much oil was flowing from the Macondo well after the blowout.”

“By the time Mix deleted those texts, he had received numerous legal hold notices requiring him to preserve such data and had been communicating with a criminal defense lawyer in connection with the pending grand jury investigation of the Deepwater Horizon disaster,” the agency said.

During the time of the spill, Rep. Edward J. Markey (D-Mass.), a senior member of the House Energy and Commerce Committee, was a lead critic of BP and its estimates of the rate at which oil was leaking into the Gulf of Mexico. On Tuesday, he issued a statement saying that the case against Mix “raises additional questions about what the company knew about the size of the spill at the time.”

Two years after the catastrophe, Markey said, BP “is still challenging the size of the spill to reduce their own liability and fines. It is not surprising that there may be instances where BP employees tried to cover up their tracks, when billions of dollars in fines are at stake that should be paid to the American people.”

Steven Mufson covers energy and other financial news.
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A former BP drilling engineer was arrested Tuesday on charges of intentionally destroying text messages sought by federal authorities as evidence in the wake of the April 20, 2010, Deepwater Horizon oil spill disaster, the Justice Department said.

The two charges of obstruction of justice filed against Kurt Mix, in the Eastern District of Louisiana, are the first criminal charges connected to the oil spill caused by a blowout on BP’s Macondo well. If found guilty, Mix could face up to 20 years in prison and up to $250,000 in fines for each count.

Attorney General Eric H. Holder Jr. held out the possibility of further criminal charges — a key uncertainty hanging over the London-based oil giant as it tries to settle claims and move past the disaster, which was the largest oil spill in U.S. history. Eleven men were killed in the explosion that sank the drilling rig. The massive leak destroyed thousands of birds and other wildlife in the region.

“The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history,” Holder said in a statement.

The charges against Mix are not related to the multiple errors that led to the blowout or the design of BP’s botched attempts to stop the spill later. Nor do they allege any wrongdoing by the company as a matter of policy.

But the charges do point to the question of what BP knew about the flow rate from the Macondo well and whether it covered up any of that information. Knowing exactly how fast the oil was leaking into the Gulf of Mexico is important because BP is subject to fines based on the amount of oil spilled. Those fines are still being negotiated but could run from $5 billion to more than $15 billion.

The Justice Department complaint says that immediately after the blowout, Mix told his supervisor that his own spill estimates ranged from 64,000 to 138,000 barrels a day, far higher than any figure BP ever reported publicly. He subsequently sent much lower estimates to an outside contractor.

Seth Pierce, a partner and corporate litigation expert at Mitchell Silberberg & Knupp, said that “it is extremely rare . . . to bring obstruction-of-justice charges in connection with the destruction of evidence” and that he believed the Justice Department was making “a pressure play” and was “trying to turn this guy in the hope that he’ll rat out other people and say that he was pressured to do it.”

Mix, 50, from Katy, Tex., was a drilling and completions project engineer for BP. The company declined to say how long Mix had been with BP or why he resigned in January.

While it is unclear who was exchanging text messages with Mix, an industry source said that Mix reported to John Sprague, a drilling engineer in charge of BP’s gulf operations, who in turn reported to Pat O’Bryan, the vice president for drilling and completions for the Gulf. O’Bryan was one of two BP executives who flew to the Deepwater Horizon rig hours before the blowout and who later escaped the burning rig.

In the case against Mix, the Justice Department said that the former engineer allegedly ignored instructions from unidentified BP officials and lawyers to preserve evidence. The Justice Department said BP “sent numerous notices to Mix requiring him to retain all information concerning Macondo, including his text messages.”

BP said in a statement Tuesday that it is cooperating with the Justice Department and that it “had clear policies requiring preservation of evidence in this case and has undertaken substantial and ongoing efforts to preserve evidence.”

But the case against Mix raises further questions about who knew what, and when.

The Justice Department said that after the blowout, Mix worked to estimate the amount of oil leaking from the well and was involved in the company’s efforts to plug the leak. Among other strategies, those included the “top kill” technique, BP’s failed attempt to pump heavy drilling mud into the wellhead to try to stop the oil flow.

On or about Oct. 4, 2010, after Mix learned that his electronic files were to be collected by a vendor working for BP’s lawyers, he deleted from his iPhone “a text string containing more than 200 text messages with a BP supervisor,” the Justice Department alleged in its statement. “The deleted texts, some of which were recovered forensically, included sensitive internal BP information collected in real-time as the Top Kill operation was occurring, which indicated that Top Kill was failing.”

Mix deleted a text he had sent on the evening of May 26, 2010, at the end of the first day of top kill, the Justice Department said. In the text, Mix stated, among other things, “Too much flowrate — over 15,000 and too large an orifice,” according to the complaint. Before the top kill effort, Mix and other engineers had concluded internally that top kill probably wouldn’t work if the flow rate was greater than 15,000 barrels of oil a day.

At the time, however, BP had not changed its public estimate that the flow rate was about 5,000 barrels a day. Earlier that day, BP then-chief executive Tony Hayward had said that “the operation is proceeding as we planned it.” The company did not announce that the top kill effort had failed for three more days, on May 29. And when it did make that announcement, BP stock plunged about 15 percent.

Eventually, federal regulators estimated that the average flow rate during the 87-day spill was more than 50,000 barrels a day.

In the other charge against Mix, the Justice Department alleged that the engineer later deleted a text string containing more than 100 messages between him and a BP contractor he had worked with “on various issues concerning how much oil was flowing from the Macondo well after the blowout.”

“By the time Mix deleted those texts, he had received numerous legal hold notices requiring him to preserve such data and had been communicating with a criminal defense lawyer in connection with the pending grand jury investigation of the Deepwater Horizon disaster,” the agency said.

During the time of the spill, Rep. Edward J. Markey (D-Mass.), a senior member of the House Energy and Commerce Committee, was a lead critic of BP and its estimates of the rate at which oil was leaking into the Gulf of Mexico. On Tuesday, he issued a statement saying that the case against Mix “raises additional questions about what the company knew about the size of the spill at the time.”

Two years after the catastrophe, Markey said, BP “is still challenging the size of the spill to reduce their own liability and fines. It is not surprising that there may be instances where BP employees tried to cover up their tracks, when billions of dollars in fines are at stake that should be paid to the American people.”

Steven Mufson covers energy and other financial news.
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