Hayward Deposition - June 2011

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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA
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IN RE:
OIL SPILL
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MDL NO. 2179 SECTION "J" JUDGE BARBIER MAG. JUDGE SHUSHAN
BY THE OIL RIG

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"DEEPWATER HORIZON" IN THE GULF OF MEXICO, ON APRIL 20, 2010
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***************** VOLUME 1 *****************
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Deposition of Anthony Hayward, taken at Kirkland & Ellis International, 30 St. Mary Axe, 22nd Floor, London EC3A 8AF, England, United Kingdom, on the 6th of June, 2011.
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PURSUANT TO CONFIDENTIALITY ORDER
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A P P E A R A N C E S Magistrate Judge Sally Shushan UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA 500 Poydras Street, B345 New Orleans, Louisiana 70130 APPEARING FOR THE PLAINTIFFS' STEERING COMMITTEE: Mr. Robert T. Cunningham Mr. William E. Bonner CUNNINGHAM BOUNDS, LLC 1601 Dauphin Street Mobile, Alabama 36604 Mr. Paul M. Sterbcow LEWIS, KULLMAN, STERBCOW & ABRAMSON 601 Poydras Street, Suite 2615 New Orleans, Louisiana 70130 Mr. Calvin C. Fayard, Jr. FAYARD & HONEYCUTT 519 Florida Avenue, SW Denham Springs, Louisiana 70726 Mr. Stephen J. Herman HERMAN, HERMAN, KATZ & COTLAR 820 O'Keefe Avenue New Orleans, Louisiana 70113 Mr. Ronnie G. Penton LAW OFFICES OF RONNIE G. PENTON 209 Hoppen Place Bogalusa, Louisiana 70427-3827 Mr. John Parkerson Roy DOMENGEAUX, WRIGHT, ROY & EDWARDS 556 Jefferson Street, Suite 500 Lafayette, Louisiana 70501
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APPEARING FOR THE DERIVATIVE PLAINTIFFS, MDL 2185 SECURITIES PLAINTIFFS SUBCLASS: Mr. Richard Warren Mithoff MITHOFF LAW FIRM 500 Dallas St. - Penthouse Houston, Texas 77002 APPEARING FOR BP, INC.: Mr. Richard C. Godfrey Mr. Mark R. Filip KIRKLAND & ELLIS 300 North LaSalle Chicago, Illinois 60654 Mr. Daryl A. Libow SULLIVAN & CROMWELL 1701 Pennsylvania Avenue, N.W. Washington, D.C. 20006-5805 Mr. James J. Neath ASSOCIATE GENERAL COUNSEL BP LEGAL BP AMERICA INC. 501 Westlake Park Boulevard Houston, Texas 77079 APPEARING FOR ANTHONY HAYWARD: Mr. Dan K. Webb Mr. Thomas L. Kirsch II WINSTON & STRAWN 35 West Wacker Drive Chicago, Illinois 60601-9703 APPEARING FOR ANDY INGLIS: Ms. Kathleen H. Goodhart COOLEY LLP 101 California Street, 5th Floor San Francisco, California 94111-5800 APPEARING FOR TRANSOCEAN: Mr. Steven L. Roberts Mr. Daniel Johnson Mr. Jack Massey SUTHERLAND ASBILL & BRENNAN 1001 Fannin, Suite 3700 Houston, Texas 77002-6760
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APPEARING FOR ANADARKO PETROLEUM COMPANY AND MOEX OFFSHORE 2007: Ms. Diane C. Hertz BINGHAM MCCUTCHEN 399 Park Avenue New York, New York 10022-4689 APPEARING FOR CAMERON INTERNATIONAL CORPORATION: Mr. David J. Beck BECK, REDDEN & SECREST One Houston Center 1221 McKinney Street, Suite 4500 Houston, Texas 77010-2010 APPEARING FOR DRIL-QUIP, INC.: Mr. C. Dennis Barrow, Jr. WARE, JACKSON, LEE & CHAMBERS America Tower, 42nd Floor 2929 Allen Parkway Houston, Texas 77019-7101 APPEARING FOR M-I SWACO: Mr. Hugh E. Tanner MORGAN, LEWIS & BOCKIUS 1000 Louisiana Street, Suite 4000 Houston, Texas 77002 Mr. Steven A. Luxton (Partial Appearance) MORGAN, LEWIS & BOCKIUS, LLP 1111 Pennsylvania Avenue, NW Washington, D.C. 20004 APPEARING FOR HALLIBURTON: Mr. Donald E. Godwin Ms. Jenny L. Martinez Ms. Stefanie K. Major GODWIN RONQUILLO 1201 Elm Street, Suite 1700 Dallas, Texas 75270-2041 APPEARING FOR THE UNITED STATES: Mr. R. Michael Underhill Attorney in Charge West Coast office U.S. DEPARTMENT OF JUSTICE TORTS BRANCH, CIVIL DIVISION 450 Golden Gate Avenue 7th Floor, Room 5395 San Francisco, California 94102-3463
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APPEARING FOR THE STATE OF ALABAMA: Mr. Luther Strange Attorney General Mr. Corey L. Maze Special Deputy Attorney General Mr. Winfield J. Sinclair Assistant Attorney General OFFICE OF THE ATTORNEY GENERAL STATE OF ALABAMA 501 Washington Avenue Montgomery, Alabama 36104 APPEARING FOR THE STATE OF LOUISIANA: Mr. Allan Kanner Ms. Elizabeth "Lili" Petersen Attorneys for Louisiana Attorney General KANNER & WHITELEY 701 Camp Street New Orleans, Louisiana 70130-3504 APPEARING FOR OHIO PENSION FUNDS: Mr. Jeffrey C. Block BERMAN DEVALERIO One Liberty Square Boston, Massachusetts 02109 ALSO PRESENT: Mr. Peter Jennings, Logistics Supervisor Mr. Ray Aguirre, Case Manager Mr. Max Kennedy, Videographer Ms. Lilia Garcia Mr. Chad Paris Ms. Cecelia Aguilar
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INDEX VIDEOTAPED ORAL DEPOSITION OF ANTHONY HAYWARD JUNE 6, 2011 Appearances.............................. Direct Examination-Mr. Cunningham........ Examination-Mr. Sterbcow................. Examination-Mr. Underhill................ Changes and Signature.................... Reporter's Certificate................... EXHIBIT INDEX Exhibit No. Description Marked 2 11 232 346 444 446
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6000
6001
Tony Hayward Speech Transcription from Youtube.com, Entrepreneurial Spirit Needed; 58 pages June 17, 2010 Verbatim Transcript, House of Representatives, Committee on Energy and Commerce, Subcommittee on Oversight and Investigations, Committee Hearing on the Deepwater Horizon Oil Spill; 102 pages Printout of presentation, Leading from the top in BP, Steve Flynn, Vice President, HSSE, BP Group Safety and Operations; 11 pages Printout of 1 April 2005 speech by Tony Hayward, Working Safety - a continuous journey, at the International Regulators' Offshore Safety Forum, London; five pages
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6002
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39
6003
46
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6004 6005
March 9, 2001 printout from Reuters, Exxon's Tillerson blames BP for Gulf oil spill; one page February 3, 2000 printout of article by Ben Spiess, OT: BP Fined $15.5 Million in Dumping of Toxic Waste in Alaska; one page United States District Court, Southern District of Texas, Judgment in a Criminal Case, United States of America v. BP Products North America, March 13, 2009, attachments; 13 pages Printout from BP website, 17 August 2005, BP to Appoint Independent Panel to Review U.S. Refinery Safety; two pages United States District Court For The District of Alaska, United States of America v. BP Exploration (Alaska), Inc. Information, Judgment in a Criminal Case; seven pages Printout from PBS Newshour website, August 8, 2006, Alaskan Oil Pipeline Leak Raises Environmental Concerns; five pages United States District Court For The Northern District of Illinois, Eastern Division, United States of America v. BP America, Inc., Deferred Prosecution Agreement, attachments; 70 pages Emergency Planning: Preparedness, Prevention & Response by Center for Chemical Process Safety, Lessons from Grangemouth: A Case History, by Michael Broadribb, et al.; 17 pages March 2007 U.S. Chemical Safety and Hazard Investigation Board Investigation Report, Refinery Explosion and Fire, BP, Texas City, Texas, March 23, 2005; 341 pages
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March 2007 Booz Allen Hamilton Management Systems Review, 2006 BPXA GPB OTL Incidents, BP America Inc. Final Report; 164 pages Printout from The Guardian website, BP boss warns of shake-up after dreadful results; two pages Printout of Tony Hayward's speech at 2008 Annual General Meeting, 17 April 2008, from BP website; four pages BP press release, April 16, 2009, BP AGM Speech, Tony Hayward, BP Group Chief Executive, printout of presentation, 100 years of operating at the frontiers, Annual General Meeting; 16 pages BP press release, April 15, 2010, BP Annual General Meeting 2010: Speeches, Tony Hayward, Group Chief Executive, printout of presentation, Annual General Meeting; 24 pages Document 14 - From 'BP Parties' database, 2010 Drilling Excellence Update PowerPoint; four pages BP Gulf of Mexico Strategic Performance Unit, Drilling and Completions, The Way We Work, marked CONFIDENTIAL; BP-HZN-2179MDL00369620-369643 BP D&C HSSE Organization Change August 09, marked CONFIDENTIAL; BP-HZN-2179MDL00306832-306837 H. Lamar McKay, Chairman & President, BP America responses for US House Energy and Commerce Subcommittee on Energy and Environment Pre-hearing Questions, June 15, 2010, Submission date: June 13, 2010; 10 pages BP document, Horizon, Issue Three 2008, A Better Record on Safety and Environment; one page
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154
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BP Sustainability Reporting 2009, Safety; 48 pages BP p.l.c. Group results, Second quarter and half year 2010(a); 43 pages Document 7 - From 'BP Parties' database, SPU OMS gaps PowerPoint; eight pages Failure to Learn, the BP Texas City Refinery disaster, by Andrew Hopkins; 200 pages Printout from iWatch News, Renegade Refiner: OSHA says BP "systemic safety problem," by Jim Morris, M.B. Bell, May 17, 2010; three pages Printout from OSHA website, OSHA Fact Sheet, BP History Fact Sheet; two pages
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Group of E-mails, various dates, among Scherie Douglas, Mark Hafle, Carl Butler, Marty Rinaudo, David Sims, Ian Little, Kevin Lacy, Kevin Guerre, Michael Leary, Jasper Peijs Martin Illingworth, Spencer Howe, Steve Chappell, Mike Daly, Subjects: Casing test extension - GB 873 #001, Update on TO performance, Weekly Drilling Report, marked CONFIDENTIAL; BP-HZN-MBI 00031629-31630, 37507-37508, BP-HZN-2179MDL00004792 277 March 3, 2010 E-mail from Tim Burns to Glenn Nohavitza, David Schilling, George Gray, Subject: Maersk Developer Subsea BOP Report, attaching presentation, Subsea BOP Failures, Maersk Developer, Statoil Gulf of Mexico Experience Transfer, marked CONFIDENTIAL; BP-HZN-2179MDL00281877-281905
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March 22, 2010 E-mail from Jasper Peijs to Martin Illingworth, others, Subject: Weekly Drilling Report, E-mail from Laura Rumelhart to Fergus Addison, others, Subject: Tucker-2 Daily Update, June 11, 2010 Wilmer Hale letter to Jeff Bingaman from Tonya Robinson, marked CONFIDENTIAL; BP-HZN-2179MDL0004792, 45236-45237, 459-480 RB Falcon DEEPWATER HORIZON BOP Assurance Analysis, marked Confidential; BP-HZN-BLY00053046-53194 BP Annual Report and Form 20-F 2010; 309 pages Printout from BP website, Fourth Quarter and Full Year 2007 Results; one page Printout from BP website, BP Fourth Quarter and Full-Year 2008 Results; one page Printout from BP website, BP Fourth Quarter and Full-Year 2009 Results; one page Printout from BP website, BP Fourth Quarter and Full-Year 2010 Results; two pages Printout from BP website, First Quarter 2011 Results; one page Profit for Years 7007-2010; one page Printout from BP website, BP Announces Settlement with Moex/Mitsui of Claims Between the Companies Related to the Deepwater Horizon Accident; two pages
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MR. CUNNINGHAM: THE VIDEOGRAPHER:
We're ready. On the record at
8:41 a.m., beginning the deposition with Tape 1. ANTHONY HAYWARD was called as a witness by the Plaintiffs and, being first duly sworn, testified as follows: DIRECT EXAMINATION QUESTIONS BY MR. CUNNINGHAM: Q. A. Q. A. Q. Your name, please? Anthony Hayward. And you hold a Ph.D., correct? I do, yeah. Dr. Hayward, you first went to work for BP as
a geologist and worked as a geologist for about eight or nine years. A. Q. A. Q. That's correct. Correct? That's correct. And then in 1990 or 1991, you were asked to
become the Executive Assistant to John Browne, right? A. Q. A. That's right. Was he the CEO then? No. He was the CEO of Exploration and
Production. Q. All right.
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A.
The CEO of the company was a gentleman called
Robert Horton. Q. A. Q. And John Browne later became the CEO, correct? That's right. The position of Executive Assistant was a new
position at BP, correct -A. Q. That's right. -- at that point in time. Where was your office physically located? A. Q. located? A. He had two. He had one in Queen Victoria It was in Queen Victoria Street. And where was John Browne's office physically
Street and one in Britannic House across the city. Q. All right. The one at Queen Victoria Street,
where was it physically located relative to your office? A. Q. A. Q. It was adjacent. Adjacent? M-h'm. All right, sir. And until the late 1990s, BP
was a relatively small, regional oil and gas company, correct? A. No, it was -- it was one of the world's seven Relative to today,
largest oil companies at the time.
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it was small, but relative to the world at the time, it was actually relatively large. Q. Well, in -- is this statement true or not:
Until the late 1990s, BP was a relatively small, regional oil and gas company? A. is true. Well, I don't real -- I don't think it really It was a -- one of the world's seven largest It was one of the seven sisters.
oil companies. Q. A. Well --
It had operations pretty well globally, had
operations in America and the U.K., in North Africa, in the Middle East, in South America. I mean, it, you
know, depends how you define "small and regional," of course. I'm not trying to be difficult, but I, you
know -- sort of -Q. A. Well, if -- if it's not -It's smaller than it was -- it's smaller than
it is today, that's for sure. Q. Well, if -- if -- if that statement is not
true, would you please explain to the Court why you made it in a speech you gave in July of 2009 to the Stanford Business School? MR. GODFREY: A. Objection as to form.
As I said, the -- it's all about the context So
in which you're describing "small" and "regional."
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in the context of my speech to the Stanford Business School, was a description of how the world's oil and gas industry developed. At the end of the 1990s, there
were a series of mergers between BP and Amoco, between Exxon and Mobil, between Chevron and Texaco, that created a new set of much larger companies. Q. (By Mr. Cunningham) Was the statement, "Until
the late 1990s, BP was a relatively small, regional oil and gas company" -- was that statement true when you made it in 2009 in your speech at the Stanford Business School? MR. WEBB: the question. A. Q. It's clearly what I said. (By Mr. Cunningham) Okay. Yes, yes, it was -And then from 1999 I -- I object to the form of
until 2003, there was an extraordinary period of mergers and acquisitions under John Browne in which you were very much involved, true? A. Q. That's correct. You became Treasurer of BP in 2000, during
that period? A. Q. Yes. A promotion to a position that John Browne had
previously held, true? A. That is correct.
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Q.
By 2003, you and Browne, John Browne, had
created BP in its current form, one of the largest energy companies in the world, a super ma -- a super major, correct? A. Q. That's correct. And in 2003, you were named to the No. 2 job,
CEO of Exploration and Production with BP, correct? MR. GODFREY: A. Objection as to form.
I think defining that as the No. 2 job would
probably not do justice to the Deputy Chief Executive at the time. Q. (By Mr. Cunningham) All right. Who -- who was
higher up the ladder? A. It was a gentleman called Dick Oliver, who was And
the Deputy Chief Executive of BP at the time.
prior to that, there had been a gentleman called Robin Chase, who was the Deputy Chief Executive. certainly not the No. 2. So I was
I would -- I thought of
myself at the time, you know, as -- with two or three other peers, as the -- sort of the third rung of Executive Management. Q. Okay. MR. ROBERTS: second. Bobo, could -- just a We
Would -- would you pull his microphone up?
can't hear.
We can hear Bobo, but we can't hear the --
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MR. GODFREY: MR. WEBB: microphones -MS. GOODHART: anything down here. THE WITNESS: MS. GOODHART: from the witness. THE WITNESS:
Or turn up the volume.
It's not really the
We're not -- we can't hear
Yeah. We're not hearing anything
It's not my microphone. If you'll keep your
MR. CUNNINGHAM: voice up -THE WITNESS: three inches from my mouth. MR. GODFREY:
M-h'm.
The microphone is
Okay. Just speak up.
THE VIDEOGRAPHER: MR. GODFREY: THE WITNESS: MR. GODFREY: speak to the -THE WITNESS: MR. GODFREY:
This -- I think we have -Can I -The witness is going to
-- ask a --- Examiner and, I think,
the other transcripts, and that's going to be fine. The witness is not going to be shouting into the microphone. MR. ROBERTS: Well, I didn't ask for
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that.
I just asked for the microphone to be placed so
we didn't have this problem. MR. WEBB: I think the microphone is So
placed about two inches below his throat right now. I think -- I'm not sure if we move it up, if that's
going to accomplish much, based on -- let -- let's see how it goes. Q. (By Mr. Cunningham) You wouldn't describe it
as the No. 2 position, but you were in the top leadership -A. Q. A. Q. Yeah. -- of BP, without question, weren't you? Absolutely. And at that time, in 2003, you were also named
to the Board of Directors, correct? A. Q. That's correct. And you had been working very closely with
John Browne for 12 or 13 years at that point, right? A. I'd been working closely with him for probably
the last three or four years of that period -- I mean, I -- in the intervening period, I spent seven years or six years in South America, a long way away from John Browne and anything to do with John Browne, actually. Q. A. As CEO of E&P? Yes.
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Q. A. Q. A. Q. leader -A. Q. A. Q.
So from 2003 to 2007, you were here in London? That's correct. And you were part of the top leadership -Yeah, absolutely. -- as he was, correct? He was the top
Yeah. -- correct? That's right. And during those years, particularly the last
two of those years, BP's financial performance was appalling, wasn't it? A. for sure. Q. A. It was appalling, wasn't it? I may have used that word. I'm sure you're It wasn't as good as it needed to be, that's
going to tell me I did. Q. Okay.
But it was not good.
Well, if you used that word in your
speech at the Stanford Business School in 2009, was that accurate to say that the financial performance was appalling? A. It was accurate in the context in which I --
where I was talking, yes. Q. Well, the context in which you were talking
was describing BP's financial performance, wasn't it?
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A. Q.
It was. All right. Okay. You -- you underperformed
your competitors in those years by anywhere from 30 to 50 percent, didn't you? A. We underperformed our principal competitors by I don't recall what the number
a considerable margin.
was, sitting here today, I'm afraid, but -Q. A. Q. Well, if you said that in 2009 -If I said it, then -- then --- that you underperformed your competitors by
anywhere from 30 to 50 percent, was that true or false? A. Q. Of course, it was true. All right. And that's all while you and John
Browne were part of the top leadership at BP, true? MR. GODFREY: A. Objection as to form.
No, I thi -- I -- well, I -- it was -- I mean,
I need to -- if you -- I don't recall what I said at Stanford. I don't recall what period I was re -If you're referring to our
talk -- talking to.
performance in the period between 2005 and 2007, then that's correct. Q. (By Mr. Cunningham) All right. Well, that's
the period you were referring to in your speech. A. Q. Okay. And that was a period during which you and
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Lord Browne were in the top leadership at BP, wasn't it? A. Q. That's correct. All right. When did John Browne become Lord
Browne, by the way? A. My recollection is sometime around 2004,
something like that. Q. A. Q. A. Okay. So that brings us--
I'm not certain -Excuse me. I'm not certain about that. I believe it was
around that time period. Q. All right. So that brings us up to the Year
2007, and that's the year that Lord Browne admitted to testifying falsely under oath in a legal proceeding, isn't it? MR. GODFREY: A. Q. That's correct. (By Mr. Cunningham) And he resigned before he Objection as to form.
could be fired, correct? A. Q. He resigned. Well, he resigned before he could be fired for
lying under oath in a legal proceeding? MR. GODFREY: A. I know he resigned. Objection as to form. I don't know whether that
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was before he was fired or not. resigned. Q.
It was -- I know he
(By Mr. Cunningham) And -- and you were on the
Board of Directors at that time, weren't you? A. Q. I was. Then you were appointed to his position, CEO
of BP, No. 1 in the company, right? A. Q. That's correct. And you had been right there with him at the
top and helped him lead BP into the financial hole it was in in 2007, hadn't you? MR. WEBB: question. A. Q. I had been there at the top of the company. (By Mr. Cunningham) And the general view of Object to the form of the
the world in 2007 was that you, as CEO, had two years to fix BP or someone was going to come along and put the company out of their misery. MR. GODFREY: Q. Objection --
(By Mr. Cunningham) Isn't that correct? MR. GODFREY: Objection as to form.
A.
I don't know that I can pass a comment on the
general view of the world, but I'm sure you're going to go to something I may have said at some point. can show me what it is, then I could -If you
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Q.
I'm getting ready to show you -MR. CUNNINGHAM: We'll mark this -- this
is Tab 2 -- as Exhibit 6001. THE COURT REPORTER: with 6000? MR. CUNNINGHAM: That's what we Do you want to start
understood we were starting -- oh, 6000, okay, I got you, instead of 6001. (Exhibit No. 6000 marked.) MR. GODFREY: So is this 6000 or 6001? 6000.
MR. CUNNINGHAM: MR. GODFREY:
Thank you.
(Discussion off the record.) MR. WEBB: exhibit sticker on it. Q. was: (By Mr. Cunningham) And my question to you Whether or not the general view in the world was They want you -- it's got the
that you had two years to fix it or somebody was going to come along and put BP out of its misery. Page 15. MR. GODFREY: Do we have identification Turn to
as to where this document came from? MR. CUNNINGHAM: Yeah. This is a We've also
transcript of your speech that I had done.
got an audio of your speech that we will offer as an
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exhibit that's attached to the back of this, so that you can correct anything you think may be inaccurate. Q. (By Mr. Cunningham) But for now, assuming that
it's accurate, and my question is -A. Q. M-h'm. -- did you or did you not say in that speech "And
in the middle paragraph starting with line seven:
at the end of that two-year period -- so this is sort of in the early spring of 2007 -- the sort of general view in the world was -- this was either the analyst or the news media -- two years to fix it, otherwise someone is going to come along and put them out of their misery," meaning BP? A. Q. A. Q. Yeah. Did you say that when you gave the speech? I did. Now, Lord Browne suffered no legal
consequences for his perjury, did he? MR. GODFREY: A. Objection as to form.
I'm -- I don't -- I have no knowledge as to
whether he did or didn't frankly. Q. (By Mr. Cunningham) But you know he was not
charged and he did not go to jail, he was not fined. He -- as far as you know, he suffered -A. As far as I'm aware.
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Q.
As far as you're aware, he suffered no legal
consequences, correct? A. Q. As far as I'm aware, that is true. But his experience certainly brought home to
you the significance of taking an oath, didn't it? A. Q. It did. And you did not clude -- conclude from his
experience that testifying falsely under oath came without legal consequences, did you? MR. GODFREY: A. Q. I didn't. (By Mr. Cunningham) Okay. So you fully Objection as to form.
understood the significance of the oath you took when you testified before the Congress of the United States on June 17, 2010, didn't you? A. Q. I did. And you testified both for yourself and on
behalf of BP, didn't you? A. Q. I did. And you raised your right hand and swore that
the testimony you give -- gave would be the whole truth, and nothing but the truth, didn't you? A. Q. That's correct. And then you proceeded to testify falsely
under oath on multiple material issues, didn't you,
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Dr. Hayward? MR. GODFREY: A. Objection as to form.
I certainly did not. MR. CUNNINGHAM: MR. BONNER: Tab 1.
(Tendering.) This is Tab 1.
MR. CUNNINGHAM:
(Exhibit No. 6001 marked.) THE COURT REPORTER: MR. GODFREY: Q. 6001, Mr. Godfrey.
Thank you.
(By Mr. Cunningham) I'll show you a transcript Turn to Page 26, Look
of your Congressional testimony. please.
And this is from your opening statement.
down at the bottom with the -- at the paragraph that begins with the word "Fourth." Do you see that? A. Q. Correct. Tell me if I read this correctly: "...we need
to know what went wrong so that we as a company and we as an industry, can do better. That is why" -- "That
is why, less than 24 hours after the accident, I commissioned a non-privileged investigation. I did it
because I want to know what happened, and I want to share the results." Did you say that? A. I did.
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Q. A. Q.
Turn to Page 68. (Complying.) About one-third of the way down the page, "HAYWARD: I believe I've set the" -"We...launched an
where it says:
"set the right tone," did you say: investigation within 24 hours. transparent.
We've made it open and
And we're sharing with everyone" --
"everyone the results as they come out." Did you say that? A. Q. I did. And the investigation that you were referring
to was the Bly investigation? A. Q. A. Q. That's correct. Wasn't it? It was. Okay. Turn to Page 67. In the middle of the
page where it says "HAYWARD:," did you testify, quote, "We are conducting a full and comprehensive investigation," end quote? A. Q. A. Q. I did. Turn to Page 89. (Complying.) At the bottom of the page where it says
"HAYWARD:," did you testify, quote, "Our investigation is covering everything," end quote?
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A. Q.
I did. Turn to Page 90. About a quarter of the way
down the page, where it says "HAYWARD:," did you testify, quote, "It will cover everything," end quote. A. Q. I did. All right. Now, Dr. Hayward, you -- you knew
full well when you gave that testimony to the Congress and to the American public what your investigation was covering and what your investigation wasn't covering because you're the one that commissioned it, aren't you? A. It was a terms of reference, which I'm sure
you've seen. Q. You appointed Mark Bly to lead the
investigation, and he answered to you, right? A. Q. Yes. Because not only were you the CEO and a Member
of the Board, but you were the ultimate in the safety chain of command, you were absolutely responsible for safety at BP, weren't you? MR. GODFREY: A. Objection as to form.
Yeah, I was responsible for the safe and
reliable operations of the company. THE COURT REPORTER: Could everyone
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remove their BlackBerrys from the table, please. Q. (By Mr. Cunningham) You were the ultimate in
the safety chain of command, absolutely responsible for safety, weren't you? MR. GODFREY: A. Objection to form.
I was responsible for safe and reliable
operations at BP. Q. (By Mr. Cunningham) Well, does that mean that
there was somebody higher up than you that was responsible for -A. That's what I said, I was responsible for
safe and reliable -Q. A. Q. You were it, weren't you? -- operations at BP. And that means you were the ultimate in the
safety chain of command, weren't you? MR. GODFREY: A. Objection, form.
I was responsible for safe and reliable
operations at BP. Q. (By Mr. Cunningham) Who was the ultimate in
the safety chain of command at BP? A. Q. A. Q. In the safety chain of command? Yeah. Who was the ultimate?
What does -Who was at the top?
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A. Q.
-- the "safety chain of command" mean? You don't know what the words "safety chain of
command" mean? A. Well, I think you're -- I -- I just want to be
clear in the -- in the sense that you're using them -Q. I'm using it in the plain old English
language, "safety chain of command." A. Okay. MR. GODFREY: Q. A. Q. A. Q. A. command. Q. A. Q. You were? M-h'm. Okay. And that's true across the entire BP Objection to form.
(By Mr. Cunningham) Do you understand? I do. Okay. Who was ultimate --
I was the --- in the safety chain of command? I was the ultimate in the safety chain of
group, from BP, PLC, in London, all the BP subsidiaries, true? A. By definition, the CEO has an accountability
for safety in a company -Q. A. And --- by definition.
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Q.
And you monitored the investigation that
Mr. Bly conducted from Day One, didn't you? A. I -- I periodically checked in with him to see
how it was going. Q. A. Well -But he was -- he was left to, as -- as we --
we said at the time and as the terms of reference were established, to conduct an independent operation, an independent assessment. Q. A. Right. And I -- I think the report that he issued is
robust, rigorous -Q. A. I didn't ask you about the report. -- in terms -MR. GODFREY: the witness, please. MR. CUNNINGHAM: The witness is -- is Excuse me, don't interrupt
answering a question that I didn't ask, and I have limited time. Q. (By Mr. Cunningham) My question was -MR. GODFREY: to interrupt the witness. Q. (By Mr. Cunningham) You monitored the Bly Well, you're spending time
investigation, "Yes" or "No"? MR. GODFREY: Objection to form.
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A.
Mark Bly is the -- was conducting the
investigation on my behalf; therefore, he reported to me. Q. A. (By Mr. Cunningham) All right. I did not monitor the investigation on a daily
basis, weekly basis, or even, indeed, a monthly basis, given everything else that was going on at the time. Q. The -- the Board of Directors and you as CEO
get periodic reports on the progress and the findings of the Bly investigation? A. We had periodic reports when there were
findings -- findings to discuss. Q. All right. And you knew what was being
investigated was, in fact, two of the three elements of a standard BP investigation, didn't you? A. I knew that we had set up an investigation to
establish the cause of the accident. Q. You -- you knew what the investigation covered
because you knew what the terms of reference were, didn't you? A. Q. I did. You did. And you knew that what the investigation covered was two out of the three elements of a standard BP investigation, didn't you?
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A. Q. A.
I didn't know that actually. You didn't know that?
I didn't.
I -- I established the terms of reference
to -- to determine the cause of the accident. MR. CUNNINGHAM: MR. GODFREY: Tab 3.
When you say "Tab 3," is
that an internal tab or is that a -MR. CUNNINGHAM: That's the tabs on the
CD, so they know what I'm getting ready to show the witness. MR. GODFREY: Fair enough. Oh, fair enough. Okay.
I was looking for a tab, and I -MR. CUNNINGHAM: MR. GODFREY: Sorry.
That's all right. 6002, Mr. Godfrey.
THE COURT REPORTER: MR. GODFREY: as Exhibit 269.
It says previously marked
Are we marking this? Yeah.
So we mark -Or we can refer to it by
MR. CUNNINGHAM: its prior exhibit number, 269. MR. GODFREY:
I think the practice,
Mr. Cunningham, has been to use prior exhibit numbers, but I'm -MR. CUNNINGHAM: Okay. That's fine.
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MR. GODFREY:
I want to defer to you on
this, I don't want to confuse you. MR. CUNNINGHAM: fine. MR. WEBB: 269 or 60 -MR. CUNNINGHAM: MR. WEBB: Q. Okay. 269. So, for the record, is this No, that's fine. That's
(By Mr. Cunningham) This is the terms of
reference, isn't it, Mr. Hayward? A. Q. were? A. Q. I did. And if you look under "Critical factors" in It is. And you knew what these terms of reference
Paragraph 3 -- or Section 3, it clearly states that you're investigating "Immediate Causes" and System Causes," doesn't it? A. Q. That's correct. You knew that what was not being investigated
was the third standard element of a BP investigation, which is systemic causes, which BP defines as root causes or Management-related causes, you knew that, didn't you, when you gave your testimony? MR. GODFREY: Objection as to form.
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A.
I -- I knew that this was the terms of
reference. Q. A. Q. (By Mr. Cunningham) Well -That is what I knew. You testified under oath to the United States
Congress that you were doing a full and complete investigation that covered everything, and you knew at the time you gave that testimony that the investigation did not cover systemic causes, which are root causes or Management-related causes? A. As far as I was concerned, this investigation
was designed to -- to unearth what happened in this accident. And as far as I was concerned, that meant That's what we were doing.
covering all the bases. Q.
A full and comprehensive investigation, one
that covered everything, one that included an investigation of systemic causes would have required the executives to investigate themselves, wouldn't it? MR. GODFREY: A. here. Objection as to form.
As I said, the terms of reference are clear We were trying to establish what was the cause That's what we did. I -- I believe
of the accident.
that we did that to -- to most people's satisfaction and that the Report has stood the test of time. It's
not been contradicted by anyone to any significant
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degree.
It was deemed to be -- I think the
Presidential Commission said that they agree to more than 90 percent of what was in the Report. Q. (By Mr. Cunningham) Well, that's far --
that -- that's real interesting, but that's got nothing to do what I just -- with what I just asked you. My question to you is: The truth is, you did
not conduct a full and comprehensive investigation that covered everything because the investigation specifically excluded systemic causes, didn't it? MR. GODFREY: A. Objection as to form.
As I said, our investigation was designed to That's
un -- to determine the cause of the accident. what we did. THE COURT REPORTER:
Counsel, would you I cannot
please take your BlackBerrys off the table. hear with the interference.
Right now it's going off.
So whoever has it on, just turn them off. THE VIDEOGRAPHER: Q. Yeah.
(By Mr. Cunningham) If you -THE VIDEOGRAPHER: Turn -- try turning
them off or going to straight WIFI and no -- no signal. Just -- just turn them off. Q. (By Mr. Cunningham) If you had said during
your testimony that we are conducting an investigation,
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but it's not a full and comprehensive investigation that covers everything, it only covers two-thirds of our standard investigation, you know what the next question would have been, don't you? MR. GODFREY: A. Q. Objection as to form.
I couldn't possibly speculate. (By Mr. Cunningham) Well, the next question What are you not investigating,
would have been: wouldn't it? A.
As I said, we -- we were investigating what And I -- I believe that
the cause of the accident was.
the Report determines with some degree of rigor and confidence what the cause of the accident was. Q. And if your testimony had been in response to
the question what are you not investigating, well, we're not investigating Management causes, we're not investigating ourselves, that would have been a public relations disaster for BP, wouldn't it? MR. WEBB: question. A. Q. A. Q. A. I can't possibly comment on that, can I? You -- you don't -How can I -- how can I speculate on that? You don't think -It's not a question. It's an assertion -Object to the form of the
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Q. A. Q.
You don't think that if --- which is entirely theoretical. You don't think that if you had said, "We're
not conducting a full investigation, we're only conducting two-thirds of investigation, and what we're not investigating is ourselves and Management," you don't think that would have been -A. Q. A. Q. Yes, I think -Let me finish my question. I'm sorry. I'm sorry. I apologize.
You don't think that would have been a public
relations disaster in June of 2010, as you sat there with the oil flowing in the Gulf of Mexico, you don't think that would have been a public relations disaster if you had told the truth and said that? MR. GODWIN: A. Objection as to form.
I -- I'm not prepared to speculate on what
would or would not have been a public relations disaster. What I can say, as I've said again, is we This was an
were investigating ourselves.
investigation that was open, transparent, it was communicated as soon as we had the results, in stark contrast to anyone else involved in this accident. MR. GODWIN: Q. Object to form.
(By Mr. Cunningham) So is it your testimony
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then, here today, that you conducted a full and comprehensive investigation that included systemic causes? A. I believe we conducted -MR. GODFREY: A. Objection to form.
-- a full investigation into the cause of the
accident, and that's -Q. A. we did. Q. Is it your testimony here today, that you (By Mr. Cunningham) That's not the question. Well, that's what we -- that's -- that is what
conducted a full and comprehensive investigation that did cover systemic causes? A. We conducted an investigation to determine That's what the That's what it did. Is it your
the -- the cause of the accident. investigation was designed to do. Q. I'm going to try it again:
testimony here today under oath that you did conduct a full and complete investigation that covered systemic causes? MR. GODFREY: A. Objection as to form.
We -- we conducted a full investigation into
the cause of the accident, and as you identified, it did not look at the overarching Management process at that time.
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Q.
(By Mr. Cunningham) Your Group Defined
Practice at BP GDP 4.4 lays out how incident investigations are handled, doesn't it? A. I believe it does. MR. CUNNINGHAM: Tab 4.
(Discussion off the record.) Q. (By Mr. Cunningham) Previously marked as 1742. This is BP's "Group Defined Practice" for
(Tendering.)
"Incident Investigation," isn't it? A. Q. It is. And you knew what Incident Investigations
covered because of your capacity as the top person responsible for safety at BP, didn't you? A. I was the CEO, so as you've -- if -- as you
have correctly identified. Q. Well, you were also the Head of the Group
Operating Risk Committee, the Group Operations Risk Committee, weren't you? A. Q. That's correct. All right. MR. CUNNINGHAM: MR. BONNER: 47.
(Tendering.) Tab 47.
MR. CUNNINGHAM:
(Exhibit No. 6002 marked.) THE COURT REPORTER: 6002, Mr. Godfrey.
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MR. GODFREY:
Thank you. Peter. I -- I hear them
THE COURT REPORTER: THE VIDEOGRAPHER:
everywhere, a BlackBerry or some sort of device. Q. A. (By Mr. Cunningham) Who is Steve Flynn? The -- the Vice President for Health, Safety,
and Environment. Q. All right. And this is a PowerPoint that
Mr. Flynn gave, correct? A. Q. That's correct. Turn to Page 6. Bottom right-hand corner is And the title of this
where those numbers are. document is:
"Leading from the very top The BP Group
Operations Risk Committee," correct? A. Q. That's correct. Tell me if I read this correctly: "The Group
Operations Risk Committee...is chaired by Tony Hayward and meets monthly. It brings together our segment CEOs
with senior functional expertise to oversee and build a foundation for consistent, safe, reliable operations. This includes:" -- and the first bullet is: analysis, learning and response," correct? A. Q. Correct. So you -- you, in your capacity not only as "Incident
CEO, but also in your capacity as Chairman of the Group
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Operating Risk Committee, reviewed investigations, didn't you? A. Q. We did. So you knew what an investigation covered and
what it didn't cover, didn't you? A. Q. I did. All right. And the group defined practices --
and by the way, you -- you have repeatedly stated in public that you focus like a laser on safety, right? A. Q. I have. All right. And investigations and knowing
what investigations cover and what they reveal is part of focusing like a laser on safety, isn't it? A. Q. It's an element of it, yes. All right. Turn to Page 84, and that's a
Bates number, bottom right of the Group Defined
Security, and Environment, correct? A. It is.
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Did I read that correctly? A. Correct.
Did I read that correctly? A. Q. Correct. All right. Now, turn to Page 102, Bates
number at the bottom. Gives a definition of root cause, doesn't it? A. Q. A. (Reviewing document.) Do you see it? I do.
Did I read that correctly? A. You did.
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A. Q. A. Q. A.
Correct. Turn to Page 85, Bates. (Reviewing document.) See the section "2 Scope" toward the bottom? M-h'm.
Did I read that correctly? A. Yep.
You were a leader in group functions, weren't you? A. Q. A. Q. I was a leader in both senses, I think. In both senses? M-h'm. All right. Turn to 86, the next page.
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Did I read that correctly? A. Q. A. Correct. Turn to 95. Correct. 95 is a Severity Matrix, correct?
A.
Yep.
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A. Q.
Correct. And does the third column tell what
investigation is required by BP when you have either of those conditions? A. Correct.
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Q.
And in addition to the fact that you were
familiar with this GDP, you knew exactly what a root cause analysis was, didn't you? A. I knew the -- the concept behind a root cause
analysis, yes. MR. CUNNINGHAM: Tab 6.
(Exhibit No. 6003 marked.) THE COURT REPORTER: Q. 6003. 6003.
(By Mr. Cunningham) I'll show you Exhibit This is a speech you gave on April the 1st of You can look at the top.
2005, correct? A. Q. Yeah.
And this is about one week, ten days, in that
vicinity -A. Q. A. Q. M-h'm. -- after the Texas City disaster, isn't it? It is. And did you say in this speech in the first "...last week BP experienced the most
paragraph:
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serious and tragic safety accident in our recent history. 15 of our people died in a major explosion at
a refinery in Texas - we do not yet know the cause of the accident but we will and we will learn from it and take action to ensure that it is never repeated"? Did I read that correctly? A. Q. A. Q. Correct. Did you say that? I did. And then in the middle of the next paragraph, "We are applying our established
did you say this:
process of root cause analysis to determine the underlying cause of the incident"? A. Q. I did say that. All right. You knew exactly what a root cause
analysis was because you described in this speech what you were going to do after Texas City, and that was a root cause analysis, didn't you? A. I described -MR. GODFREY: A. Objection as to form.
I described in this speech what we're going to
do after Texas City, that is correct. Q. (By Mr. Cunningham) So knowing everything that
you knew and holding the positions that you held on June 17th of 2010, you told the United States Congress
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and the American public under oath that BP was conducting a, quote, "full and comprehensive investigation," end quote that was, quote, "covering everything," end quote, didn't you? A. I believe that to be the case. I believe that
the investigation was full and comprehensive, and we -it was published in an open and transparent way. Q. The Senior Executives at BP certainly watched
your Congressional testimony, didn't they? MR. GODFREY: A. Objection as to form. I --
I have no idea whether they watched it.
I rather hoped they didn't, actually. Q. (By Mr. Cunningham) You don't think that given
the circumstances that existed in June of 2009 with oil still flowing into the Gulf of Mexico and the CEO of BP giving testimony before the American public and the Congress, you don't think that the high level executives at BP bothered to watch your testimony? A. It's not a case of bothering to watch it.
Most of them were very engaged trying to contain and manage a spill, actually. Q. Well, the Board of Directors wasn't engaged
trying to -A. Q. They may well have --- contain it, were they?
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A. Q.
They may well have watched it. Look, you're going to have to let me finish my
question because I'm afraid the court reporter's going to have difficulty if we talk over each other -A. Q. I'm sorry. I apologize. I'll
-- so please let me finish my question.
do my best to let you finish your answer. if I don't, your lawyers will help me. A. Q. Okay.
And I'm sure
Okay?
The Board of Directors of BP was not engaged
in the spill in the U.S., were they? A. Q. That's correct. All right. You certainly would believe,
wouldn't you, that the Board of Directors, at least some of them would have watched your Congressional testimony, wouldn't they? MR. WEBB: question. A. Q. A. Q. I imagine that's probably true -(By Mr. Cunningham) Probably true. -- I don't know, but probably true. And the Board of Directors knew because they Objection to the form of the
had been briefed by Mr. Bly that there was no systemic investigation being conducted, didn't they? MR. WEBB: Objection to form --
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MR. GODFREY: MR. WEBB: A.
Objection to form.
-- "they knew."
They'd been briefed on the extent of the
report of the investigation and what we had found at that time. Q. (By Mr. Cunningham) Yes, sir. And your
in-house legal counsel and your PR people knew what the investigation covered, didn't they? MR. GODFREY: A. Objection as to form.
Well, you can clearly see in the terms of
reference. Q. (By Mr. Cunningham) All right. And they
watched your testimony before the Congress you would expect, wouldn't you? A. Q. I would expect. All right. Did your PR people congratulate
you on how you did after your testimony was concluded? MR. GODFREY: A. Objection as to form. Thank
No one congratulated me after that day.
you very much. Q. (By Mr. Cunningham) You're fully aware,
though, that the Presidential Commission did investigate management-related causes, aren't you? A. I haven't read the Presidential Commission
Report because it was published a long time after I
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left the company.
I'm aware of it through the press, So it's -- there is
and I -- I've skimmed it.
certainly a section on management causes. Q. A. All right. I have no idea as to the depth or extent of
that investigation. Q. Are you aware of the conclusion stated in the "Most of the
Presidential Commission Report, quote:
mistakes and oversights at Macondo can be traced back to a single over-arching failure, a failure of Management," end quote? MR. GODFREY: Q. Objection as to form. Are you
(By Mr. Cunningham) My question is:
aware of that statement? A. I'm aware of that statement. And as I read
it, it referred to the immediate oversight of the Macondo Well; that's to say, either on the rig or in the immediate management over the rig. Q. Okay. MR. ROBERTS: Q. Objection, form. So as you read
(By Mr. Cunningham) All right.
it, it's the people on the rig or the immediate managers on the rig that they were talking about and not you and the other high level executives at BP. that your testimony? Is
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A.
That's what I interpreted from the description
in the Report. Q. All right. So -- so you -- you read it -- or
when you heard what it said, your conclusion was "They're not talking about me"? A. I didn't -- I didn't say that. I said my
interpretation was that the investigation and the conclusions drawn in the Presidential Commission were referring to management actions primarily on the rig. Q. Well, do you or do you not think that that
statement that, "Most of the mistakes and oversights at Macondo can be traced back to a single over-arching failure, a failure of Management"? Do you or do you
not think that that statement included references to you? MR. GODFREY: MR. WEBB: A. Objection as to form.
Object to form. It was
I have no idea what that referred to.
certainly not made clear in the report what it referred to. So all I can do is draw an interpretation based on
the -- the extent of the -- of the report. Q. (By Mr. Cunningham) You know that Rex
Tillerson, the CEO of Exxon, said virtually the same thing, didn't he? MR. GODFREY: Objection as to form.
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A. Q. thing?
Said exact -(By Mr. Cunningham) Said virtually the same
MR. GODFREY: A. Q. he said? A. No.
Same objection.
Well, what exactly did he say? (By Mr. Cunningham) Well, you don't know what
Well, I'm sorry, but I don't spend a lot
of time worrying about what Rex Tillerson says. Q. A. industry. Q. A. He's a friend of yours, isn't he? Well, I would say he's a colleague in the Well, he's a friend of yours, isn't he? He's certainly a -- a colleague in the
industry, yeah. Q. A. friend. Q. Well, you've called him a friend. You said he All right. Yeah, he's a friend. You can call him a
was a friend in your speech in July of 2009, didn't you? A. Q. Okay. Yeah.
You said you'd known him a long time, that he
was one of your -A. I have known him --
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Q. A.
-- didn't you --- a long time. We were in the in -we've
been in the industry together a long -Q. A. Q. A. Q. today? A. Q. A. Well, I'm sure he'd still be a friend if I -All right. -- you know, was in Dallas. (Exhibit No. 6004 marked.) THE COURT REPORTER: MR. CUNNINGHAM: Q. 6004. So --- time. -- so is he a -I --- is he a friend today or just a colleague
Tab 9.
(By Mr. Cunningham) So you've never seen this
document before? A. Q. A. Q. A. I haven't seen this document. Never heard or -I was --- read --- I was aware of the -- I -- I was vaguely
aware of it, but, you know, but -- but in March of this year, I would -- I had been -- I'd left BP for over six months.
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Q. A.
All right. And I wasn't actually practicing in the
industry at the time. Q. So you didn't know that a friend of yours who
held a similar position at another big major oil company said what Mr. Tillerson said? A. I -- I -MR. GODFREY: A. Objection as to form.
-- as I said, I -- I -- I -- I didn't -- I was
aware of it subsequently, but, you know, in -- at this period in my life, I was not focused on any of this. was doing other things. Q. I'm sorry, but I was. Well, when I
Mr. Tillerson said, "It was a breakdown of management oversight... When you do things the proper way these kind of things do not happen," did you -- did you think, when you heard that, that he was talking about the folks on the rig or -A. Q. A. I had --- BP LC? -- I had no idea what he was talking about. I've
And I -- I'm -- certainly have no idea today. never asked him about it.
He could have been talking I --
about anything, as far as I'm concerned. Q. All right.
Well, we'll -- we'll come back to
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your Congressional testimony later, because there's -there's more there, isn't it? There's more there what
you testified falsely under oath, isn't there? MR. GODFREY: A. Objection.
I do not believe so -MR. GODFREY: Move to strike.
A. Q.
-- at all. (By Mr. Cunningham) Now, as far as
investigations go, you know what a full and comprehensive investigation is, because you and BP have seen a lot of them since you've been in the top leadership; isn't that true? MR. GODFREY: A. Q. Objection as to form.
I've seen most of the investigations. (By Mr. Cunningham) All right. BP has been
the subject of, and you have been in the top leadership for multiple investigations resulting in criminal charges and guilty pleas; isn't that true? MR. GODFREY: A. Objection as to form.
To my knowledge, there is one accident where
the company subsequently pled guilty, to a guilty charge. Q. A. Q. (By Mr. Cunningham) Okay. Criminal charge. -- one is all you know about? Well --
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A. Q. A. Q.
To a criminal charge, yeah. All right. Well, let's start --
Well, perhaps --- with 1999, then, all right? In Alaska. At that
You were Lord Browne's Executive Assistant.
point, you had been his Executive Assistant for almost 10 years, hadn't you? A. Well, I'm sorry, but in 1999, I wasn't his I
Exec -- I was his Executive Assistant for a year. then went to Colombia for four years. Venezuela for almost three years. take up an executive role in 1997. I was the Group Treasurer. Q. You were the Group Treasurer, the position I went to
And I came back to In 1999, I believe
that Lord Browne had previously held? A. No. The person who previously had that role
was a gentleman called John Buchanan. Q. Is it a position that Lord Browne had held at
some point -A. Q. A. He had held --- previously? -- at an earlier point in his career in the
middle of the '80s in -Q. A. Okay. -- '86 to '88, I believe --
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Q. A. Q. point -A. Q. A. Q.
You were --- when --- you were the Treasurer then at that
I was the Treasurer. -- in 1999? Yes. And BP pleaded guilty to a felony for dumping
toxic waste in Alaska; isn't that true? A. Q. That's correct. All right. The crime occurred in 1999, and
sentence was handed down on February the 3rd of 2000, while you were the Treasurer, right? A. Q. That's correct. There was a $500,000 fine, which was the
maximum allowable fine, and BP agreed to spend $20 million on an Environmental Management system, true? MR. GODFREY: A. Objection as to form.
I -- I -- I'm sure it is true, I can't recall I can't recall the fine or the
the details.
commitments we made -- Q. A. (By Mr. Cunningham) Well -But if your assertion is that's what we did,
I'm certain that's correct. Q. Well, you were the Treasurer. Did you write
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the check? A. Q. A.
Did you sign --
It's --- the check? -- 12 years ago, a -- a lot of water has I cannot remember, but I'm sure
passed under a bridge.
if that's what the record says, then it's correct. Q. So you think you signed a $20 million check
and a $500,000 check for a -A. Q. A. Well, I --- criminal fine, but you don't remember? The answer -- with respect, sir, Treasurers And --
don't sign checks. Q. A. Q. A. Q. But --
-- I do not remember. Okay.
I'm sorry --
-- but I do not remember. All right. So you don't know how that money
got paid, in your position as Treasurer, then? A. I -- it would have been -- it would have been But, you know, I -- I -- I -- I
a bank transfer.
honest -- I do not remember -Q. A. Q. A. All right. -- those details -Well, you --- I'm sorry.
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Q.
-- remember that BP was put on five years'
probation, don't you? A. Q. A. Q. I remember BP was -In --- put on probation. -- February of 2000, put on five years'
probation for a felony, right? MR. GODFREY: Q. A. Objection as to form.
(By Mr. Cunningham) Right? I -MR. GODFREY: Same objection.
A. Q. A. Q.
-- I -- I remember we were put on probation. (By Mr. Cunningham) All right. Thank you for reminding me why. -- and -- and in 2003, in 2003, while that And in --
probation was in progress, you became a Member of the Board, right? A. Q. A. Q. A. Q. Correct. And you were the CEO of E&P at that point -That's correct. -- is that correct? (Nodding.) And this is -- in 2000 -- the -- the Year
2000, when this felony conviction occurred, this is during the period of acquisitions and mergers that
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began in 1999 and ran through 2003, correct? A. Q. That's correct. All right. And BP got off probation for this
felony in February of 2005, and the Texas City disaster that killed 15 people and injured 170 occurred the next month, didn't it? MR. GODFREY: Q. A. Q. A. Q. Objection as to form.
(By Mr. Cunningham) March -That's -- actually --- of 2005? -- the accident occurred in March of 2005. And it's after that felony conviction that we
see a quote that's going to be familiar in every disaster BP's involved in, don't we. And that is,
"We're going to do everything to be sure it never happens again." Isn't that what was said by BP? Objection to form.
MR. GODFREY: A. I don't recall.
MR. CUNNINGHAM: MR. BONNER:
(Indicating.)
(Tendering.) Tab 11.
MR. CUNNINGHAM:
(Exhibit No. 6005 marked.) THE COURT REPORTER: Q. 6005.
(By Mr. Cunningham) (Tendering.) This is a
news article that discover -- discusses the guilty
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plea.
And if you'll look down about four or five
paragraphs where it starts with "BP vice president," do you see that? A. Q. point? A. Q. I do. Do you see where he is quoted as saying, "We I do. Do you know who Chris Phillips was at that
are committed to ensuring this never happens again," end quote? A. Q. I do. Then comes the Year 2000. BP's Grangemouth
petrochemical complex, there are a series of major incidents involving equipment failure and fire, true? A. Q. right? A. Q. A. Q. A. Q. That's right. Is your office in London? It is. All right. And where is Grangemouth? Correct. And at this point, you're the Treasurer of BP,
In Edinburgh, Scotland. Scotland. And various investigations were
conducted of the Grangemouth events, and BP was fined a million pounds, true?
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A. Q.
I believe that's correct. And did -- did you write that check, or did
you have anything to do with seeing that that was paid, since you were the Treasurer? A. checks. Q. All right. And BP made statements after the As -- as I said, Treasurers do not write
Grangemouth event such as "We changed our process Management system to be sure this never happens again," correct? A. I -- I don't recall that, but I'm sure that's
probably right. Q. And Lord Browne said, "We are renewing our
commitment to safety," didn't he? A. I -- I -- the -- I don't remember what Lord If you'd like to show me where he
Browne said. said it -Q. A. Q. right? A. Q. A. Q.
You would have --- I think --- expected him to say something like that,
Something like that -Yeah. -- I would imagine. And -- and you -- when these events occurred,
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you were right there in the top Management at BP, weren't you? A. Q. I was at the top Management. And then comes 2005, Texas City. You're on
the Board of Directors.
Are you still the Treasurer,
or have you now taken a higher position? A. Q. I'm, at that point, the CEO of E&P. CEO of E&P and on the Board of Directors. And
it's March 23rd, 2005, when that disaster occurs in Texas, correct? A. Q. Correct. And BP had just gotten off probation the month
before for the Alaska felony -MR. WEBB: Q. Objection.
(By Mr. Cunningham) -- right? MR. GODFREY: Objection as to form.
Q.
(By Mr. Cunningham) Right? MR. GODFREY: The same objection.
A. Q.
That's what the record shows. (By Mr. Cunningham) As a result of Texas City,
BP pled guilty to a felony, didn't it? A. They -- we did. Or BP did. Two minutes.
THE COURT REPORTER: MR. CUNNINGHAM: MR. GODFREY:
Let's stop here.
Off the tape.
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MR. CUNNINGHAM: minutes, so I won't -MR. GODFREY: stop him. MR. CUNNINGHAM: THE VIDEOGRAPHER: 9:37 a.m., ending Tape 1.
He says we've got two
It's a convenient time to
All right. Off the record at
(Recess from 9:37 a.m. to 9:57 a.m.) MR. CUNNINGHAM: THE VIDEOGRAPHER: Ready. All set?
On the record at 9:57 a.m., beginning Tape 2. Q. (By Mr. Cunningham) Dr. Hayward, my closing As a result of the Texas City
question was this:
disaster on March 23rd of 2005, BP pled guilty to a felony, didn't it? A. That's correct. (Exhibit No. 6006 marked.) THE COURT REPORTER: Q. 6006.
(By Mr. Cunningham) I hand you Exhibit 6006.
Judgment -MR. GODWIN: Tab number? Tab number? 12.
MR. CUNNINGHAM: MR. GODWIN: Q.
Excuse me.
Thank you.
(By Mr. Cunningham) Judgment was imposed on
March the 12th of 2009, true?
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A. Q. A. Q. A. Q.
Correct. Excuse me? Correct. And you were the CEO? I was. BP was sentenced to probation for three years,
weren't they? A. Q. That's correct. So as of April 20th, 2010, the date of the
DEEPWATER HORIZON disaster and the deaths of 11 men, BP was on probation for a felony related to the deaths of 15 people and still had two years to go on its probationary term, true? MR. GODFREY: MR. WEBB: question. MR. GODFREY: Q. A. -- as to form. Objection --
Object to the form of the
(By Mr. Cunningham) True? We were still on probation on the 20th of
April for Texas City. Q. A. Q. And still had two years to go? And still had two years to go. As a matter of fact, BP is still on probation
today, isn't it? MR. GODFREY: Objection as to form.
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A. Q.
Yes. (By Mr. Cunningham) And there were conditions
of supervision for that probation, weren't there? A. Q. There were. If you look on Page 2, it required that BP
designate an official of the organization to act as their representative and be the primary contact with the Probation Officer, right? A. Q. Correct. Did you have to report to the Probation
Officer, or was that somebody else? A. Q. That was somebody else. And BP has violated this Settlement Agreement,
hadn't it? MR. GODFREY: A. Q. I'm sorry? Objection as to form.
We had --
(By Mr. Cunningham) BP violated the Settlement
Agreement that it entered as part of this guilty plea, didn't it? A. Q. A. Can -- can you -You don't know anything about that? It's not that I don't know anything about it.
I'd just like to be clear about -Q. Paragraph 8 on Page 3 of 5 requires BP to
fully comply with the Settlement Agreement it exeted --
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executed between it and the United States Occupational Health and Safety Administration. A. Q. A. M-h'm. Right? M-h'm. MR. GODFREY: Q. Objection as to form.
(By Mr. Cunningham) And the reason you're
hesitating when I asked you whether they violated that Settlement Agreement is what? A. Is because of the protracted discussion and
negotiation we had with OSHA over the exact terms of the Settlement Agreement. Q. So it is in dispute whether or not you
violated the Settlement Agreement? A. I honestly can't recall the details of where
we got to with OSHA in the course of late 2009, early 2010. Q. All right. Page 4, BP paid criminal monetary
penalties in the form of a fine of $50 million, correct? A. Q. That's correct. And if you look at Page 7 of the Criminal
Information that's attached to these first few documents, if you turn to Page 7 of that Criminal Information, which is Page 7 of 8, top right corner --
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do you have that page? A. Q. A. Q. Does it start with E, "Excess Pressure"? Yes. All right. And if you'll look down below H, BP pled
guilty to a knowing violation of risk management practices, didn't it? MR. GODFREY: A. Objection as to form.
Well, what it says under H is that BP Products
failed since at least 1999 to perform a relief valve study. Q. (By Mr. Cunningham) Excuse me. MR. GODWIN: Q. I -- I --
Objection, form.
(By Mr. Cunningham) I misstated what I was
asking you to refer to. Below H, the next paragraph -A. Q. I'm sorry. -- starts with "knowing violations of risk
management practices," correct? A. Q. That's correct. And it discusses the period between January of
'99 and March of 2005, correct? A. Q. Correct. All right. And included in the time frame
when the violations occurred, you were Treasurer of BP
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PLC, correct? A. Q. A. Q. A. Q. A. Correct. Part of that time. Correct. On the Board of Directors of BP PLC, correct? Correct. Or the No. 2 man, or CEO of E&P? CEO of E&P would be a more accurate
description. Q. In the top Management. You were there,
weren't you? A. Q. I was in the top Management. Did you -- did you have to sign the check
paying these penalties? MR. GODFREY: A. checks. Q. (By Mr. Cunningham) Did you issue the check? Did you ever even see the Objection as to form.
I think I made it clear Treasurers don't sign
Did you order the check? check? A. Q. A.
No, I didn't ever see the check. You didn't? I was -- most money is sent by bank transfer
these days, as I'm sure you're aware. Q. Did you -- did you ever go to Court as a
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result of this? guilty plea? A. Q. No.
Did you ever appear in Court for the
Did you ever undergo questioning in a
deposition like this today, relative to the Texas City disaster? A. No, because it was -- in -- in reality, I had
no authority or accountability over Texas City at any point in -- in this time. Q. So even though you were in the top Management Is that your
of BP, you had no accountability. testimony? A.
I said I was not accountable for the Texas
City refinery or any -- any part of my -- the organization I was running was not accountable for the Texas City refinery. am assuming. Q. Did you ever give testimony such as you're That is why I was not deposed, I
giving today either in the Alaska felony case, the Grangemouth event, or the Texas City disaster? A. Q. I did not. And then after Texas City, Lord Browne said
the same thing that we've heard before, that BP says after a felony convictions or disasters, and that is, "We're going to do whatever it takes to see it never
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happens again," didn't he? MR. WEBB: Object to the form. Objection to the form.
MR. GODFREY: A.
If you can show me, I -- I can confirm or deny
whether that's the case. Q. (By Mr. Cunningham) Tab 15. (Exhibit No. 6007 marked.) THE COURT REPORTER: A. Q. Thank you. (By Mr. Cunningham) This is a BP press Exhibit 6007.
release, correct? A. Q. A. Q. right? A. Q. Correct. And it quotes "BP Group Chief Executive John It is, yes. Dated 17 August 2005? Correct. Which is a few months after the explosion,
Browne," doesn't it? A. Q. It did -- it does. And does it quote him, in the third paragraph, "The Texas City explosion was the
as saying, quote:
worst tragedy in the recent history of BP, and we will do everything possible to ensure nothing like it happens again," end quote?
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A. Q. A. Q.
It does. Did I read that correctly? Correct. And that's almost exactly the same thing you
had said in BP TV ads after the DEEPWATER HORIZON blowout, isn't it? MR. GODFREY: question. A. I think I'd like to see the TV ad so I can But Object to the form of the
make the comparison, if you have them available.
if not, then I -- I honestly don't remember what I said in the TV ads, frankly. Q. (By Mr. Cunningham) So you do not remember
having said, essentially, that the DEEPWATER HORIZON was a tragedy and that you would do everything possible to ensure nothing like it happened again? recall -A. Q. A. Q. A. Q. A. Q. I'm sure --- saying that? I'm sure I said something very similar. And -- and you said it more than once and -I'm sure I did. -- in more than one location, didn't you? I did. Then we come to 2006, and that is the Prudhoe You don't
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Bay pipeline leak of some 200,000 gallons.
You --
you -- you're familiar with that, aren't you? A. Q. I am, yes. You were CEO of E&P and on the Board of
Directors and you were in the top Management of the company when that occurred, correct? A. Q. I was. And BP pled guilty to violations of the Clean
Water Act, didn't it? A. Correct. MR. CUNNINGHAM: Tab 13.
(Exhibit No. 6008 marked.) THE COURT REPORTER: Q. A. Q. 6008.
(By Mr. Cunningham) (Tendering.) Thank you. If you'll look at Page 1, sentence was imposed
on November the 29th of 2007, wasn't it? MR. GODFREY: What page, please? Three, excuse me, three. It says "Page 1 of
MR. CUNNINGHAM:
It actually is the third page down. 5" at the top. A. Q. A. Q. Yeah.
(By Mr. Cunningham) Do you see that? M-h'm. BP pled guilty -- or the sentence was imposed
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on November 29th 2007, wasn't it? A. Q. PLC. A. Q. Correct. And at that time, you were the head man at BP You were the CEO, weren't you? I was, yes. And, again, BP was put on probation for a term
of three years, true? A. Q. Correct. So as of the date of the DEEPWATER HORIZON
blowout, BP was on probation for two crimes, wasn't it? A. Q. That's correct. One related to multiple deaths, and the other
related to an oil spill -MR. GODFREY: Q. Ob --
(By Mr. Cunningham) -- true? MR. GODFREY: Objection as to form.
A. Q.
We were on probation for two -- two accidents. (By Mr. Cunningham) Well, one of them -MR. GODWIN: Objection, form.
Q.
(By Mr. Cunningham) One of them related to
multiple deaths, and the other related to an oil spill? A. Q. That's correct. Didn't it? MR. GODFREY: Q. Objection as to form.
(By Mr. Cunningham) And there were conditions
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of probation attached that are on Page 2 of 5 here, right? A. Q. Sorry. (Reviewing document.)
Do you have that, the standard conditions of
probation, the bottom of the page? A. Q. Yes, I do, yeah. Required the defendant organization to provide
a resi -- a representative to be the primary contact with the probation officer, right? A. Q. A. Q. Correct. I don't guess that was you, was it? It wasn't me. And it required, in Paragraph 5, that "the
defendant organization...notify the probation officer within seventy-two hours of any criminal prosecution, major civil litigation, or administrative proceeding against the organization." True? A. Q. Correct. Did BP comply with its terms of probation by
notifying its probation officer about this litigation? MR. GODFREY: A. Q. A. Objection as to form.
I -- I honestly don't know. (By Mr. Cunningham) Well -I have no knowledge whatsoever. I would
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imagine that we complied with the terms of the probation. Q. All right. Turn to the next page. BP paid
criminal monetary penalties in the form of a $12 million fine and $8 million restitution, correct? A. H'm. MR. GODFREY: A. Which page are we at? We're on Page 4 of
Sorry, I can't -- sorry.
5, are we now? Q. top -MR. GODFREY: on? Q. -- "Criminal Monetary Penalties." MR. GODFREY: A. Q. A. Q. A. Q. Yeah. (By Mr. Cunningham) Correct? Correct. $12 million fine and $8 million restitution? M-h'm, correct. And do we need to guess what BP said in the Oh, Page 4 of 5, thank you. Which -- which page are you (By Mr. Cunningham) It say -- it says at the
wake of this event, or will you just go ahead and agree that they said the same thing they had been saying in every other disaster and every other criminal plea -MR. WEBB: Object to the form of the
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question. MR. GODFREY: Q. Objection, form.
(By Mr. Cunningham) -- that it would never
happen again, would you agree? MR. GODFREY: A. Q. said? A. If you'll demonstrate to me what we said, then Same objection.
I don't know what they -- I -(By Mr. Cunningham) You don't know what they
I can agree with you or disagree with you. MR. CUNNINGHAM: (Indicating.)
(Exhibit No. 6009 marked.) THE COURT REPORTER: MR. GODWIN: 6009.
What tab was that? 10.
MR. CUNNINGHAM: MR. GODWIN: Q. A. Q.
Thank you.
(By Mr. Cunningham) (Tendering.) Thank you. If you'll turn to the next-to-the-last page of
this transcription of an interview, Steve Marshall, President of BP Alaska. A. Q. Do you see him?
I do, next-to-the-last page. And do you see in the quote on the left under "...we need to bring
his picture where he says that:
to bear" certain actions "to make sure an incident like
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this does not happen again"? A. Yeah, I think what he's referring to is "need
to put in place systems, including pigging, and ultrasonic testing, and whatever technology we need to bring to bear" -Q. A. Q. again"? A. Q. A. Q. -- "does not happen again." Correct? That's right. Now, we're through 2006, let's go to 2007. In 2007, BP entered into a Deferred Prosecution Agreement in Illinois for mail fraud and wire fraud, true? MR. GODFREY: A. Objection as to form. "...to make sure" --- "to make sure an incident like this" --- "an incident like this does not happen
Could you just elaborate a little bit about
what was -- sorry. Q. (By Mr. Cunningham) Mail fraud and wire fraud.
You don't know anything about it? A. I -- I'm sure I do know something about it,
but I don't recall hearing it described in those terms. MR. CUNNINGHAM: Tab 16.
(Exhibit No. 6010 marked.)
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THE COURT REPORTER: Q.
6010.
(By Mr. Cunningham) (Tendering.) If you will
look at Page 21 of "ATTACHMENT A" to this exhibit -MR. CUNNINGHAM: Is that separate -
(Discussion off the record.) A. Q. (Reviewing document.) (By Mr. Cunningham) -- which is a "STATEMENT It's Page 1, starts at Page 1. MR. GODFREY: sorry, which page? MR. CUNNINGHAM: It's Attachment -- it's Which -- which -- I'm
OF FACTS."
Attachment A is how it's described, Rick, on -- it's Page 21 -THE WITNESS: I'm half through them. -- of 36.
MR. CUNNINGHAM: MR. GODFREY: the document. MR. CUNNINGHAM: MR. WEBB:
It's about halfway through
Yeah, yeah.
Well, there's multiple
documents here, so I don't think the witness has any idea where you are in the document. MR. CUNNINGHAM: him find it if I can. A. Q. I'm trying to find it -Let's just -- I'll show it to you. It's this Well, I'm trying to help
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far down and it starts with Attachment A, "Statement of Facts"? A. Q. (Reviewing document.) There are a series of Officer Certificates and
it follows those. A. Okay. Q. A. Q. A. Q. Have you found it? Yeah, yeah. Okay. Yes. If you'll look at Page 21 of Attachment A, and It follows those, okay. (Reviewing document.)
I'm looking at the numbers at the bottom. A. Q. M-h'm, yep. Let me read to you the Paragraph 73 and see if
this refreshes your recollection about what BP pleaded guilty to. A. Q. A. Q. Okay. And in 2007, you were the CEO, right? That's correct. And so when I say "mail fraud" and "wire
fraud," you don't remember that? A. I -- I don't remember it because I always
referred to it as propane trading, not mail fraud. Q. Oh, you called it trading. Okay. All right.
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A. Q. A. Q.
I -- I'm -See if I --- sorry. I apologize. "Based
See if I read correctly at the bottom.
on the facts set forth above, BP admits that through the actions of its employees, BP conspired to corner the market and manipulate the price of February 2004 TET propane contrary to Commodity Exchange Act...and engage in transactions that violated 18 U.S.C. 1341 (mail fraud)" -A. Q. M-h'm. -- "and 18 U.S.C. 1343 (wire fraud)." Now does that refresh your recollection? A. Q. Yeah, yeah. Yeah.
And if you look at Page 1 of the entire
exhibit, it sets out the various entities that entered the agreement, in the first paragraph. Do you see that? A. Q. I do. It included BP America, and the BP America
subsidiaries, BP Corporation North America, BP Products North America, Inc., BP America Production Company, BP Energy Company, and BP International Services Company, correct? A. Yes.
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Q.
And the Deferred Prosecution Agreement is for
a period of three years from October of 2007, isn't it? A. Q. That's correct. And BP agreed to pay monetary penalties in
this Deferred Prosecution Agreement of a hundred million dollars to the U.S. Treasury, right? MR. GODFREY: A. Q. Objection as to form.
I believe that's right. (By Mr. Cunningham) All right. And $53
million to a victim restitution fund, right? A. Q. I believe that's right. And $25 million to The U.S. Postal Services
Consumer Fraud Fund, right? A. Q. That's correct. It was signed in October of 2007, and you were
the CEO, weren't you? A. Q. That's correct. So on April 20th, 2010, the date of the
DEEPWATER HORIZON explosion, this Deferred Prosecution Agreement was still in effect, wasn't it? A. Q. It was. Just to summarize, then, Dr. Hayward, as of
April 20, 2010, BP was on probation for two crimes and was the subject of a three-year Deferred Prosecution Agreement for mail fraud and wire fraud?
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MR. GODFREY: Q.
Objection as to form.
(By Mr. Cunningham) Correct? MR. GODFREY: Same objection.
A. Q.
That is correct. (By Mr. Cunningham) And one of those crimes
involved multiple deaths and injuries, and one involved an oil spill, didn't it? MR. GODFREY: A. Q. That's correct. (By Mr. Cunningham) And all of that conduct A, Executive Assistant or in Objection as to form.
occurred while you were:
some other position; B, No. 2 at BP, or as you say, on the third level, CEO of E&P; or C, you were on the Board of Directors; or D, you were CEO? MR. WEBB: Q. A. it. Q. A. Q. Well, let me -Let -Let me try it this way: When all of those Objection to form. Compound.
(By Mr. Cunningham) True? We can debate exactly how you want to describe
events and guilty pleas occurred, you were in the top leadership at BP, weren't you? A. Q. I was in the leadership of BP, yes, correct. And despite everything that had occurred
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before 2007, during which you were part of the top leadership at BP, the Board of Directors promoted you to CEO in 2007, didn't they? A. Q. They did. In fact, the entire time that you were the CEO
of BP, BP was on probation for criminal conduct, true? A. For incidents that had occurred prior to my
becoming the CEO, that is true. Q. Is it true that the entire time you were CEO
of BP, BP was on probation for criminal conduct? MR. GODFREY: A. Objection as to form.
As I said, BP was on probation for criminal
conduct during my time as CEO for incidents that had occurred prior to me becoming the CEO. Q. (By Mr. Cunningham) They occurred while you
were in the top leadership of BP, though, didn't they? A. Q. you? A. Q. I was. And it's true, isn't it, that the culture of I was -- I was in the senior leadership. You were in the senior leadership, weren't
an organization is shaped by the leaders in it? MR. WEBB: Q. Object to form.
(By Mr. Cunningham) That people do what
leaders do?
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MR. WEBB: Q.
Object to form.
(By Mr. Cunningham) That's true, isn't it? MR. WEBB: Object to form.
A.
I believe that the role of leaders is very
important in shaping the culture of an organization. Q. (By Mr. Cunningham) Is it true that the
culture of an organization is shaped by the leaders in it, and that people do what leaders do, and that that's been proven -A. Q. A. I believe the role -Excuse me. I'm sorry. Let me finish. I'm sorry. I thought you had. I
apologize. Q. again? And that that's been proven time and time That's true, isn't it? MR. WEBB: Object to form. Objection, form.
MR. GODFREY: A.
As I said, I believe that the role of leaders
is very important in shaping the culture of an organization. It's not unique, it's not the only
thing, but it's an important thing. Q. (By Mr. Cunningham) Is the following statement
true, quote, "The culture of an organization is shaped by the leaders in it. People do what leaders do.
That's been proven time and time again," end quote, is
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that true or not? MR. WEBB: A. Object to the form.
As I've said to you, there are -- there is Very
more -- leaders are very, very important. important.
They take a major role in shaping the
culture of an organization. There are other things that you need to put in place besides having the right leadership to shape the culture of an organization. Q. Turn to Tab 2, Page 22. MR. GODFREY: Q. Which exhibit is that?
(By Mr. Cunningham) Exhibit 6000. MR. BONNER: MR. GODFREY: (Nodding.) Oh, this is -- is this
earlier? MR. CUNNINGHAM: MR. GODFREY: Yes.
What page number again? 22.
MR. CUNNINGHAM: Q. gave -A. Q. Yeah.
(By Mr. Cunningham) This is a speech you
-- to the Business School at Stanford, and did
you or did you not say, quote, "...what I'm very certain about is that a culture of an organization is shaped by the leaders in it. People do what leaders
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do...that's been proven time and time again"? or did you not say that? A. Q. I did say that. I did say that.
Did you
You would agree, wouldn't you, Dr. Hayward,
that there were a couple of common threads running through the various investigations by various parties both inside and outside BP of Grangemouth, Texas City, and Prudhoe Bay? There were a couple of common threads
running through those, weren't they? MR. GODFREY: A. Objection as to form.
I would like you to elaborate as to which
common threads you might be referring to -Q. A. Q. All right. -- then I can -Well, let me refer you to two. Those
investigations focused, one after the other, on issues including one, cost-cutting, and two, process safety, correct? A. I certainly believe that process safety was a I think there is certainly no evidence
common theme.
in the case of Alaska that it was anything to do with cost-cutting. Q. A. Well, then -It was to do with the assessment of risk, but
it wasn't about cost-cutting.
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Q.
All right.
Well, do you concede, then, that
the other two investigations a common thread was cost-cutting by Senior Management? A. Q. A. Q. I don't agree with that. You don't agree with that? No. All right. Did you read press reports that
described cost-cutting by Lord Browne, aggressive cost-cutting directed by him as one of the causes of those events? MR. GODFREY: A. Q. A. recall. Q. And in the lessons that were learned from Objection to form.
Did I read press reports? (By Mr. Cunningham) M-h'm. I may have read press reports. I don't
Grangemouth, was the subject of cost-cutting discussed? A. I -- I don't recall. MR. CUNNINGHAM: MR. BONNER: (Indicating.)
(Tendering.) Tab 8.
MR. CUNNINGHAM: Q.
(By Mr. Cunningham) From a safety perspective
it was important that lessons be learned from prior events such as Grangemouth, correct? A. Correct.
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(Exhibit No. 6011 marked.) THE COURT REPORTER: MR. GODFREY: of this? THE COURT REPORTER: MR. GODFREY: "11" part. Q. Thank you. 6011. Now I get the 11.
What's the Exhibit number
Thank you.
(By Mr. Cunningham) And, certainly, in your
capacity in the leadership at BP, you were interested in what lessons there were to learn from events such as Granemouth -- Grangemouth, correct? A. Q. Yes, indeed. And if you look at the first page of this
exhibit, we see that the three authors were, in fact, employees of BP, weren't they? A. Q. M-h'm. So they would know that the Senior Management
level that BP would be reading this Report they wrote about the lessons from Grangemouth, correct? A. Q. I'm sure that's correct. All right. If you look at Page 252 at the
bottom, tell me whether or not I read this correctly under "Cost Targets": "There was too short a focus on
short term cost reduction reinforced by KPI's..." That's key performance indicators, isn't it?
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"...in performance contracts, and not enough focus on longer-term investment for the future. HSE
was unofficially sacrificed to cost reductions, and cost pressures inhibited staff from asking the right questions; eventually staff stopped asking." Did you read that when this Report was issued? A. I can't recall. I almost certainly did, but I
can't recall it. Q. You're almost certain you did, but you can't
recall it? A. Q. I can't recall it, no. Okay. And you're familiar with the U.S.
Chemical Safety Investigation Report out of Texas City, correct? A. I am. MR. CUNNINGHAM: MR. BONNER: Tab 21.
(Tendering.) I'm going to mark the
MR. CUNNINGHAM:
full copy, Rick, and give y'all pages from it. MR. GODFREY: That's fine.
(Exhibit No. 6012 marked.) THE COURT REPORTER: MR. GODFREY: Q. A. 6012, Mr. Godfrey.
Thank you.
(By Mr. Cunningham) (Tendering.) Thank you.
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Q.
This report came out in March of 2007, seven
years after Grangemouth, correct? A. Q. Correct. And among the Key Findings, turn to Page 25,
if you will. A. Q. A. Q. (Reviewing document.) Do you have that page? I do. The first paragraph under Key Organizational
Findings, tell me whether I read this correctly, quote, "Cost-Cutting, failure to invest, and production pressures from BP group executive managers impaired process safety performance at Texas City." Did I read that correctly? A. Q. You did. And if you'll turn to Page 157, do you see
that there's a followup portion here or correction on Page 158, Section 9.4, related to budget cuts? A. Q. M-h'm. It refers to a 2002 study. That's three years
before the Texas City explosion, correct? A. Q. Correct. Are you familiar with the study that was done
three years before Texas City? A. I'm not familiar with it, no. I'm certain I
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was at the time, but I'm not familiar with it. Q. Tell me if I read this correctly: "The 2002
study identified a 25 percent cut in fixed cash cost targeted in 1999" to "2000. Chief Executive" -That would have been Lord Browne? A. Q. Correct. -- "outlined his strategies and goals for" the In 1999, the BP Group
"newly merged company, with the target of" reducing business -- "business unit cash costs for the year 2001 by at least 25 percent from year 1998 levels. He also
set out three year targets to cut" 1 point -- "1.4 billion from R&M worldwide." Did I read that correctly? A. Q. You did. Turn to the next page, second paragraph:
"While some BP refinery leaders resisted the call for a 25 percent reduction in fixed costs, Texas City made serious cuts and came close to the 25 percent reduction target. Its cost reduction strategy was to
'aggressively drive costs out of the system at an accelerated pace relative to other refiners.'" Did I read that correctly? A. Q. Correct. And that same Report also noted what BP had
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learned in the lessons -- in the way of lessons from Grangemouth, didn't it, on Page 145? Look down at the bottom and tell me whether I read this correctly in the middle of the paragraph: "...even though the group Chief Executive told staff in October 2000 edition of BP's in-house magazine that BP would learn lessons from Grangemouth and other incidents. The CSB found that a number of managers,
including executive leadership had little awareness or understanding of the lessons from Grangemouth." Did you read that when it was published? A. Q. A. Q. Did I read this -- this Report? Yes. I did. All right, sir. And the Baker Independent
Panel Report, which BP commissioned, reached similar conclusions, didn't it? A. Q. It did. And then if we move to Prudhoe Bay. MR. CUNNINGHAM: MR. BONNER: Tab 38.
(Tendering.)
(By Mr. Cunningham) I'm going to mark the full
report and give you excerpts.
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MR. GODFREY: Q.
Right.
Thank you.
(By Mr. Cunningham) Are you familiar with the
Booz Allen Report that BP commissioned out of Prudhoe Bay? A. Q. Yes, I am. And this is a Report or a study that BP paid
for, correct? A. Q. it says: Correct. And if you look at Page 7, the bottom, where "BP XA had a deeply ingrained cost Management
ethic as a result of long periods of low oil prices, constrained budgets, and multiple cost/head count reduction initiatives." Did I read that correctly? MR. GODFREY: A. Objection as to form.
It also says, just so we're complete:
"However, larger budgets alone would not have prevented these incidents without fundamental changes in corrosion and integrity Management." Q. (By Mr. Cunningham) The question was: Did I
read the sentence before that correctly or not? A. Q. A. complete. You did. All right. I just wanted to make certain the context was
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Q.
And are you familiar with a Fortune article
that was published relating to this very issue? MR. GODFREY: A. Q. Objection to form.
No, I don't -- I don't -- I don't recall it. (By Mr. Cunningham) Of cost-cutting? You
don't recall -A. I don't recall the Fortune article. When was the Fortune article published? Q. A. Q. A. Q. It was published in January of 2011. I -- yes, I'm -- I'm aware. Are you familiar with that? I'm aware of that article, yes. And are you familiar with the statement in
that article that "John Browne" -- quote, "John Browne's legacy as CEO would be enormous - for better and worse. After taking over in 1995 he imposed a
tough bottom-line mentality, ever focused on cutting" cost? Did you read that? A. Q. A. Q. A. Q. No. Is that true? No. It's not true? No. So he was not focused on cutting cost?
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A. business. Q. A.
He was focused on running a very effective
Okay. It wasn't just about cutting costs, or
anything -Q. A. Well, it wasn't just about cutting cost? It wasn't about cutting costs. It was about
building a -- a large oil and gas company. Q. Is it -- is it your testimony, Mr. Hayward,
that John Browne did not aggressively cut cost when he was CEO of BP? MR. GODFREY: A. Objection as to form.
I -- there was certainly cost management in BP
at the time. Q. A. (By Mr. Cunningham) So -But I'm not saying -- I -- I -- I don't think So I'm
that's in any way a complete description. sorry, the answer is "No." Q.
The answer is "No," he did not aggressively
cut cost while he was CEO? MR. GODFREY: Q. A. Objection as to form.
(By Mr. Cunningham) Is that your testimony? He certainly cuss -- cut costs, but as part of It wasn't like it was the only
running the business.
thing that was happening.
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Q.
Okay.
It wasn't the only thing that happened,
but he certainly cut cost, correct? A. Q. A. Q. A. sorry. Q. A. Q. Go ahead. I interrupted you. All right. You were familiar with all of He certainly reduced costs -All right. -- yes. You were famil -There's a difference, I think. Sorry -- I'm
these investigations and studies when you became CEO in 2007, weren't you? A. Q. I was. Because you had been there, and you had been
directly involved in the top leadership and as a Board Member and as a Treasurer, correct? A. Q. Correct. All right. And when you testified in
Congress, on June the 17th of 2010, you knew by that point that Congress knew and the public knew about BP's history of cost-cutting and the relationship between that and what occurred at Texas City, you knew that, didn't you? MR. WEBB: Objection, form.
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MR. GODFREY: A. Q. A. Q.
Objection, form.
I knew that some people had made that link. (By Mr. Cunningham) You knew that the -That's certainly true. Okay. You knew that the Chemical Safety Board
had made a link between cust cotting -- cust -cost-cutting and impaired process safety that they believed had led to the Texas City disaster? A. I knew what the Chemical Safety Board had
concluded. Q. And your testimony before Congress came three
years after those Reports, three years after you were CEO, and five years after Texas City, right? A. And three years after I had launched a major
change program at BP to -Q. A. Q. I didn't ask you about that. -- take account of the -Did you hear me -MR. WEBB: Q. change -MR. WEBB: -- he can answer -No. I didn't ask Before you --
(By Mr. Cunningham) -- ask you about a
MR. CUNNINGHAM: him about any change -MR. WEBB:
You interrupted -- you can
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move to strike it, but he has a right to finish his answer. MR. CUNNINGHAM: He does not have to
right -- have a right to make a speech on my time about something I didn't ask him. MR. WEBB: answer. A. Q. He's in the middle of an
I think he has a right to finish it. You have your time back. (By Mr. Cunningham) When you took the oath
before Congress on June the 17th of 2010, the last thing you wanted to admit was that since 2007, when you became CEO, and despite what had happened at Grangemouth, Texas City, and Prudhoe Bay, you had done exactly the same thing as Lord Browne, you had aggressively cut cost, didn't you? A. Oh, that is fundamentally -MR. GODFREY: A. Q. A. Q. A. Objection as to form.
-- and completely inaccurate. (By Mr. Cunningham) Okay. And I will -- if you would allow me to -No. I'm asking you --
-- please, sir, I would like to explain to you
what I did do. Q. Here's the way it works: If I want an
explanation, I'll ask for one.
If I don't ask your
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lawyers, great lawyers, they can ask you to explain any answer that they feel you need to explain. My question was real simple: you not? didn't." A. Q. I categorically did not. You categorically did not. MR. CUNNINGHAM: All right. Okay?
Did you or did
And as I understand your answer, it's "No, I
Oh, I got it.
(Discussion off the record.) Q. 37. THE COURT REPORTER: Q. 6000. (By Mr. Cunningham) Exhibit 6000. Tab 1, Page
(By Mr. Cunningham) It's a -- it's the -- it's To your right. MR. WEBB: There.
to your right.
I got it. Oh, it's -- that's not
MR. CUNNINGHAM: it. MR. WEBB:
This is 6000? Okay.
Tony's speech? Excuse me. 6001.
MR. CUNNINGHAM: I'm sorry. MR. WEBB: 6001.
MR. GODFREY: MR. WEBB: you? That's -THE WITNESS:
6001.
Do you have 6001 in front of
I do.
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MR. WEBB:
Okay. I do.
THE WITNESS: MR. WEBB:
Go ahead. No. I think --
MR. GODFREY: MR. WEBB:
No, he's got 6000, too.
You -- you're looking at the Congressional testimony? MR. CUNNINGHAM: MR. GODWIN: Right.
Tab what? Tab 1, Page 37.
MR. CUNNINGHAM: MR. GODFREY: 37?
MR. CUNNINGHAM: Q.
Yes.
(By Mr. Cunningham) Did you give this
testimony in Congress in the middle of the page? "SULLIVAN: Do you think the other companies have
different or stricter or -- stricter guidelines with their safety and spend more money on it? Because you
probably compare yourself to other companies, I'm sure." Was your -- was your answer: detailed comparison. we've done. "I can't make a
But I can be clear that what
We've invested billions of dollars, we've
recruited thousands of people, and we've changed significantly our processes, systems and procedures in the course of the last three years." A. I did.
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Q. A. Q.
Did you say that? And I stand absolutely by it. You stated, quote, "We've invested billions of
dollars" and "we've recruited thousands of people," right? A. Q. Right. And it is true that when you took over in
2007, BP's financial performance, as you said, was appalling, wasn't it? A. Q. Correct. All right. And you had two years to fix it,
didn't you? MR. WEBB: Q. you? A. Q. I said that in this speech. And one of the things you did, if we look at Object to the form.
(By Mr. Cunningham) You said that, too, didn't
Tab 2, Page 19, that's the speech, Exhibit 6000. MR. WEBB: I'm sorry, what page number? 19.
MR. CUNNINGHAM: MR. WEBB: Q.
Page 19, Tony.
(By Mr. Cunningham) And tell me whether or not We had "lost track
I read this correctly, at Line 13: of the competition.
And we reinstated very" vigor --
"rigorous competitive benchmarking across the" country.
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The most profound level or the most rudimentary level actually, it was looking at our performance as a company against our principal competitor, Shell. "And in the second quarter of 2007 on an annualized basis, we had a gap of 8 billion dollars relative to Shell in terms of what we should have been generating from our asset base versus what they were. And we" use "that as a burning platform. You know, we"
use "that as" a "rallying cry behind this big change that we" have..."we have subsequently been driving through...BP." Did I read that correctly? A. You did. Am I allowed to state the context in As to completeness --
which it was said? Q.
If your lawyers want to ask you about the
context, they can ask you about the -A. Q. said it. A. Q. A. And I said prior to -Did you say it? -- saying that in the speech. We created Well --- context. I asked you whether or not you
something called -- which we refer to as the forward agenda, which was a focus on safe, reliable operations. Having the right people with the right skills in the
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right place. Q. A. Q. A. Q.
That was --
Did you also say the words I just read? I did. All right. After I had said what I just said. And then BP had a very bad fourth quarter in
2007 after you became CEO, didn't it? A. Q. I think that's probably right. And you sought help. You called in the
investment bank, Morgan Stanley, didn't you, and specifically, someone named Neil Perry, who was an oil and gas specialist, correct? A. I -- I didn't seek help from Morgan Stanley.
I asked -Q. A. Did you seek advice? -- Neil -- no. I asked Neil Perry to do one To come to a management
thing and one thing only:
conference and give an unblemished assessment of the performance of BP at that time, and that is what he did. Q. A. Q. A. -And did he recommend cost-cutting -He recommended --- and austerity measures? He recommended nothing. It wasn't a case of
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Q. A.
He recommended nothing? -- asking Mr. Perry to make recommendations.
I asked him to come to a management conference for a couple of hours and give an objective, independent assessment of how he saw the industry and how he saw BP in the industry at that time. He was in no position to
make any recommendations about anything. Q. Did he make any suggestions about
cost-cutting? A. He may have done, but they were of no
consequence. Q. A. All right. And they -- they were not something that
anyone was going to listen to, because he had no standing to make that sort of recommenda -Q. So you invited him to come to make a speech at
a BP meeting, and he had no standing to make any suggestions? A. I didn't -- I -- I -- like I said, I asked him
to come and give an objective assessment of the industry and where BP stood in the industry. ask him for recommendations. If he gave But they weren't I did not
recommendations, very interesting.
asked for, and they weren't acted on. Q. Did he give a recommendation related to
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cost-cutting and austerity measures? A. Q. A. Q. I don't recall. Because as I said --
But what you know is that you --- we weren't listening for that. Yeah. What you know is that you did not
engage in cost-cutting -MR. GODFREY: Q. -A. Q. 2007? MR. GODFREY: A. did? Q. A. Q. A. (By Mr. Cunningham) No -In the course --- you just get to answer the questions. Well, the answer to the question is: I Objection as to form. Well --- because of BP's financial condition as of Objection as to form.
(By Mr. Cunningham) -- and austerity measures
Am I going to be allowed to explain what I
engaged in what -- investment into the operations, in terms of investment into people and investment into plant. And I engaged in cost reductions above the
operations. MR. CUNNINGHAM: MR. BONNER: (Indicating.)
(Tendering.)
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MR. CUNNINGHAM:
Tab 25.
(By Mr. Cunningham) (Tendering.) This is your copy. The other one is --
A. Q. A. Q.
Oh, I'm sorry. -- your counsel's. Thank you. You gave a speech that was reported in the
Guardian on September the 26th of 2007, correct? A. Q. Correct. It states in the first sentence: "Tony
Hayward, the new Chief Executive of BP, is to instigate a thorough Management shakeup in an attempt to refocus the group following a dreadful third quarter." true? A. Q. Correct. And it says in Paragraph 3: "Mr. Hayward Is that
outlined new plans to slash management layers from 11 to 7, redeploying some staff and removing others to kick start an oil group that he believes has become overcautious, despite the fatal Texas City refinery fire and other major accidents in the U.S." Did I read that correctly? A. You did.
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Q.
It then states:
"He told a staff meeting of
American workers in Houston that the company share price performance compared with that of its peers was now at its lowest ebb since 1992." A. Q. Correct. And then at the bottom, quote: "Assurance is Is that true?
killing us," quote, "Mr. Hayward told U.S. staff noting that too many people were engaged in decision-making leading to excessive cautiousness." Did you say that? A. I said that assurance is killing us because
there was lack of clarity as to who was accountable for what. And when you don't have clarity of
accountability, no one is accountable for anything. Q. The -- the article goes on to say: "The
speech in Houston builds on comments made at his first press conference for BP's half yearly results in July that the operating performance was not good enough and he wanted change, including a 25 percent cut in staff at the St. James Square Headquarters." A. Is that true?
That is correct, and in sharp contrast to
cutting staff in the operations. MR. GODWIN: Q. Object to form.
(By Mr. Cunningham) And did you also say on "We can be more efficient,
the next page, quote:
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leaner, and fitter by ensuring we have a common and consistent way of doing things by reducing our overheads and doing a better job at managing our third party spend." A. I did. Did you say that? By reducing the overheads, not
reducing the money we invest into our operations -MR. GODWIN: A. Objection, form.
-- or anything to do with our operations. MR. CUNNINGHAM: Tab 24.
(Exhibit No. 6015 marked.) THE COURT REPORTER: MR. CUNNINGHAM: MR. WEBB: Q. 6015.
(Tendering.)
Thank you.
(By Mr. Cunningham) I'll hand you a document
which purports to be your speech that you gave on the 17th of April 2008 at the Annual General Meeting. that what that document is? A. Q. It is. Turn to Page 3 at the top. Tell me whether or "Corporate Is
not you said this in the speech you gave: simplification: with our peers.
There is a significant competitive gap If we are going to close that gap, BP
needs to undergo a process of change as big as anything it has achieved in the last 20 years. business is too complex. Our way of doing
We are overly bureaucratic,
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not consistent enough, and our costs are too high. October last year, we announced a forward agenda to simplify BP and to fundamentally change the company culture in our way of operating." Did I read that correctly? A. Q. That's correct.
In
And then dropping down to the next -- to the "Our objective
two paragraphs below that, did you say:
is to reduce the corporate overhead by between" 20 -"15 and 20 percent"? A. Q. A. That's correct. All right. A very significant difference in redu --
reducing the corporate overhead to reducing operating costs. MR. GODWIN: Q. A. Q. read. See, your lawyers will get a chance, Mr. Hayward, to explain anything. You can give any Object to form.
(By Mr. Cunningham) I didn't ask you that. Well, I -I asked you whether or not you said what I
self-serving explanation you want to give later. A. I just want to make certain -MR. GODFREY: Objection to form.
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A.
-- that the statements made here are not taken
out of context. Q. (By Mr. Cunningham) You don't have the option
for making self-serving statements every time you have to answer a question you don't like. MR. GODFREY: A. Q. simple. Okay?
I'm not making self-serving statements. (By Mr. Cunningham) The question is real Did you say, quote: "Our objective is to
reduce the corporate overhead by between 15 to 20 percent," end quote? didn't. MR. WEBB: of the paragraph. MR. CUNNINGHAM: I know I didn't. I I Well, you didn't read the rest Now, either you said it or you
don't intend to read the rest of the paragraph.
asked him if he said what it said in the sentence. MR. GODFREY: Objection as to the form.
He answered the question already. Q. right? A. Q. It is, yes. Okay. And then in 2009 -MR. CUNNINGHAM: MR. BONNER: Tab 26. (By Mr. Cunningham) This is your speech,
(Tendering.)
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(By Mr. Cunningham) (Tendering.) MR. GODWIN: Excuse me.
Q.
(By Mr. Cunningham) Is that document a speech
that you gave on April 16th of 2009 -A. It is. Sorry. Q. And did you say when you gave in that speech "We set out a plan to
on Page 2, second paragraph:
deliver safe and reliable operations to restore revenues and to reduce the complexity and cost structure of BP. A. Q. A. Q. A. Q. Yes. -- "exactly that," end quote -I did. -- is that what you said? It is. All right. And then on the next page, did you "At a corporate We've done" --
say in the middle paragraph, quote:
level, we began to reduce the complexity and cost base of our overheads. By the end of 2008, we had reduced
our organization by around 3,000 people and are on track to exceed our original target of 5,000 by the middle of 2009. We have also eliminated nearly 20
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percent of the senior positions." A. Q. I did.
Did you say that?
And then on Page 5, third paragraph down -MR. GODFREY: MR. WEBB: Hold on a second, please.
I don't see -- I just don't
see page numbers.
Are they here or -All right. It's the
MR. CUNNINGHAM:
third page from the back of the speech portion of the exhibit. MR. WEBB: Three, four, five. Is this -Not the bullet point.
MR. GODFREY:
Is this the fifth page in? I think it is. I think I have
MR. CUNNINGHAM: MR. GODFREY: it. MR. CUNNINGHAM: page in from the front. MR. GODFREY: MR. WEBB: same page he's on.
All right.
Yeah, it's the fifth
Thank you.
I don't think you're on the
I just -- you want me to just make You want five
sure he's on the same page you're on?
pages from the beginning; is that correct? MR. CUNNINGHAM: top, "But so not only..." Right. It starts at the
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Q. A. Q.
(By Mr. Cunningham) You got that? Yeah. Okay. And did you say on the fourth "At BP, we
paragraph -- or third paragraph down:
started our drive to counter cost inflation some 18 months ago and managed to halt that inflationary trend in 2008 despite the continued rise in oil prices for most of the year"? Did I read that correctly? A. Q. I did. Did you then say: "The challenge for the
industry now is to bring this cost base down - and to do this fast, to align with new market conditions"? A. Q. A. Q. A. I did. Did you say that? I did. And then at the bottom of the next -And then I went to on say: "We've been
working with our suppliers to improve" -Q. A. I didn't ask you what you went on to say. -- efficienty...with one important caveat -
safe and" reliable -- "reliable operations come first whatever" the "cost." Q. Mr. Hayward, I didn't -MR. GODWIN: Objection, form.
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Q. anything.
(By Mr. Cunningham) -- ask you to read I asked you whether or not you said what I Okay? Can you follow the rules and read
read to you.
or answer the question I ask you? MR. GODFREY: Q. Objection to form.
(By Mr. Cunningham) You understand this isn't
a press conference where you get to say anything you want? MR. GODFREY: MR. WEBB: Objection to form.
Object to the form. The colloquies are
MR. GODFREY: inappropriate. Q.
(By Mr. Cunningham) Did you say at the bottom "We expect our cost to
of the next paragraph, quote:
fall by around $2 billion in 2009," end quote? Did you say that? A. Q. Yes. And did you say at the bottom paragraph, first "At BP we have a mantra, every dollar
sentence, quote:
counts, every seat counts, and we intend to follow it through"? Did you say that? A. caveat -Q. The question was -And I did in the context of one important
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A. Q. A.
-- safe and reliable operations --- did you say that? -- come first whatever cost efficiency
measures we undertake. MR. GODWIN: Q. Object to form.
(By Mr. Cunningham) And you have repeated
multiple times that the first words out of your mouth when you talk about BP are always "safe and reliable." You've said that, haven't you? A. Q. I have. That that's your emphasis always that whenever
you give a speech, whenever you talk about -- the emphasis is safe -- the first words are "safe and reliable," right? A. Q. Correct. Correct. Well, Mr. Hayward, if -- if the
first words out of your mouth every time you open it were "I am Superman," that wouldn't make you Superman, would it? MR. GODFREY: MR. WEBB: Q. Objection to the form.
Object to form.
(By Mr. Cunningham) Would it? MR. GODFREY: Object to form.
A.
I'm not going to answer that question. THE COURT REPORTER: Three minutes.
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MR. CUNNINGHAM:
Tab 29.
(By Mr. Cunningham) (Tendering.) MR. CUNNINGHAM: I'll start on this
exhibit when we come back. MR. GODFREY:
Time's up. Let's take a break now. Off the record at
THE VIDEOGRAPHER: 10:54 a.m. Ending Tape 2.
(Recess from 10:54 a.m. to 11:10 a.m.) MR. CUNNINGHAM: THE VIDEOGRAPHER: Ready. All set. On the
record at 11:10 a.m., beginning Tape 3. Q. (By Mr. Cunningham) Dr. Hayward, you have
before you Exhibit 6017, correct? A. Q. Correct. And that is a speech you gave to the General
Meeting of BP on April the 15th of 2010? A. Q. A. Q. Correct. Correct? (Nodding.) That was five days before the DEEPWATER
HORIZON blowout, correct? A. Q. Correct. I'll ask you to turn to Page 3, please, the
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third page down. correctly.
Tell me whether or not I read this
I'm looking at the fourth or fifth "The drive to increase efficiency and
paragraph down:
reduce costs remains a key focus for everyone at BP." Did I read that correctly? A. Q. You did. And the next paragraph: "In the upstream, we
are leading our peer group and driving down production costs, with BP's unit cost in 2009, 12 percent lower than in 2008. We will maintain this momentum through
activity choice and in the way we manage the supply chain. In the downstream, our efficiency initiatives
have reduced cash costs by more than 15 percent in 2009, and our goal over the next two to three years is to return costs to 2004 levels. For the group as a
whole, we reduced our cash costs last year by more than $4 billion." A. Q. Did I read that correctly?
You did. And in the last paragraph, quote: "...and we
have furthered our corporate simplification agenda, reducing head count by around 7,500," end quote. read that correctly? A. Q. Correct. And did you then or did you in conjunction Did I
with your speech use a PowerPoint that's attached to
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this speech? A. Q. I did. All right. And if you'll turn to Page 16,
those numbers in the bottom right-hand corner of the PowerPoint, titled "Strategic Progress in 2009." you have that page? A. Q. I do. As part of your PowerPoint, did you state Reduced Do
under "Corporate Simplification," "Head count: by 7500 to date. billion in 2009"? A. I did. Cash costs:
Down by more than 4
Did you say that in your PowerPoint? These are all corporate overhead
reductions.
And as I've said many times, the context
was I had spent a lot of time in the speech talking about safe, reliable operations before I talked about any of this. MR. GODWIN: Q. Object to form.
(By Mr. Cunningham) You understood when you
just answered that question that all I asked you was whether or not you said that in the PowerPoint, didn't you? A. Q. I did. Okay. But you went on and made an explanation
anyway that you weren't asked for, didn't you? A. I did.
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Q. work.
All right.
Well, that's not the way the Rules
We have Rules that govern this process, and And I would ask you
they're not made by you or by me.
to answer the question I ask you and only the question I ask you. Would you do that? MR. GODFREY: colloquy. Q. A. Q. Objection as to the
Ask your questions and move on. (By Mr. Cunningham) Would you do that? I'll answer your questions. All right. So it is your testimony that your
cost-cutting initiatives and your philosophy, as set out in these multiple speeches we've looked at, did not flow down to drilling operations; is that your testimony? A. Q. That is my testimony. That is your testimony. Do you know last week
that testimony was given under oath that there were cost cuts in 2009 between $250 million and $300 million in the Gulf of Mexico drilling and completion operations? Do you know that? MR. WEBB: A. Q. Object to the form.
I didn't know that. (By Mr. Cunningham) Okay. Is that testimony
that was given, false? A. I don't --
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MR. WEBB: A. Q. A.
Object to the form.
I'm sure it was true. (By Mr. Cunningham) You're sure it was true? But I -- I was not aware of the testimony.
Would you like -- in fact, could you show me the testimony, so I can see it? Q. A. Q. A. Q. A. Q. No, I'm not going to show you the testimony. Well, how can you -Is it --- expect me to -Do you deny -With respect, sir -Forget the testimony. Do you deny that cost
cuts in 2009 in the Gulf of Mexico drilling and completion operations were in the range of 250 to $300 million? A. Q. A. in 2009. I do not know what the Gulf -All right. -- reductions in drilling and completions were If you can provide me with some material that
demonstrates it, then I can form a view, but I honestly do not know. Q. Well, we know what the two thousand tren --
'10 Drilling Excellence Plan had to say about costs. Have you ev -- you've seen that document?
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A.
No, I haven't. MR. CUNNINGHAM: Tab 33.
(Exhibit No. 6018 marked.) THE COURT REPORTER: Q. 6018. Is that a
(Tendering) I'll hand you 6018.
2010 Drilling Excellence Plan? A. That's what it said it is. I haven't seen
this document prior to today. Q. And do you see where it says on the next page
under "Performance Focus," "Every rig minute counts"? A. Q. I do. Turn to the next page. Do you see the bullet
point at the top that says "Time is Money"? A. Q. I do. And do you see the one at the bottom that says
"Every minute matters"? A. And the one in between, "Efficient Wells are I do.
Safer Wells." Q.
Dr. Hayward, your cost-cutting -- your
cost-cutting in the wake of the Grangemouth investigation and the Texas City investigation flowed right down to the drill rigs, didn't it? A. There was no cost-cutting conducted by me in The
the wake of Grangemouth or Texas City.
cost-cutting conducted by me upon bec -- upon becoming
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the CEO of BP in 2007 was to reduce the corporate complexity of the company and reduce the overhead. Q. A. It -That is a very different focus than
operations. Q. Is it your testimony that your cost-cutting
initiatives did not flow right down to the rigs? A. I -- I -MR. WEBB: answered -A. I do not know -MR. WEBB: A. Q. A. Objection, form. Objection, asked and
-- whether they flowed down to the rig, no -(By Mr. Cunningham) You don't know? No, I don't, because my focus was on reducing
the corporate overhead of the company. Q. A. Your -That's the thing that I could most easily and
obviously focus on. Q. Your -- your cost-cutting flowed right down to
the Gulf of Mexico in general and the DEEPWATER HORIZON specifically, didn't it? A. I do not believe that -MR. WEBB: form. Objection, form. Objection,
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A. Q. A. Q.
-- is the case. (By Mr. Cunningham) You do not believe that? No. Your cost-cutting directly impacted safety in
the Gulf of Mexico on April the 20th of 2010, didn't it? A. It did not. MR. CUNNINGHAM: Tab 27A. 27A.
(Exhibit No. 6019 marked.) THE COURT REPORTER: Q. document. 6019.
(By Mr. Cunningham) I'm handing you a The title is "Gulf of Mexico SPU." That's
the Strategic Performance Unit, correct? A. Q. It is. "Drilling and Completions, The Way We Work."
Is that correct? A. Q. That's what it says on the document. All right. And it has a date of 4/1/09 on the
front, the date of the draft, correct? A. Q. A. Q. Correct. Turn to Bates 29. This is a draft for review, is it? Right. But it was issued, if you'll look at
the next page, in -- later in April, wasn't it? A. Correct.
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Q.
Turn to Page 29, Bates 29.
It says at the top
"Operations Team Model." A. Q. M-h'm, I do.
Do you see that?
Looking down the paragraph, tell me if I read "The Rig Ops Team will consist of two
this correctly: parts.
The first is a core group of dedicated rig team
members" -A. Oh, I'm sorry. Can you -- I haven't found
out where you are -Q. A. Q. I'm on -Okay. I got you. Okay.
"The Rig Ops Team will consist of two parts.
The first is a core group of dedicated rig team members (as represented on the right side of the diagram below with the solid line reporting line)." A. Q. I do. And then if you look at the chart for the Rig Do you see that?
Ops Team, do you see the "Well Teams Leader" at the top? A. Q. machine"? A. Q. A. I do. And to the right, "One rig - one team Do you see that? M-h'm. And do you -I do.
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Q.
-- see below "Wellsite Leaders," the fourth
block down, "HSE Advisors"? A. Q. I do. That's Health, Safety, and Environment
Advisors, isn't it? A. Q. A. today. Q. It is. All right. Turn to Bates 38.
It says structure of this will be much as Got it. That's 38.
"Organizational Structure" is what it says at Do you see that?
the top, Bates 38. A. Q. I do.
And it refers to an "Office HSSE Advisor" and
a "Field HSSE Advisor," correct? A. Q. Correct. And under the "Field HSSE Advisor," it says:
"Each rig will have two Field HSSE advisors (working 14/14)" -- correct? A. Q. Correct. Next bullet: "Assigned to a specific Rig and
will stay with the rig even if it moves to a different operating area," correct? A. Q. Correct. "Focus on rig specific HSSE needs." Did I
read that correctly?
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A. Q.
Correct. "Reports to HSSE Manager with dotted line to
Well Site Leader"? A. Q. A. Q. Correct. Did I read that correctly? Correct. "Receives oversight of day-to-day activities Did I read that
by the Office HSSE advisors." correctly? A. Q. You did. All right.
Turn to the next page, titled Do you see that?
"Team Functions." A. Q. A. Q. M-h'm.
And do you see "Operations" below that? I do. It says: "HSSE is accountable for providing
HSSE support for drilling, completions and intervention operations. HSSE advisors will be embedded within
office-based teams for each Drilling Operations Manager. Each rig and intervention activity will also Did I read that
be staffed with onsite HSSE support." right? A. Q. Correct.
And then it describes -- or it discusses the And does it say: "Ensure HSSE
subject of performance.
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performance is continuously improving in drilling and completion operations. Improvement activities will
include the following..." And the third bullet: "Implementing HSSE
systems that are simple and consistent with OMS, GoM SPU requirements and contractor management systems." Did I read that correctly? A. Q. Correct. And below that, under "Assurance," does it say
that "HSSE is accountable for ensuring that all applicable BP Policies and Agency Regulations are followed"? A. Q. A. Q. Did I read that correctly?
Correct. Turn to Page 41. (Complying.) At the bottom, under "Assessment and Audit," "D&C" -- and that's Drilling and
does it say:
Completions -- "conducts internal risk-based HSSE self-assessments. The intent of the self-assessment is
to verify contractors are properly utilizing their safety management systems and bridging documents"? I read that correctly? A. Q. Correct. And finally, on Page 42, the next page, under Did
the Team Roles for Drilling and Completion HSSE, at the
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bottom:
"D&C Field" HSE -- "HSSE Advisor," "The Field
D&C HSSE Advisor is the day-to-day offshore interface with all on" -- "onboard staff and contractors. This
role provides constant on-site support and coaching to help ensure HSSE systems are fully implemented and continually used by work crews." correctly? A. Q. You did. You gave your 2009 General Meeting speech, Did I read that
which is at Tab 26, 16 days after the date of implementation of this exhibit, correct? MR. WEBB: exhibit? MR. CUNNINGHAM: MR. BONNER: What is that exhibit? Tab 26. What is -- is that an
6016. 6016. Okay. Exhibit 6016. Yeah.
MR. CUNNINGHAM: A. Q. It's this one, yeah.
(By Mr. Cunningham) You gave that speech 16
days after this document, this draft for review, was issued on April the 1 -- April 1, 2009, correct? A. Q. Correct. And then if you'll look at Tab 27B, which
we'll mark as the nest -- next exhibit. (Exhibit No. 6020 marked.) THE COURT REPORTER: 6020.
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Q.
(By Mr. Cunningham) Exhibit 6020. MR. GODFREY: THE WITNESS: It's right there. I'm sorry. I'm sorry. I'm
sorry. Q. (By Mr. Cunningham) This is four months after In August of 2009, BP removed the
your April speech.
BP Safety Men from the rigs in the Gulf of Mexico; isn't that true? MR. GODFREY: A. Q. A. Q. A. Q. I don't know. Objection as to form.
Where does --
(By Mr. Cunningham) Look at the top -Where does it --- bullet point. Where does it say that? This is the "Drilling and Completions HSSE You gave your
Organization Change - August of '09."
speech in April where you discussed cost-cutting, didn't you? A. I did my speech in April where I discussed And you're -- you're now talking about
cost-cutting.
an organizational change in August, which -Q. A. speech. Q. You don't think so, huh? Right. And does the first --
-- doesn't seem to have much to do with my
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A. Q.
I don't think so, no. Does the first bullet say: "D&C has reached
the place in our HSSE journey where the Drilling Contractors must take full responsibility for HSSE on the rig"? A. Q. A. Did I -Because that --- read that right? -- that sounds like a very reasonable and
sensible position to take, that drilling -MR. GODWIN: A. Objection, form.
-- contractors must take full responsibility
for HSSE on their rigs. Q. bottom -MR. GODWIN: Q. Objection, form. (By Mr. Cunningham) And does it state at the
(By Mr. Cunningham) -- the next to last -MR. GODFREY: Objection, form.
Q. report:
(By Mr. Cunningham) -- next-to-last bullet "Next step is to remove fulltime BP Field Isn't that what it
staff and focus on verification"? says? A. you? Q. A. Sorry. Hang on.
Which -- where -- where are
I'm at the next-to-the-last bullet -Yeah. "The next step is to remove full-time
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BP Field staff and focus on verification."
Because the
drilling rigs are the responsibility of the contractor. MR. ROBERTS: Q. A. Q. Objection, form --
(By Mr. Cunningham) The document where -It's very clear. (By Mr. Cunningham) The document where BP
describes the purpose of the HSSE Safety Men on the rigs and the significance of it and what their role was and the reason they were there came out in April of 2009, and then in August of the same year, BP completely changed and removed the Safety Men from the rigs in the Gulf, didn't it? MR. WEBB: A. Object to form.
Bullet three says the Gulf of Mexico is
"...the only BP organizations that utilizes fulltime BP Field HSSE Advisors on drilling rigs - most rely on the Drilling Contractor..." Q. that? A. Q. A. Q. No, but -The question was --- taking statements out of context is -The question was -- the question -(By Mr. Cunningham) Did anybody ask you about
Mr. Hayward, you need to listen to the question. The question is: You gave your speech in
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April, this came out in April.
Before you gave your
speech about cost-cutting, this came out talking about the purpose of the Safety Men, the BP Safety Men on the rigs in the Gulf of Mexico and the importance of having them there, and four months later, they're jerked off all the rigs in the Gulf of Mexico; isn't that true? MR. GODFREY: A. Objection, form.
I don't believe that there's any evidence of In my speech I talked about the costs
jerking off.
that had been reduced, talked very little about the future, and certainly set no targets with respect to the future. Q. A. (By Mr. Cunningham) You were Head -So I think trying to link this with anything I
know said at any general meeting is tenuous in the extreme. Q. You -- you were Head of the Group Operating
Risk Committee, weren't you? A. Q. I was. And certainly, with you as the Head of that,
you knew what was going on with safety, didn't you? A. I probably would not have been aware of this.
I don't recall it. Q. You "probably would not have been aware."
Let's go to Tab 47.
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MR. CUNNINGHAM: already used it. MR. BONNER:
Exhibit -- well, I've
6002. 6002?
6002. Correct.
So you used it earlier? Yes. Thank you. One
MR. CUNNINGHAM: MR. GODFREY: second while we find it. THE WITNESS: MR. GODFREY:
Okay.
What does it look like? It looks like this one.
It's at the base of your pile, if you'll give me -THE WITNESS: MR. GODFREY: Q. document. MR. GODWIN: 47? Yes. I think it's here. Yeah.
(By Mr. Cunningham) Look at Page 6 of this
MR. CUNNINGHAM: MR. GODWIN: Q.
Thank you.
(By Mr. Cunningham) At the top, it says:
"Leading from the very top, the BP Group Operations Risk Committee," and we read this earlier. That's the
Committee you chair, right, the Safety Committee? A. That's correct.
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Q.
All right.
And does it say, the fifth bullet
down, that what is included in the oversight -oversight by your Committee is oversight of HSE? A. Q. That's correct. So you would have certainly known that BP was
removing -A. Q. A. Q. No, I would not. You would not have known? And I was not aware, actually. Okay. Did you know that Mr. Daun Winslow with
Transocean testified that there were Safety Men, BP safety people onboard the five rigs that he managed from the time he was onboard in 2006 until 2009, and that those people were removed in 2009? A. Q. I haven't seen his testimony, I'm afraid. Well, they hadn't been on those rigs for years
for no reason, had they? MR. WEBB: A. Objection, form.
I think if you would go back to the rationale It's leaving accountability
for removal, it's clear.
for the drilling rig with the drilling contractor, whose rig it is -MR. ROBERTS: A. Objection, form.
-- whose systems operate on the rig, whose
procedures and processes are used on the rig.
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Q.
(By Mr. Cunningham) Had the BP Safety Men who
had been on the rigs assigned responsibility for safety been on there for years for no reason? MR. WEBB: A. Objection to form.
What it says in bullet two is triple redundant So I -- I wouldn't argue that it's
HSE role -- roles.
no reason, but there was clearly a lot of redundancy in the matter of HSE professionals on the rigs. Q. (By Mr. Cunningham) What did you do in your
capacity as the person ultimately responsible for HSE to determine what effect this decision would have on the rig floor? A. Q. A. Q. I was not involved in this decision -What did you do --- unfortunately. -- to become aware of these types of decisions
and to make a determination of what effect it would have on the rig floor? A. Q. I did not review this level of decision. Did it, in fact, make a difference in safety
on the rig floor? A. I don't believe there's any evidence that it
made a difference in safety. Q. You don't? MR. CUNNINGHAM: 27D.
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THE COURT REPORTER: MR. CUNNINGHAM: Q.
B, Bravo?
D, Delta.
(By Mr. Cunningham) It's already -- 1351, (Tendering.)
Exhibit 1351. A. Q. A. Q.
Thank you. You've never seen this document, have you? I haven't seen this document, I'm afraid, no. It begins at the top -- it's a Transocean "Following a recent BP
document, and it says:
performance review I have been tasked with following up with our rigs to solicit feedback." Did you ever ask to get any feedback from the rigs about what the effect of removing the Safety Men from the rigs might be? A. Q. I didn't. Look at the next page, at the bottom, and tell
me whether or not I read this correctly, as part of this audit, quote, "It would be nice to have a BP HS" -A. Q. Sorry, sorry, sorry, sorry. Yeah. Can you -- can --
The bottom of the page, next to the
last paragraph. MR. GODFREY: seen the document. One second. He's never
It's not a BP document.
(Discussion off the record.)
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THE WITNESS:
So -The bottom of --
MR. CUNNINGHAM: MR. GODFREY: at? MR. GODWIN:
Which page are you looking
What is this?
(Discussion off the record.) A. So we're -- actually I've found it. It's
half -- it's two-thirds of the way -Q. A. Q. (By Mr. Cunningham) It's the second page. -- through the penultimate paragraph. It's the second page. It's the second
paragraph from the bottom of the second page. A. Q. A. Q. M-h'm. The Bates number is 378 on the bottom right. Yeah, I've got it. Do you have that page? MR. GODWIN: Q. A. Q. A. Q. Thank you.
(By Mr. Cunningham) Do you have that page? I've got it, yes. All right. That's what I said. Tell me whether or not I read this correctly:
"It would be nice to have a BP HSE Rep on board like we used to. It really made a difference: they brought a
lot to the table, its like when they come out now its
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only for maybe 5 days and they are not in tune with the pulse of the rig crews any more. They also was very
involved with the 3rd parties, make sure they were participating in our safety program, helped us out with training that need to be done for 3rd parties and any training that was required from BP for" Transocean, period. Did I read that correctly? MR. GODFREY: A. Q. Objection as to form.
You read it correctly. (By Mr. Cunningham) Did you, as the person
responsible for safety, for HSE and the Group Operations Risk Committee, ever ask to see any information that suggested that removing the BP Safety Man from the rig might make a difference? A. Q. I didn't. Now you said that -MR. GODFREY: on this document? MR. CUNNINGHAM: Not that I saw, but it's Excuse me. Is there a date
obviously after the Safety Man is gone. MR. GODFREY: came from? MR. CUNNINGHAM: to another deposition. It's an exhibit to the Do we know what unit this
I don't have the history of the
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exhibit, but it's a Transocean document, as I said. MR. GODFREY: Q. Fair enough. Fair enough.
(By Mr. Cunningham) Now, Mr. Hayward, the
reason that the cuts that you made, just like Lord Browne had made, the reason they reached throughout the organization and down to the rig floor is because safety is included in your capital and your operating spending, isn't it? MR. GODFREY: A. Objection as to form.
Of course investment in safety is part of the
overall investment into capital and operations, so by definition, but it was, in fact, measured and monitored separately such that I know that in the three years that I was CEO, we invested $14 billion into integrity of plant. Q. said? A. plant. MR. CUNNINGHAM: Tab 30. We invested $14 billion into the integrity of (By Mr. Cunningham) What was that you just
(Exhibit No. 6021 marked.) THE COURT REPORTER: Q. 6021. Who
(By Mr. Cunningham) I'll show you 6021.
is Lamar McKay? A. He's the President of BP America.
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Q.
Now, you just -- you just told us how much
money you claimed B spent -- BP has spent on safety, right? MR. GODFREY: A. Objection as to form.
I -- my recollection is that it was $14
billion in plant integrity over a three- to four-year period. Q. (By Mr. Cunningham) Well, Mr. Lamar McKay
answered written questions to Congress before the Hearing on June 17 where you testified, did he? A. Q. Yes. Submission date is June 13th, four days before
you testified, correct? A. Q. Right. And in No. 2, the question is asked how much
money has BP invested in various things, one of which is: "How much was focused on technologies related to
rig safety and accident prevention?" Do you see that -A. Q. A. Q. Yes, correct. -- in that paragraph? (Nodding.) I do. If you look at the answer, he didn't answer Instead what he said on the next page --
it, did he? A.
Let -- if you just let me read -- can I read
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the answer, please -Q. A. Q. A. Q. Congress? MR. GODFREY: A. Objection as to form. Sure. -- to determine whether he's answered or not? Sure. Thank you. You didn't read them before y'all gave them to
I certainly didn't read this before it went to I was actually dealing with a (Reviewing
Congress, of course.
very significant oil spill at the time. document.) Q. Okay.
(By Mr. Cunningham) He's asked how much is He doesn't answer it with a number Instead what he says --
spent on safety. like you have. A. Q.
Can I just -- sorry. -- on Page 2 -- and tell me whether I read "Safety is
this correctly, at the top of Page 2:
embedded in everything we do, thus much of our capital and operating spend incorporates elements of safety." Did I read that correctly? A. You did, and that is correct. I would just if
I can, please, like to correct -Q. I'm not asking you for a self-serving I asked you whether or not he said it.
explanation.
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A.
It's not self-serving.
I want to state an
accurate fact. Q. A. Did he say -What I said, $14 billion in plant integrity. I just want it to be
That's not the same as safety. clear. Q.
Is this true, that safety is embedded in
everything you do; thus, much of your capital and operating spend incorporates elements of safety? A. Q. A. Q. Indeed. Is that true? It is. All right. And the speech you gave on April
15th of 2010, it was Tab 29 -MR. CUNNINGHAM: Q. What is it --
(By Mr. Cunningham) -- 6017, this speech was
five days before the DEEPWATER HORIZON blowout, correct? A. Q. Correct. And in this speech -- and I read this to you "Head count reduced by 7500 to
earlier -- you said:
date and cash costs down by more than 4 billion in 2009," didn't you? A. Q. I did. And in the -- it's the speech --
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A.
Immediately following a description of our
performance on safety. Q. All right. And then 60 days later after the
DEEPWATER HORIZON blowout, you testified before Congress under oath that you had, quote, "invested billions and recruited thousands," didn't you? A. Q. That's true, and it remains true today. In the wake of Texas City, Dr. Hayward, you
instituted a program called OMS, true? A. Q. Correct. Operating Management System.
It stands for Operating Management System, and
it was a cornerstone of achieving safety at BP, wasn't it? A. Q. It was. You and the senior -- senior leadership at BP
touted OMS as a blueprint for safety, didn't you? A. Q. It was designed to make our operations safe. And most importantly for your testimony today,
an integral part of OMS was something called process safety, wasn't it? A. Q. Correct. And the purpose of process safety is to
prevent, control, and mitigate major accidents, correct? A. Correct.
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Q.
Major accidents are ones that have the
potential to cause multiple fatalities, just like what occurred on the DEEPWATER HORIZON, correct? A. Q. Correct. Major accidents include accidents with the
potential to cause catastrophic environmental damage, just like what occurred on the DEEPWATER HORIZON, correct? A. Q. Correct. Major accidents include a blowout just like
what occurred on the DEEPWATER HORIZON, correct? A. Q. Correct. And failures by BP in process safety were
cited as early as Grangemouth, weren't they? MR. GODFREY: A. Objection as to form.
There were certainly elements of process
safety failures in the Grangemouth incident. Q. Tab 8 -MR. CUNNINGHAM: MR. BONNER: Q. number. MR. GODFREY: 6011. 6011. What exhibit is that?
6011.
(By Mr. Cunningham) -- 6011 is the exhibit
Hold on one second, please,
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while we find it. Q. A. Q. A. Q. Safety"? A. Q. A. Q. (By Mr. Cunningham) You have that? I do. Turn to Page 252, please. (Complying.) Do you see par -- Paragraph "4.9 Process Do you have -I do. -- that? I do. Does it say: "With no formal structure or
specific focus on process safety, many of the components of process safety management (PMS) were not formalized at Grangemouth. There was no site
governance structure to provide overview and assurance that process safety issues were being handled appropriately. Process safety needed to be evaluated
to the same level as personal safety"? Did I read that correctly? A. Q. correct? A. Q. Correct. And, in fact, the Chemical Board Report cited That's correct. And Grangemouth, again, is in the year 2000,
failures and process safety as one of the root causes
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of the disaster at Texas City, didn't it? A. Q. It did. And even your own internal report on Texas
City, done by your Head Safety Man, at the time John Mogford, recognized failures in process city -- at Texas City, didn't it? A. Q. It did. The Chairman of the Chemical Safety Board
commented on this very subject after the Texas City report was issued, didn't she? A. Q. I believe so, yes. All right. And so I can be sure we're both
referring to the same quote, let me read it to you and see if this is the quote you had in mind. of the CSB was Carol Merritt, quote: A. Q. A. Q. Sorry. The Chairman
"It is my" --
Can you just remind me --
Carolyn Merritt? Quote from when was this? Sorry.
After the CSB Report came out. "It is my sincere hope and belief that our
report and the recent Baker Report will establish a new standard of care for corporate Boards of Directors and CEOs throughout the world. Process safety programs to
protect the lives of workers and the public deserve the same level of attention, investment, and scrutiny as
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companies now dedicate to maintaining their financial controls. The Boards of Directors of oil and chemical
companies should examine every detail of their process safety programs to ensure that no other terrible tragedy like the one at BP occurs," end quote. Is that what you remember her saying? A. Q. A. Q. It's obviously there -Or words to that effect? Words to that effect, yes. Okay. And you are very familiar with process
safety because of your position as Chair of the Group Operating Risk Committee, aren't you? A. Q. I am. That's one of the responsibilities of the
Group Operating Risk Committee, isn't it? A. Q. A. Q. A. Q. A. What is the responsibility? Process safety? Process safety. Part of OMS? Process safety is part of OMS. All right. And the group operating risk committee was
implementing -- charged with implementing OMS. Q. All right. And it's OMS and its integral
component of process safety that you have repeatedly
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referred to as the basis for the major changes that you say you made between 2007 and 2010? A. Q. A. I didn't say I made them. All right. We implemented major new process, major new I made them.
measurement, recruited many people, trained thousands of people. Q. Tab 1. MR. GODFREY: Exhibit 6001? 6001, yeah. Hold on a second, Turn to your Congressional testimony, please.
MR. CUNNINGHAM: MR. GODFREY: please.
Okay.
THE WITNESS: MR. GODFREY: somewhere. please.
Here it looks like -Well, it was here Hold on,
There's a lot of exhibits.
MR. CUNNINGHAM: think. There it is. MR. GODFREY: Q.
It's in this stack, I
Okay.
(By Mr. Cunningham) Turn to Page 27, please.
Did you say, Dr. Hayward, at the bottom of this page: "Since I've been the CEO of this company, I have focused on safe, reliable operations. I've set the
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tone from the top by making it very clear to everyone in B.P. that safe, reliable operations are our number one priority"? Did you say that? A. Q. I did. And on Page 28, about two-thirds of the way
down, where it says "HAYWARD," colon, did you say: "There is no doubt that I've focused on safe, reliable operations. We've made major changes in everything we
do over the last three years"? Was that your testimony? A. Q. right? A. Q. Referring to the implementation of OMS. All right. And that's what you were It was. And what you're referring to there is OMS,
specifically referring to when you gave this testimony on Page 58, wasn't it? MR. GODFREY: The same exhibit? Yes.
MR. CUNNINGHAM: Q.
(By Mr. Cunningham) And I'm looking about a
third of the way up from the bottom, or a quarter of the way up, where it says "HAYWARD," colon -MR. GODFREY: MR. GODWIN: Hold on, please. 58, Bobo?
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MR. CUNNINGHAM: MR. GODWIN:
Yes. And what part of
Thank you.
the page are you looking at, please? MR. CUNNINGHAM: Bottom third, where it
says "HAYWARD," colon, "We've implemented." MR. GODWIN: Q. I see it.
(By Mr. Cunningham) Do you have that, Do you have that? Thank you.
Dr. Hayward? A. Q.
Yes, I found it.
"We've implemented major, major change We've
following the incidents in 2006 and 2007.
implemented changes to our people in terms of the skills and capabilities we have. We've implemented
changes to the training that they get and the expertise that they develop. And we've implemented significant
changes to all of our operating practices, including the implementation of an operating management system that covers all of the company's operations." Is that what you testified to? A. Q. It is. So just -- just to be clear, you testified to
the Congress that you had implemented significant changes to all of your operating practices, including the implementation of OMS that covered all of the company's operations. Isn't that what you said?
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A. Q.
That's what I said. All right. Now, that statement was false, and
you knew that it was false at the time you made it, didn't you? MR. GODFREY: A. OMS. Objection as to form.
I wasn't aware -- well, we had implemented It was not fully complete in all of the
operations, but it had been implemented. Q. (By Mr. Cunningham) Okay. So you now -- you
know admit -A. Q. A. Q. A. Let me just --- that your testimony was false -No, I don't --- that you gave, don't you? No, I don't agree with that at all, actually.
I'd just like to read exactly what I -- what I said. (Reviewing document.) Which page was it, 58? it's not complete. Q. A. The implementation,
The implementation --
That isn't what you said, is it? Well, look, the implementation of Operating
Management System covers operations, the implementation. Q. I'm going to read it again: "And we've
implemented significant changes to all of our operating
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practices, including the implementation of an operating management system that covers all of the company's operations," that's -A. Q. A. Q. That's correct. -- what you said, isn't it? That's correct. All right. Tab 51. (Tendering.)
MR. BONNER:
(By Mr. Cunningham) This is a document from
"Horizon," which is the BP magazine, Issue 3, 2008, correct? A. Q. Correct. Look down on the about the sixth or seventh
paragraph that begins with the words "The operating management system," that's OMS, right? A. Q. That's correct. It says, quote, "The operating management
system, designed to reduce risks and improve the quality of operations for the long term, is now being implemented at 12 of the largest operations, including five U.S. refineries, with" implement -"implementation throughout BP due to have started by the end of 2010?"
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Did I read that correctly? A. Q. state: You did. And does it go in the -- two paragraphs down "The Group Operations Risk Committee..." -That's the one you headed, right? A. Q. M-h'm. -- "...which oversees process safety
management and reviews performance, met 14 times in 2007"? A. That's correct. MR. CUNNINGHAM: Tab 37.
(Discussion off the record.) (Exhibit No. 6023 marked.) Q. that? A. Q. says: It's the BP Sustainability Report from 2009. 2009. Turn to Page 5, please. At the top it Do you have (By Mr. Cunningham) 6023 is Tab 37. What is
"Striving for safe operations."
that page? A. Q. I do. And does it say, quote, "BP continues to
implement its operating management system...a" corner -- "a cornerstone of achieving safe, reliable and responsible operations at every BP operation." Did I read that correctly?
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A. Q.
Correct. And then there's a segment on the "Progress in
implementation," correct? A. Q. Correct. And does the last sentence say: "This
represents around 80% of our planned implementation. It is expected that the OMS will be adopted at all operations in scope by the end of 2010." Did I read that correctly? A. That is correct. That is correct. Tab 29, 6017.
MR. CUNNINGHAM: A. 6017. MR. GODFREY:
6017? Yes.
MR. CUNNINGHAM: MR. GODFREY: I don't have it yet, sorry. Q.
Hold on one second, please. All right. Got it.
(By Mr. Cunningham) This is a speech you gave
to the Annual General Meeting five days before the DEEPWATER HORIZON blowout, correct? A. Q. Correct. Two months before you testified to Congress on
June the 17th of 2010, correct? A. Q. Correct. Look at Page 2 and tell me whether or not in
the next to the last couple of paragraphs, I read this
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correctly:
"We are continuing..." --
And this -- this is you talking, right? A. Q. M-h'm, yes. "We are continuing to improve our skills and
capabilities as we roll out a common Operating Management System across our business. By the end of
2009 we'd fully implemented this at 70 sites - covering around 80 per cent of our operations -- and the remainder will be completed this year." Did you say that? A. Q. I did. And then did you say in the next paragraph,
"But implementation is just the beginning"? A. Q. I did. Okay. And in the PowerPoint you gave in that
same exhibit, Page 9, you discussed the "Forward Agenda," right? A. Q. I did. And the second bullet point in the Forward
Agenda says, quote, "Implement Operating Management System," end quote, correct? A. It does. MR. CUNNINGHAM: Tab 43.
(Exhibit No. 6024 marked.) THE COURT REPORTER: 6024.
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Q.
(By Mr. Cunningham) This is portions of the
Report, not the entire Report, but I'll call your attention to Page 38. This is a BP Group results
report in July of 2010, correct? A. Q. correct? A. Q. corner. A. Q. M-h'm, correct. Turn to Page 38, at the bottom right-hand Do you have Page 38? I -- yes, I do. All right. The third paragraph down, second (Reviewing document.) Correct. Your testimony was given in June of 2010,
sentence, does it say this -- or in part does the first sentence say this: "...BP continues to implement a
group-wide operational management system...at the present time OMS has not yet been fully implemented across the group." Did I read that correctly? A. Q. It is correct. And, Dr. Hayward, if you had told Congress
that OMS -- the central safety system, the process safety system, that, in fact, that OMS only covered part of the company, the next question would have been what part did it not cover, wouldn't it? MR. WEBB: Object to the form of the
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question about what Congress would have asked. A. asked? Q. (By Mr. Cunningham) So you think if you had How can I speculate what Congress would have
told Congress that, "Look, we have this Operating Management System, that includes process safety, and it's been implemented across most of the company," you don't think somebody might have been curious about what part it had not been implemented across? MR. GODFREY: MR. WEBB: A. Objection, form.
I think -- I think there were two things I
would have said, number one. Q. is: (By Mr. Cunningham) No, that's -- the question
Do you think Congress -A. Q. I have no idea what Congress would have said. You don't know -- you don't know whether they
would -A. Q. A. I cannot possibly speculate. -- have been interested? Okay.
Because they may well have been inter -And what I would have said is that's not
interested.
to say there wasn't a process safety system in place before OMS. OMS was designed to bring all of our
process safety systems to a common consistent standard.
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It wasn't as if there was nothing there prior to OMS. Q. When you told Congress that OMS had been
implemented across all the company's operations, you knew that, in fact, OMS was nowhere near full implementation in the Gulf of Mexico, didn't you? MR. GODFREY: MR. WEBB: Q. A. Objection to form.
(By Mr. Cunningham) Didn't you? I knew -MR. GODFREY: Same objection.
A.
I certainly knew that OMS implementation was
not complete in many parts of the company because we had made it very clear it was a five-year journey and we were in Year 3. Q. (By Mr. Cunningham) You didn't make that very
clear to Congress, did you, when you told them it had been implemented across the entire company? MR. WEBB: Object as to form. Objection, form.
MR. GODFREY: A.
Let's go back and just look again at what I
did say, shall we? Q. (By Mr. Cunningham) Sure. Page 58, at the
bottom, quote, "And we've implemented significant changes to all of our operating practices, including the implementation of an Operating Management System
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that covers all of the company's operations," end quote. A. Q. A. That's true. That's what you said, isn't it? That is true. MR. GODFREY: A. Objection, form.
It wasn't complete, but the initiation of that
program had begun everywhere. Q. (By Mr. Cunningham) I didn't ask you about the
initiation -A. Q. And you can verify -And you didn't say the initiation, did you? MR. GODFREY: Object to form. Is it your
representation this is the only commentary on the OMS? MR. WEBB: Well, I also object to him -I haven't represented
MR. CUNNINGHAM: anything. MR. WEBB:
I'm going to object to
interrupting his last answer where he was explaining and responding to your question. Q. (By Mr. Cunningham) When you told Congress
that the OMS system had been implemented and covered all of the company's operations, you knew that even though it was ten years after Grangemouth and five years after Texas City, the process -- the process
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safety aspect of OMS, and OMS itself, had not been implemented in the Gulf of Mexico, you knew that, didn't you? MR. GODFREY: A. Objection as to form.
Was not -- what I knew was it was not fully
implemented across the entirety of the operations. Q. (By Mr. Cunningham) And if you had told
Congress that it had not been implemented in the Gulf of Mexico, that would have been a disaster for BP, wouldn't it? MR. GODFREY: A. Objection as to form.
I -- I think we had plenty of disaster to be Thank you.
going on with. Q.
(By Mr. Cunningham) You had oversight of OMS,
didn't you? A. Q. A. I was the Chairman of the GORC. Yes. The oversight of OMS was with Mark Bly and a
gentleman called John Sieg. MR. CUNNINGHAM: exhibit number? Tab 47. What's the
6002 is the exhibit number. 6002. 6002.
MR. GODFREY:
MR. CUNNINGHAM: A. 6002. MR. GODFREY:
Bear with us a second,
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please. MR. CUNNINGHAM: MR. GODFREY: first, please. THE WITNESS: Q. Here we go. Got it. Page 6.
We need to find the exhibit
(By Mr. Cunningham) The title of it on the
cover is "Leading from the top." A. Q. I have it. And I'm looking at Page 6 which is "Leading
from the very top," which describes your role as Chair of the Group Operations Risk Committee. that? A. Q. A. Q. That's correct. And one of the responsibilities you had -M-h'm. -- as Chair of that Committee, look at the Do you see
fourth bullet -- bullet point and tell me whether I read this correctly, quote, "Oversight of development and implementation of BP's Operating Management System..." A. Q. A. Q. That's correct. Is that what it says? Yep. Dr. Hayward, you knew when you gave your
testimony to Congress, on June the 17th of 2010, that
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there were huge safety-related gaps in the OMS system in the Gulf of Mexico, didn't you? A. No, I did not. MR. GODFREY: Q. A. Objection as to form.
(By Mr. Cunningham) You did not? I knew that we hadn't completed the
implementation of OMS. MR. CUNNINGHAM: A. gaps. Tab 44.
It tells you nothing about safety-related It just tells you we haven't completed the
implementation of OMS. MR. CUNNINGHAM: Tab 44. 6025.
THE COURT REPORTER: (Exhibit No. 6025 marked.) Q. A. Q.
(By Mr. Cunningham) (Tendering.) Thank you. This document is identified as a 2010 -- "2010
SPU" -- that's Strategic Performance Unit -- "OMS" -Operating Management System" -A. Q. A. Q. M-h'm. -- "Gaps," isn't it? M-h'm. It's a "Ranking" Matris -- "Matrix" for OMS
gaps, isn't it? A. Correct.
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Q.
To put this in perspective, before we go into
this document, this is five years after Texas City, correct? A. BP. Q. years -A. Q. Three years into a five-year journey. Three years after you told the Congress that Three years after you became CEO. Three Three years after I assumed the CEO role of
you had made all these changes -A. Q. M-h'm. -- implemented all these changes, and three
years after OMS was in -- initiated, wasn't it? A. Q. exhibit. Exactly. All right. Look at the first page of this
On the right is "IMPORTANCE" and on the -MR. GODFREY: The -- you mean the second
page of the exhibit? MR. CUNNINGHAM: MR. GODFREY: Excuse me, yes.
Page Number -Yes.
-- 1? 1, correct.
MR. CUNNINGHAM: Q.
(By Mr. Cunningham) Right is "IMPORTANCE" and
at the bottom, "GAP RISK TO THE BUSINESS."
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Do you see that? A. Q. I do. It looks at the highest risk and the highest
important -- importance gaps, doesn't it? A. Q. It does. And the highest ones, when you add them up, is
in the top right corner where you got a "High" for importance, and a "High" for risk to business. see that on the front? A. Q. A. Q. Correct. On the front page? M-h'm. And then if you turn to the second page, It tells you exactly Do you
it's -- there's "OMS Gap Detail."
where the gaps are in safety in the Gulf, correct? A. No. It tells you where the gaps are in
relation to the OMS standards. Q. A. Okay. It doesn't tell you anything about gaps
rela -- rela -- relative to safety. Q. A. Q. It tells you what the gaps are in the OMS. It does. All right. And if you'll look in the It tells
right-hand corner, you see the letters there?
you where there are gaps for a given area on the left?
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A. Q.
Yes. For example, "4.1 Procedures & Practices" on
the left, matches up with the blue A, B, C, D, E, F, G -A. Q. A. Q. M-h'm. -- under the "10," the highest risk, right? Yes. All right. And if you turn down to the next
page, Practices & Procedures, and look in the item number, you find which items under Practices & Procedures are considered the highest risk gaps in OMS, right? A. Q. M-h'm. And if you look to the right, under "Area,"
you see which ones of these relate to Health, Safety, Security, and Environment, don't you? A. Q. Yes. And the highest risk under "4.1 Procedures &
Practices," are A, B, C, D, E, F, and G, aren't they? A. Q. Correct. For example, "A, Inconsistent methodology in
creating & reviewing Operating procedures," which is an a -- HSSE gap, right? A. Q. Correct. And then "B, Lack of culture to use procedures
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in the" Gulf of Mexico. A. Q. Correct.
Do you see that?
And then multiple other of the highest risk
gaps are HSSE gaps, aren't they, under "Procedures & Practices"? A. Q. Correct. All right. And then if you go back to the
first page and look at the next color, which is the gray, and you see an A, B, C, then you look over to the left, you find that "2.2, People & Competence" is where those major gaps exist, right? A. Q. That's correct. And then if you turn to the next page, under
"People & Competence" 2.2, and you look and see which items of the highest risk A, B, and C, you can find out where the gaps are, right? A. Q. That's right. And, for example, "B, Lack of process to
assess key operating risk decision makers," is an example -A. Q. right? A. Q. Correct. And then go back to the first page and look at M-h'm. -- of one determined to be a highest risk gap,
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"Process Safety," 3.3, do you see that on the left, and you match it up on the right -A. Q. A. Q. Yes. -- to the A, B, C, and D -Yes. -- and you go back down a few pages, and you Do you have that,
get to "Process Safety," right? "3.3, Process Safety"? A. Q. I do.
And if you look back, you see that the -- the
highest risk gaps were A, B, C, and D under Process Safety, right? A. Q. Correct. And just to reiterate, again, process safety
is that aspect of safety that deals with major disasters like the one that occurred on the DEEPWATER HORIZON, right? A. No, it doesn't, actually. It -- does it --
it -- it -- it -- it -- it often is, but process safety is designed -- is defined as the systems around an operation that maintain the integrity of the plant or the control of work around an operation. Q. Is the purpose of process safety to prevent,
control, and mitigate major accidents? A. Absolutely.
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Q.
All right.
And the DEEPWATER HORIZON was a
major accident? A. Q. A. Q. It was a tragic and -All right. -- major accident. So if you look under Process Safety, you see A, for
that the major gaps were in A, B, C, and D.
example, "Lack of information to provide-predictive indication of process safety issues." Did I read that correctly? A. Q. You did. All right. And then if you look back to the
first page, go to "Regulatory Compliance," 7.1, do you see that the major gaps there are A, B, C, D, E, F, G, and H, right? A. Q. Sorry. Where are you? I'm back on the
"Regulatory Compliance."
front page. A. Q. Yep, okay. And you see that the gaps -- the major risk
gaps are A, B, C, D, E, F, G, and H -A. Q. A. Q. M-h'm. -- correct? Correct. And if we go back to Regulatory Compliance, A,
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B -- you have a major gap in every single one, with one exception, don't you? A. Q. Sorry. Which page are you looking at? Okay.
"Regulatory Compliance."
Do you see that?
Major gap in every single one.
The one exception where
you don't have a major risk gap is "Incorrect application of federal drinking water regs." Other
than that, you've got major high risk gaps, don't you? MR. GODFREY: A. Objection as to form.
Well, they're of -- of varying severity, I
would say, but -Q. (By Mr. Cunningham) Yeah. Well, they're all
in the 10 -- they all rate a 10 -A. Q. A. Q. A. Q. They --- the highest you can possibly -Yes. -- get, don't they? They do. All right. And do you understand in this case
that BP claims that the Federal Government didn't regulate them enough? MR. GODFREY: MR. WEBB: question. A. I have -Objection as to form.
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Q. A. Q.
(By Mr. Cunningham) Do you know that --- I have not said that. That -- do -- do you know that BP says that
the Federal Government is at fault, that it didn't have enough regulations? MR. GODFREY: A. Objection as to form.
I'm not aware of that. THE COURT REPORTER: Three minutes.
Sorry. Q. (By Mr. Cunningham) The next one, 2.5, looking That's
back, "Working w/Contractors," do you see that? the purple. there, right? A. Q. A. (Reviewing document.)
A, B, C, D, E, F, G is where the gaps are
You got every one of them on that, didn't you? I'm sorry. I'm -- not actually found your -"Working with
where you're referring to yet. Contractors," okay. Q. A. Q. A. Q. A. Yeah. Okay.
Working with Con -Let me just have a look.
Every one of them -Just hang on --- had a high risk number 10, didn't it? Lack of accountabilities between supply
chain's management and HSE.
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Lack of standardization/documentation in supply chain and management. Q. A. Q. A. Q. A. Q. Where are you? I'm looking at "Working with Contractors." All right. Lack of understanding -Working --- of supply chain management. Working with Contractors, and if you go back
to the front, every single one of those -A. Q. A. Well, not --- fell into the high risk, didn't it? It doesn't sound much like it's got anything
to do with safety, actually. Q. "It doesn't sound like it's got anything to do Is that --
with safety?" A. Q. A. Yeah.
-- what you just said? Lack of understanding of supply chain I don't know.
management. Q. A. Q. A. Q.
Do you -I haven't seen this document -Well, do you --- of course, so -Well, you read documents all the time you
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haven't seen before, don't you? A. Yeah, but not normally in this sort of
situation -Q. A. Well --- where someone is firing questions at me
before I can have a chance to look at the document. Q. You -- you say that this doesn't have much to What are the two words at the end of
do with safety. "B"?
MR. GODFREY: A. Q. isn't it? A. At the end of B?
(By Mr. Cunningham) Yeah.
"Process safety,"
"...incorporates robust" -This -- yeah, but this is about tendering in
supply chain management. Q. A. Q. A. Q. A. Q. Well, this is a BP document, isn't it? It is. All right. But I -Over on the area on the right -M-h'm. -- whoever wrote this BP document listed
"HSSE" under every single one of these major gaps -A. As I --
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Q.
-- in Working with Contractors, didn't it?
Every one? A. Every one is a -- as I -- as I understand this
document, having not seen it before, the -- this is -this is referring to the interface between HSSE and Engineering in the matter of supply chain management. That's probably very serious, but it -- it is not really about the -- you know, the inherent safety in operation, I don't think. this before. Q. So where it says, "Inconsistent" or "absent As I said, I haven't seen
communication of applicable HSSE requirements," that doesn't have anything to do with safety? A. Well -MR. WEBB: question. A. It -- my -- without any backing up -- backup Objection to the form of the
information, it's very difficult to determine exactly what this all means. Q. (By Mr. Cunningham) Okay. So this would -- it
wouldn't have done any good if somebody had sent this to you as head -A. Q. I --- of the Group Operations Risk Committee
because you don't understand it?
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MR. GODFREY: MR. WEBB: question. A.
Object to the form.
Objection to the form of the
Can I just make a comment, please?
This
document -Q. A. document. (By Mr. Cunningham) Do you understand it? -- this document was not designed as a written It was designed as a presentation for It has --
someone to be out -- to make on this issue.
there -- there's no explanation of what's here. Q. You read documents all the time that don't
have an explanation for everything in them, don't you? A. Well, I -- I think in -- in this -- in this
particular situation, the -- this document is quite difficult to understand without a bit of supporting documentation and explanation. MR. CUNNINGHAM: THE VIDEOGRAPHER: 12:10 p.m., ending Tape 3. (Recess from 12:10 p.m. to 1:03 p.m.) MR. GODFREY: ready to start. MR. CUNNINGHAM: THE VIDEOGRAPHER: Ready. All set? Okay. I believe we're Let's take a break. Off the record at
On the record at 1:03 p.m., beginning
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deposi -- beginning Tape 4. Q. (By Mr. Cunningham) Dr. Hayward, I call your
attention back to Exhibit 6025, and the last section I want to ask you about is 4.5, "Control of Work." you see the gaps noted for that area? A. can see. Q. A. Q. I see -- I can see the -- let me see what I "Control of Work," yes. A, B, C, D, E, correct? Correct. And then if you turn back, where there's the Do
list of Items and Descriptions, do you see that covers all of them but one? A. Well, without -- without wishing to be
difficult, I can't actually see anything on this -- on this copy that I've got. MR. WEBB: A. Q. A. Q. The copy we have is all black.
It's completely black. (By Mr. Cunningham) (Tendering.) Thank you. Yeah. And one of those, C, says this:
You see that?
"Inconsistent task based approach in JSEA process resulting in process safety hazards/personnel safety individuals." A. Q. Do you see -- did I read that correctly?
You did, yeah. And if when you testified in Congress that
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implementation of an Operating Management System covered everything across the company's operations, if, instead, you had said that "We have an Operating Management System, but it has huge safety gaps, in the Gulf of Mexico," BP stock prices would have tanked, wouldn't it? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A.
It's complete conjecture, but more
importantly, it's not true. Q. A. gaps. (By Mr. Cunningham) So -The whole notion of OMS is that you measure It's a continuous improvement process. You You
measure gaps, and you take action to close them. measure gaps; you take action to close them.
It's the
fundamental tenet of the system that we're putting in place. Q. And what we've just looked at in the -- the
last exhibit is BP's evaluation of all of the gaps that existed in OMS in the Gulf of Mexico in 2010, correct? MR. GODFREY: Q. 2010. A. Q. That -- that is --- correct? Objection as to form.
(By Mr. Cunningham) Not some other time, but
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A. Q.
-- what the document describes. And the truth is, as you sat there testifying
with the oil flowing in the Gulf of Mexico, that BP had major gaps in the Gulf of Mexico and that those gaps and those failures were a product of the failure of Senior Management; isn't that true? A. That's not true either. MR. GODFREY: Q. Objection, form.
(By Mr. Cunningham) Well, you were the one
generally responsible for safety at BP? A. Q. I was im -And you were the one specifically responsible
for OMS implementation, weren't you? A. Absolutely. And I was implementing it, we
were implementing it, the company was implementing it. And we were very clear that it was a five-year journey and we were three years into it. And as I've stated on
many occasions, it wasn't that there was nothing there previously. There was process safety systems in place.
What we were doing is ensuring that they were a common and consistent standard across the company. Q. You not only testified before Congress that
OMS covered all the company's operations, you also testified that, specifically as to the DEEPWATER HORIZON, that safeguards were in place, didn't you, for
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OMS? MR. GODFREY: A. I'm sorry. Objection as to form.
I don't understand the question.
I think you're referring -Q. A. (By Mr. Cunningham) Tab 1 --- to something I may have testified. I'd
like to see it, please. Q. A. Exhibit 6001. All right. THE COURT REPORTER: top, second one down. A. Q. That's not -- there it is. (By Mr. Cunningham) Page 36. Did you say It should be on the Turn to Page 36.
in -- at the bottom of the page, a little bit up, about a paragraph up, "HAYWARD: As I said, we acknowledged The vast
the problems that we had in 2005 and 2006.
number of those things that you've referred to date from that time" -- "to date from that time period. And
we have made major changes in the company over the last three to four years." A. Q. A. OMS. Q. That's OMS, isn't it?
It's not only -That's what you called it? It is many other things in addition to O -- to It -Does it include OMS?
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A. Q. A. Q.
It includes OMS, but it's -Okay. -- many other things as well. And then you were asked: "Do you think the
changes you made in that time period you're talking about when you were" C -- "CEO -- I understand what you're saying -- do you think that they were using those measures and protocols on the DEEPWATER HORIZON?" That was the question, wasn't it? A. And I said: "To the best of my knowledge,
they absolutely were." Q. You testified that to the -- you testified
under oath that to the best of your knowledge, the safeguards of OMS absolutely were being used -A. Q. A. No --- on the DEEPWATER HORIZON, didn't you? That actually is not -MR. GODFREY: A. False. I said: Objection as to the form.
That is not actually what I said. We acknowledge problems, and we've
made major changes in the company over the last three years. I was asked: Do you think the -- those changes
apply to the DEEPWATER HORIZON? And I said: did. To the best of my knowledge, they
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Q. A. there. Q.
You just told us -I have no -- there's no reference to OMS
You just told us that when you said, "We have
made major changes in the company over the last three to four years," that you meant to include OMS. just testified to that? A. Q. A. Q. OMS was certainly part of that -All right. -- of course. And then you said: Whether or not those You
measures and protocols were in application on the DEEPWATER, "to the best of my knowledge, they absolutely were," is what you testified. A. Q. That's correct. Okay. And you knew when you gave that
testimony that not only had OMS not been fully implemented in the Gulf of Mexico, but that an integral part of it, the process safety part of OMS, had not been implemented on the DEEPWATER HORIZON, didn't you? A. I -MR. GODFREY: MR. WEBB: question. A. I wasn't aware of the details of the Objection to the form.
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implementation in the Gulf of Mexico at the time. Q. A. (By Mr. Cunningham) So -But I was certainly aware that the
implementation of OMS was not complete across the company. And I may -- I can't recall -- have been
aware that it was not complete in the Gulf of Mexico. I probably was. Q. When you gave the testimony that the measures
and protocols absolutely were being used on the DEEPWATER HORIZON, you knew for a fact -- you knew for a fact, didn't you, that critical aspects, process safety-related aspects of OMS were not implemented on the DEEPWATER HORIZON on April 20th, 2010? A. No, I did -MR. GODFREY: A. Q. Object to the form.
I did not know that absolutely. (By Mr. Cunningham) Well, you had actually
been briefed on that very point less than a month before you testified, hadn't you? A. I had. Q. Tab 49. Tab 49. This is Exhibit 1737, I -- I think you need to refresh my memory if
previously marked.
I call your attention to the E-mail Do
at the bottom of the first page, from John Baxter. you see that?
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A. Q. A. Q.
It is, yeah. It's dated Wednesday, May 12th, 2010, right? Correct. Your Congressional testimony was on June 17th,
2010, right? A. Q. That's correct. The subject is "URGENT DRAFT - GORC" -- that's
your Committee, Group Operating Risk Committee, correct? A. Q. M-h'm. -- "/SEEAC" -- that is Security, Ethics,
Environment -- what is it -- Action Committee? A. Q. A. Audit Committee. Aud -Safety, Environmental, Ethics and Audit
Committee. Q. Audit Committee? All right.
And its Importance is High, correct? A. Q. It's a Subcommittee of the Board of BP. It shows, though, the Importance of the E-mail
as being High, doesn't it, right under "Subject"? A. Q. Yes, it does. Okay. And then does it say this: "I am
preparing a short brief for Tony Hayward at SEEAC 20 May (and will use it if necessary at GORC) on how we
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apply 'risk assessment' and how we are using the ETPs in the Gulf of Mexico." Did I read that correctly? A. Yeah. We're using the Engineering Technical
Practices. Q. And then it goes on to say: "This has taken
on a bit more urgency as the Chairman has asked to see me tomorrow morning." A. Q. A. Q. No. The Chairman is you, right?
I believe the --
Who is that? -- Chairman is Carl-Henric Svanberg. All right. "Topics not yet defined but it I can explain the risk
will be on the Gulf of Mexico.
GDP structure, but do not have all the detail on how E&P have applied the various documents to drilling." And then those various documents include S&O risk -- what is that? A. Q. A. Q. A. Q. A. Q. Safety and Operational risk. "MAR," what is that? Major Accident Risk. "Haz/Op," what is that? Hazardous Operations. "LOPA"? H'm -Layers of Protection?
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A. Q. it? A. Q.
Layers of Protection Analysis. MAR is Major Accident Risk Assessment, isn't
Correct. Last paragraph: "Please can you work up the
wording with Malcolm, Kieren, Cheryl, et al to cover risk assessment of drilling where it is within a BP Operation...and where it is outside a BP operation (eg. Drilling Contractor exploring on BP acreage.)" Transocean, correct? A. Q. Correct. And then above that, we see a response from That's
one of the recipients of Mr. Baxter's E-mail, named Cheryl Grounds. A. Q. Do you know who she is?
No, I don't. You don't know that she's the Chief Process
Safety Engineer, and was at the time, for BP? A. I don't recall that. I -- I'm sure I knew it
at the time, but I don't recall that. Q. And she replies, saying: "John, Attached is a
brief description of risk management activities in the Gulf of Mexico Strategic" Unit -- "Performance Unit including ETPs, GDP 3.1 on risk, and MAR," Major Accident Risk Assessment, correct? A. M-h'm, correct.
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Q.
And you know what a Major Accident Risk
Assessment is, don't you? A. Q. I do. This has been previously marked as 1734.
(Tendering.) A. All right. Thank you.
(Discussion off the record.) MR. CUNNINGHAM: MR. GODWIN: 50.
Thank you. Correction. 52.
MR. CUNNINGHAM: Q.
(By Mr. Cunningham) This document is the
"Major Accident Risk Process," isn't it? A. Q. That's what it says it is, yes. And it's a Group-defined ETP that has been
approved by the GVP -- what is the "GVP Safety"? A. Group Vice President for Safety and
Operations. Q. correct? A. Q. Correct. Turn to the next page. In the Foreword, about -- for implementation across the BP Group,
four paragraphs down or three paragraphs down, it
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Q.
Turn to Page Bates 43 at the bottom.
Do you
have that? A. I do, yes.
Q.
Then if you'll turn to Bates 47, where it Do you
describes the "Features of the MAR process." see that?
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A.
I do.
A.
I'm sorry.
I -- can you just give -- say
again where that is? Q. A. Q. A. Sure. Seven point -Under "Type of Risk" -Yeah.
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Q. A. Q.
-- "Covered," b.3? Yep. Middle paragraph, where it says: "By
definition..." A. Q. A. Yes. Did I read that correctly? You did, right.
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Q.
And then if you'll turn to Page 59 Bates, it
discusses -MR. GODFREY: 59? 59.
MR. CUNNINGHAM: Q.
(By Mr. Cunningham) -- a "Methodology for
offshore operations," correct? A. Correct.
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Q.
All right.
Now, that's what an MAR is, and
what you learned when you were briefed is set out in a confidential document describing the Gulf of Mexico Risk Management activities; isn't that true? A. to. I don't know which document you're referring
I don't -- can you -Q. A. Q. A. Q. Well, what --- identify that -What --- for me? Yeah, we'll -- we'll -- I'll show you that in
just a second. What you learned, though, when you were briefed here a month before you testified in Congress was that the Risk Management activities did not cover MODUs, didn't you? A. briefing. I don't recall that. I don't recall the
I'd like to see the document, please. MR. CUNNINGHAM: MR. BONNER: Let me see that.
(Tendering.)
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MR. CUNNINGHAM:
Tab 50. Previously marked.
(By Mr. Cunningham) Previously marked 1736.
(Tendering.) A. Q. Thank you. This is the brief of 12 May 2010, the Safety,
Ethics and Environmental Assurance Committee, is actually the -- what that acronym means, isn't it? A. Safety, Ethics and Environmental Assurance
Committee -Q. A. Q. Assurance Committee? Yeah, yeah. And does it say at the top: "This brief
describes Gulf of Mexico SPU (Gulf of Mexico) risk management activities in the following areas," and included on the list is MAR, isn't it? A. Q. A. Q. It is. Major Accident Risk. Right. And does it say in the middle paragraph, in
the body below "ETPs," the third paragraph down, quote: "The focus of the ETP application and assurance has been on the existing assets as opposed to drilling from Mobile Offshore Drilling Units"? correctly? Did I read that
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A. Q.
You did. And then if you turn to the next page, in the
second paragraph, does this brief say, second sentence: "MODUs have not been included in Gulf of Mexico MAR analysis to date"? A. Q. You did. It says: "There are existing plans to include Did I read that correctly?
MODUs" in the future, but MODUs have not been included in the Gulf of Mexico MAR analysis, according to this brief that was given within a month before you testified, right? A. Q. Correct. So what you learned before you went to testify
to Congress, was not only were there huge gaps in safety in OMS in the Gulf, but that with respect to the DEEPWATER HORIZON specifically, that no MAR had been done; isn't that true? MR. GODFREY: A. Objection as to form.
That -- that is certainly what this document
says, a Major Ri -- Accident Risk Assessment had not been conducted on the Mobile Drilling Units. Q. (By Mr. Cunningham) And not only had no MAR
been done, but you learned, didn't you, that there were no Process Safety Engineers in place for drilling operations, in addition to the fact that no MAR had
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been done; isn't that true? MR. GODFREY: A. H'm, I -MR. GODFREY: A. -- as to form. I'd like you to Objection --
I don't recall learning that.
show me where you think I learned that, please. Q. (By Mr. Cunningham) Well, if that were the
case, as head of Safety, head of the Group Operating Risk Committee, you wouldn't know it? MR. WEBB: A. Objection, form.
I wouldn't know the details of the personnel What -- what you can do --
in a drilling organization.
I -- I don't want this to sound wrong, but what you can do at my level is set expectations and have measurement and followup, which is what you've been showing to me today. Q. A. (By Mr. Cunningham) Were -There was a lot of measurement going on in the
organization, designed to determine where -- where and where there were not gaps. Q. Well, Dr. Hayward, were you unaware whether or
not there was a Process Safety Engineer in place for the Gulf of Mexico drilling operations? A. I -- I wasn't -- I was not aware or unaware.
I don't recall being made aware of that, I'm afraid.
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Q.
If Cheryl Grounds, then, the Chief Engineer
for Process Safety at BP, testified that there's no Chief Engineer of Process and Process Safety Engineering for Drilling, then you would not be in a position to disagree with that, would you? MR. WEBB: A. Objection, form.
I certainly wouldn't be in a position to
disagree with the testimony of one of my staff. Certainly not. Q. (By Mr. Cunningham) Well, what you did know,
though, was that DEEPWATER blowout was the highest risk across the entire corporation and that it was the highest risk for your Exploration and Production Unit, wasn't it? A. It was certainly one of the highest risks for It was the highest risk in the Gulf
the corporation.
of Mexico and one of the highest risks for the Ex -for the Exploration and Production Unit. Q. And despite that risk, by April of 2010, five
years after Texas City, there was no major risk assessment done for the DEEPWATER HORIZON, was there? MR. GODFREY: A. As -MR. GODFREY: A. -- form. Objection as to --
As it says in this document, the focus has
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been on the existing producing assets in the Gulf of Mexico. Q. (By Mr. Cunningham) And that's not the
DEEPWATER HORIZON, is it? A. It isn't, no. MR. GODWIN: fallen off the real time. Q. (By Mr. Cunningham) And in addition to there Bobo, I think everybody has
being no Major Accident Risk Assessment, although you don't know one way or the other, if there has been testimony that there was no Process Safety Engineer for Drilling in the Gulf, that would mean that despite the fact that this was the highest risk at BP, that you had done no MAR and had no Process Safety Engineer for Drilling? MR. WEBB: question. A. It's certainly true that there was no MAR, as And I -- I will take it on trust that I don't know Objection to the form of the
you described.
there was no Process Safety Engineer. that for a fact. Q. A. not -Q. Excuse me. (By Mr. Cunningham) If you --
It was certainly one of the highest risks,
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A.
-- not the only. MS. GOODHART: Excuse me. I'm sorry, but And if we
we've all -- I think we've all dropped off.
can't hear the answer and can't read the answer, then we're sort of at a loss. So could we wait a minute
until we can get the system back up? MR. CUNNINGHAM: MS. GOODHART: Sure. Thank you. Go off.
THE COURT REPORTER:
(Discussion off the record.) THE VIDEOGRAPHER: 1:27 p.m. (Recess from 1:27 p.m. to 1:36 p.m.) MR. CUNNINGHAM: Ready? Yes, sir. 30 seconds. Off the record at
THE COURT REPORTER: THE VIDEOGRAPHER:
On the record at 1:36 p.m. Q. (By Mr. Cunningham) Dr. Hayward, if you had
told Congress that there were safety critical measures and protocols that were not being used on the DEEPWATER HORIZON, measures that were specifically created to prevent exactly the kind of catastrophe that occurred, you know, don't you, that the public outrage would have been off the chart? MR. WEBB: Objection to the form of the
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question. MR. GODFREY: A. Objection, form. So it's
I don't believe that was the case.
entirely hypothetical and theoretical. Q. (By Mr. Cunningham) You didn't believe what
was the case? A. That the -- the DEEPWATER HORIZON was missing
safety critical systems and processes that you refer to. Q. Do you deny that you were briefed less than a
month beforehand and told that no MAR had been done on this particular rig -A. Q. A. I -- I don't --- as well as any other MODU? I don't recall that briefing. I don't -- I
don't know whether it occurred or not, frankly, in the circumstance at the time. not have occurred. Q. It may have occurred, it may
I certainly do not recall it.
Now, there -- there was no higher level
executive in BP than you, right -A. Q. A. Q. That's correct. -- on April of two -- 2010? That's right. And in your position as Chairman of the GORC
and as the CEO of BP, PLC, you monitored and supervised
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the very system that was responsible for these gross failures in safety management, didn't you? MR. GODFREY: A. Objection as to form.
The GORC had a role of oversight of the That
Group's Safety Management Systems and Processes. is what the GORC did. Q. A. Q. A. (By Mr. Cunningham) Right. And in the --
I didn't do that in a personal capacity. You didn't do it in a personal capacity? No. You can't, as the CEO or Chairman of the
GORC, monitor every -- every rig, every process, every system. It's not possible. What you can do is to set
standards, create the right people around you to implement the right sort of processes and measures that they're be -- and measure that they are indeed being implemented. Q. A. Okay. And that's what we were doing. That's what I
was doing. Q. So do you suggest, then, that you were not
responsible for the gross failure of safety management on the DEEPWATER HORIZON on April the 20th? A. I was not -MR. WEBB: Objection, form. And objection as to form.
MR. GODFREY:
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MR. WEBB: A.
Go ahead, Tony.
I was not directly responsible in any way, I was certainly
shape, or form for that drilling rig.
responsible for establishing the systems, the standards, the procedures, ensuring that we recruited the right people, but I was not in any way directly responsible for the DEEPWATER HORIZON drilling rig. Q. (By Mr. Cunningham) And to the extent that
those systems and standards failed, you were the person responsible, weren't you? A. Well, we have to -MR. WEBB: A. fail. Objection to the form.
We have to assess -- determine that they did It's -- it's -- and that's not what the Bly
Report shows. Q. (By Mr. Cunningham) If it is determined that
they did fail, you were the person responsible, weren't you? MR. GODFREY: A. Objection as to form.
I was the person responsible for the I wasn't
establishment of the systems and processes. accountable for implementing them. accountable for the drilling rig. Q. I wasn't
(By Mr. Cunningham) You were not accountable
for implementing them?
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A. Q. A.
How can one person be -Is that what you said? -- accountable for implementing the
company-wide system, standards, and processes? MR. CUNNINGHAM: 47, Tab 47, please. MR. BONNER: 6002. 6002? What exhibit number is
MR. CUNNINGHAM: MR. BONNER: Q. A. Q. Yes.
(By Mr. Cunningham) Tab 47. 6002? Yes. MR. GODFREY: Hold on, please. Okay.
Q.
(By Mr. Cunningham) Page 6, does this describe
what you did as Chair of the Group Operations Risk Committee, and does it include oversight of the development and implementation of BP's Operating Management System? A. Q. It's -- it does. You were responsible for knowing where OMS was
functioning and where it wasn't functioning, weren't you? A. I -- I was measuring with the -- where we were
in implementation of OMS. Q. Right. And the OMS was a group-wide policy
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directed from the very highest levels at BP, PLC, wasn't it? A. Q. That's correct. And a lack of implementation of that corporate
policy is ultimately your responsibility, isn't it? MR. GODFREY: A. Objection as to form.
I don't think there's any evidence of a lack What there is clear evidence of is
of implementation.
that the implementation of a system of this type does not occur overnight. We said from the beginning, it This tragic accident occurred
was a five-year process.
three years into the process. Q. (By Mr. Cunningham) If your investigation had,
in fact, included everything, as you testified to Congress in June of 2010, it would have led right back to you, wouldn't it? MR. GODFREY: A. Objection as to form.
Well, as I said, as far as I'm concerned, the
investigation did a very thor -- thorough job of determining what was the cause of the accident. Q. (By Mr. Cunningham) If there had been a full
investigation that included an investigation of systemic Management-related causes, it would have led right back to the top at BP, PLC? MR. WEBB: Object to -- object to the
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form. A. That's entire speculation based on something
that didn't occur, that may or may not have been an outcome. MR. CUNNINGHAM: copy. MR. BONNER: Q. (Tendering.) Let me see the book, my
(By Mr. Cunningham) I'll hand you a book we'll
mark as the next exhibit. MR. CUNNINGHAM: I don't have copies for
everybody, but here it is, and we'll pass it around later if you don't already have it. (Exhibit No. 6026 marked.) THE COURT REPORTER: Q. 6026.
(By Mr. Cunningham) Have you read this book,
Dr. Hayward? A. produced. Q. A. So -I didn't read it from cover to cover, but I I skimmed it when it was -- when it was
did look at it -Q. A. Q. Okay. -- in the past. So when it came out in 2008 -- it's titled It's a safety analysis of the BP
"Failure to Learn."
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disaster, the Texas City disaster, correct? A. Q. That's correct. So you knew it came out in 2008, you had the
book in hand, and you didn't read it? A. to cover. Q. it"? A. I looked -- I read it over in a -- in a -As I said to you, I didn't read it from cover I look -- I -- I skimmed it. You skimmed it. What do you mean you "skimmed
perhaps over a course of four or five days, perhaps half an hour a day, something of that sort. Q. A. Q. Okay. But I didn't read it from cover to cover. You read it over the course of four or five You
days, but you didn't read it from cover to cover. read parts of it, is that what you're saying? A. Q. Yes, that's right. Okay.
And it was published about three years
after Texas City, correct? A. Q. That's correct. You were the CEO of BP when it came out,
that's correct? A. Q. A. Correct. Right? (Nodding.)
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Q.
Did -- did some of the other safety leadership
at BP read the book? A. I'm certain they did. It was widely
circulated. Q. And the title, "Failure to Learn," refers to
BP -- BP's conduct before Texas City, correct? A. Q. A. Q. That's correct. That's what it's about? That's correct. And on Page 51, for example, when you skimmed
it, you saw that the chapter was titled "Blindness to major risk," right? A. on, sir? Q. A. Q. 51, page -Page -Chapter 6, Page 51, "Blindness to major risk," I don't recall that. Which chapter are you
do you see that? A. Q. Correct. And in the middle of the page, it quotes from
the Baker Report, doesn't it, and specifically refers to process safety hazards, right? Do you see that? A. Q. Yep. It says: "Process safety hazards give rise to
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major accidents involving the release of potentially dangerous materials, the release of energy (such as fires and explosions), or both. Process safety
incidents can have catastrophic effects and can result in multiple injuries and fatalities, as well as substantial economic, property, and environmental damage." Did I read that correctly? A. Q. You did. That -- that's exactly what had happened at That was a process safety accident, wasn't
Texas City. it?
It was deemed to be a process safety accident. (By Mr. Cunningham) Yeah. Correct. And this entire chapter discusses the subject
of process safety, doesn't it? A. Let me just refresh my memory. It was four or (Reviewing
five years ago -- three or four years ago. Exhibit 6026.) Yes. Q.
And on Page 63, toward the end of this, it "The major lesson: the need to focus
states, in bold:
on process safety."
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Did I read that -A. Q. A. Q. That's correct. -- correctly? Yes. And the second sentence in the first "All noted, in particular, that BP had
paragraph:
emphasized personal safety indicators and had paid little attention to process safety indicators." Did I read that correctly? A. Q. That's correct. "Correspondingly, their recommendations
focused on the need to give greater prominence to process safety." Right? A. Q. Correct. The same lesson we discussed earlier as having
been found in other events other than Texas City, correct? A. And that is why we -MR. GODFREY: A. Objection as to form.
-- implemented in 2007 and 2008 a safety
system focused on process safety called the Operating Management System. Q. (By Mr. Cunningham) That's why you implemented
OMS, because OMS focuses on process safety?
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A. Q. A. Q.
That's correct. Correct? Correct. All right. And process safety is the kind
of -- is the safety program designed to prevent just what happened on the DEEPWATER HORIZON, correct? MR. WEBB: Objection, form. Objection to form.
MR. GODFREY: A.
You would certainly hope that it would prevent
something of the -- of the tragic accident we saw with the DEEPWATER HORIZON. Q. Page 65. (By Mr. Cunningham) All right. Now turn to
Did you read or skim or scan Chapter 7 on
"Inability to Learn"? A. the time. Q. All right. If you look down toward the middle Well, I don't recall, but I'm sure I did at
of the page, again, it refers to the Baker Panel, and states: "Its final recommendation was that: Quote,
'BP should use the lessons learnt from the Texas City" tragedy -- "tragedy and from the Panel's report to transform the company into a recognized industry leader in process safety management.'" Do you see where it says that? A. That's indeed what we were doing --
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Q. A.
And do you see the next --- to the point where by in 2009, BP was
recognized as an industry leader, ironically, in the Gulf of Mexico. Q. And you're talking about the same place where
we just went through those process safety gaps that were high risk according to BP's own evaluation. talking about the same Gulf of Mexico -A. We're not talking -MR. WEBB: A. I'm not -MR. WEBB: A. I just -MR. WEBB: A. Objection. Objection. Argumentative. Objection -We're
I just want to, if I can. As I tried to explain on a number of
occasions, the basis to improve safety is to take action, measure gaps, take action, measure. don't -Q. A. And you --- improve safety by just sitting in a room You go out and measure, identify You
talking about it.
the -- where the gaps are, and take action to close them. Q. And five years --
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A. through. Q.
And that is the process that we were going
And five years after Texas City, you were
still measuring in the Gulf -A. Q. A. Q. We were still --- right? -- closing. And the next sentence here says: "The fact
is, however, that these lessons were widely available previously." A. Q. Do you see that?
(Reviewing document.) The lessons learned from Texas City, the "...these lessons were widely available
author states:
previously," doesn't it? A. Q. A. Q. A. Q. A. Q. A. Q. With respect to Texas City. Yeah. (Nodding.) And then -Correct. -- he discusses Grangemouth, correct -Correct. -- in the next few pages? Correct. And then he discusses something we haven't
discussed, Longford, which was not a BP operation but
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which BP was fully aware of, an explosion at the ESSO plant, correct? A. Correct. MR. GODFREY: Q. Objection as to form.
(By Mr. Cunningham) BP knew all about that
because -A. Well, I'm not sure we knew all about it, but And there
we certainly were aware of the explosion. was a book published, I believe. Q.
There was a book published called "Excerpts
From Lessons From Longford" that was circulated within BP, and John Mogford himself, the Head Safety Man at BP, circulated an E-mail with highlights from that book, didn't he? MR. WEBB: A. Well -MR. WEBB -- multiple parts to the question, objection. A. I don't recall that, but I'm -- as I read this Objection --
book, I'll just finish reading it, if I can, that seems to have been the case. Q. (By Mr. Cunningham) That seems to be the case.
Is that what you said? A. That's what I said -MR. WEBB: Objection. Leading.
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A. that. Q.
-- but I haven't -- you know, I don't recall I'm just reading the book now, and I'm -- okay? (By Mr. Cunningham) All right. And if you
turn to the next page, what he's referring to is laid out in detail, Page 70, where the bold is "Messages from major reviews." And it states that: "A major
external review of Texas City in 2002 described the failings that it identified as 'urgent and far-reaching.'" And does it then state, quote:
"Assets safety [process safety]...is one of the biggest issues identified by the assessment team"? Do you see that? A. Q. Correct. That's referring to a study that was done at
Texas City three years before the explosion in 2005, where that study identified process safety as a problem, correct? A. I -MR. GODFREY: A. Objection to the form. All I'm doing is
I know nothing about this.
reading the book, as you are here. Q. A. (By Mr. Cunningham) Okay. So I can assume that the book is accurate. I
was not involved with Texas City at that time. Q. Well, then, do you know about the major audit
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done in 2003 by a team of BP people at Texas City focusing on process safety that's referred to in the next paragraph? A. Q. A. Q. A. Q. A. I don't -Do you know -I --- about that one? I don't remember that. Okay. I'm sure if it's in here it's correct, but I
don't remember that. Q. And then we come to Page 73. Did you skim
this part of the book when you read it in 2008? A. Q. A. Q. A. Q. A. Q. I -- I honestly don't know. On cost-cutting? I don't know. You -I can't --- probably did? I can't remember. And it discusses the impact of cost-cutting on I probably did.
process safety and how that led to the disaster of Texas City, doesn't it? A. Well, I don't know because -MR. GODFREY: Objection, form.
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A. Q. A.
-- I haven't actually read it. (By Mr. Cunningham) Well -So -- the best part of four or five years. So
if you want me to say "Yes" or "No," I need to read it. Q. Well, I don't want you to stop and read the So we'll -- we'll move on --
whole chapter. A. Q. Okay.
-- but whatever the case, at the time you read
this book and did or didn't read the chapter on cost-cutting is when you were engaged in cutting $4 billion in cost out of BP; isn't that -A. Well, I was -MR. WEBB: question. A. As I've tried to explain to you on a number of Objection to the form of the
occasions, the costs that -- that were being removed at BP were in Head Office, in the Corporate Offices of the company. Q. A. 30 -Q. A. above -Q. Where is the Head Office? Where -- where's Head Office? -- $30 billion of overhead. Cost sitting They were nothing to do with the operations. You cut $4 billion out of the Head Office? Yes. We had -- yes. That's why we did it,
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A.
It's in London.
It's in Houston.
It's in We had a
many different locations all over the world. very significant cost base, sitting above the
operation, had no impacts on the operation, added nothing to the operation other than burden and complexity. That is what we removed in the course of
2008 through 2010, and we supplemented the operations by investing into them. Q. Did your read the chapter, Chapter 9, Page 83
on the "Reward structures"? A. As I said, I'm sure I did at the time, but I
don't recall what it says. Q. Well, we haven't discussed this today, but do
you remember that it discusses -A. Q. No. -- Lord Browne tying compensation of employees
to cost-cutting? A. book. Q. Well, that's the exact same thing you did when I don't remember any of the details of this
you became CEO, you tied compensation to cost-cutting, didn't you? MR. GODFREY: A. Objection as to form.
I tied compensation, firstly, to safety and Safety --
then to financial performance.
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Q. A.
(By Mr. Cunningham) The financial performance? Safety was a cost mark. You either -- you
either performed against the safety matrix or you got nothing. Q. Did you or did you not tie compensation to
cost-cutting? A. There was an element of compensation that
related to management of costs. Q. A. Q. All right. Turn to page one --
It was subsidiary to safety performance. Turn to Page 107, "Leadership." Did you read
this chapter? A. As I've said, I'm sure at the time I did, but So --
I don't recall. Q. A.
Well, if --- if you want me to answer questions, I -- I
will need to read it. Q. Well, if you -- if you were the CEO of BP at
the time you saw this and saw a chapter on leadership, it seems like you probably -A. Q. A. I probably would have done. -- would have read that. But as I say, I can't remember whether I did, So if we want to
and I can't remember what it says.
have a question and answer, I'll need to read it.
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Q.
I'm going to ask you whether or not you agree
with the second paragraph that's quoted here out of the Baker Panel Report, which says this, quote: "The Panel
believes that a primary reason that process safety is not more widely shared as a core value in the US refinery workforce is that BP executive and corporate refining management have not provided effective process safety leadership." Did I read that correctly? A. Q. You did. And then on Page 120, in the "Conclusion" -MR. GODFREY: MR. WEBB: Which page, please?
120. 120.
MR. CUNNINGHAM: Q. quote:
(By Mr. Cunningham) Third sentence down, "BP's most senior executives failed to provide
appropriate leadership on process safety issues," period, end quote. Did you read that when you scanned this chapter? A. Q. A. Q. A. I almost certainly did. You certainly did? I almost certainly did. Okay. And throughout my term as the Leader, I
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focused exclusively on process safety. Q. And in conclusion, did you -- or do you think
you read the concluding chapter -A. Q. A. Q. I'm sure I read --- page --- the concluding chapter. -- 157? Second paragraph, quote: The major -- "The
major lesson coming out of the various reports written about the accident is the need for a specific focus on process safety" -A. Q. again" -A. Q. Well --- "reports about major accidents in the That's correct. -- "but this was not a new insight. Time and
petrochemical industry have drawn this conclusion. What is most striking about the Texas City accident was BP's failure to have learnt this lesson already. It
seems that the organisation suffered from a learning disability in this respect." Do you agree with that? MR. GODFREY: A. Objection to the form.
I -- I think that's -- I think that certainly
in 2005 we needed to shift our focus to process safety,
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rather than personal safety.
And in the time that I
was the CEO of the company, that's exactly what we did. We had a relentless focus on process safety. Q. A. (By Mr. Cunningham) And did you -And notwithstanding the tragic accident in the
Gulf, all of the indications, measurements, showed that we were improving significantly. Q. And did you read the final conclusion on "Cost
cost-cutting on Page 162, where it says, quote: cutting was perhaps the most obvious cause of the failure to learn at Texas City," end quote? Do you agree with that? MR. GODFREY: A. Objection as to form.
It was certainly one of the things that
contributed to Texas City, that -- there's no doubt. Q. (By Mr. Cunningham) And so you read this book
or you skimmed this book or you reviewed this book in 2008, when it came out, and in 2010 on the DEEPWATER HORIZON, despite the institution of your OMS in 2007, you still had not found the time to do an MAR on the DEEPWATER HORIZON, correct? MR. WEBB: question. A. Q. I don't do MARs. (By Mr. Cunningham) You don't do MARs? Objection to the form of the
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A.
But what is clear is that we had made major
changes to operations with explicit focus on process safety. Consequently on Texas City, actually, in line
with a lot of what is written in here. Q. Is that the reason that there was no process
Engineer responsible for the Gulf of Mexico drilling operation? MR. WEBB: A. Q. it? A. the case. Q. A. Yeah. But all I can tell you is there's been a lot I'm not -- I'm not aware of why that was not I'm not sure -(By Mr. Cunningham) That's not consistent, is Objection, form.
of focus on process safety in the intervening three years. I when I have the opportunity to explain to
people, I will tell you. Q. All right. So given BP's safety history at
the time you testified before Congress, you made the point you've made here today multiple times, didn't you, that you did everything possible to change everything between 2007 and 2010 before the DEEPWATER HORIZON occurred -MR. WEBB: Objection to the form of the
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question. Q. A. Q. A. (By Mr. Cunningham) -- didn't you? We changed a lot of things. Okay. We changed a lot of things in terms of how
people were compensated, we changed things -- systems, processes, we recruited people from outside of our industry to bring expertise into BP. And we made
process safety and safe and reliable operations the priority. Q. And you made that statement or a similar
statement on five or six times in your Congressional testimony, didn't you? A. Q. I did. Same thing. All right. And, of course, BP
PLC had the power to make all these changes that you say you did make, true? A. Q. We did make a lot of changes. All right. You had the power to make any
change you wanted to make safety related, didn't you? A. We -- and we made a lot of changes. MR. GODFREY: A. Object as to form. You can't change It takes a long
But change takes time.
everything in weeks or even years.
time to change the operations of a company.
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Q.
(By Mr. Cunningham) And the specific event
that precipitated these changes that you've discussed today and that you talk about in Congress was Texas City, right? A. I think the specific event was the publication
of the Baker Report and the recognition of what the Baker Report said. Q. All right. And we've read what portions of But it's true that in the wake
the Baker Report said.
of Texas City, you and Lord Browne repeatedly stated that it would never happen again, didn't you? MR. WEBB: A. Objection, form.
I -- I believe we repeated we would do
everything possible to -- to -MR. CUNNINGHAM: A. 35.
-- stop it from happening again. MR. CUNNINGHAM: Tab 35. Previously marked.
THE COURT REPORTER: Q. marked.
(By Mr. Cunningham) Exhibit 870, previously This is a news release from the U.S.
Department of Labor in October, in fact, the end of October of 2009, correct? A. Q. please. (Reviewing document.) Correct. Read the first two paragraphs into the record,
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MR. GODFREY: Q. hear it. MR. GODFREY: A. Q. A.
Object as to form.
(By Mr. Cunningham) Loud enough for people to
First two paragraphs? (By Mr. Cunningham) Yes, sir. "U.S." -- beginning with "The U.S. Department
of Labor's" -Q. A. Yes. "The U.S. Department of Labor's Occupational
Safety and Health Administration (OSHA) today announced it is issuing" an "$87,430,000 in proposed penalties to BP Products North America...for the company's failure to correct potential hazards faced by employees. fine is the largest in OSHA's history. The prior" The
target "total penalty, $21 million, was issued in 2005, also against BP." "Safety violations at BP's Texas City...refinery resulted in...massive explosion -- with 15 deaths and 170 people injured -- in March of 2005. BP entered into a settlement agreement with OSHA in September of that year, under which the company agreed to corrective actions to eliminate potential hazards similar to those that caused the 2005 tragedy." Today -- "today's announcement comes at the conclusion
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of a six-month inspection by OSHA, designed to evaluate the extent to which BP has complied with its obligations under the 2005 Agreement and OSHA Standards." Q. Now, this -- this news release is four and a
half years after Texas City, isn't it? A. Q. isn't it? A. Q. Correct. And tell me whether or not -- whether or not I It is. And it's two years after you became the CEO,
read the statement below this made by the Secretary of Labor correctly. Quote, "When BP signed the OSHA
settlement from the March 2005 explosion, it agreed to take comprehensive action to protect employees. Instead of living up to that commitment, BP has allowed hundreds of potential hazards to continue unabated..." end quote. Did I read that correctly? A. You did. MR. CUNNINGHAM: MR. BONNER: Tab 34.
(Tendering.)
(Exhibit No. 6027 marked.) THE COURT REPORTER: MR. WEBB: 6027.
You said 27?
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(Nodding.)
(By Mr. Cunningham) The news article I want to "Renegade
ask you about, Mr. Hayward, it is titled: Refiner:
OSHA says BP has 'systemic safety problem.'" "Two refineries owned by oil giant
First paragraph: BP..." --
And this is dated May the 17th of 2010, correct? A. Q. Correct. "Two refineries owned by" BP oil giant -- or
"oil giant BP account for 97 percent of all flagrant violations found in the refining industry by government safety inspectors over the past three years..." Is that correct? MR. GODFREY: A. Q. A. Q. Objection as to form.
That's what it says. (By Mr. Cunningham) Is that a fact? That's what it says. "Most of BP's citations were classified as
'egregious willful' by the Occupational Safety and Health Administration and reflect alleged violations of a rule designed to prevent catastrophic events at refineries." Is that what it says? A. It is.
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Q. sentence:
Going down to the next paragraph, last "While continuing its probe in Texas City,
OSHA launched a nationwide refinery inspection program in June 2007 in response to a series of fires, explosions and chemical" lease -- "releases throughout the industry. Refinery inspection data obtained by the
Center under the Freedom of Information Act for OSHA's nationwide program and for the parallel Texas City inspection show that BP received a total of 862 citations between" July -- June" 7 "and February 2010 for alleged violations at its refineries in Texas City and Toledo, Ohio." Is that, in fact, true? MR. GODFREY: A. Q. Objection as to form.
That's what it says here. (By Mr. Cunningham) And June 2007 to February
of 2010, that's about the three-year period when you were the CEO, isn't it? A. Q. That's correct. And then it goes on to say: "Of those, 760
were classified as 'egregious willful' and 69 were classified as 'willful'...virtually all...the citations were for alleged violations of OSHA's process safety management standard..." Did I read that correctly?
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A. Q.
You did. "BP accounted for 829 of the 851 willful
violations among all refiners cited by OSHA during the period analyzed..." Do you disagree with those numbers? A. Q. I have no basis to disagree with them. "Top OSHA Officials told the Center in an
interview that BP was cited for more egregious willful violations than other refiners because it failed to correct the types of problems that led to the 2005 Texas City accident even after OSHA pointed them out." Did I read that correctly? A. Q. You did. And then turn to the next page, fifth "No other oil company inspected by
paragraph down:
OSHA since June" of "2007 was even close to BP in the number of citations issued." Did I read that correctly? A. Q. Correct. And then we find that willful and egregious is "OSHA defines a willful violation
defined as follows:
as one 'committed with plain indifference to or intentional disregard for employee safety and health.'" Did I read that right? A. You did.
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Q.
"An egregious willful violation is considered
so severe that it can result in a penalty each time a violation occurs, rather than a single penalty for all" the "violations..." Did I read that correctly? A. You did. THE COURT REPORTER: MR. CUNNINGHAM: Four --
Tab 34. Four minutes. Tab
THE COURT REPORTER: MR. CUNNINGHAM: 34.
That's what I want.
(Discussion off the record.) MR. CUNNINGHAM: MR. BONNER: Tab 36.
(Tendering.)
(Exhibit No. 6028 marked.) THE COURT REPORTER: Q. A. Q. 6028.
(By Mr. Cunningham) (Tendering.) Thank you. This is an "OSHA FactSheet," a "BP History It relates to the BP Texas City refinery.
Fact Sheet."
I'd ask you to look at the time line of events at the bottom. correct? A. Q. Yes. You'll see on June 5th, 2007, a fatality, You'll see on July 22nd, 2006, a fatality,
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correct? A. Q. A. Q. correct? A. Q. correct? A. Q. Correct. And who was absolutely responsible for safety Correct. And on October the 9th, 2008, a fatality, Yep. Correct? Correct. And on January 14th, 2008, a fatality,
at BP during these three years cited in these articles? MR. WEBB: Objection as to form. Objection, form.
MR. GODFREY: Q.
(By Mr. Cunningham) Who was it? MR. GODFREY: Same objection.
A.
I was the Chief Executive of the company
during these three years. Q. (By Mr. Cunningham) And despite these numbers
which you knew about, in the April 15th, 2010, BP Sustainability Report, Tab 37 -MR. GODFREY: please? MR. CUNNINGHAM: don't think. I don't have one yet, I What exhibit number,
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MR. GODFREY:
Okay. Is it already in? 6023. 6023.
MR. CUNNINGHAM: MR. BONNER: Yes.
MR. CUNNINGHAM: MR. GODFREY: A. Q. Okay.
Thank you.
(By Mr. Cunningham) You are quoted in this
document five days before the DEEPWATER HORIZON blowout, and after these statistics were published? A. Just -MR. WEBB: A. Q. like. A. Yeah. MR. GODFREY: front? MR. CUNNINGHAM: MR. GODFREY: Yeah. Is -- got the 2009 on the He doesn't have the document.
-- help me get the document, please. (By Mr. Cunningham) This is what it looks
This was 6023? Yes.
MR. CUNNINGHAM: MR. GODFREY: A. 6023. MR. WEBB:
Thank you.
Just use this copy, Tony. Thank you.
He's got the document.
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Q.
(By Mr. Cunningham) Page 2.
The date of this
on the front is "15 April 2010," and you are quoted as saying at the bottom of the first page, quote, "I am extremely proud of BP's 2009 safety performance - it reflects a sustained effort across all our operations over many years," end quote. A. Did you say that?
I did, and I remain exactly that view, because
our safety performance has measured, my rigorous statistical analysis had improved significantly over the prior two years. MR. CUNNINGHAM: of tape. THE VIDEOGRAPHER: 2:10 p.m., ending Tape 4. (Recess from 2:10 p.m. to 2:25 p.m.) MR. GODFREY: We're ready to start. Can Off the record at Take a break. We're out
you shut the door down there, please? THE VIDEOGRAPHER: All set. One second.
On the record at 2:25 p.m., beginning Tape 5. EXAMINATION QUESTIONS BY MR. STERBCOW: Q. Mr. Hayward, my name is Paul Sterbcow, with Both represent the PSC. I'm going to
Mr. Cunningham.
use some more of our time. Did you know who was in charge of safety in
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the Gulf of Mexico Drilling and Completions Unit as of 2009? A. Q. No, I didn't. Do you know if there was any changeover in
personnel with respect to managerial Safety representatives in the Gulf of Mexico in 2009, early 2010? A. Q. A. Q. A. Q. company? A. Q. A. Q. A. Q. No, I don't. Do you know why he left the company? No. Do you know Mr. Thierens? I know Mr. Thierens, yes. Are you aware of the circumstances of his No. Have you ever met Kevin Lacy? No, I haven't. Are you familiar with Mr. Lacy? I've -- I've heard of his name. Do you know why Mr. Lacy was brought into the
leaving Gulf of Mexico and coming -- relocating back to London in late '09? A. Q. A. Mr. Thierens? Correct. -- I don't. No --
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Q. A. Q.
Do you know a Curtis Jackson? No. So you wouldn't be familiar with his HSSE
responsibilities were in -A. Q. A. Q. No. -- the Gulf of Mexico either? No. All right. So is -- suffice it to say from
the time that the Macondo Well started in October of '09, through the tragedy, neither you in your capacity as CEO nor in your capacity as Chair of the Committee had any notion as to who was in charge of implementing OMS and HSSE policy within Drilling and -- and Completions in the Gulf of Mexico; is that fair? A. Q. I didn't know the name of the individual, no. All right. Do you recall ever meeting at any
point in your position to discuss with your colleagues at BP whether or not the DEEPWATER well blowout in the Gulf of Mexico was possible? A. The identification of that sort of accident
was part of the Group-wide risk assessment. Q. A. Okay. So it was identified as a Group-wide risk, and
it was believed to have been mitigated by the things that we had in place.
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Q.
Can you list for us the steps or the -- the
things you had in place that led the Committee to conclude that that risk of a deepwater blowout had been mitigated in the Gulf of Mexico? A. Well, I don't recall ever discussing it in any I think subsequent to the accident,
detail at GORC.
that we -- the critical issue was, of course, we believed that any blowout would be mitigated by a functioning blowout preventer. Q. And I think you mentioned to Congress on a
number of occasions that the blowout preventer was considered the fail-safe piece of equipment, if you will, to prevent an accident like that? A. Q. That was the intention. So if all other considerations that BP relied
upon to conclude that they had mitigated this risk -had all of them failed, the last line of defense would have been the fail-safe BOP, if you will? A. Q. That's correct. All right. Had BP done any research, to your
knowledge, into the performance of the blowout preventer aboard of the -- the make/model of the blowout preventer aboard the DEEPWATER HORIZON? A. Q. Not to my knowledge. Do you know why or on what basis BP came to
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the conclusion that the blowout preventer would provide the company with a fail-safe, last line of defense to a deepwater blowout? A. It was the design basis of a blowout In the event of a blowout, it closes, and
preventer.
the well is shut in. Q. And what was the basis of concluding that that
design basis was fail-safe? A. Q. I don't know. Were there any discussions in the GORC
meetings about the fail-safe aspect of the -A. Q. A. Q. A. No. -- of the piece of equipment? No. Do you recall -It was industry practice to assume that the
blowout preventer was -- would operate to the criteria by -- which it was designed for, and in the event of a blowout, it would close and seal the well. Q. Was there any discussion about the actual
performance of blowout preventers on deepwater drilling rigs operated by BP in the Gulf of Mexico -A. Q. A. Not --- over time? Not with myself.
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Q. A. Q. A.
Do you know anybody within the company -I -- I --- this -- had this discussion? I'm not aware of whether they did or whether
they didn't. Q. You mentioned other companies. Is it your
testimony that Exxon, Shell, Chevron, other deepwater operators in the Gulf of Mexico, also relied solely on the blowout preventer as the fail-safe, last line of defense? MR. WEBB: Objection to the form -Objection, form.
MR. GODFREY: A. I think -MR. WEBB: A.
-- of the question.
I think it's fair to say that the industry
generally -- I'm including those companies -- believed that the blowout preventer was the last line of defense if all other mechanisms, systems, and processes had failed. That's what it was designed to do. That's
what it's been designed to do since the piece of equipment was created when drilling for oil began, you know, almost a hundred years ago. Q. (By Mr. Sterbcow) And do you know if the
design criteria of the blowout preventers that we're referring to kept up with the pace of deepwater
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drilling, in terms of deeper and deeper depths, higher pressures, and higher temperatures? A. Well, they were certainly intended to. I -- I
think -- I -- I don't know where the analysis of the blowout preventer has got to. complete. I know it's not
I -- I think, with the benefit of hindsight, But I think
you might -- you might question that.
until that analysis is complete, it's difficult to know. I mean, I -- I'm not aware of why -- why we I know that
believed the blowout preventer failed. analysis is still ongoing. Q.
Do you know whether or not BP is using
state-of-the-art blowout preventers in its drilling -Gulf of Mexico deepwater drilling projects, or at least was as of April 20, 2010? A. Q. To the best of my knowledge, they were, yes. Did you have any knowledge prior to April 20,
2010, as to how old this particular blowout preventer at the Macondo Well was? A. No, I didn't -MR. GODFREY: A. Objection as to form.
I didn't have any knowledge of how old this
particular blowout preventer was. Q. (By Mr. Sterbcow) Given the restructuring of
deep -- deepwater Drilling and Completions in the Gulf
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of Mexico, do you know if there was any person or job position who would have been responsible for reviewing design, maintenance, repair, and performance of blowout preventers in deepwater drilling in the Gulf of Mexico for BP in 2009, early 2010? A. Q. I'm unaware of them. Would the OMS -- implementation of OMS, to
your knowledge, had it been implemented in Drilling and Completions in the Gulf, required someone within BP to conduct that type of analysis? A. Q. I honestly don't know. Okay. Given that you don't know these things,
let -- let me make my questions a little more general. Are you familiar with any studies that have been conducted by or on behalf of MMS or the drilling industry, in the period 1999 through 2005, that specifically looked at the performance of deepwater blowout preventers in the Gulf of Mexico and their ability to actually prevent a disaster of the type that happened on the DEEPWATER HORIZON? A. Q. I'm not aware of any. Do you know of anybody within the company, BP,
who would have looked at, looked for, or looked into such studies to see what this piece of equipment's performance record was in general?
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A.
I don't know -MR. GODFREY: Object as to form.
A. Q.
-- of anyone. (By Mr. Sterbcow) Do you think that's
something that should have been done, given that BP considered the blowout preventer the last line of defense to an accident of this magnitude? MR. WEBB: A. Object to form.
I -- I think it's reasonable to believe that
within the drilling organization, there were experts on blowout preventers who were looking at blowout preventers. Q. any? A. Q. I'm not -- I'm not aware of anyone. All right. Do you know who the highest (By Mr. Sterbcow) Are you personally aware of
position would be within BP PLC's organization who would have the responsibility to either look at these studies or ensure that somebody was familiar with such studies? A. I don't know. I -- and I'm not prepared to
speculate. Q. Okay. So as we sit here, you -- you can't
testify as to either a person or a job position within BP PLC that actually undertook the responsibility to
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examine design and performance history of Gulf of Mexico deepwater blowout preventers at any point, to your knowledge? A. Q. I can't. All right. Have you been shown any documents
since this tragedy with respect to blowout preventer performance in the Gulf? A. Q. A. Q. H'm, I don't believe so, no. Do you know if BP -Not to my recollection. -- since the tragedy, has undertaken any
study, looking -A. Q. A. studies. Oh, I'm --- into the future? I'm certain that there has been lots of I clearly -- I haven't been involved in the
company now for almost nine months. Q. leave? A. I left in the -- I handed over the reins on Prior to your leaving when? When did you
the -- effective the end of July and -- July and left in the end of -- beginning of October. Q. Okay. Can I assume, then, that once you
handed over the reins at the end of July, that your involvement into both looking into the reasons for the
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blowout and steps taken to prevent a future blowout after the casualty -- all of -- all of your efforts in that regard ended; is that fair? A. Yeah. I -- I -- I clearly handed over the
leadership of the Company to someone else, and it was right that whatever the future is going to be about should be them and not me. Q. Okay. So whatever BP has done or has not
done, for that matter, in terms of looking at its prior reliance on the blowout preventer as the fail-safe piece of equipment in Gulf of Mexico deepwater blowout prevention, anything that happened after late July 2010 is something that you're not going to be familiar with? A. Q. I'm not familiar with. I'm sorry. Have you
Have you seen anything published?
read anything about BP's efforts in this regard after you've left? A. The only thing that I've seen is the
Presidential Commission Report and the fact that the analysis by a technical expert group, I think DN&O, on the blowout preventer is, as far as I'm aware, still ongoing. Q. It's not -- it's not complete. So you're not familiar with any completed
investigation -A. No.
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Q. A. Q.
-- into the blowout preventer itself? No, no. All right. Having said all of this, I'm
assuming the -- the answer to the following series of questions is probably going to be "No," but let me ask anyway: Were you aware of the fact that the blowout
preventer utilized on April 20, 2010 had undergone significant downtime and maintenance and repair problems in deepwater wells drilled in the Gulf of Mexico in 2006 and 2007? MR. WEBB: A. Q. Object to form.
I wasn't aware of the details of that, no. (By Mr. Sterbcow) You've never seen any
documentations? A. Q. I've not seen any documentation. Were you aware of the fact that the blowout
preventer in place at Macondo as of the night of this blowout had a ram that would have otherwise been available to assist in blowout prevention converted to a test ram six years prior? MR. WEBB: A. Objection, form. I'm -- you know, that
I don't recall that.
may -- I may have become aware of that in -- in the immediate aftermath of the incident, but I -- I -- I don't know.
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Q.
(By Mr. Sterbcow) Did you become aware that
there was a period of time between April 21 and May 5 when there was an ongoing, consistent effort by Transocean and BP to utilize this test ram which had been -- which had basically been rendered useless as a blowout prevention tool to try and stop the ongoing blowout? A. What I recall is that we worked extensively on
the blowout preventer to try and get it to activate in the subsea and were unable to do so it turns out for a whole host of reasons to do with dead batteries, switching not working, and various other things, which -- you know, the details of which I can't -- I can't remember exactly, and I -- and I wasn't really ever fully party to -MR. ROBERTS: A. Objection, form.
-- the detail of that analysis, because it was
all coming out as I was leaving the company. Q. (By Mr. Sterbcow) Did you know that BP
personnel in the Gulf of Mexico were receiving ongoing reports of problems, maintenance, and repair of not only this blowout preventer, but every blowout preventer in use on a BP leased well? MR. WEBB: A. Objection, form.
I wasn't aware of that.
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Q.
(By Mr. Sterbcow) So if there were problems
with batteries and cables or whatever it might have been, as of April 20, 2010, you were not aware that not only whoever was running the rig for you as a contractor, but also BP itself was receiving contemporaneous information about the ongoing condition and problems with every blowout preventer being used by BP in the Gulf? MR. GODFREY: A. Q. A. Q. A. Objection as to form.
Every -- every blowout preventer? (By Mr. Sterbcow) Correct. Not on every blowout preventer -Every -- ever --- on every drilling rig, every platform, on I find that
every -- I find -- I wasn't aware of that. rather surprising. Q. Okay.
So it would be surprising to you in
your position that BP would be privy to and receive contemporaneous records, ongoing records of maintenance, repair, problem, et cetera, on blowout preventers being used on its leased wells? A. Q. Yes. When did you become aware that there was an
ongoing attempt for a period of time to try to close a test ram that had been converted to a test ram, at BP's
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request, and with BP's consent? MR. GODFREY: A. Objection as to form.
I can't remember the details of the R -- the
BOP intervention using the ROVs, but there was a period from immediately -- the immediate aftermath of the accident on the 21st through to around the 5th of May when we were trying to use ROVs to close the BOP. don't -- I -- you know, I wasn't involved in the detailed Engineering that was going on at the time because I was, quite frankly, focused on other things, and I could not add very much to that -Q. A. Q. (By Mr. Sterbcow) Okay. -- discussion. Do you know whether or not the ROVs that were I
being utilized to try to operate the BOP were indeed sufficient in terms of their ability to generate enough hydraulic pressure to close any ram or any valve on this BOP? A. Q. I don't know. Do you know whether or not the ROVs were
designed to provide enough hydraulic pressure and power to close the type of ram equipment that was on this specific BOP? A. I don't know. I -- I believed that the ROVs
were capable of operating the BOP in the subsea.
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Q.
Do you know whether or not anyone with BP ever
questioned or had direct knowledge that the ROVs to be used in the event of a blowout, in fact, could not close the blind shear ram on a BOP like the one at the Macondo Well? A. Q. I was not aware of it. Are you aware that on May 5th, Harry Thierens,
along with Billy Stringfellow of Transocean, discovered that they had been attempting for days to close a test ram that never was going to be closed in this situation? A. I recall that on or about May 5th, we
determined that the ROV intervention, if it had not succeeded -- I -- I don't recall the details. I don't
even know whether I knew the details of exactly why the intervention had not -- had not been successful. I don't know whether we knew at the time why the intervention had not been successful. Q. All right. You don't recall learning that I --
Mr. Thierens, along with other folks, suddenly learned on May 5th that this particular ram that they were trying to use, in fact, whether it functioned 100 percent as intended would never, ever close in this situation? MR. WEBB: Objection to form.
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A.
I don't recall that.
I recall hearing that
there was significant variances with the BOP relative to what we believed was on the seabed. Q. (By Mr. Sterbcow) All right. Do you believe
that had the appropriate process safety measures been put in place in Gulf of Mexico drilling and completions, that someone with BP faced with this situation would have or should have known not to try to close a test ram to stop a blowing out deepwater well? MR. GODFREY: MR. WEBB: A. Objection as to form.
Objection, form.
I think it's impossible to speculate whether I would also have expected that
that's true or not.
the Transocean team, whose blowout preventer it was, would know how the blowout preventer operated. Q. (By Mr. Sterbcow) Have you talked with anybody
with Transocean to determine the facts and circumstances around -- surrounding how and why this test ram was converted? A. Q. I haven't talked to anyone from Transocean. You used the term "their blowout preventer."
Do you believe that this was Transocean's blowout preventer? A. I believe it was part of the rig, and I
believe the rig is Transocean's, and, therefore, you
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know, I would imagine it's a Transocean blowout preventer. Q. All right. Do you -- given that, do you think
that BP bore any responsibility, operational or otherwise, for the performance of this blowout preventer? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A.
Clearly, we were -- we had operational
oversight of our contract with Transocean. Q. (By Mr. Sterbcow) Would that include the
blowout preventer? A. Including the equipment that they were using,
the rig and the blowout preventer. Q. Do you believe that Federal regulation, United
States Federal regulation, governing the drilling of deepwater wells in the Gulf of Mexico required BP to ensure that blowout preventers operated as intended in this situation? MR. WEBB: Objection, form. Objection, form.
Is that what the regulations state? (By Mr. Sterbcow) I'm asking you if you know. I don't know. Okay.
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A. Q.
I don't know. In fact, let me ask it in a broader sense:
Are you aware of the certified Federal Register Regulations and the requirements they placed on BP in this situation to ensure that an adequate blowout preventer, both in terms of capacity, repair, and maintenance, was in place on the Macondo Well as of April 20, 2010? A. No, I'm not aware of the details of that
regulation at all. Q. Do you -- do you know whether Mr. Lacy was
aware of those regulations? A. help you. Q. Do you know whether Mr. Thierens was aware of I don't know Mr. Lacy, so I'm afraid I can't
those regulations? A. Q. I don't know, and I -- I -- I won't speculate. Do you know whether or not BP's Gulf of Mexico
drilling and completions organization in Houston had anyone who was designated to know and ensure that the -- the certified Federal -- Federal Regulations pertaining to the blowout preventer were properly adhered to by BP? A. I don't know that. MR. GODFREY: Objection as to form.
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Q.
(By Mr. Sterbcow) And in a broader sense, do
you know whether or not anyone with BP in Houston was charged with the responsibility to ensure that BP was complying with applicable Federal Regulations in the drilling and completion of the Macondo Well? A. Q. I -- I don't know who that would be. Do you know whether or not BP was, in fact, in
compliance in terms of design, and drilling, and completion of the Macondo Well with applicable certified Federal Regulations? A. Q. A. Q. To the best of my knowledge, yes. But you don't know what those Regulations are? But what they -- I don't know for a fact. Okay. And you don't know who within the
organization would be able to tell us that they were, in fact, so compliant? A. Q. A. Q. A. I'm afraid not. When did you learn about the blowout? On the morning of April 21st. And how did you find out? I received a phone call at about 7:00 o'clock
U.K. time, which would be, I guess, 1:00 o'clock in the morning U.S. time. Q. A. Do you recall who called you? Yes. My -- the Head of Exploration and
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Production, Andy Inglis. Q. Okay. Mr. Inglis was in the States, or was he
in the U.K. at that time? A. Q. A. No, he was in the U.K. What did he tell you? He said, "We have a serious incident in the
Gulf of Mexico." And I -- and I -- we said, "Right. in the office." He was in London. We'll meet
"We'll" -- "we'll
meet in the office in an hours' time to review what we know." Q. All right. Do you recall when your first
contact was with anybody who was based in Houston charged with any managerial responsibility over Macondo? A. I would -- I don't recall precisely, but I
would think in the course of the early afternoon, London time, on the 21st -Q. A. Q. A. Q. And when --- which would be daybreak in Houston. Daybreak in Houston? Yeah, I think. Right. Okay. Do you recall when BP began its
effort, its organizational effort, to respond to this disaster?
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A.
Very soon after the incident.
The Incident
Management Team was called in Houston, so within hours. I don't know exactly how many hours, but within a few hours. Q. Was there a single person placed in charge at
that point? A. There would have been the Incident -- the I can't
Incident and Crisis Management Team leader. remember who they were. Q. All right.
Do you recall when you first came
to the States? A. Yeah, I came on the -- the 23rd, I think. It
was Thursday or Friday. Q. And once you came, did you play -- well, what
role did you play in terms of determining what was the best method of responding to and capping the spill? MR. GODFREY: A. Objection as to form.
Relatively early in the process, probably on
the 24th, we -- I sat down with the team, the team of technical experts, and Andy Inglis and Doug Suttles, and we designed a multiple parallel path intervention strategy. We had already recognized the need to drill
a relief well, the rig was moving to location, and it spudded very shortly thereafter. The second relief
well spudded within a couple of weeks.
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And then we drew up a series of options to contain and limit the flow in the intervening period. So there -- there was a -- there was a two-pronged attack, really. One was to mount the surface response,
which was very significant, ultimately involved 48,000 people, 7,000 boats, hundreds of planes. And in the
subsurface, we identified options to contain the -- the leak, to plug the leak in various forms, including things like the top kill, the cofferdam, et cetera. Q. A. (By Mr. Sterbcow) Okay. And each one of those was pursued in parallel,
and when it was ready to be implemented, it was implemented. Q. Prior to that effort, are you aware of any
research and development, done by or on behalf of BP, to create a strategy and build equipment that would allow you to respond to a spill of this nature? MR. GODFREY: A. Objection to form.
We had significant equipment available on the
surface, in -- in the guise of the marine spill response corporation, which is an industry body. It
was supplemented significantly in the course of the response. And, in essence, because the intervention in
our Response Plan was relief wells, and because we believe this risk had been mitigated, and it hadn't
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occurred for over 25 years, the industry had been exploring deepwater for 20 years, the ability to intervene in the subsea was not in any way, shape, or form complete. Q. (By Mr. Sterbcow) Was BP's longtime first
option and only option for stopping a well flow of this magnitude to drill relief -- one or more relief wells? A. That is what was documented in our Oil Spill
Response Plan, which was approved by the appropriate authorities. Q. Correct. Having said that, then, was that
BP's -- at the time of this blowout, and this spill, other than the documented relief well plan, did BP have any other plans whatsoever before you got together with these other gentlemen and started drawing up plans for well control and well plugging, was there any other plan on the table or had any plan been contemplated other than relief wells to stop this? A. In line with the rest of the industry, we did
not have a plan to intervene to prevent flow in the subsea until the relief well was there. Q. And -- and I understand the rest of the
industry, but the rest of the industry has also testified and stated publicly that they would never have drilled the well the way BP did. Okay.
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So in terms of what we have here, regardless of what the rest of the industry did, it's my understanding that as of the time this tragedy happened, BP's sole plan to respond and deal with this was relief well drilling? MR. WEBB: Objection to the form. Objection to form.
MR. GODFREY: A.
It was to contain the oil on the surface using
spill response capability on the surface and to drill a relief well. Q. (By Mr. Sterbcow) And how long did BP think
that one or more relief wells would take in Mississippi Canyon Block 252? A. Q. A. On the order of three months. And did -- did BP know that going in? We knew pretty well that it would be of the That -- that is what the Oil
order of three months.
Spill Response Plan articulated. Q. And did BP drill the relief wells in the same
manner in terms of Engineering casing design, casing depth, as the original Macondo Well was drilled, if you know? A. remember. Q. All right. So details in terms of length of Broadly, yes, but in details, I honestly don't
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casing, size of casing, long string versus liner, those are details that you're not familiar with? A. Q. A. Q. We were drilling a relief well, so -- and -All right. -- we weren't drilling a production well. Did you get involved in any of the details of
the -- of the drilling of the relief wells while you were in the States? A. Q. No. No.
Are you aware of any problems that BP
encountered in getting the DD2 and the DD3 over to begin the relief well drilling? MR. GODFREY: A. Objection as to form.
I don't believe there was significant problems
because they were drilling very shortly after the incident, or the accident. Q. (By Mr. Sterbcow) What was the first option
that was put on the table other than the three-month relief well plan to try to stop the oil from flowing? A. The first option that we could create in terms
of time, not in terms of its likelihood of success, because it's likelihood of success was deemed low, but it was worth attempting, because it -- we -- we -- we weren't certain whether it would or not work -would -- would work or not, was, I think, the
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cofferdam.
I mean, at the time we had a very Had a -- a well
complicated situation on the seabed.
with a 5,000 feet riser snaking around the seabed, and there was oil leaking from the end of the riser. And
the attempt with the cofferdam was to put it on the end of the riser to contain at least some of the hydrocarbons. It was not deemed to be a very likely
successful intervention, but it was worth a try. Q. Were there any more options on the table
during the cofferdam design and implementation that BP felt would be more successful? A. As I said, what -- what -- what we set out to
do was create multiple interventions, all of which were pursued in parallel, in terms of resourcing, Engineering, any investment, and as they crystalized, that's to say as they were completed, they were implemented. So the more complex, more technologically
advanced, more difficult interventions, it took longer. But probably by definition were more likely to work occurred later. The ones that we could put together
quickly, were implemented earlier, but almost by definition they had less likelihood of success. Q. A. Q. And the cofferdam did not work, correct? It didn't work, no. And do you know why?
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A.
Yeah, because there was a -- the formation of
hydrates in the -- in -- in the structure, and, you know, it was a -- it wasn't designed for operating in 5,000 feet of water. Q. A. Was that a foreseeable problem going in? It was -MR. GODFREY: A. Object to form.
It was, I think, foreseeable as much it was But given that we
identified as a risk of failure.
could create it easily, and quickly, it was worth a try to see whether it could actually do anything by way of containing the oil and gas. And -- and it was not done
in any way at the expense of the other interventions that came later. Q. Was there any attempt, to your knowledge, to
mitigate the risk of hydrates forming in the design and implementation of the cofferdam? A. Not -- not particularly, no, because it was --
what we were use -- do -- using was something that we could sort of deploy because it was available. mitigation of hydrates came in subsequent interventions, where we would -- we had had the time to design and build hydrate mitigation capability, such as the ability to pump hot water from the surface up and down the production string, which is what occurred with So the
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the various capping mechanisms and the riser insertion tool. Q. A. What came after the cofferdam, do you recall? I think the next int -- intervention was
the -- the so-called riser insertion tool, which was a pipe that we inserted into the end of the broken riser, and were able to produce some quantities of oil and gas from it. Q. And where was that gas being taken, the oil
and gas being taken? A. It was -- the gas -- the -- the oil was being
collected on the surface and the gas was being flared. Q. Did BP have enough containment vessels on the
surface to handle the amount of oil being taken out of the riser by the riser containment tool? A. Well, at the time of the riser insertion tool
broadly, I think the answer is yes. Q. A. All right. Are you sure about that?
I'm most -- I -- no -- I -- I can't remember
the details, but the riser insertion tool never produced a great deal of oil. Q. to be: That's -- I was -- my next question was going Do you have any idea on a daily basis, whatever
measurements you're comfortable with, how much oil was being trapped?
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A.
I -- I can't re -- recall the precise numbers. It was very variable
I know it was very variable.
because of the nature of the riser insertion tool and the nature of the intermittent flow from the well. well was flowing intermittently. The
The riser insertion
tool was moving around in a gas and oil flow, so the flow rates were very variable over a period of time. I -- I can't recall what we -- what we deemed the average to be at that time. Q. Did the riser insertion tool require design by
the team, or was that a tool that was already available and just brought in and used? A. It was a -- it was a tool that was modified,
really, and it was -- it was -- there were some rudimentary pieces of equipment that could be rapidly modified to correct the riser insertion tool. Q. And who was in charge of the modifica -- who
created the modifications? A. The person in charge of the containment effort
was Richard Lynch. Q. And -- and likewise, was the cofferdam
something that had to be designed from scratch? A. The cofferdam was available in Foshan. It's a
piece of equipment that we had used successfully following Hurricanes Rita and Katrina to contain
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leaking oil from shallow -- shallower water wells. Q. So it was being tested in a deeper water
situation? A. It was being tested for the first time in
deepwater. Q. Okay. So that piece of equipment was
available, it just had to be brought out and put in place? A. Q. Yeah. After the cofferdam, the riser insertion tool,
what was the next step, do you recall? A. The next step was -- I think the terminology It was a -- a containment. As it
was a capping stack.
implies, it was like an up-turned cup that was put over the -- over the flow to produce oil and gas to surface. Q. A. And did that work? It worked to some degree, and then following
that, we created a -- a containment -- a capping stack which could actually be landed on top of the wellhead. Q. as well? A. Q. I do. Where did the top kill effort come, if you Do you recall there being a top kill effort,
remember, in this -A. The top kill effort was post, I think, the
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riser insertion tool and prior to the implementation of the major capping stack, is my recollection. Q. Now, if I understand it correctly, the -- the
top kill is essentially attempting -- an attempt to regain hydrostatic pressure over the well as you would try to maintain while you're drilling a well? A. I mean, in essence, it's an -- it's an effort
to pump from the surface against the flow -- flow of the well, to stop the flow. Q. A. Okay. I mean, it's -- it's -- it's a combination of
pumping at pressure heavy material to, as you say, overcome the hydrostatic pressure. Q. And did BP have available the sufficient
amount of volume and weight of mud to pump into the hole in this -- in the Macondo Well for the capping stack, excuse me, for the top kill effort to be successful? A. We certainly had a lot of -- we had a lot of It -- it was clear that the
mud and a lot of material.
top kill operation was only going to be successful under some circumstances. And we judged, I think, at
the time, the likelihood of success to be between 50 and 60 percent, and it was seen in the -- in the outcome, we were unsuccessful.
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Q. A.
And why was it unsuccessful? Well, I -- I think -- I -- I don't honestly --
I haven't followed all of the analysis that has subsequently taken place. that for two reasons: But it is likely to being
Were -- there were -- there were One was to simply And the second was to
two approaches to the top kill: overcome the well with pressure.
try and create a bridging mechanism in the blowout preventer to reduce the flow and then to pump. So the first attempt was to just overcome the -- overcome the flow with -- through sort of pumping high pressure mud, high pressure, high density mud. The second one required us to try and reduce the Both of them
flow through the blowout preventer. failed.
We weren't able to pump hard enough in the And in the second case, we were never able
first case.
to create a bridge within the blowout preventer to, in any way, inhibit the flow. I -- I don't know. Q. All right. As -- as part of the top kill Why -- why that was, is --
effort, are you aware of any BP personnel who attempted to determine the rate of flow so the amount and weight of mud could then be calculated, in terms of trying to successfully kill the well? A. There were certainly estimates to try and
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estimate under what circumstances the top kill could work and on what circumstances it would not. Q. A. Q. And what do -I don't remember the details of it now. Do you know what methods BP employed
specifically to determine the -- the flow rate -A. Q. A. Q. A. I don't --- as part of the top kill? -- I don't know the specific. Do you know who was involved in that? I don't know, no, I don't -- I'm afraid I
don't know who the -- who -- who was actually doing the calculations, I don't know. Q. So in terms of who would have made the flow
rate calculation to and then -- to -- to then in turn decide volume and mud that would be required to -A. Q. A. Q. A. Well --- kill the flow -No --- you have no knowledge that? -- we -- we -- yeah, but I just want to be
clear that the -- we gave it the maximum volume and mud and pumping pressure. So it was not like it was It was -- and
designed against a specific parameter.
we -- we -- we maxed out on the surface facilities in
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terms of our ability to pump -Q. A. So --- and the volume we pumped and the density of
the mud that we pumped. Q. Okay. So in terms of the available surface
equipment that you had to mix and create as -- as heavy a density mud as you could and pump it as fast as you could, you pushed the available equipment and technology to its limit? A. Q. We did. Having said that, the top -- the -- the
pumping of the mud still could not abate the flow? A. That's correct. It's unclear why it couldn't
abate the flow, but that's correct. Q. Well, does that at least tell us that the flow
rate surpassed the capacity, the technological capacity, of BP and the industry at that point to put enough volume and weight of mud into the hole to kill it? A. I -- I think it -- I -- if -- I -- I'm -- I'm
not sure my memory is correct in this, but my recollection is that if the well was flowing above 18,000 barrels a day, then the top kill operation, through the pumping solely the mud was not going to be successful.
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Q.
Did BP come to the conclusion, to your
knowledge, that this well was flowing in excess of 18,000 barrels a day? MR. GODFREY: A. Object as to form.
I -- I -- I think that there were all sorts of
analyses going on at that time that suggested the well was flowing -- I think there was a -- my recollection is the Flow Rate Technical Group, which was the Government body, suggested flow rates in between 12 and 18,000 barrels a day around this time. Our -- the -- the results from the top kill operation were not inconsistent with that. Q. (By Mr. Sterbcow) Well, if it had been flowing
at 12,000 barrels, given -A. We probably -- we probably, but not for But the
certain, would have been able to overcome it.
answer is "Probably," because it depended on, you know, the configuration of the blowout preventer, the configuration of the casing. So I -- I -- you know, at
the time when I left involvement with all of this, in -- you know, the end of July, all of the -- all of that analysis was not complete. Now, I honestly don't know whether it has been completed and there is a definitive view as to at what point the top kill failed and why.
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Q.
But can we conclude from your knowledge and
what happened, that at least there was not existent equipment and technology to allow BP to pump sufficient mud, weight and volume, into this well, given its rate of flow, to kill it? MR. WEBB: Object -Objection as to --
MR. GODFREY: Q.
(By Mr. Sterbcow) It just didn't have -MR. WEBB: -- objection to the form. -- form.
MR. GODFREY: Q. that? A.
(By Mr. Sterbcow) -- the capability to do
Well, we -- we didn't -- that is one I'm -- I'm -- I'm not being cute. There were other
interpretation.
It's one interpretation.
interpretations at the time as to why the top kill failed. And -- and I do not know whether they have
stood the test of time or not. Q. A. Q. A. Do you know what those other indications -It was --- were? -- about the -- the flow through the choke and What was
kill lines and into the blowout preventer.
the flow path that we were actually achieving versus the flow path that we believed we were achieving.
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Q. A. Q. A. Q. A.
And do you -I --- know if anybody has looked into those -Well, I --- considerations? -- I -- I -- I don't know. I -- I imagine
they have, but I don't know. Q. Okay. As you sit here today, though, have you
reached any conclusion that the Macondo Well was more likely than not flowing at least at a rate of 18,000 barrels a day? MR. WEBB: A. Object to form.
I -- yeah, I honestly haven't reached any
conclusions as to what the flow rate was at any particular time. It -- it clearly evolved over time,
as restrictions on the well were removed. Q. A. (By Mr. Sterbcow) H'm -It's clear that -- what is clear to me is that
in the very early part of the accident, in the -- in the -- in the first days, there was flow that was coming through the blowout preventer, through a piece of drill pipe, a longer piece of riser that was wrapped round the fl -- all over the seabed, with many constrictions and restrictions on flow. And certainly the videotape at the time then
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didn't appear to show very high flow. Q. A. Did the flow increase over time? It -- the flow increased over time, and it in
particular increased over time when we began to cut away the restrictions on the riser such that we could implement the capping stacks. That's when the major
increase in flow appeared to occur. Q. So is it fair to say that the ultimate method,
the capping stack method that ultimately stopped the flow, actually required BP to increase the flow over a given period of time before it could then be stopped? A. It require -MR. GODFREY: A. Q. A. Q. A. Objection as to form.
-- it required us to cut off the riser. (By Mr. Sterbcow) Which then increased -Which --- the flow? -- by definition, would have increased the
flow for a brief period until we put the capping stack. Q. All right. Do you recall whether or not the
Exploration Plan submitted by BP to the MMS provided the Federal Government with a specific number of how many barrels per day flow BP was capable of responding to in a disaster like this? A. I think the Oil Spill Response Plan referred
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to our ability to respond on the surface.
And I -- I
believe that the number was -- I think around 160,000 barrels a day. And it -- it was specifically about the
ability to respond on the surface. Q. A. And -- and -Of course, it was a -- a -- a plan that was
approved by the relevant authorities. Q. I -- I understand that. Did the relevant
authorities rely on BP to be accurate and truthful in their estimates? MR. GODFREY: MR. WEBB: A. Objection, form.
Object to the form.
I don't think there was any evidence
suggesting we weren't accurate and truthful in our estimates. Q. (By Mr. Sterbcow) Well, was BP capable of
responding to this spill on the surface at 160,000 barrels a day? A. Well, we responded to it in very It -- the -- it --
significant -- significant measure.
the -- the -- the plan required us to still respond. We responded. Q. A. I understand. 48,000 people, 7,000 boats, hundreds of planes
and helicopters, 30 million feet of boom.
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Q.
And yet oil still reached the coasts of
Louisiana, Mississippi, and Alabama. A. Q. A. Q. That's correct. And -Very regretfully. -- and oil still killed a lot of the wildlife
along those coasts, correct? MR. GODFREY: A. Q. Objection as to form.
There was certainly wildlife killed. (By Mr. Sterbcow) And oil still shut down the
fisheries industries in Louisiana, Mississippi, and Alabama, correct? MR. GODFREY: A. Objection as to form.
Well, the fishery industries were of course
shut down by the Government, consequent on a concern about the extent of the oil. Q. concern? MR. WEBB: A. respects. Q. (By Mr. Sterbcow) Are you aware of documented Objection, form. (By Mr. Sterbcow) Was that a legitimate
I'm sorry, it certainly was in some -- in some
effects that the oil and the toxicity caused by the oil and the dispersants has had on the oyster, the shrimp, the crab, and fishing industries in South Louisiana,
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Mississippi, and Alabama? A. Well, I -MR. WEBB: A. evidence. Q. (By Mr. Sterbcow) Have you seen documented Objection, form.
-- well, I haven't seen the documented
evidence of exactly where this oil has been seen to have gone? A. Well -- well -- well, I had seen documented
evidence up until the time I was no longer involved. Q. A. Which would be late July? So late July, early August. And at that
point, I was no longer involved. Q. Would you agree with me that oil having
reached the shoreline polluted the beaches and the marshes and done the damage to the wildlife and fisheries that have been documented, indicate that BP, in fact, was not capable of responding to 160,000 barrels a day on the surface? MR. WEBB: Objection, form. Object as to form.
MR. GODFREY: A.
I -- I think the issue is that the Oil Spill
Response Plan, which was approved by the authorities, made no guarantees that oil would not reach the shore. That -- that may be what people have -- could have
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expected, but it -- it did not make any guarantees. And, in fact, that was the basis for all Oil Response Spill Plans, in the Gulf of Mexico and elsewhere. Q. (By Mr. Sterbcow) Did the BP Exploration Plan
specifically tell the authorities that, because this well was 48 miles offshore, that it was highly unlikely that oil would ever reach the beaches, and it was not a concern? MR. WEBB: A. Objection, form.
No, I don't know. MR. GODFREY: Same objection.
A.
I honestly can't remember what it -- precisely
what was said in the Oil Spill Response Plan. Q. (By Mr. Sterbcow) So you don't know if that
language is in there one way or the other? A. Q. No. At the end of the day, as of the time that you
left the company, what were you told by BP Officials was the daily oil flow rate? A. There were -MR. GODFREY: re-read that? Q. it easy. Objection. Could you I'm sorry.
I didn't hear the question.
(By Mr. Sterbcow) And I'll rephrase it, make As of the time that you left --
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A. Q.
M-h'm. -- what was your understanding and what had
you been told by BP Officials as to what the oil -daily oil flow rate was at Macondo? A. Well, there was -MR. GODFREY: A. Objection as to form.
-- there wasn't a BP view of the flow rate.
From quite early in this accident, the Flow Rate Technical Group, the Government body, was established, and they assumed responsibility and accountability for estimates of flow rate. passed to them. flow. But the fact is the flow rate was actually not in any way important in determining how we responded. We responded with everything we could conceive of, from the very beginning. And it -- the flow rate was never So there was information being
I wasn't part of that information
something that I spent very much time on, because we were trying to stop the well. And, you know, we were And, of course,
deploying multiple interventions.
ultimately, we succeeded in stopping the well, well ahead of when the relief wells would have been done. Q. How long did it take -- well, first, back up? Let me back up and ask you this: Who designed
the ultimate capping stack device that worked?
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A. Q. A. Q.
Richard Lynch's team. So that was BP? With input from many people. How long did it take Mr. Lynch's team with
input from third parties to design and build that piece of equipment? A. Well, it was finally deployed, I think,
something between 80 and 90 days after the spill started. Q. So from the time that the spill started -- and
I -- and -- and let me make sure I'm clear, prior to this spill BP made no effort to design such a device, correct? A. That's correct, because we believed that the
blowout preventer would mitigate such a need for it. Q. Okay. From the time that it became apparent
within a day or two of the spill that such a device would be needed, it took approximately how long? A. It was, I think, of the order of 85 to 90 days
from the spill to when we finally stopped the well. Q. A. Q. And how much did it cost? I have no idea. Cost was never an issue.
Do you have -- well, I think you may have
answered my question. Was there no effort to design, build, and have
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available such a device prior to April 20, 2010, because BP assumed that the blowout preventer at Macondo and every other place where BP was drilling a deepwater well in the Gulf would, in fact, prevent an accident like this? MR. GODFREY: A. Objection, form. We
Along with every one else in the industry.
believed in the even of a blowout, the blowout preventer, as it name -- the name implies, would stop the blowout. Q. (By Mr. Sterbcow) Let me show you -MR. STERBCOW: MR. BONNER: MR. GODWIN: MR. STERBCOW: MR. GODWIN: Let's go to 3, Billy. (Tendering.) Did you say Tab 5? Tab 3. Thank you.
(Exhibit No. 6029 marked.) MR. GODFREY: MR. STERBCOW: Which one are we on? THE COURT REPORTER: MR. STERBCOW: Q. 6029. 6029. What exhibit is this? This is -- I don't know.
(By Mr. Sterbcow) The top one -- actually you
have to read from the from the bottom, is an E-mail from Scherie Douglas to Marty Rinaudo, Friday, December
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8, 2006, where they're talking about a different well in the Gulf of Mexico. And the reference specifically
is to a 13-day extension that this rig needed for its thirteen and five-eighth inch casing test. And it
specifically references a 13-day shutdown during those days repairing a failed ram on a BOP stack. I take it in your position this is not the type of event that you would be familiar with, correct? A. Q. I'm afraid not. No, I'm sorry.
Who within -- within BP's Drilling and
Completions Division in Houston in 2006 kept track or a record of events like failed rams on B -- BOP stacks in the Gulf? A. Q. A. didn't. Q. Okay. If you flip to the next one, which is I don't know. Do you know if anybody did? I don't know for a fact whether anyone did or
MBI 37507 and 37508, and you have to read from 08 forward because it's an E-mail chain. This is from
Kevin Lacy, who was basically in charge of safety in Drilling and Completions Gulf of Mexico at this point, updating Transocean performance, and he's asking those below him with BP whether they have -- want to flag any significant issues with Transocean's performance.
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And the response is the current well, Cortez Bank, had top quartile performance, however there is evidence that there were BOP ram failures on the Cortez Bank. First of all, I'm assuming you have no reason whatsoever to disagree with Mr. Sims' response to Mr. Little, all of whom are in Drilling and Completions in the Gulf of Mexico, the Transocean Horizon performance remained excellent. reason -A. I -Q. A. Q. Were you --- have no memory. -- informed either directly or indirectly at I've -- I've obviously not seen this before. You have no -- no
any time while the DEEPWATER HORIZON was spending ten years drilling for BOP in deepwater Gulf of Mexico that there was a problem with the qualifications or performance of the Transocean DEEPWATER HORIZON rig crew? MR. GODFREY: A. Q. Objection as to form.
I wasn't informed of that. (By Mr. Sterbcow) Do you have any reason, as
you sit here today, to think that they were undertrained, underqualified, or in any way incompetent
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in doing their jobs in drilling deepwater wells in the Gulf of Mexico for BP? MR. WEBB: A. Objection, form.
I think if you look at the results of the Bly
investigation it raises serious issues with a whole number of companies, BP, Transocean, and Halliburton -MR. GODWIN: A. Objection, form.
-- and some of those are to do with That's what the Bly
potentially training. investigation found.
MR. GODWIN: Q. A.
Objection, form.
(By Mr. Sterbcow) So would -I have no prior knowledge. MR. ROBERTS: Objection, form.
Q. ask you. A.
(By Mr. Sterbcow) That's what I was going to
All I'm basing it on is what I've read in the
Bly Report. Q. A. Q. In the Bly Report? Yeah. Okay. You have no other source of
information -A. I have no other source of information, no
prior knowledge. Q. All right. The E-mail above Mr. Sims' E-mail
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is Little E-mailing back to Sims:
"I guess at this
stage we don't want to raise any flags around BOP ram failures?" And then at the top, Sims tells Little: I
"My inclination is not say anything at this time. can't point to anything that TOI has done wrong to cause the failures. Also, we drove the decision to
install test rams and put ourselves in this position of having to pull the stack if one ram fails." Would you agree with me that BOP through Mr. Sims Drilling and Completions Gulf of Mexico admits to, number one, Transocean not causing or contributing to any BOP problems and, two, BO -- BP is the one who drove the test ram decision and decreased the ability of the brow -- blowout preventer to prevent a blowout? MR. WEBB: Objection to the form of the
question for several reasons. MR. GODFREY: A. Object to the form.
That is what this E-mail out of context But I'm going to say, I didn't -- I'm
appears to say.
not in a position based on a one-line E-mail to make a judgment one way or the other. I'm sorry. Three minutes.
THE COURT REPORTER: Q. a break.
(By Mr. Sterbcow) Last E-mail, and we'll take This one is March 22nd, 2010, from Mr. Peijs Do you have that E-mail?
one month before Macondo.
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A.
Yeah.
I found it, yeah. MR. GODWIN: MR. STERBCOW: What Tab is that, Paul? It's still Tab No. 3.
It's Bates 4792. Q. (By Mr. Sterbcow) It talks about Macondo
actually sidetracking at 13,305 depth after taking a kick. Then just below that, it talks about the Tucker
Well, set thirteen five-eighths casing at 24,160 feet. "BOP failed; pulled riser and BOP stack to fix." Would you consider this a fail-safe piece of equipment? MR. WEBB: A. Objection, form.
I think there is no basis to assess one way or
the other based on one line in an E-mail which talks about BOP failed, whether it is or isn't. Q. (By Mr. Sterbcow) So from these E-mails, you
wouldn't even -- it would not even raise a concern to you that maybe the fail-safe last line of defense to a disaster like this one may have an issue with ongoing failure problems? MR. WEBB: A. Objection, form.
We know nothing about what failure they're Is it fundamental? I don't know. Is it -- I mean,
referring to. what is it? Q.
I don't know.
(By Mr. Sterbcow) So you just --
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A.
So -- so in the event that it was shown to me,
I would probably make some inquiries, but, you know, I'm not in a position to make that sort of judgment based on this. Q. Can you at least conclude that this piece of
equipment is not fail-safe? MR. WEBB: Objection, form. Objection.
MR. GODFREY: A. Q. A.
I don't think you can conclude that, no. (By Mr. Sterbcow) Why is that? Well, because in many fail-safe pie -- pieces
of equipment, there are, you know, ongoing tests that demonstrate you need to make an intervention to -- you know, to reaffirm its -- its worthiness, its robustness. So I -- you know, I don't think that this
here can lead us to a conclusion that a BOP is not a fail-safe piece of equipment. designed to be. Q. It is designed to be a fail-safe piece of That's what it's clearly
equipment as long as it is designed to handle the environment it's in and the folks who are repairing, maintaining, and inspecting it or doing their jobs and the folks who are operating it are doing their job? A. That's right. MR. WEBB: Objection, form.
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MR. GODFREY: Q. A.
Objection, form.
(By Mr. Sterbcow) Is that correct? That's correct. And as I -- as I understand
it, this was a Transocean blowout preventer on a Transocean drilling rig where the responsibility for maintaining the equipment was clearly with Transocean. Q. And so we'll take a break. We'll leave it at
that for now. Your understanding, then, as the former CEO of BP is that maintenance, repair, and operation of the -of the blowout preventer at the Macondo Well, either by practice in the industry, practice by BP, or pursuant to Federal law governing this operation is solely the responsibility of Transocean? MR. WEBB: Objection, form. Objection, form. I do
MR. GODFREY: A.
I didn't say solely responsibility.
believe, though, that we expect that under drilling contracts to have an operating piece of equipment called a blowout preventer. MR. STERBCOW: a break now. THE VIDEOGRAPHER: 3:24 p.m., ending Tape 5. (Recess from 3:24 p.m. to 3:41 p.m.) Off the record at Well, let's -- we'll take
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(Exhibit No. 6030 marked.) MR. GODFREY: Ready. On the record at
THE VIDEOGRAPHER: 3:41 p.m., beginning Tape 6. Q. Tab 6. (By Mr. Sterbcow) Okay. Let's see here.
We're going to go to
And it's 60 -6030.
THE COURT REPORTER: MR. STERBCOW: MR. WEBB: Q.
Here you go, Dan.
Thank you.
(By Mr. Sterbcow) Dr. Hayward, this is an --
an E-mail dated March 6, 2010, about six weeks before the HORIZON, from Tim Burns to David Sims and Keith Daigle, both of whom with D&C in -A. Q. M-h'm. -- Houston, referencing the MAERSK DEVELOPER.
First of all, just generally, are you -- are you familiar with the MAERSK DEVELOPER? A. Q. A. Q. No. Okay. I -- I -- I haven't seen this -There's a picture of it on the second page.
It's a drillship fairly similar to DEEPWATER HORIZON, but it operated in the Gulf of Mexico. And the team in
Houston was compelled to put together a PowerPoint presentation regarding "Subsea BOP Failures" associated
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with this particular rig.
And if you go to the third
page, which is Bates 1879, under "Introduction," it talks about "The..Developer commenced contract on 10 September '09," and in the ensuing -- December -- about four months or so, it had developed "more than 50 days of downtime related to the BOP." Many were prob --
problems that "required stack pull." And the problems including -- included a number of things, choke stab leaking, electrical short on the control, and cap screw failure on the 22-inch blind shear ram operators. The "1st attempt," if you go to the next page, "found older revision software on the drillers chair" for the EDS, which "resulted in an incorrect sequence of the EDS." First of all, I assume in your position, you would have no knowledge of any of these issues, correct? A. Q. I'm afraid not, no. Do you know whether anybody in Houston in
Management of Drilling and Completions, beyond preparing a PowerPoint and discussing it, actually took any affirmative steps to investigate the performance of this BOP and any design problems that may have existed? MR. WEBB: Object to form.
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A.
Well, I -- I don't know anything about this.
This is the first time I've seen it, and I have no idea what -- what was done with this presentation. Q. (By Mr. Sterbcow) If you go to, let's see,
Bates Stamp 1886, you'll see that there were problems involving erroneous readings at 5,000 feet water depth, with blo -- both the blue and yellow pods when running the BOP -- pieces of the BOP that were specifically cited by the Bly Report. A. Q. M-h'm, I do. Are you aware of any ongoing problems with the Do you recall that?
blue and yellow pods on BOPs utilized by BP in deepwater drilling 5,000 feet in the Gulf of Mexico? MR. GODFREY: A. Q. Objection as to form.
No, I was not aware of any. (By Mr. Sterbcow) And you were never made
aware of any such issue? A. Q. No. All right. If you go to Bates 1896 of the
same PowerPoint, entitled "Failsafe Close Assist Circuit Failure," it says, "Several leaks have been encountered with the failsafe close assist circuit. Swagelock fittings have failed on two different occasions and pressure relief valves have failed." Do you think it's a misnomer to label this
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bi -- this piece of equipment or any component part "fail-safe"? MR. GODFREY: A. Objection as to form. I
I'm -- I'm not able to make that judgment.
mean, it said -- encountered with the "Failsafe Close Assist Circuit." I don't know what the "Failsafe Close
Assist Circuit" is, so -Q. (By Mr. Sterbcow) But have you, since Macondo,
ever gone back and questioned BP's decision to consider this a fail-safe piece of equipment when it's mechanical equipment dependent on so many factors to work properly? A. I -- I think -- I haven't, but I think that
the industry generally is -- has looked at the nature of BOPs and their reliability. case. Q. A. Q. A. Do you know if BP specifically has done -I --- anything in that regard? I certainly know that it was started, and I I know that to be the
have no idea what happened to it after I left. Q. You a -- you concur that that's something that
absolutely needs to be done in deepwater drilling? A. Q. I do. If you go to 1898, Bates 1898, there was a
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"major fluid run away."
A "leak was discovered to be Let me ask you: Do
coming from the blind shear ram."
you know what the blind shear ram is designed to do in the BOP? A. Yeah. It's designed to cut the drill pipe in
the event of a blowout. Q. Would you agree with me that of all the BOP
components, the blind shear ram is the most critical well control blowout prevention device? MR. WEBB: Objection to form. Object as to form.
MR. GODFREY: A.
In the event of a well blowing out, the blind
shear ram is the most important piece of kit to stop it blowing out. Q. (By Mr. Sterbcow) Okay. And -- and do you --
are you aware of whether or not engaging the blind shear ram also engages other protective devices, like the emergency disconnect automatic function mode, things of that nature? A. My understanding is it is the engage --
engaging the ESD that activates the blind shear ram. Q. A. Q. A. Okay. Not the other way around. And not the other way around. Right.
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Q.
And -- and you know from, obviously,
experience in looking into the Macondo incident that the ESD and blind shear rams on the BOP there failed? A. Q. Correct. All right. Wa -- had anybody made you aware,
or anybody within BP aware, to your knowledge, that the cap screws from the blind shear rams on this BOP were manufactured from a type of stainless steel that was subject to hydrogen embrittlement in marine environments? MR. GODFREY: A. analysis. Q. (By Mr. Sterbcow) Do you know whether or not Objection as to form.
I wasn't aware of anything of this BOP
the BOPs being used by BP in the Gulf of Mexico were vulnerable to hydrogen embrittlement in the blind shear ram component? MR. GODFREY: A. Q. of that? A. Q. I have no knowledge. All right. If we go to Tab 7 -No. (By Mr. Sterbcow) You don't have any knowledge Objection as to form.
(Exhibit No. 6031 marked.) THE COURT REPORTER: 6031.
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MR. STERBCOW: MR. GODFREY: THE WITNESS: Q.
Sorry (Tendering.) Thank you. Thank you.
(By Mr. Sterbcow) -- a Sunday, April 4, 2010 Again, we
E-mail, 16 days before the Macondo incident.
go back to the Tucker Well that we discussed earlier. If you go down one, two, three, four, five, six, seven to "Day 199" of drilling, "March 29, 2010: 1777...tested failsafe valves - failed." the BOP and riser to repair..." "Day 198: Run BOP to 202 feet and test choke Pull BOP to repair Ran BOP to Had to "pull
and kill in boost lines - failed. blue conduit line."
Knowing that you've never seen this before, seeing these E-mails and hearing this information now, does it lead you to question BP's reliance on this piece of equipment the way it did? MR. WEBB: A. Q. A. Objection, form.
I don't think so, no. (By Mr. Sterbcow) And why is that? Well, what -- what they seem to be doing is
testing to ensure that they're working, and when they aren't working, they're intervening. And they're not
ac -- they're not deploying them until they -- they're confident that they're working.
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Q.
And you noticed the E-mails are written by BP
representatives and to BP employees who are intimately involved in both the testing and response thereto? A. This is the -- I think this is the BP Drilling
Report, isn't it, right? Q. A. Q. Correct. Correct.
Which is -- is a Drilling Report. So BP has knowledge on an ongoing basis of --
of -- of blowout preventer testing, failure of fail-safe valves, et cetera, and efforts or lack thereof to address these issues -MR. GODFREY: Q. Same objection --
(By Mr. Sterbcow) -- based on these reports? MR. GODFREY: Objection as to form.
A.
Certainly has knowledge of the status of the
blowout preventer. Q. A. And would you -In this -- in the -- in the instance we're
talking about here. Q. Would you have any reason to believe that the
Tucker blowout preventer reporting would be any different than any other deepwater well in the Gulf of Mexico? A. Q. No. So would it be fair to conclude that whether
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we're talking about Tucker, Kaskida, Macondo, whatever the deepwater well may be with BP as lessee, BP is involved regularly in testing, test results, maintenance, followup, to ensure that the BOPs are functioning properly? A. I think we're involved -MR. GODFREY: A. Objection as to form. The
-- ensuring that tests are conducted.
people performing the tests, I'm certain, are the drilling contractors' operatives on the rig. Q. (By Mr. Sterbcow) And do you think BP had any
responsibility, given its position that the BOP was the last line of defense, to follow up to ensure that any maintenance and repair that needed to be done, got done? A. You can say -MR. GODFREY: A. Objection as to form.
-- that in this case, there is -- we are, and
I'm certain that that's the case. Q. (By Mr. Sterbcow) Do you have any reason to
believe that the BP Well Team Leaders, Well Site Leaders, ensured that regular maintenance and testing was done on the BOP at Macondo? they did -A. I don't know. Do you know whether
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Q. A. Q.
-- one way or the other? I don't know. Did you learn at some point following this
accident that this particular BOP was out of certification? A. Have you ever heard that?
I -- I was made a -- aware of that in the
course of the investigation. Q. Were you made aware of the fact that BP was
aware of the fact that it was out of certification? MR. GODFREY: A. Objection as to form.
I honestly can't recall that I was made aware
of the fact that we were aware of the fact that it was out of -Q. A. Q. (By Mr. Sterbcow) Okay. -- certification. Do you know whether BP either knew -- or
should they have known -- should the company have known, those involved, that the blowout preventer being relied on as the fail-safe, last line of defense at Macondo was out of certification as of the night of the blowout? MR. WEBB: Form. Objection as to form.
MR. GODFREY: A.
We -- we probably should have known, and we --
we -- I would have hoped that the contractor would have
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known and done something about it. Q. (By Mr. Sterbcow) Did BP have any process in
place at that point in time, to your knowledge, through OMS, the predecessor to OMS, whereby BP ensured that its blowout preventers being relied upon as the last line of defense, fail-safe, last line of defense, were in certification, and if they weren't, such a problem was addressed immediately? A. I don't know. MR. GODFREY: Q. Objection as to form.
(By Mr. Sterbcow) You don't know one way or
the other? A. Q. I don't know. If you turn to the next page in this same Tab,
it should be a June 11, 2010 letter, and it's Bates-stamped 459, 460, addressed to the Honorable Jeff Bingaman, Chairman, Committee on Natural -- on Energy and Natural Resources. And the letter is written on
behalf of BP in response to a May 17, 2010 correspondence to Mr. Lamar McKay. If you go to the next page, Page 460, it confirms what we've been talking about under Subsection (d). "This data for the Deepwater" -- referencing This data for
"Blowout Preventer Digital Test Data.
the Deepwater Horizon was provided electronically to BP
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by the contractor." Again, you have no reason to disagree with that, do you? A. Q. No. Okay. And, again, you have no knowledge of
any process, safety process, whatever name we're going to call it, that BP had in place to ensure that any problems noted in the data for the DEEPWATER HORIZON provided electronically to BP were addressed to ensure that the -- that the blowout preventer functioned properly? A. You don't know? I've got no knowledge of what processes may or
may not exist. Q. Okay. If you would turn to -- it's Page 11 of No. 14
the letter, and it's Page 469, Bates stamp 469. of the inquiry was:
"Testimony was received to the
effect that the shear ram of the blowout preventer was known to be unable to cut through certain material in the well, including tool joints and possibly other debris." And in response on behalf of Mr. McKay, it is written: "The 5-1/2 drillpipe tube that was across the
BOP stack was capable of being sheared and sealed by the blind shear rams. It is known that the blind shear
ram cannot shear the tool joint of the 5-1/2 inch
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drillpipe..." Further down in that paragraph, it says: "There are no other mechanisms available on the BOP stack for the Deepwater Horizon that would shear the drillpipe tool joint." Were you aware of that fact before the accident? A. Q. No. Were you aware of the fact that a high
pressure, high temperature well like Macondo could indeed push drill pipe back up through the BOP in event of a loss of well control? A. Q. In the event of a loss of well control, yes. Were you aware of the fact that if that
occurred and in fact did occur here, that a tool joint otherwise kept clear of the blind shear ram could be forced into the level of the blind shear ram? MR. WEBB: question. A. Q. No, I wasn't aware of that. (By Mr. Sterbcow) All right. Would you agree Objection, form of the
with me that if that foreseeable event occurred and in fact did occur here, that would prevent an otherwise well maintained, in repair, certified blowout preventer from operating as the ultimate fail-safe and sealing
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the well? MR. WEBB: question. MR. GODFREY: the question. A. or not. Q. A. What I don't know is whether that was the case I -(By Mr. Sterbcow) Here. I'm not -- I'm not aware as to whether or not Objection to the form of Objection to the form of the
it was the tool joint across the blind shear ram that prevented the blind shear ram closing. My
understanding from a cursory look at the Presidential Commission is that -- is that is not what was found. don't know. Q. Did you know before April 20th, 2010, that the I
foreseeable possibility existed that a tool joint could be forced back up to the level of the blind shear ram and, therefore, prevent it from operating and sealing a well that was undergoing -A. No. MR. WEBB: Q. Object --
(By Mr. Sterbcow) -- a well control event in
the Gulf of Mexico? MR. WEBB: Objection to form. Objection, form.
MR. GODFREY:
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A. Q. A. Q.
I didn't. (By Mr. Sterbcow) You did not know? I wasn't aware of that, no. Do you know if anybody within BP knew that? MR. WEBB: Same objection.
A. Q. Tab 8 --
I -- I have no idea. (By Mr. Sterbcow) All right. If we go to
MR. BONNER:
(Tendering.)
(Exhibit No. 6032 marked.) Q. (By Mr. Sterbcow) (Tendering.) MR. WEBB: Thanks. Rick. Thank you.
MR. STERBCOW: MR. GODFREY: Q.
(By Mr. Sterbcow) Tendering 6032, did you know
that RB Falcon, in conjunction with BP, commissioned in 2001 a study specifically called DEEPWATER HORIZON BOP Assurance Analysis? A. Q. A. No. I've not seen this document.
Before now? Before now. I wasn't aware of its existence
or of this study. Q. If you could turn, it would be at the top page It's the "EXECUTIVE
iii, but it's Bates stamp 53052. SUMMARY" --
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A. Q.
M-h'm. -- of what is otherwise a lengthy study. We
won't go through the whole thing. point says:
But the third bullet
"A risk assessment focused on reliability Engineering and operations personnel
was completed.
from RB Falcon, BP, Cameron, TSF and WEST identified 260 failure modes that could require pulling of the BOP or LMRP. It was found that malfunctions of regulators,
solenoids, hoses, ST Locks, connectors, shuttle valves and autoshear circuitry were the predominant failures." Were you aware of the fact that as of 2001, BP knew of at least 260 failure modes of the fail-safe BOP aboard the DEEPWATER HORIZON? MR. GODFREY: A. No. Objection to form.
I think to be precise what this says is
it identified 260 failure modes that could require pulling of the BOP. Q. that? A. Q. I wasn't aware of it. All right. Again, does that call into (By Mr. Sterbcow) Correct. Were you aware of
question BOPs reliance on this particular B -- excuse me, BP's reliance on this particular blowout preventer because this is specific to the DEEPWATER HORIZON, which at this time was a year old versus 10 years old,
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does that call into question BP's reliance on this piece of equipment as the final fail-safe prevention of an accident like the one you had on April 20, 2010? MR. GODFREY: A. Objection to form.
I can't judge on the basis of this whether
that's a -- an appropriate conclusion to draw or not. What is clear is that everyone else in the industry relied on the blowout preventers as the ultimate form of containment in the event of a blowout, and the industry has done that for 50 or 60 years. Q. (By Mr. Sterbcow) Did anyone else in the
industry, to your knowledge, have the history of criminal convictions and OSHA violations that BP had in 2010? MR. WEBB: question. A. I'm not aware of all of the history of the Objection, form of the
industry, but what I am aware of is that the history of BP's drilling in -- in the deepwater Gulf of Mexico was it was deemed by the Regulators to be amongst the very best, in terms of its -MR. GODWIN: A. Object to form.
-- safety performance. MR. GODWIN: Object to form.
Q.
(By Mr. Sterbcow) And that deeming of being
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the best would be specifically dependent upon information provided to the Regulators by BP, would it not? MR. WEBB: A. Objection, form.
I believe it was based on information provided
and on visits from the Regulator to our facilities. Q. fact? A. Q. A. "I believe" I said. Okay. I see. I believe that's (By Mr. Sterbcow) Do you know that to be a
I don't know it for a fact.
what it was based. Q. Would you agree with me that Regulators,
accepting Exploration plans, accepting dispensations, accepting requests for changes from BP in a deepwater drilling situation, are relying on the operator such as BP to provide truthful and accurate information in making their decisions? MR. WEBB: A. Objection, form.
I'm certain that in all cases, BP provided
truthful and accurate information. Q. (By Mr. Sterbcow) So is it your testimony that
the 52-page Exploration plan provided to the MMS for the Macondo Well was true -- was truthful and accurate, not only in all respects generally, but specifically
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with respect to spill response information? MR. WEBB: question. A. As to the best of my knowledge, what was in Objection, form of the
that re -- that report was accurate. Q. A. (By Mr. Sterbcow) Have you read it? I certainly haven't read it prior to the -I read parts of it immediately following
the accident. the accident. Q.
Who with BP, if anyone, was charged the
respon -- with the responsibility of keeping up with developments in terms of state-of-the-art design and manufacture of blowout preventers? A. Q. I don't know. Do you know if anybody within the Gulf of
Mexico, be it D&C or Exploration & Production, was anybody working in Houston with respect to -- to deepwater exploration, production, drilling completion activity, did anyone have any responsibility that focused on knowing and possibly implementing state-of-the-art changes and improvements in blowout preventers in the Gulf of Mexico? A. Q. I'm not aware of who that would be. Do you know whether or not there was any
periodic review required of blowout preventers in terms
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of age and history of performance by BP for blowout preventers in use in deepwater drilling in the Gulf of Mexico? A. Q. I'm not aware of that. Would the OMS that had not yet been
implemented have required such procedures, do you know? A. done. Q. I don't know. I don't know. All right. I don't -- I don't recall if you It's conceivable it might have
were asked this, but do you know why the OMS didn't make it in terms of implementation to the Gulf by April 2010? MR. GODFREY: A. Objection to the form. To
It wasn't a case of not making it.
implement a system such as that, you need to spend many months in preparation. And the Gulf of Mexico had
spent many months in preparing to move to OMS and were in the process of moving to OMS. on a light switch unfortunately. It's not like turning It's a process that
takes months, indeed years to fully implement. Q. (By Mr. Sterbcow) Have any steps been taken
since April 20th, 2010, to implement the OMS program started by you, if you know? A. I don't know. I would hope that they were.
They continued and were fully implemented, but I'm not
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aware. Q. Do you know whether or not a comprehensive
review of the blowout preventers currently in use by BP in the Gulf of Mexico has been undertaken? A. There was certainly the initiation of activity I wasn't around
of that sort, once I was still there. to see it completed. Q. A. Q.
Whether it was completed or not? No. Okay. Were you aware in your position of any
organizational changes taking place in drilling and completions in the Gulf of Mexico in late 2009 and early 2010? A. No, at the time, I was not aware. I clearly
became of them consequently after the accident. Q. And why would you have become aware of those
organizational changes? A. It was one of the things that was raised in
the course of the -- the -- the response to the accident. Q. Do you recall the Bly Report commenting on
that at all? A. Q. I don't recall. Do you know whether or not disorganization
within Drilling & Completions and a lack of both
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leadership and clear absolute delineation of duties contributed to this disaster in any way? A. anywhere. Q. Do you know whether or not any of the well I don't believe I've seen that written
team or well site leaders were questioning what authority they had and didn't have with respect to operations at Macondo? MR. GODFREY: A. Objection as to form.
I believe in the course of the Congressional That's
Hearing I was shown an E-mail to that extent. the extent of my knowledge. Q.
(By Mr. Sterbcow) You don't have any -- any
further knowledge -A. Q. A. Q. No. -- beyond that? No. Do you have any knowledge of exactly how Gulf
of Mexico Engineering on one side and Operations on the other side was undergoing changes and reorganization specifically? A. Q. I have no detailed knowledge at all. Do you know who was in charge of that,
overseeing those changes? A. I believe that the Head of Drilling &
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Completions at the time was Pat O'Bryan.
I don't know
whether he was overseeing those changes or not, but I think that was the name. Q. Do you know whether those changes were being
made pursuant to the OMS implementation effort? A. linkage. Q. I -- I assume you've heard that Mr. O'Bryan I don't know whether there was a direct
was actually on the rig? A. Q. A. Indeed. Have you spoken to him about that? I -- I spoke to him, not so much about being
on the rig at the time of the accident, but, obviously, he was intimately involved in the response and was part of the response. I periodically met him on the third
floor of the Crisis Center in Houston. Q. Okay. He -- he has never told you about what
he heard, what he saw, conversations he had, et cetera, on the rig that night? A. Q. A. Q. He hasn't, no. All right. We never talked about it. Speaking of -- of -- I want -- you -- you The
raise a point I wanted to touch with you briefly. Operations Center in Houston, do you know what the
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realtime Operating Center capability was in terms of BP's ability to monitor realtime data from the DEEPWATER HORIZON as of April 2010? A. Q. No, I don't. Are you familiar with the facility at all, the
West Lake facility, in terms of how it was set up? A. I -- I -- well, I -- I became very familiar
with it in the course of the crisis response, so I -- I saw it operating in crisis mode, rather than being familiar with the details of it in normal operation mode. Q. In your opinion, should realtime data from
Macondo, and any other deepwater well in the Gulf of Mexico being drilled on BP's behalf, should that data have been monitored 24 hours a day, seven days a week? MR. WEBB: Objection to form. Objection to form.
MR. GODFREY: A.
I don't know that I could pass a judgment Well, there were,
whether it should or it shouldn't.
of course, at least two sets of eyes monitor -monitoring the data on the rig. Q. A. know. Q. In terms of policy and procedure, we've talked (By Mr. Sterbcow) Right. So could it have made a difference, I don't
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about industry-wide practice.
Do you know what the
industry practice was in terms of monitoring realtime rig data in deepwater Gulf of Mexico drilling activities? A. I think the industry is in -- in a point of
transition, whereby some companies are and some companies are not monitoring real time. Q. Did -- did BP, to your knowledge, prior to
this blowout, ever tout itself as a Leader in realtime Operating Center technology? A. Q. A. Q. In some locations, yes. Would Houston have been one of them? I don't recall. Possibly.
Do you feel like the realtime Operating Center
technology in Houston was sufficient to adequately monitor the Macondo Well? MR. GODFREY: MR. WEBB: A. Objection, form.
Objection to form.
I don't have a basis to take a view of that.
I just don't. Q. (By Mr. Sterbcow) Do you know -- you have any
reason or do you know of any reason why the Macondo Well would not have been monitored on the critical well list as other ongoing deepwater wells in the Gulf of Mexico?
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MR. GODFREY: A. Q. I don't know.
Objection to form.
(By Mr. Sterbcow) Do you know whether or not
the Macondo Well was even monitored in the same room as other deepwater wells in the Gulf of Mexico? A. Q. A. No, I don't. Or who would have been monitoring or how long? I don't know how it was being monitored, who
monitored it -Q. A. Q. Okay. -- for how long it was monitored. Who would -- if you know, who with Gulf of
Mexico deepwater Drilling & Completions would have been ultimately responsible for overseeing realtime Operating Center -A. Q. A. Q. I don't know. -- monitoring? I don't know. All right. There's -- it's not a job position
you would know of? A. Q. No. Do you know if the OMS that was in the process
of being implemented had any provision for upgrading or changing in any way realtime Operating senator -Center monitoring?
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A. Q.
I don't. All right. Let's go to Tab 10. (Tendering.) Yes. This -- well, this
MR. BONNER: MR. STERBCOW:
was previously marked, I found, but you can go ahead and put a sticker on it. It's 1166, but I don't have a We can let it
copy with the stickers already on it. go, you can let it go, that's fine. Q.
(By Mr. Sterbcow) This is previous 1166. MR. GODFREY: MR. STERBCOW: Thank you. You're welcome.
Q.
(By Mr. Sterbcow) This is a copy of a Report
done for the Mineral Management Service, March of 2003, by West Engineering Services. Do you know whether or
not West Engineering Services has had an ongoing relationship with BP in terms of providing Engineering evaluations over time for deepwater drilling activities? A. I've never heard of West Engineering Services,
and I have no idea what they do or -Q. A. Okay. All right. We'll wait --
-- whether we have a rela -- BP has a
relationship with them or not. Q. Okay. If you turn just past the cover page,
if you turn to Page 1.
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MR. GODFREY: Q.
What page?
(By Mr. Sterbcow) It -- well, it's actually --
it's a page -- there's no number on it, it's -- it's a letter from -- to Mr. Bill Hauser. MR. GODFREY: Q. I see, thank you. Mineral Management
(By Mr. Sterbcow) Sorry.
Services from Raleigh Williamson, Professional Engineer. is: And what -- what Mr. Williamson tells him
"Based on your previous comments we have prepared
the final report for the research project "Evaluation of Secondary Intervention Methods in Well Control" as required by the contract for your review." Do you know if anyone within BP Gulf of Mexico, either Exploration and Production or Drilling & Completions, ever saw this Report prior to -A. Q. A. Q. No idea. No idea.
And you've already told me you didn't. I have no idea. Okay. At the bottom of the -- of the ensuing
pages you'll see the page numbers, and I wanted to go to Page 20 of 85. Under 4.2, West concludes for the
MMS, "The ultimate success of the secondary intervention system is completely dependent upon the ability of the shear ram to shear the drill pipe...under the specific well conditions experienced."
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Did BP, to your knowledge, take the specific well conditions experienced at the time of a given well control event, when it determined the ability of the shear ram to shear drill pipe in a deepwater blowout situation? A. Q. I don't know. If you go to the next page, it sites: "New
MMS regulation" as of 2003 "30 CFR Part 250.416(e) requires the lessee" -- in this case BP -- "to provide information that shows that the blind-shear or shear rams installed in the BOP stack (both surface and subsea) are capable of shearing the drill pipe in the hole under maximum anticipated surface pressures." First question: Regulation at all? A. Q. No. Do you know whether or not anyone with BP Were you aware of that
confirmed that this blowout preventer at Macondo complied with this Regulation? A. Q. I don't. Do you know whether or not anyone at BP
calculated maximum anticipated surface pressures for the Macondo Well? A. Q. I don't. So if -- if they did --
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A. Q. A.
I knew nothing about the Macondo Well. Okay. Other than it was an exploration well prior to
the accident. Q. Well, were you notified when the Macondo team
hit pay sand? A. I was notified that we appeared to have made a That was the first I really knew of the
discovery.
Macondo Well. Q. From the time the well began till the time
that -- that you were notified that a discovery had been hit, based on what you've said you had absolutely no information on -A. Q. A. Q. A. Q. No. -- anything -No. -- pertaining to that well? No. Did you know the size of the discovery at the
time it was hit? A. Q. No, because no one did, of course. Was there any effort by BP going in through
its Geology Department to predict the size of the -A. Q. There was --- discovery?
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A.
There was a prediction it would be a
relatively modest discovery if it was successful. Q. And as of the time you left BP, do -- was
there any information within the company as to the size of that discovery? A. I think -MR. GODFREY: A. Objection as to form.
I don't believe there was any information that
in any way refined the initial estimate which was a pre -- predrill estimate. Q. (By Mr. Sterbcow) And the predrill estimate
was deemed a moderate discovery -A. Q. I think --- I thought?
Q.
And is that moderate in terms of all wells
drilled or just in terms of deepwater wells? A. It's moderate in terms of all of the wells
that BP drills.
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Q.
Was a dollar figure put on that, a potential
dollar figure, revenue of BP? A. Q. Not -- not in terms of revenue, no. Was the fact that this was a moderate well
potential taken into account by BP at any point during the effort to cap the well? And by that question, I
mean was there any consideration given to try and preserve BP's ability to go back and extract hydrocarbons from this well during the control effort? A. None. None whatsoever. What we wanted to do
was stop it. Q. A. Q. A. Q. A. Q. Okay. No discussion whatsoever by anyone?
None whatsoever, to my -Do you know whether --- knowledge. Not to your knowledge? To my knowledge. Do you know whether or not this well remains
producible today? A. The -- I don't -- the completion of the well
occurred after I left, but I -- if the program that was envisioned at the time of my leaving was implemented,
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then the well would not be producible today, the well that was drilled. Q. A. Q. And why is that? Because it's full of cement. Given that, then, then did this tragedy cost
BP a moderate sized reser -- hydrocarbon reservoir? MR. GODFREY: A. Objection, form.
You could describe it as that potentially.
But, of course, it cost the company greater more than that. You know, this -- this was never in any -- any
part of any consideration about what we might do. Q. (By Mr. Sterbcow) Are either one of the relief
wells capable of production, or are those strictly relief wells? A. Q. They're strictly relief wells. Are there any -- or were there any plans as of
the time that you left, assuming deepwater drilling would resume in the Gulf of Mexico, to try to drill into this same reservoir from a different location? A. Q. today? A. Q. A. I don't know. Okay. I'd be surprised, but I don't know. None. Do you know if they have any plans like that
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Q.
All right.
You mentioned the -- I think you
mentioned earlier in a question a response to me, the moratorium. Do you have an opinion as to whether that
moratorium was directly the result of and caused by this accident? MR. WEBB: Objection, form. Same objection.
MR. GODFREY: A.
I think it was a response by the authorities
to say, "We want to understand what has happened here before we have drilling continuing in the Gulf of Mexico." At the time and the circumstance, probably
not an unreasonable thing to have done. Q. (By Mr. Sterbcow) Do you have any reason -- or
did you have any reason in your position before you left the company to believe that the Administration had any plans whatsoever to either stop or limit or in any way involve itself in deepwater drilling activity had this not occurred? MR. GODFREY: A. Objection as to form.
I just want to make certain I've understood
the question. So the question is did the -- did the Administration have an intent to involve itself in deepwater drilling operations had this not occurred? Q. (By Mr. Sterbcow) Let me say a better
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question. A. Q. A. Q. A. Q. They were involved -They were involved? -- in deepwater -Correct. -- operations? Do you have any reason to believe that but for
this incident a moratorium on deepwater drilling would have ever taken place in the Gulf of Mexico? MR. WEBB: Objection, form. Same objection.
MR. GODFREY: A.
Well, I think it's clear that the moratorium
was put in place following this accident until the -the authorities could understand what had happened and how to ensure there was not a repeat. Q. (By Mr. Sterbcow) And do you think that
deepwater drilling in the Gulf of Mexico can be done safely and reliably despite this accident? A. Q. I do. And do you think that deepwater drilling in
the Gulf of Mexico should, in fact, continue? A. Q. A. I do. And do you -It's a very important part of America's energy
concept, as the President has recently enunciated.
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Q.
If you would, turn to Page 25 of 85. MR. WEBB: It's that one.
Q.
(By Mr. Sterbcow) Paragraph -- oh, I'm sorry. THE WITNESS: Sorry.
Q.
(By Mr. Sterbcow) It's Paragraph 4.3, called "Response time is an issue because
"Response Time."
well control events starts slowly and if handled early can be more readily controlled. Waiting too long
allows the flow rates to increase vehemently, which can wash out and damage the BOP equipment -- decreasing the likelihood to be able to close in the well." Do you agree with that statement? A. I certainly do. The whole focus of drilling
well control is to act quickly and ahead of time. Q. And were you aware of MMS Regulation 30 CFR,
250.442(c), requiring the accumulator system on the BOP meet or exceed the provisions of API RP 53, Section 13? A. Q. I was not. Do you know whether or not the accumulator
system on this BOP was sufficient to provide enough hydraulic pressure and force for this BOP to work under the pressure that it was subjected to when the well control event began? A. Q. I don't. Do you know whether or not there was any
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attempt to activate this BOP before hydrocarbons entered the BOP system itself? A. I think our understanding on reconstructing
the accident suggests that there was an attempt to activate the blowout preventer on the rig. Whether
that was done prior to or at the same time as hydrocarbons into the blowout preventer I think's unclear, certainly unclear from my understanding. Q. Okay. And did -- did the facts and
information you had that and your understanding come from the work of the Bly investigation team? A. Q. A. Q. A. Everything I say about this accident -From that? -- is predicated on the Bly Report. Okay. I don't have any independent assessment. I
clearly was not on the rig at the time.
I -- the only
basis of my assessment of what happened is the Bly Report -Q. A. All right. -- which I think to be fair has stood the test
of time and certainly was, I think, agreed to -- at least 90 percent of it was agreed to by the Presidential Commission. MR. GODWIN: Object to form.
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Q.
(By Mr. Sterbcow) Would you agree with me that
the Presidential Commission was far more critical of BP than the Bly Report was? A. I think it's fair to say that the Presidential
Commission was critical of I think what was referred to as systemic failure in management of the industry and also critical of BP. Q. Do you think that that criticism extended to a
systemic failure within BP Management, or was it just industrywide management? MR. WEBB: A. detail. Objection to the form.
I haven't read the Presidential Commission in I've read the -- large part the reports in the
press, and the reports in the press that I read referred to the industry. I think the Head of the
Presidential Commission was very clear when he said that it's not the instance of a one rogue operator or one outlier. It's an industry systemic issue. That's
what his principal conclusion was, and -Q. A. Q. (By Mr. Sterbcow) Okay. -- that's what I read in the press. And you -- you obtained that information from
the press but not sitting down and reading the entire report? A. Well, I -- I skimmed the report. I didn't go
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through it page to page.
But it seemed -- in terms of
what -- how that accident happened, it seemed to be very consistent with the findings of the Bly Report, and there was, as I said, some broader findings about the industry. MR. GODWIN: Q. Object to form.
(By Mr. Sterbcow) Do you know whether --
did -- are you aware of the fact that Fred Bartlit issued a Chief Counsel's independent, separate report following the Presidential Commission Report? A. Q. A. Q. A. Q. I didn't see that, no. So you haven't seen that at all? No. Okay. I've seen the Presidential Commission. All right. Are you content, then,
understanding you've left the company, that you have a good working -- accurate working knowledge of the facts and circumstances surrounding this accident, including all causes, from the Bly Report? A. I would say that that would be an unreasonable
statement to make on my behalf at this time, given that I have been away from this now for nine or ten months -- almost a year, in fact -- and have only taken a sort of -- I don't want to say cursory, because it's
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not cursory, but a distant in -- distant interest in how things have developed. I have not followed things
in detail since around the end of July. Q. And I'm assuming because you're -- you're now
moving on to other things, you're not going to go back and take a greater interest than you have? A. I won't, because there are many -- plenty
other people doing it, frankly, and I really have no role in doing that any more. Q. All right. Were you aware of any issue in the
industry generally, in BP specifically, with respect to the ability of the ROVs to accomplish the task of remotely operating deepwater blowout preventers? A. Well, I was not aware of any issues prior to Clearly in the light of the accident and
the accident.
having spent many days watching the -- the struggle of the ROV operators to intervene on the BOP, then it's clear that there were serious issues. Q. All right. Are you aware of any -- any
industrywide or BP effort that has been undertaken since to improve either the ability of the ROVs to operate blowout preventers in these conditions or to find an alternative method of subsea remote operation? A. The only thing I'm aware of which is something
that we implemented very shortly after the accident,
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which was to run multiple checks on the ability of an ROV to in -- intervene on a BOP during the -- during the testing protocol of the BOP. So we changed the
testing protocol of the BOP to require that ROV -- real live ROV intervention took place not only on the surface, which is where it had been done traditionally as a consequence of Regulation, I suppose -- it was -that was what the Regulation required -- but we took an additional action to ensure that the intervention could be proven to work from the seabed ahead of utilizing the BOP. Q. And -- and is that a change that BP made with
respect to its procedures? A. It's a change that we made with respect to our
procedures, and we -- we recommended to the -- what was then the MMS, now the BOEM, that that would be good industry practice. Now, I have no idea whether it was
implemented across the industry. Q. So if -- if BP's recommendation were followed,
henceforth, ROV testing, in terms of the ROV's ability to subsea operate deepwater blowout preventers, would actually be done subsea? A. yes. Q. All right. Was that a feasible change, from It would be take -- it would take a subsea,
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BP's perspective, prior to April 20, 2010? MR. WEBB: question. A. I -- I don't know. I wasn't -- you know, I'm Objection to form of the
not an ROV expert, but I -- because we could implement it post and then one has to -- a measurement could have been done pre. Q. (By Mr. Sterbcow) Was any thought given to
that prior to the accident, to your knowledge? A. Q. Not to my knowledge. Would -- is that change specifically in
response to this incident? A. It's one of the things that changed in
response to this in -- incident. Q. A. Q. And is it -I can't --- is it BP's feeling that, by doing this,
the -- BP will have a much better sense of whether or not ROVs are able to operate blowout preventers deepwater subsurface in the event of a well control problem? A. Well, I -- I think it's one of many
interventions that were made, and I'm certain are continuing to be made to improve the overall reliability and safety of the entire system.
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Q.
And is the reason that it -- to your
knowledge, the reason that it wasn't done before this accident, was simply because MMS didn't require such testing? MR. WEBB: Objection, form. Objection to the form.
MR. GODFREY: A.
I -- I don't know why it wasn't done prior to It wasn't required, as I understand,
the accident.
under MMS, and I think probably people believed that testing on the surface was sufficient. Q. (By Mr. Sterbcow) All right. If you look at
Page 40 of what's before you, 4.7.5, it spell -- it -it references NORSOK, which, to my understanding, is the Norwegian regulation equivalent of MMS; is that correct, if you know? A. Q. A. Q. I don't know, but I suspect that you're -Okay. -- probably right. In the -- under -- under this section, Special
requirement for mobile offshore drilling units No. 3, "When drilling with the" B -- "BOP system installed on the seabed, an acoustic or an alternative control system shall" be -- "in addition be installed." Do you know whether or not the DEEPWATER HORIZON BOP had an acoustic system?
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A.
I don't believe it did, and I -- I think there I think there were --
was a good reason for that.
there has -- and I -- I -- I'm -- this is from memory, so it -- it may not be completely reliable. But I believe that there was a view from the experts that, below a certain water depth, the -- the Norwegian Continental Shelf is much shallower than the Gulf of Mexico. At the depths we were operating in the Gulf of Mexico, the acoustic system was unreliable. Q. A. So if B -And none -- there were -- there were -- sorry.
There were, I -- I think examples of activation when it should not have been activated, which -- which is, in some senses more -- as dangerous as not being able to intervene using the acoustic system. Q. Okay. So -- so did BP actually obtain expert
advice and look into this issue of -- of alternative acoustic or alternative control systems prior to April 20, 2010? A. Q. I don't know. When did you -- when do you recall hearing
about the information received from experts regarding the acoustic system probably being detrimental or possibly being detrimental in deeper water?
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A.
In -- in the course of the months that
followed the accident. Q. before? A. Q. No. Do you know whether or not MMS -MR. GODFREY: Excuse me, one second. I All right. That was not an issue that came up
need to ask a question, whether we're venturing into privileged areas. You're asking about how he became
aware of certain things, and I think I need to have one second -MR. STERBCOW: MR. GODFREY: question. (Discussion off the record.) MR. GODFREY: MR. STERBCOW: MR. GODFREY: We're good. Q. (By Mr. Sterbcow) H'm -MR. GODFREY: Thank you for that. I just We're okay, then. We're good? Not a problem. All right. Okay. -- before you ask your next
wanted to avoid any un -- unnecessary interruption about in -- instructions which would prove unnecessary. MR. STERBCOW: Q. All right.
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MMS ever issued any Safety Bulletin or recommendation regarding the presence of an acoustic or an alternative control system be installed on deepwater BOPs in the Gulf of Mexico prior to this accident? A. Q. Not to my knowledge. Are you familiar with a -- something, a device Is that --
called a bi-directional test ram? A. Q. No.
How about a -- have you ever heard of a BOP Are you familiar with
having a 20,000-pound psi stack? that -A. Q. A. Q. Yes. -- capability? Yes.
Did BP ever consider installing 20,000-pound
psi stacks in deepwater in light of the pressures being encountered in the wells being drilled in the Gulf of Mexico? A. Q. I don't know. Who would have made -- considered or made such
a decision within BP? A. Q. The -- the Drilling Team. Do you -- in other words, in this case, it
would be Drilling & Completions Gulf of Mexico? A. Yeah.
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Q. or not? A. Q. stack? A. Q. A.
And you don't know whether that was considered
I -- I'm not aware. All right. Have you ever heard of a 6 cavity
No. How about a double blind shear ram device? I heard of a double blind shear ram as part of
the discussion around the BOP at the time of the accident. Q. A. Q. A. Not before? Not before and -All right. -- you know, I don't real -- really recall
exactly what it was. Q. All right. And, again, any discussion that
may have been -- that may have taken place within BP regarding inclusion of these devices in Gulf of Mexico deepwater BOPs would have gone on within the Gulf of Mexico Drilling & Completions Team? A. Q. To my knowledge, yes. And that -- those discussions and decisions
would not make their way up to you? A. Q. No. Finally, Page 41 of the West Report discusses
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Personnel Qualifications.
At the top, "When and how to
operate" a "secondary intervention system on a given vessel is critical; it goes without saying that having a system in place is of little value if key staff are not knowledgeable about how to operate it in a short timeframe." Then references MMS. MMS, as of 2003, Section
250.401(d) required the lessee, in this case, BP, "...to establish standards of training and competency of all personnel involved in oil and gas drilling operations." Do you know whether or not, as of April 20, 2010, BP had established standards of training and competence -- competency for all persons involved in oil and gas drilling operations aboard the DEEPWATER HORIZON? A. that. Q. So if, indeed, that did not occur, and I don't know that. I have no knowledge of
training and compency -- competency, as mentioned by the Bly Report, may have played a role in the failure to both detect this loss of well control and engagement of the BOP. Based on this Regulation, would you agree
with me that BP bears some responsibility for this? A. It's -- it's --
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MR. WEBB: question. A. -- it's --
MR. GODFREY: several reasons. A.
Objection to the form for
-- it's all conjecture, what you've said. So I can't
don't know what BP had or hadn't done. really comment. Q.
(By Mr. Sterbcow) Well, have you -- have you
come to the conclusion, in the way I interpret the Bly Report, that there is an issue with respect to the training and actions that night of the Transocean staff in failing to control this -A. Q. A. There was --- well? -- there was certainly -MR. WEBB: question. Go ahead. A. That is -- is undoubtedly true, that for I'll object to the form of the
whatever reason, the Drilling Team that evening failed to recognize that the well was flowing in the first instance. action. And then failed to take the appropriate I -- I can't judge whether that was a
consequence of training or what it was a consequence
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of. Q. (By Mr. Sterbcow) Do you know whether or not
the Well Site Leaders -- the BP Well Site Leaders aboard the DEEPWATER HORIZON also failed in both of those respects? MR. WEBB: A. Objection, form.
I -- I don't believe that it's the role of the
Well Site Leader to monitor the minute-to-minute flow of the well and to be taking action if it starts flowing. Q. (By Mr. Sterbcow) Do you believe -MR. GODWIN: Q. Object to form.
(By Mr. Sterbcow) Do you believe that the Well
Site Leader had any responsibility in properly interpreting a negative test and taking the appropriate responsive action? A. I think that the -MR. GODFREY: A. Objection to the form.
-- the negative pressure test was, as the Bly
Report identifies, were only interpreted by the Transocean toolpusher, the BP Well Site Leader, and the Transocean driller. And they -- at the insistence of
the BP Well Site Leader, the negative pressure test was conducted twice. Q. Both times they misinterpreted it.
(By Mr. Sterbcow) "They" meaning --
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MR. ROBERTS: Q. A.
Objection, form.
(By Mr. Sterbcow) -- both Transocean and BP -Transocean, the -- the -- the sue -- the
toolpusher, the driller, and the Well Site Leader. Q. And if the driller and toolpusher weren't
properly trained and competent to interpret of a negative -- interpret a negative test in this situation, would you agree with me that BP bears some responsibility for that under -A. Q. A. Well --- this Regulation? -- if that -MR. WEBB: question. MR. GODFREY: the question. A. If that was the -- the reason why they Objection to the form of Objection to the form of the
misinterpreted it, that could be true, but I -- I don't know that that's the case. THE COURT REPORTER: A. Two minutes.
We know -- what we know is that they I -- I don't think anyone has
misinterpreted it.
established that that was because they hadn't been trained. MR. STERBCOW: Well, two minutes. You
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know what, let's stop here, change the tape, and then I'll -- I'll -- I'll -- I'll wrap it up. 10-minute. THE VIDEOGRAPHER: 4:38 p.m., ending Tape 6. (Recess from 4:38 p.m. to 4:51 p.m.) MR. STERBCOW: MR. GODFREY: Ready. We're ready to go. All set? Off the record at Take a
THE VIDEOGRAPHER:
On the record at 4:51 p.m., beginning Tape 7. Q. (By Mr. Sterbcow) Okay. Dr. Hayward, would
you agree with me that you have made public statements to the effect that BP was indeed unprepared for this spill? A. I'd like -- I'd like to know which statements
you are referring to before I answer that question, if I can, please. Q. I've -- I've got -- well, you know what, let Have you ever read the 52 page
me do it this way:
initial Exploration Plan for Macondo? A. Q. No. Okay. Do you know whether or not, or do you
know that BP indeed asserted that it was unlikely that an accidental surface or subsurface oil spill would occur from these activities, first?
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A. Q.
I didn't know that's what it said. Did you know that BP estimated a worst case
discharge scenario of 162,000 gallons a day? A. Q. I think the number is 162,000 barrels. Barrels. I'm sorry. I'm sorry.
Did you know that BP assured the MMS that it was -- was prepared to respond to such a spill? MR. GODFREY: A. way. Objection as to form.
And we did respond in a very full and complete The fact that it wasn't immediately successful
does not say anything about the fact that we responded. Q. (By Mr. Sterbcow) Did you know that in the
plan BP named a wildlife expert by the name of Peter Lutz upon whom it would rely in terms of preserving wildlife, who had died several years before the plan was submitted? A. I didn't know that. I -- I became aware of it
in the course of not my Congressional testimony, but the testimony of my industry peers because it turned out we all had essentially the same description in our oil spill response plans, which is not a good indictment of the industry. Q. Did you know that BP listed seals and walruses
of species of concern? A. We did, along with our colleagues at Chevron
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and Exxon. Q. A. Q. A. Well, let -- does it -- does it excuse? No, it doesn't. Okay. But -- but it does point to the fact that the
industry was not -- we were not an outlier in the industry. Q. Was the entire industry -- industry grossly
negligent? MR. WEBB: Objection to the form. Objection, form.
MR. GODFREY: A.
I'm not certain that any one's demonstrated
anyone has been grossly negligent thus far. MR. GODWIN: Q. Object to form.
(By Mr. Sterbcow) In your opinion -- in your
opinion, given everything that we've learned and everything we know and everything you heard in your capacity as CEO before the time that you left the company, you have not heard anything that would indicate that either BP specifically or the deepwater Gulf of Mexico drilling industry in general engaged in grossly negligent behavior? MR. WEBB: question. MR. GODFREY: Same objection. Objection to the form of the
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A.
Well, I think -- and I'm not an American
lawyer, so the definition of "grossly negligent" is a legal term. But based on my layman's interpretation of
what grossly negligence is, I don't think there's any evidence of gross negligence on the part of the industry or BP. MR. GODWIN: Q. Object to form.
the response vessel summoned to the scene by BP at any time during the effort could recover a half a million barrels of oil a day? A. The response vessels -- well, I -- I know that
we ultimately recovered somewhere north of 850,000 barrels a day of oil, and a vast amount of oily water. So I don't -- I'm not certain I understand exactly the question. Q. Yeah. At any point in time, was the
recovery -- the response vessel capability in terms of recovering oil, did it ever reach or exceed a half million barrels a day, to your knowledge? A. day? Q. A. oil. Or a half a million barrels total? Well, we recovered 850,000 barrels total of And we recovered, I can't remember the number, Reach or exceed a half a million barrels a
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but a very large number of the same order of oily water, so it seems to me that the evidence is there. Q. Do you know how long it took those response
vessels to recover 850,000 barrels of oil? A. The 850,000 barrels of oil was recovered over
the course of the response, which took place from very soon after the accident to, I would say, I think from recollection, by -- by the 20th of July, which was five or six days after we'd stopped the flow, that there was nothing left to recover. Q. A. Q. Okay. So it was over that period of time. Do you know what that amount of oil
represented in terms of the total amount of oil that was spilled? A. Q. A. No. What percentage of oil was BP able to recover? Well, none -MR. GODFREY: A. Objection, form.
-- of us know what the total amount of oil
spilled was, so -- there were various theories, but I'm not certain that there was a -- a -- a definitive view as to what the amount of oil spilled was. And the
reason for that is, of course, it was very difficult to estimate the flow rate.
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Q.
any of the folks who were involved in the private effort, known as vessels of opportunity, have become ill as a result of their exposure to oil or hydrocarbons during the recovery effort? A. I'm aware of reports of people becoming ill.
I don't know the details, and I don't know whether it was a consequence of their involvement with the spill or not. I just don't know. I -- I've seen -- seen
press reports, essentially, of people be -- becoming ill. Q. Do you know whether or not all involved in the
private vessel of opportunity spill response were provided with the appropriate protective wear, both respiratory and clothing, to protect them from the exposure to hydrocarbons and dispersant? A. That was certainly the intent. I'm not aware
as whether there were people who were not provided with it, but that was, I believe, ab -- absolutely the intent. Q. Does BP have any study passed or is -- if not,
is BP engaging in any study currently, to your knowledge, as to the potential effects of the dispersants on the environment in the Gulf of Mexico? A. At the time when I was the CEO, we established
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a -- I can't remember the exact name, but it was, in essence, an environmental assessment fund whereby we committed $500 million to assess the impact of the spill and our response to the spill over the course of many years, and to my knowledge, that is ongoing, but I've not seen any results from it -Q. A. Q. take? A. Well, the -- the study was designed to take Do you know how long --- for obvious reasons. -- that will take, how long such a study would
many years to determine fully and completely whether there was or there was not any lasting impact. And I
think my view has always been we should allow time and science to demonstrate what the impact was. Q. Do you know whether or not BP ever tried to
exert any influence on this study to influence the outcome in any manner? A. Q. I'm not aware of that. Do you know of any internal BP E-mails or
memos wherein there was a discussion about whether or not BP could influence the activity of that research? A. I certainly haven't seen those E-mails, and I
wasn't aware of -Q. Nobody's ever brought that to your attention?
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A. Q.
No. All right. Finally, do you recall two things:
No. 1, a BBC interview where you said you -- that BP in terms of response was making it up day-to-day? remember saying anything like that? A. response. I didn't say that with respect to the I said that in respect to the extraordinary Do you
innovation that was taking place in the subsea as we optimized and changed the various capping and containment facilities. Q. A. Q. That effort we talked about before? Exactly. All right. And do you recall saying publicly
that -- that you did not -- "you" meaning BP -- did not have tools you would want to have in your tool kit? A. We certainly didn't have all of the tools that
in -- with the benefit of hindsight we could have had, yes. We didn't have a capping stack that would go We didn't have some of the
instantly into place.
things that you would ideally want. Q. And would you agree with me, that had BP
invested in that technology, that it would take -- it would have taken a relatively short period of time, given the fact that this capping stack was designed and built in less than three months, to have had such a
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stack built, in place, ready to go prior to April 20, 2010, had it wanted to do so? MR. WEBB: question. MR. GODFREY: A. again? Q. I'm sorry. Objection. Objection to the form of the
Can you just repeat the question
What exactly are you asking? (By Mr. Sterbcow) I'm asking: Do you agree
with me that BP, had it wanted to do so, could have designed, built, and had ready this same capping stack prior to April 20, 2010, had it made any effort to do so? MR. WEBB: Objection to form. Objection, form.
MR. GODFREY: A.
If we'd had the benefit of hindsight, it could
have been ready and available, but we didn't. Q. (By Mr. Sterbcow) And you didn't, if I
understand you correctly, because you thought BP had taken every step necessary and a spill of this magnitude and type had been mitigated, correct? MR. WEBB: A. Objection, form.
BP, along with the rest of the industry,
believed that the blowout preventer prevented a well blowing out, if it started to blow out, and, therefore, that we had mitigated this risk.
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Q.
(By Mr. Sterbcow) And given what we've talked
about in terms of the blowout preventer and the problems that it's fraught with, you still maintain the opinion that neither BP nor the industry as a whole was grossly negligent in coming to that conclusion prior to April 20, 2010? MR. WEBB: Objection to form. Objection, form. I don't think there's
MR. GODFREY: A. I absolutely do.
anything here that we've talked about at which points -- I'm not a -- I'm not a lawyer. It's my
layman understanding of what grossly negligent means. There's nothing in anything that we've talked about today that points to that. MR. GODWIN: MR. STERBCOW: have. THE WITNESS: MR. STERBCOW: it. MR. GODFREY: MR. UNDERHILL: about five to set up. MR. GODFREY: Okay. Off the record at Next. Why don't you give me Thank you. Thank you. I appreciate Object to form. That's all the questions I
THE VIDEOGRAPHER:
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5:02 p.m. (Recess from 5:02 p.m. to 5:08 p.m.) MR. GODFREY: think we're ready to begin. MR. UNDERHILL: I'm ready. All set? Okay. Are we ready? I
THE VIDEOGRAPHER:
On the record at 5:08 p.m., beginning Tape 8. EXAMINATION QUESTIONS BY MR. UNDERHILL: Q. A. Q. Good afternoon, Mr. Hayward. Hello, sir. My name is Mike Underhill. I represent the
United States.
And my Assistant, Cecelia, is sitting
to my right, and she's going to be the lucky person to hand you exhibits during this deposition. A. Q. Right, thank you. It's been a long day, so can you bear with us
a bit longer? A. Q. A. Q. I certainly can. Okay. -- for everyone. I think you're right on that one. Mr. Hayward, I'm going to turn to some issues that maybe you know something more about, financials, okay? It's been a long day --
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A. Q.
M-h'm. So your title until October 1st of 2010 was
Group Chief Executive? A. Q. That's correct. And that's Group Chief Executive over all of
the BP companies and subsidiaries, right? A. PLC. MR. UNDERHILL: And why don't we go ahead Yeah. It's Group Chief Executive, P -- BP
and have marked next, which I think is Exhibit 1033 -THE COURT REPORTER: MR. UNDERHILL: 6-0.
-- 6033, and that's Tab 7
in the CD that you folks have been given. (Exhibit No. 6033 marked.) MR. UNDERHILL: boot up. MR. GODFREY: notebook? MR. UNDERHILL: MR. GODFREY: Q. Roger that. Thank you. It's at Tab 7 in the I'll give you a moment to
(By Mr. Underhill) And, Mr. Hayward, we've
handed you what's now been marked as 6033, and it's the "Annual Report and Form 20-F" for the Year 2010, for BP. Are you familiar with this type of document? A. Yes, I am.
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Q.
And when you were the Group Chair -- Group
CEO, did you sign documents like this? A. Q. I did, yeah. And I'm not -- you don't have to look at it,
but I think this particular one, Mr. Dudley signed in March of 2011. A. Q. Would that be --
That would --- something that he would do in his new
position; that is, the successor to your job? A. Q. That's correct. And is it your understanding that this
particular type of document is something that's required to be filed with the Securities and Exchange Commission for a publicly traded company doing business in the United States? A. Q. That's correct. And I -- just to clean it out, I also assume
there may be some requirements under British law? A. Q. A. Q. Correct. But perhaps a different form? Correct. And is it your understanding that it is
important that these types of documents -- that is, these Annual Reports and 20 daf -- esh -- daf -- dash, F forms be as accurate as reasonably possible?
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A. Q.
Correct. And do you understand that there are legal
consequences -- I'm not going to go into them, but do you understand that there are legal consequences if there are material misrepresentations in a document such as this? MR. GODFREY: A. Q. Yes. (By Mr. Underhill) And this particular Objection as to form.
document, Exhibit 6033, is for the Year 2010, and I think I read in there that it ends on December 31st of 2010, correct? A. Q. Correct. And does BP have a calendar accounting year
that is January 1st through December 31st? A. Q. That's correct. So these kinds of documents would have been --
would be filed every year -A. Q. A. Q. Correct. -- on the year, correct? Correct. This particular year, you left the company
on -- what date did you resign your position? A. The fir -- well, I announced my intention to
leave on the 27th of July, I think, and then enacted a
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transition with my successor and left the company on the 1st of October. Q. Did you formally hold the title of Chairman --
or Chief Executive Officer, I should say, until the date that you left on October 1st of 2010 -A. Q. A. Q. A. Q. October 1st, yeah. I'm sorry? Yes. Thank you. Yes. So this particular report would encompass ten
of the months in which you held the -- the CEO job, correct? A. Q. A. Q. Nine. Nine months. Nine. Thank you. Please don't hesitate to correct I do it a lot.
me if my math is wrong.
Let -- let's turn -- it -- well, actually, before we begin with this document, ha -- have you seen this particular document before? A. I haven't actually. I didn't -- I didn't read
the -- this when it was published a few months ago. Q. Before we go into it, if -- if you could tell
me, given your experience when you were the CEO, is the
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Annual Report something that the CEO reads prior to being disseminated to the SEC and to the public? A. Q. Yes. And I -- I couldn't find a particular It could just be
accounting company listed in there. that I overlooked it.
Does -- at least when you were
the CEO, did BP have an accounting firm or company that was responsible for assisting in the preparation of its Annual Reports? A. Q. Ernst & Young is the accounting company. And do you know if it was through their New
York office or another office? A. I -- I -- well, I suppose the principal
partner was in their London office, but clearly they drew on their global organization, because this was, as you correctly said, filed on the U.S. Securities. it was a -- benefited from the input from their New York office, I'm certain. Q. Got it. And -- and is it your understanding So
that this is the type of document upon which either investors or potential investors in BP may rely in deciding whether to keep their investment in the company or, alternatively, make a new investment in the company? MR. GODFREY: Objection as to form.
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A. Q.
It's certainly one of them, yes. (By Mr. Underhill) Let -- let's start looking And if you could turn
through it, if we could, please.
first to Page 38, numbered Page 38. A. I would just like to make it clear, I -- I had
no role in producing this document, reviewing it, or any part in its preparation. This all occurred many
months after I had left the company. Q. I understand that, and I respect that, and I
didn't mean to imply otherwise. On Page 38, let's go there first. A. Q. M-h'm. Over on the right-hand column, do you see
where it states, and I'll quote, "Consequences of the accident for BP and its shareholders"? A. Q. Yeah. And below that, "Financial consequences." Do
you see -A. Q. A. Q. Yes. -- that? Yeah. And I'll read the first paragraph in the
record, and at the end, could you tell me whether I read it accurately, please. A. M-h'm.
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Q.
Quote, "The group income statement for 2010
includes a 'pre-cha'" -- "pre-tax charge of 40.9 billion" -- "dollars," that is -- "in relation to the Gulf of Mexico oil spill. This comprises costs
incurred up to 31 December 2010, estimated obligations for future costs that can be estimated reliably at this time, and rights and obligations relating to the trust fund, described below." Did I read that correctly? A. Q. You did. And so we can put some of this in context, the
third paragraph down, and it's the second sentence, where it begins "BP has established" -A. Q. A. Q. M-h'm. -- a trust fund," do you see that? Yep. Same drill. I'll read that. Tell me if I
read it correctly. "BP has established a trust fund of 20 billion to be funded over the period to the fourth quarter of 2013, which is available to satisfy legitimate individual and business claims administered by the GCCF, state and local government claims resolved by BP, final judgments and settlements, state and local response costs, and natural resource damages and
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related costs arising as a consequence of the Gulf of Mexico oil spill." And I'll leave it there.
Did I read that correctly -A. Q. You did. -- so far? The next paragraph down, beginning with: has provided...," do you see that? A. Q. Yes. I'll read that, and I'll ask you again whether "BP has provided for all "BP
I read it correctly:
liabilities that can be estimated reliably at this time, including fines and penalties under the Clean Water Act (CWA). The total amounts that will
ultimately be paid by BP in relation to all obligations relating to the incident are subject to significant uncertainty." Did I read that correctly? A. Q. You did. Final -- I'm sorry. The penultimate paragraph
in that column:
"BP holds a 65 percent interest in the
Macondo well, with the remaining 35 percent held by two joint venture partners. While BP believes and will
assert that it has a contractual right to recover the partners' shares of the costs incurred, no recovery amounts have been recognized in the financial
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statements." A. Q.
Did I read that correctly?
You did. What I'd like you to do next is turn to Page
158, please. MR. GODFREY: MR. UNDERHILL: MR. GODFREY: Q. A. Q. 158? Correct. Thank you.
(By Mr. Underhill) Are you there, Mr. Hayward? I am. Thank you. And, please, if you haven't seen
this before, please feel free to slow me down and tell me you'd like time to -A. Q. that. M-h'm. -- study it. I have no problem if you do
Perhaps we could walk through it and make this
as simple as possible. Do you see under where -- there are a series of columns, financial columns -A. Q. A. Q. M-h'm. -- numbers. Yeah. Do you see the first one, "Income statement," Do you see that?
and then "Production and manufacturing expenses"? A. Q. Yes. Do you see the column to the right where it's
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$40,000,858,000 [sic]? A. Q. Yeah. If you'd like to study the document in more
detail, feel free, but my question to you initially is: Do you understand that that represents the $40.9 billion loss referred to on Page 38 that is the loss projected to have been incurred or that will be incurred as a result of the Gulf Oil spill? A. Q. Yeah. It's the provision that was made.
And then down below that, a -- a few -- four Taxation," and that
or five lines, do you see "Less: would be $12,000,894,000? A. Q. M-h'm.
And if I -- I'm not an accountant.
That's why
I became a lawyer, okay? A. Q. A. Q. Nor am I. Fair enough. I'm a geologist. But you were CEO, and I wasn't. So do you understand that that means that since BP didn't book income for that 40 million [sic] that it projects as potential losses, it didn't have to pay taxes on that amount; the wor -- there -therefore, the net loss, if you factor in the need not to pay taxes -- that the net loss they're projecting
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there is 28 billion .041 [sic]? A. Q. A. Q. M-h'm. That's "Yes"? Yeah. And you've been doing really fine, but just to
be certain, the reporter needs to have "Yes's" -A. Q. A. Q. I'm sorry. Yes.
-- and "No's." Sorry. Yes. Makes his job easier.
Thank you very much.
So if we can put that in context, and understanding all kinds of caveats that are probably in this document about uncertainties about predicting with certainty what the loss is going to be, this document, at least, filed with the SEC indicates that the projected after-tax loss is 28 billion and some-odd change above it, correct? MR. GODFREY: A. Q. Objection as to form.
That is what this document indicates. (By Mr. Underhill) And this document is BP's
Annual Report filed with the -A. Q. A. Q. M-h'm, yes. -- SEC for the Year 2010, correct? Correct. I'd like to shift -- why don't you go ahead
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and keep that document out. it. A. M-h'm. MR. UNDERHILL:
We're going to go back to
Exhibit -- Tab 1.
(Discussion off the record.) (Exhibit No. 6034 marked.) THE COURT REPORTER: Q. 6034.
(By Mr. Underhill) Handing you 6034,
Mr. Hayward. A. Q. Thank you. You're welcome. And I'll tell you where we're going. I'm
going to hand you a series of documents that are very similar to this which for the Years 2007, I think, through 2010, or at least 2009, will list BP's yearly profit -A. Q. M-h'm. -- as listed in its Financial Reports. That's
just the -- kind of the roadmap, okay? A. Q. (Nodding.) So Exhibit 6034, does it indicate there what
BP's net profit was for the period 2007? A. Q. A. It does. And what is that number? On a replacement cost basis, it was 17.2.
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Q. period." A. Q.
And there's a number above it, "Profit for the Why don't we just use that one? 20.8. And then for 2006, what were the replacement
cost profit and the profit for the period? A. Q. 22 and 22.253. And just because I need to know this, what's
the difference between profit unadorned and profit replacement cost? A. Replacement cost profit is -- it takes account
of the inventory, changes in the value of the inventory that the company holds in the reporting period. Q. A. Q. Thank you. Yes. Would -- would -- just for my edification
again, would inventory include oil that's still in a reservoir? A. No. That's oil in a refinery in a tank,
that's been processed. Q. Thank you. Go to the next one, which we'll
have marked as 6035. (Exhibit No. 6035 marked.) MR. GODFREY: MR. UNDERHILL: Thank you. Tab 2? That's correct, Tab 2.
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MR. GODFREY: Q.
Sure.
(By Mr. Underhill) Year 2008, same drill, sir.
Could you list the profits, both unadorned and replacement cost, for the Year 2008? A. Q. correct? A. Replacement cost, yep. MR. UNDERHILL: Yep. 21.15 and 25.59. And the 25.9 is the replacement cost profit,
The next one, Tab 3 --
(Exhibit No. 6036 marked.) MR. UNDERHILL: going to be Exhibit 6036. Q. (By Mr. Underhill) The same drill, for the -- Year 2008, and that's
Year 2009, could you list the unadorned profit and the replacement cost profit? A. Q. A. 16.57 and 13.95. Thank you. Thank you. MR. UNDERHILL: The next exhibit, which
is going to be 6037, which is behind Tab 4. (Exhibit No. 6037 marked.) Q. A. Q. (By Mr. Underhill) (Tendering.) Thank you. Same drill, for the Year 2010, could you list
the replacement cost profit and the profit for the
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period or loss? A. Q. A. Q. A. Q. Loss of 3.7 and a loss of 4.9. And 4.9 loss is the replacement cost -That's correct. -- profits? Correct. Thank you. MR. UNDERHILL: And the next one which
will behind Tab No. 5, which is Exhibit 6038. (Exhibit No. 6038 marked.) Q. (By Mr. Underhill) And this is -- lists first
Quarter 2011 results, does it not? A. Q. A. Q. M-h'm. And what is the profit listed on Exhibit -7.1, replacement cost 5.48. Thank you. And just for the heck of it, could
you read to the right of that column for the Fourth Quarter of 2010 both the replacement cost profit and the profit for the period? A. Profit for the period for the Fourth Quarter
2010 was 5.56, and replacement cost profit for the same period was 4.61. MR. UNDERHILL: marked as 6039 -(Exhibit No. 6039 marked.) And next could we have
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MR. UNDERHILL: Rule 1006 Summary. Q.
-- which I'll tender as a
(By Mr. Underhill) Does that appear to record
with the profits both unadorned and replacement costs listed for 2007 through Fiscal Year 2010? A. It does. MR. GODFREY: Q. A. Q. Objection as to form.
(By Mr. Underhill) Thank you very much, sir. Yes. Now I'm going to ask you to go back to the That's the -- the
Annual Report, if you could, please. thick one there. A. Q. A. Q. M-h'm, m-h'm.
Let's go to -- again, to Page 158. Yep. I'm going to first focus on that -- on the
profit for the period, the after tax -A. Q. M-h'm. -- on 158 which is 28 billion and something
above that, 28.041 to be precise. A. Yep. MR. GODFREY: tax? MR. UNDERHILL: MR. GODFREY: Correct. Okay. You mean the loss after
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Q.
(By Mr. Underhill) If -- just a straight math
question, and I'll accept an approximation, it doesn't have to be down to the tenth or the hundredth or the thousands. If -- if we simply take the -- the First
Quarter profit for 2011, which is listed on one of those previous exhibits, and let's -- let's take a lower number, the replacement cost profit of five billion 481 -A. Q. M-h'm. -- just rough ballpark figures, how many
quarters would it take of profit at that same level to essentially pay off the 28 billion after tax loss? A. Q. A. Q. Six. Six quarters? M-h'm. So just on the straight math, I understand
that BP may have a -- the next quarter may be higher, lower, the same, we -- we don't know yet. But if we
just take that number, that means that using these figures from BP's own financial reports, it would pay off its losses for the DEEPWATER HORIZON in year and a half, correct? MR. GODFREY: A. Objection as to form.
That's the -- that is the maths of your
calculation.
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Q.
(By Mr. Underhill) And -- and if -- if you
want to take a more favorable number for the company, let's take the 7.124 billion which is the -- whatever you call it, the profit that is not the replacement cost profit. A. Q. A. M-h'm. What do you call that? There is an official name for it. I can't
remember because we always use "replacement cost profit." look. I think it was just "profit." there's a -- it's just "profit." Q. A. Q. Just profit? Yeah. So if we take the -- let's just round it down I don't think And I honestly don't remember. Let me have a
to $7 billion. A. Q. M-h'm. A straight math question again: If BP was
fortunate to have successive quarters of $7 billion profit, how long would it take to recoup the $28 billion loss projected on Page 158 of the Annual Report? A. Four quarters as -MR. GODFREY: Objection, form.
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Q. A. Q.
(By Mr. Underhill) So one year --- as your math says. So, again, with the understanding that these
numbers might change, BP might make more money, might make less money, might make the same amount of money in the future quarters, potentially BP, based upon its Fourth Quarter results for the year 2000 -- I should say First Quarter results for 2011 would pay off the after tax loss listed in its 2010 Annual Report in only one year, correct? MR. GODFREY: A. That's correct. MR. UNDERHILL: Could you turn to Tab 8, Objection to form.
ladies and gentlemen, and I'll hand it to Mr. Hayward. (Exhibit No. 6040 marked.) Q. A. Q. (By Mr. Underhill) This is Exhibit 6040. Thank you. Mr. Hayward, in deference to you, I -- you Why don't you take
probably haven't seen that before.
a look at it, and you tell me whether you've seen it before. A. Q. I haven't seen it before. I don't --
I'm not going to ask you very many questions
about this at all, especially since you haven't seen it.
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I'll represent to you that BP recently entered into some kind of a settlement with MOEX, one of its partners in the Macondo Well -A. Q. M-h'm, yep. -- whereby, I'll quote from the document:
"Under the settlement agreement, MOEX USA Corporation, the parent company of MOEX Offshore 2000 [sic], will pay BP $1.065 billion," period, close quote, and then it goes on. So that's the background of the document. A. Q. M-h'm. What I really wanted to show you is down Tell me
below, the very last sentence of the document. if I read this correctly:
"To date, BP has paid nearly
$6 billion dollars in claims." Did I read that correctly? A. Q. You did. So the same math drill, if we go back to
Page 158 of the Annual Report, if -- if BP were to make the same replacement cost profit that it made in the First Quarter of 2011, it would recoup that $6 billion in claims paid to date in a little over one quarter, correct? A. Q. That's correct. And if we use 7.1 profit figure for the First
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Quarter of 2011, BP would pay off the tot -- totality of the 6 billion in claims paid so far, it would pay the totality of those claims back, recoup the losses, in less than three months, correct? A. Q. That's correct. I'd like you to turn to page -- it's -- same It's Note 37, titled
on the annual statement. "Provisions" on that page. A. Q. A. Q.
On what page is that? I'm going to get you there in a second. Okay. It actually starts on Page 199, but I'm going I'll let
to start asking questions at about Page 200. you get there first. A. Q. Okay.
And I'm going to go through some of these same
drills since, again, you haven't read this particular page, have you, sir? A. Q. I haven't, no. Thank you. I'm going to read some sections
and, again, ask you if I read them correctly, okay? A. Q. M-h'm. M-h'm.
This way, and I'll just -- as a nonlawyer,
I'll explain to you that's partly so if Judge Barbier or a jury reads this transcript or looked at the video,
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they don't have to refer to the separate document.
The
document, at least the part I want to quote, is going to be through testimony, or my reading of the record. I'm going to go down, do you see where it says "Litigation and claims"? A. Q. Yep. It's the second paragraph, and I'm going to Quote: "The It's a --
start with "The estimated future cost."
estimated future cost of settling Individual and Business Claims, State and Local Claims under OPA 90 and claims for personal injuries, both reported and unreported, has been provided for. Claims
administration costs have also been provided for." Did I read that correctly? A. Q. You did. The next paragraph: "BP believes that the
history of claims received to date, and settlements made, provides sufficient data to enable the company to use an approach based on a combination of actuarial methods and management judgments to estimate IBNR (Incurred But Not Reported) claims to determine a reliable best estimate of BP's exposure for claims not yet reported in relation to Individual and Business Claims, and State and Local Claims under OPA 90. The
amount provided for these claims has been determined in
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accordance with IFRS and represents BP's current best estimate of the expenditure required to settle its obligations at the balance sheet date." Did I read that correctly? A. Q. A. Q. A. Q. A. Q. A. Q. You did, sir. And the balance sheet date would be -December 31st --- December 31st -Correct. -- of 2010? M-h'm, correct. Okay. Yes. So we can put this in context, I'm going to go
to the next page of the exhibit -A. Q. M-h'm. -- which is Page 201. At the very top, quote:
"Through the application of this approach, BP has concluded that a reasonable range of possible outcomes for the amount of the provision as of" December 31st, 2010, "is $6 billion to $13 billion. BP believes that
the provision recorded at 31 December 2010 of $9.2 billion represents a reliable best estimate from" with this -- "within this range of possible outcomes. This
amount is shown as payable from the trust fund under
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Litigation and claims" from "the table above.
The
provision is in addition to $3.4 billion of claims paid in 2010. Of this total paid, $3.2 billion is included
within utilization of provision in the table, and remaining $0.2 billion was a period expenditure prior to the recognition of the provision at the end of the second quarter 2010. Also included within the total
utilization of provision of $4 billion under Litigation and claims are amounts relating to claims administration costs and legal fees. Of the total
payments of $3.4 billion during the year, $3 billion was paid out of the Trust Fund and $0.4 billion was paid by BP." Did I read that correctly? A. Q. You read it correctly. And the next sentence, quote: "BP's
management has utilized actuarial techniques and its judgment in determining this reliable best estimate. However, it is possible that the final outcome could lie outside this range." Did I read that correctly? A. Q. You did. Can we go back to the table on Page 200. And
if you need time to study it, please feel free to let me know and I'll be glad and let you --
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A.
It would depend on what the question is.
certainly would need -- like some time to -- if you're going to question me about this paragraph, I need to -Q. Well, I'm not going to test your math -- or I shouldn't say that. I only want to
maybe I will.
focus on a few things. A. Q. Go. But, again, if you need to slow down, please
feel free -A. Q. Yeah. -- I'll be glad to give you that courtesy. On the table, do you see where it says "Litigation and Claims"? A. Q. A. Q. A. Q. A. Q. Yes. Third column over. Yep. Yes.
And that's listed at 14 billion 939 -M-h'm. -- million dollars, correct? Correct. Similar -- see, I fibbed to you. I am going
to ask you about that math.
If we use the $7 billion
profit figure for the First Quarter of 2011, that number, 14 billion 939 million dollars would be paid off in half a year, correct?
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A.
Correct. MR. GODFREY: Objection as to form.
Q.
(By Mr. Underhill) And if -- if we understood,
if I understood, at least, the paragraphs we read in the next page over, on Page 2001 [sic], that would include legal fees, it would include claims administration costs, and it would include claims payable under OPA 90, to state Governments, private parties for open liabilities and even personal injury claims, correct? A. Q. That's what it says, yes. And to be fair, if we were to use that lower
replacement profit cost number of 5 point billion and change -- let's round it out -- that would take roughly three-quarters, would it not? A. M-h'm. That's correct. Object to form.
MR. GODFREY: Q.
(By Mr. Underhill) So if we take that
together -- and just, again, based on the assumption that BP -A. Q. M-h'm. -- will continue to have good quarters like
they apparently did in the First Quarter of 2011 -A. Q. M-h'm. -- BP could pay off that entire $14 billion,
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almost $15 billion, in projected outlays for the legal claims we've described in between six months to nine months, correct? A. Q. A. Q. That's what your math's demonstrating. Okay. M-h'm. And actually that would be the nine months. And that's the replacement cost?
The six months would be at the 7.1 billion figure, right? A. Q. A. Q. (Nodding.) Correct? That's correct. Now, the subject dear to my heart, Clean Water
Act penalties, do you see the column to the right? A. Q. I do. That's my client's claim. That's why it's
dear to my heart. correct? A. Q. Correct.
It's listed there at $3,510,000,000,
Now, I'm not going to quibble whether I think Let's just use the figure that BP
that's low or not. used.
If we took that figure, projected figure, from BP's 2010 Annual Report, if we took the replacement cost figure for 2011, it would have been paid off in,
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well, less than a quarter. A. Q. correct? A. Q. M-h'm. And if we were to take the 7.1 profit figure, Correct. I mean, a period of just a short few months,
BP would have paid off that number in a month and a half, right? A. Q. column. A. Q. A. Q. That's correct. There's one sentence there under that first Do you see where -- fourth paragraph down -Which page are you on, sir? Thank you very much. 201, yeah. Fourth paragraph down, it begins: "The Page 201.
outcomes of claims," do you see that? A. Q. Yep. "The outcomes of claims in litigation are
likely to be paid out over many years to come," period. Did I read that correctly? A. Q. You did. You're obviously familiar with the concept of
discount to present value? A. Q. M-h'm. I am.
So the longer you stretch out a payment, the
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less financial consequences it has in the immediate term for the person that eventually is going to pay it out, correct? MR. GODFREY: MR. UNDERHILL: isn't it? MR. GODFREY: A. Yes. Objection to the form. It's poorly phrased,
Normally you stretch out the payment -MR. UNDERHILL: Mr. Godfrey agrees with I -- we've got He agrees --
me.
He thinks it's poorly phrased.
agreement, I think it's poorly phrased. MR. GODFREY: that. Q.
It's fine, but other than
(By Mr. Underhill) So we'll skip it. Okay?
We'll
have our Economist do that for me. that can actually do justice to it.
Somebody
Do you see what I'm getting at, though? you -A. Not -- not really, no. (Laughter.) A. Q. you. A. Q. I'm sorry. I'm sorry.
Do
(By Mr. Underhill) Come on, I'm being nice to Don't insult me like that. I'd like to say yes, but -Well, I can't -- I can't leave it completely
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alone. Can you explain to me, given the fact that you were the CEO of one of the world's largest multinationals, what discount to present value is? if you can't, tell me you can't. A. I think I'll pass. It's 6:00 o'clock in the And
evening, actually. Q. Would it make any difference if I asked you at
8:00 in the morning? A. Q. Probably, yes. I'm going to ask one of my colleagues to hit
you back -A. Q. forget. That's fine. -- with that one tomorrow. I'm writing that down. Let's continue on. A. Q. Yeah. Still on Page two -- 201, please. You were asked some questions by Mr. Sterbcow about flow rate, were you not? A. Q. I was, yes. So let's -- let's go through this and see if Okay? We don't
there's any relevance here. Under "Clean Water Act Penalties," do you see that heading about a third of the way down the page?
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A. Q.
Yes. Quote: "A provision has been made for the
estimated penalties for strict liability under Section 311 of the Clean Water Act. Such penalties are subject
to a statutory maximum calculated as the product of a per barrel maximum penalty rate and the number of barrels of oil spilled. Uncertainties currently exist
in relation to both the prebarrel penalty rate that will ultimately be imposed and the volume of oil spilled." Did I read it correctly? A. Q. You did. Next paragraph, quote: "A charge for
potential Clean Water Act Section 311 penalties was first included in BP's Second Quarter 2010 interim financial statements." Did I read that sentence correctly? A. Q. You did. And that would have been during your tenure as
CEO, would it not? A. Q. It was. Continuing on: "At the time that charge was
taken the latest estimate from the interagency flow rate technical group created by the national incident commander in charge of the spill response was between
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35,000 and 60,000 barrels per day." A. Q. That's correct. Continuing on, quote: "The mid point of that
range, 47,500 barrels per day was used for the purposes of calculating the charge. For the purposes of
calculating the amount of the oil flow that was discharged into the Gulf of Mexico, the amount of oil that had been or was projected to be captured in vessels on the surface was subtracted from the total estimated flow up until when the well was capped on 15 July 2010." Did I read it correctly so far? A. Q. That's correct, yeah. Continuing on: "The result of this
calculation was an estimate that approximately 3.2 million barrels of oil had been discharged into the Gulf. This estimate of 3.2 million barrels was
calculated using a total flow of 47,500 barrels per day multiplied by the 85 days from 22nd April 2010 through 15 July 2010, less an estimate of the amount captured on the surface (approximately 850,000 barrels)." Did I read that correctly? A. Q. You did. Continuing on: "This estimated discharge
volume was then multiplied by $1100 per barrel, the
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maximum amount the statute allows in the absence of gross negligence or willful misconduct. For the
purposes of estimating a potential penalty, this resulted in a provision of 3 billion 510 million dollars for potential penalties under Section 311." Did I read that correctly? A. Q. You did. Next paragraph, I'm going to skip the first
sentence, and it begins -- where I'm going to begin is begins "In particular." A. Q. Yep. Quote: "In particular in determining the Do you see that?
amount of the civil penalty, Section 311 directs the Court to consider a number of enumerated factors, including the 'seriousness' of the violation or violations. The economic benefit to the violator, if The degree of
any, resulting from the violation. culpability involved. incident.
Any other penalty for the same
Any history of prior violations, the nature,
extents, and degree of success of any efforts of the violator to minimize or mitigate the effects of the discharge. The economic impact of the penalty on the
violator, and any other matters as justice may require," close quote. Did I read that correctly?
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A. Q.
You did. Continuing on: "Civil penalties above $1100
per barrel up to a statutory maximum of" 4300 per barrel -- "$4300 per barrel of oil discharged would only be imposed if gross negligence or willful misconduct were alleged and subsequently proven. The
company expects to seek assessment of a penalty lower than $1100 per barrel based on several of these factors. However, the $1100 per barrel rate was
utilized for purposes of calculating the charge after considering and weighing all possible outcomes and in light of (1) the company's conclusion that it did not act with gross negligence or engage in willful misconduct and (2) the uncertainty as to whether a Court would assess a penalty below the $1100 statutory maximum." Did I read that correctly? A. Q. You did. Continuing on: "On 2nd August 2010 United
States Department of Energy and the flow rate technical group had issued an estimate that 4.9 million barrels of oil had flowed from the Macondo Well and 4.05 million barrels had been discharged into the Gulf (the difference being the amount of oil captured by vessels on the surface as part of BP's well containment
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efforts)." Did I read that correctly? A. Q. You did. Continuing on: "It was and remains BP's view
based upon the analysis of available data by its experts that the 2nd August 2010 Government estimate and other similar estimates are not reliable estimates because they're based on incomplete or inaccurate" data -- strike that -- "information rest in large part on assumptions that have not been validated and are subject to far greater uncertainties that then have been acknowledged. As BP has publicly asserted,
including at a 22nd October 2010 meeting with the staff of the national commission on the BP Deepwater Horizon oil spill and offshore drilling, the company believes that the 2nd August 2010 discharge estimate and similar estimates are overstated by a significant amount. That
the flow rate is potentially in the range of 20 to 50 percent lower. If the flow rate is 50 percent lower
than the 2nd August 2010 estimate, then the amount of oil that flowed from the Macondo Well would be approximately 2.5 million barrels and the amount discharged into the Gulf would be approximately 1.6 million barrels. If the flow rate is 20 percent lower
than the 2nd August 2010 estimate, then the amount of
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oil that flowed from the Macondo Well would be approximately 3.9 million barrels and the amount discharged into the Gulf would be approximately 3.1 million barrels which is not materially different from the amount we used for our original estimate at the second quarter." Did I quote that correctly? A. Q. You did. And based upon what we've read so far,
Mr. Hayward, is it correct that BP has made those estimates; that is, the 3,510,000,000 estimate, based upon the assumption that BP will not be found grossly negligent and/or that it did not exercise willful misconduct? MR. WEBB: question. MR. GODFREY: A. Q. Objection to the form. Object to the form of the
That is what it says in the document. (By Mr. Underhill) I'm not asking you to agree
whether BP was grossly negligent or not -A. Q. Okay. -- I'm simply saying, is that the assumption
that it is made in -A. Q. That's --- the documents?
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A.
-- that's the assumption in -MR. GODFREY: Same objection.
A. Q.
-- in black and white in the document. (By Mr. Underhill) In fact, in its Annual
Report filed with the SEC? A. Q. Correct. We're almost done with my belabored quoting.
I couldn't have said it better, nor could you, so let's quote from the document. Page 202, of the same exhibit, please. "Therefore, for the purposes of calculating a provision" of fines -- "for fines and penalties under Section 311 of the Clean Water Act, the company has continued to use an estimate of 3.2 million barrels of oil discharged to the Gulf of Mexico as its current best estimate, as defined in paragraphs 36-40 of IAS 37 'Provisions, contingent liabilities and contingent assets', of the amount which may be used in calculating the penalty under Section 311 of the Clean Water Act. This reflects an estimate of total flow from the well of approximately 4 million barrels, and an estimate of approximately 850,000 barrels captured by vessels on the surface. In utilizing this estimate, the company
has taken into consideration not only its own analysis of the flow and discharge issue, but" of the "analyses
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and conclusions of other parties, including the US government." Did I read that correctly? A. Q. You did. When you were -- still held the position of
CEO of the Group, did you make representations that BP was providing all available technical data to the Flow Rate Technical Group, in order that it could calculate, to the best of its abilities, the amount of flow of oil into the Gulf of Mexico? A. I did. MR. GODFREY: A. Objection as to form.
To the best of my knowledge, that's exactly
what was happening. Q. A. (By Mr. Underhill) And -The Flow Rate Technical Group were intimately
embedded in the Operating Team on the third floor of the Crisis Center in Houston and had access to all and every piece of data and information that was available. Q. And was it your expectation that, to the
extent BP secured data that would be relevant to calculating the rate of flow, that that data would, in turn, be provided to the Flow Rate Technical Group? A. To -MR. GODFREY: Objection as to form.
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A.
To the best of my knowledge, all of the data
that was available in -- throughout the accident and the aft -- in the aftermath was available to the Flow Rate Technical Group. Q. (By Mr. Underhill) And was that your
expectation, that it, in fact, be provided? A. Q. Well -And I'm talking about your expectation when
you were in the position of -A. Q. A. Q. -- it was --- CEO of the Group? -- my expectation and my belief. Did -- did you tell people in your
organization to provide the Flow Rate Technical Group with all of the relevant -A. Q. A. effect. Oh, I --- technical data --- I didn't issue an instruction to that I'm sorry. I mean, I was not focused on the I was focused on plugging the It
flow rate, actually.
well and containing the oil on the surface.
won't -- the flow rate was not going to determine what it is we -- or what it was that we did or did not do with respect to containing the oil or plugging the well, actually.
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Q.
Do you know if, in fact, BP did not provide
all of the relevant technical data to the Flow Rate Technical -A. Q. A. Q. A. Q. A. Q. I'm -I'm not --
Let me finish, please. Sorry. I'm sorry.
Are you aware of that? That we did not? Correct. I'm not aware that BP did not. Are you aware that BP -- I'm choosing my
cur -- words carefully -- did not provide relevant technical data, because that data was retained by -- or I should say behind the wall of attorney-client privilege and/or attorney work product? A. I -MR. GODFREY: A. Objection as to form. I -- like I said,
-- I wasn't aware of that.
I wasn't focused on the flow rate, I was focused on the spill response and plugging the well. So I'm -- I'm --
I'm just not aware that that was the case. Q. (By Mr. Underhill) Are you aware that, as we
sit here today, June 6 of 2011, that BP still has not provided all of the revel -- relevant technical data to the United States Government, whether either the Flow
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Rate Technical Group or someone that's working -A. Q. A. Q. A. Q. I'm not aware of that. Let me finish. I'm sorry. Sorry.
I don't need to review, just -No, I'm sorry. -- he needs to do it. Let me start all over.
As we sit here today, June 6, 2011, are you aware that BP has still not provided all of the relevant technical data that would be relevant to the determination of flow, that they have not provided that data to the United States Government, including but not limited to, the Flow Rate Technical Group? MR. GODFREY: A. Objection as to form.
Well, I was not aware that that was the case.
I -- I'll take your word for it that it is the case, but I wasn't aware of it. Q. (By Mr. Underhill) Could you go back to Page I'm not going -Sure. I'm not going to read the whole
2002 [sic]? A. Q.
M-h'm.
-- trust me.
thing again. A. Q. either. Sure. I couldn't stand it. I'm sure you couldn't,
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In that first paragraph, I only want to focus on a clause. MR. GODFREY: MR. UNDERHILL: Q. Two-thousand -- Page 202? Yeah, that's correct.
(By Mr. Underhill) It's the -- the fifth line
down, and it's the clause that says, "...the company has taken into consideration not only its own analysis of the flow and discharge issue," close quote, and then it goes on. A. Q. M-h'm. Has BP ever -- other than in its Annual
Report, do you know if BP has ever come out with a statement as to what it believes the volume of flow was during those days between April 22nd of 2010 and the well was finally capped on July 15th of 2010? A. Not to my knowledge. I -- I know that in --
in the time that I was CEO, there was no statement made, because we had the Flow Rate Technical Group, so we didn't need to make an assessment. The Flow Rate And
Technical Group was charged with that undertaking. clearly, since I'd left, I -- I'm not aware what has exactly has gone on. Q. Fair enough. And perhaps you're the wrong
person to ask of this, but since you're the witness of day --
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A. Q. A. Q. A. Q.
M-h'm. -- I -- I -- I -Sure. -- will ask you -M-h'm. -- begging your pardon. When -- when BP's 2010 Annual Report filed as
a document with the SEC states, quote, "...the company has taken into consideration not only its own analysis of the flow and discharge issue," close quote, and it goes on, do you know what is meant by the words "its own analysis"? A. Q. I don't. That is, what analysis is the Annual Report of
BP referring to? A. I -- I have no idea. Because clearly, it was
written in the time leading up to -- this was published sometime in February, and I had left the company six months prior to that. refers to. Q. Even when you were the CEO, before you I -- I've got no idea what that
resigned, didn't you have, on your own, a curiosity as to how your company, BP, would quantify and evaluate the amount of oil put into the Gulf of Mexico was the result of the con --
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A. Q. A.
I --- Macondo spill? -- I -MR. WEBB: I'm going to object to the
form of the question. A. I -- I -- I think you have to go back to the
time, and then the time when I resigned, and what was going on at that time. And my focus then was the And -- and at -- at no
response and plugging the well.
point was an estimate of flow going to have any impact on how we responded, or the nature of the attempt to plug the well. We did all and everything we could conceive of to bring the thing to a speedy end. And it was only in
a relatively shortly after we succeeded in plugging the well, only 15 days, less than 15 days, 13 days, that I announced my resignation. And from that point on, I --
I was not front and center of any of this at all. Q. (By Mr. Underhill) So my question was: Did
you or did you not have any curiosity, just yourself -A. Q. M-h'm. -- whether it was a part of your day job -- I
mean, if -- if you -A. Q. I --- let's put it this way --
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A. Q. A. Q.
-- well -- I --- if you didn't have any curiosity -Right. -- you must have been the only person in the
country -A. Q. A. Well --- that didn't. -- well -MR. WEBB: the question. (Laughter.) A. I -- I think there was a lot of people clearly Let me object to the form of
speculating and curious as to the flow rate. Q. (By Mr. Underhill) But you weren't one of
those curious -A. Q. A. Well --- people? -- the -- the -- no. The -- the bottom line
was that I concluded early on that we had very few ways of coming up with any sort of credible flow rate, frankly. So it -- no, it wasn't impacting what I was I mean, it really wasn't. It
trying to do day-to-day.
was not -- my day was taken up with trying to liaise with Governments, coordinate thousands of people and thousands of boats, and figure out what intervention we
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were next going to do on the seabed.
I -- I didn't
have time to worry about any curiosity of whether it was 5, 10, or 20,000 barrels a day or even more. Q. What was the basis for your statement just a
moment ago, that you didn't believe that BP had any credible way to estimate -A. Q. A. Well, we didn't --- the amount of flow? Be -- because we had no measurement. We had
no device able to measure flow.
There was no -- you
know, the flow was coming up a piece of drill pipe along a kinked piece of riser. reservoir was doing. We didn't know what the We --
We knew it was pulsing.
there was no basis on which you could come up with a credible estimate. The -- the credil est -- credible
estimates emerged once we were in a position to capture oil on the surface. And those -- those remain the only
credible estimates, frankly. Q. you're -A. Q. A. The volume --- referring to now? -- the volumes that make up the 850,000 And what are those credible estimates that
barrels a day that was captured. Q. Other than that, are you aware of any other
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credible estimates that BP has made as to the volume of oil that was discharged into the Gulf of Mexico as the result of the Macondo -A. Q. I'm not --- spill? MR. GODFREY: A. Objection to form. I've not seen any
-- I'm not aware of any.
other thoroughgoing analysis of what -- what -- what -what the number was. THE COURT REPORTER: Q. A. Q. Four minutes.
(By Mr. Underhill) So before I leave this -M-h'm. -- when BP's 2010 Annual Report refers to --
using its words, "its analysis," BP's analysis -A. Q. M-h'm. -- of the flow rate, you don't know what
that's referring to? A. Q. I don't know what that was referring to. Before we do leave that page, up at the very
top of 2001 [sic], somewhere there, it -- it states that BP has used -MR. GODFREY: MR. UNDERHILL: MR. GODFREY: Q. At 201 or 2 -201. Okay. Thank you.
(By Mr. Underhill) -- BP has used actuarial
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techniques and its judgment at arriving at the numbers as to potential losses. Do you know what kind of
actuarial techniques BP used? A. Well, actuar -- actuarial techniques normally
refer to some form of life expectancy estimate, but I -- I don't know what that was. what that was. MR. UNDERHILL: ahead and change our tape now. THE WITNESS: MR. UNDERHILL: Sure. Thank you. Off the record at Okay. Why don't we go I really don't know
THE VIDEOGRAPHER: 6:03 p.m., ending Tape 8.
(Recess from 6:03 p.m. to 6:16 p.m.) MR. GODFREY: MR. UNDERHILL: Ready. We're ready. All set?
THE VIDEOGRAPHER:
On the record at 6:16 p.m., beginning Tape 9. Q. (By Mr. Underhill) Mr. Hayward, the same And
exhibit, the Annual Report, Page 218, please.
while you're getting to that page, I'll read the top. It says -- it's Note 44, "Contingent liabilities and contingent assets." And go down to the -- see where it
has a heading, "Contingent assets relating to the Gulf of Mexico oil spill"?
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A. Q.
Yes, I do. Okay. Second paragraph, quote: "As of 31
December 2010, $6 billion has been billed to the co-owners, which BP believes to be contractually recoverable. Billings to co-owners are based upon
costs incurred to date rather than amounts provided in the period. As further costs are incurred, BP believes
that certain of the costs will be billable to our co-owners under the Operating Agreement. Our co-owners
have each written to BP indicating that they are withholding payment in light of the investigations surrounding, and pending determination of the root causes of, the incident. In addition, APC has publicly
accused BP of having been grossly negligent and stated that it has no liability for the incident, both of which claims BP refutes and intends to challenge in any legal proceedings." Did I read that correctly? A. Q. You did. And the bottom sentence on that page, quote:
"BP believes that it has a contractual right to recover the co-owners' shares of the costs incurred, however, no recovery amounts have been recognized in the financial statements as of 31 December 2010." Did I read that correctly?
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A. Q.
Correct. So what that means is that 40.9 billion
figure, then tax is taken off, so I think that -strike it. Why don't we go to Page 200 -- Page 158, sorry. A. Q. A. Q. A. Q. 150 -Correct. 158. Are you there? I am. So we're focusing on that profit loss for the That's 28 billion 41 million, 158.
period after taxes. correct? A. Q. Correct.
If what I just read before from the contingent
assets, that $28 billion loss projected after taxes does not include any monies that BP hopes to recoup from its drilling partners, correct? A. That's correct. What -- what -- what I'm not
certain is the accounting treatment of the costs that will be recouped, whether they will be -- come in above the tax line or below the tax line. Q. A. Fair enough. So I think you probably have to take that
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number off the 40.1, rather than the 28. Q. Fair enough. And are -- are you aware that
BP -- in addition to its co-lessee partners, Anadarko Petroleum, Anadarko E&P, and MOEX Offshore 2000, are you aware that in addition to those parties, BP has filed, in addition to any monies it hopes to recoup from those parties, that BP has litigation pending with other entities including, but not limited to, Halliburton and Transocean? A. Q. I read the newspaper report of that. And if you know the answer to this question, Do you know
tell me; if not, tell me you don't know.
if those -- any monies that BP hopes to recoup as a result of its lawsuit against other parties in the litigation, do you know if those monies are included in the 28 billion after-tax loss projected in the Financial Report? A. I don't know, but I'm sure it states in this
report somewhere the basis on which the 28 has been created, so I'm certain we can find that. Q. Thank you. Before we took the break, do you
recall reading in the sections about the Clean Water Act penalty -A. Q. M-h'm. -- a -- a reference to gross negligence and
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willful misconduct? A. Q. Yes. And in addition to that, we just read in the
report concerning allegations that one of its -- BP's co-lessees has also made against BP with respect to gross negligence, correct? A. Q. That's correct. I'd like to you turn to a series of E-mails, It's been previously
the first one is behind Tab 10. marked as Exhibit 1127. A. Q. Thank you.
I'll hand you the exhibit.
And the first question I'm going to ask is So take
whether you've ever seen that E-mail before.
the time you need to review it, and then if you can answer that question for me, please, I'd sure appreciate it. A. Q. I haven't seen this before. And I want -- I -- I -- I accept your answer,
but I really want to make sure that, in fact, your answer is accurate, that you've never seen it before I just handed it to you today. A. before. Q. A. Never? Not -- not as far as I'm aware. (Reviewing document.) I haven't seen this
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Q. E-mail.
I'll represent to you that this is a draft I'll represent to you it wasn't sent. It was
a draft E-mail authored by David Sims to John Guide in March of 2010. And if I'm challenged later in Court,
I'll have to connect that up, but that's my representation to you, and I hope you accept it for the purposes of my questions. A. Q. A. M-h'm. Do you know who David Sims is? He was a member of the Drilling Team in the In fact, it says here well who he is.
Gulf of Mexico.
He's a Drilling Engineering Team Leader in the Gulf of Mexico Deepwater/Deep Gas Exploration at present. Q. A. Q. A. Q. And do you know who John Guide is? I don't know who John Guide is, no. I'll represent to you -Sorry. -- that John Guide, at the time that this
E-mail was drafted in March of 2010, and also on April 20th of 2010, the -- the day of the DEEPWATER HORIZON tragedy, that John Guide was BP's Well Team Leader in Houston for the Macondo Well. my representation. A. Q. M-h'm. I'll also represent to you that by April 20th I'll ask you to accept
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of 2010, Mr. Sims had received a promotion and he was John Guide's boss, not at the time of the draft E-mail, but as of the time of the explosion. Are you with me so far? A. Q. Yes. Let's just try to plug in some names, some It's not necessarily people, but --
categories here.
but titles for positions. You're aware of what a Well Site Leader is in the BP organization, correct? A. Q. I am. And just in the 25-cent version or 25-pence
version, layman's version, what does a Well Site Leader do on a drill rig that's being operated for BP? A. The layman's version would be something along
the following lines, that the Well Site Leader is there to ensure that the well is being constructed as BP intended and designed it. the operation. So it's not there to oversee
He's there to ensure that the
construction of the well is being carried out and in line with how it was designed. I mean, perhaps in a rather overly simple way of thinking of that is that BP designs the well, and then a drilling contractor builds the well, and the Well Site Leader there is to represent the architect of
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the well. Q. Aboard -- typical a situation, let's take the Who typically
DEEPWATER HORIZON before the blowout.
would be the title, that is, what title is the highest ranking BP person that's aboard the rig, you know, on a given day? I'm not talking about there for special
purposes, but on a daily event, would it be the Well Site Leader? A. Q. A. The Well Site Leader. The Well Site Leader.
And, in fact, that would be -In a typical drilling operation, there is
perhaps two Well Site Leaders, and they are, in a normal day, the only BP people on the rig. Q. And they would each stand a tour, a 12-hour
tour on a given day, correct? A. Q. That's correct. So while one is off duty, sleeping, eating,
the other is on duty and then they switch out -A. Q. A. Q. That's correct. -- another 12-hour? Correct. Okay. So that's -- thank you very much.
So that's what a Well Site Leader does, at least the 25-pence version? A. M-h'm.
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Q. Leader? A.
What, in terms of BP structure, is a Well Team What -- what is his day job, 25-cent version? He leads the -- a Drilling -- a team of
Drilling Engineers looking after a series of drilling operations. Q. And I'm looking at the word -- or the words, Is it what it implies, that that
"Well Team Leader."
person is the Leader of the Well Team? A. Is the Leader of a group of Drilling
Engineers. Q. And to whom, if you know, not -- not names,
but titles, to whom do the Well Site Leaders aboard the rig, to whom do they report? A. Q. Leader? A. No, I'm not certain -- I'm not certain whether I -- I'm not certain. I'm not certain.
You're not certain whether it's the Well Team
it's directly to the Well Team Leader or it's to the Drilling Engineers that are on the beach as it were. Q. I'll represent to you that based upon
testimony in the case, at least with respect to the Macondo Well and the DEEPWATER HORIZON, that the Well Site Leaders reported to the Well Team Leader. A. Q. Well Team, okay. And if anybody challenges me, it will be my
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obligation to prove that up at the time of trial. A. Q. I accept that. I'd like you to take -- with the understanding
that Mr. Sims, at least as of April 20th, 2010, was Mr. Guide's boss, and Mr. Guide, with the assumption that he was the Well Team Leader, I'm going to walk you through this E-mail, at least portions of it. About maybe two-thirds of the way down, begins with the: "I also heard you say..." Do you see that? A. Q. Yeah. Quote -- this is Mr. Sims drafting an E-mail
to Mr. Guide, the Well Team Leader? A. Q. A. Q. Do -- do we know if he ever sent the -I can represent to you he did not. Okay. He did not. This is his draft, quote -A. Q. M-h'm. -- "I also heard you say" -- "you" being
Mr. Guide -- "I also heard you say disgustedly that we 'can't take forever to make a decision,' closed quote, after a few second pause while everyone was thinking. Also heard, 'I had to go outside to save my family from being killed,' close quote, apparently randomly during
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the call.
I'm sure nobody had a clue what you were
talking about." Did I read that correctly? A. Q. You did. Third paragraph from the bottom, quote, "You,"
Mr. Sims talking to Mr. Guide now in the draft E-mail, "You seem to love being the victim. someone else's fault. Everything is
You criticize nearly everything
we do on the rig but don't seem to realize that you are responsible for everything we do on the rig." Did I read that correctly? A. Q. Yes, you did. Next paragraph, Mr. Sims to Mr. Guide again,
in an E-mail that Mr. Sims drafted but did not send, quote: "You seem to think that running is more Left to go run in the
important than well control.
middle of trying to pull the stuck logging tool free." Did I read that correctly? A. Q. You did. Next paragraph, "You will not call the rig in You have to sneak out of the room and
the ops room.
call them on your cell phone or go back to your office while everyone one is in the ops room." Did I read that correctly? A. You did.
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Q.
Next paragraph, "you" again Mr. Sims in a "You
draft E-mail that he did not send to Mr. Guide:
can't sit in a meeting and listen to others' opinions without arguing them. You think when somebody has an You complain that
opinion...they are demanding action.
a bunch of young engineers are throwing out all kinds of wild ideas and that it is driving you crazy. don't listen. You
You key on a random word or phrase and
then you fixate on that and don't hear anything else. You are always defensive and the victim. You seem to
not want to make a decision so that you can criticize it later." Did I read that correctly? A. Q. You did. Next paragraph and the final paragraph, "I,"
Mr. Sims, speaking to Mr. Guide in a draft E-mail he did not send: "I will hand this well over to you in
the morning and then you will be able to do whatever you want. I would strongly suggest, for everyone's
sake, that you make logical decisions, based on facts, after weighing all the opinions. Taking action just
because the" Well Site Leaders "want to do it, when there is strong argument against and multiple contrary opinions is not advised." Did I read that correctly?
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A. Q.
You did. I'd like your honest reaction as to what you,
as the CEO of the BP companies at the time that Mr. Sims drafted this E-mail to Mr. Guide, the Well Site Leader for the DEEPWATER HORIZON that blew up, blew out, April of 2010, what's your reaction as to that E-mail or that draft E-mail? MR. GODFREY: MR. WEBB: question. A. I'm not really sure I have a reaction, really. He was Objection to the form.
It's an E-mail, as you said, was never sent.
clearly very frustrated with his colleague, and he wasn't very happy with him, but I'm not sure what else. If -- if you conclude. Q. butt in. A. (By Mr. Underhill) If you -- I didn't mean to Go ahead. I'm not sure what else we can conclude on the He clearly thought better of it and
basis of that.
decided never to send it. Q. A. Q. Well, if you thought -Sure. Put it this way: Let's play pretend. You're
my boss, I report to you, and I'm a Well Site Leader for the DEEPWATER HORIZON, I, as the Well Site Leader
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represent my company, I'm its representative onboard, I'm -- I'm the highest representative onboard. If you,
my boss, thought of me and my abilities what Mr. Sims wrote down in this draft E-mail to Mr. Guide, why in the world would you keep me as an employee? wouldn't you fire me? MR. GODFREY: MR. WEBB: question. A. I'm not certain there's anything in here that There's clearly Ob -- objection as to form. Why
suggest -- talks about his capability. references to his behavior.
I don't think there's
anything in here that talks about Mr. Guide's ability as a Well Site Leader. I don't know what -- what I guess -- I
circumstance was being described here. don't know. You may do, I don't.
So I -- I'm
reluctant to draw any great conclusion based on a draft E-mail that was never sent, I'm afraid. Q. (By Mr. Underhill) So if you drafted that
E-mail to me and I was your employee and I'm the Well Site Leader, you wouldn't fire me? MR. GODFREY: MR. WEBB: A. Objection as to form.
Objection to form.
As I said, I -- I don't -- I don't think this
E-mail is the basis for firing or making a
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determination of firing anyone, frankly.
You need
something more than a draft E-mail that was clearly -well, "clearly." of frustration. I imagine it was drafted in a moment I -- and I imagine -- I don't know, of
course -- that in -- with the cold light of day, Mr. Sims decided not to send it, be -- believing that there was a better way to engage with his employee. But I don't -- I can't see anything here that says that this gentleman doesn't have skills and capability to be a Well Site Leader. Q. (By Mr. Underhill) The next exhibit, behind Please take
Tab 11, previously marked as Exhibit 1129. a moment -- it's a short one. A. Q. M-h'm.
Take a moment to read it, and let -- my Have you ever seen
question when you're finished is: this document before? A. Q.
I have not ever seen this document before. Now, this E-mail, at least according to the
document, appears to have been sent -A. Q. A. Q. A. M-h'm. -- actually. M-h'm. It's a string. M-h'm.
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Q.
The first one in the exhibit -- it's the
bottom one -- is dated Thursday, April 15th of 2010, five days before the DEEPWATER HORIZON tragedy, correct? A. Q. Correct. Mr. Sims E-mails Mr. Guide, quote: "John, Can
you meet me tomorrow morning in the meeting room around 6:15 to 6:30? A. Q. David." Did I read that correctly?
Correct. And the same day, Thursday, April 15th, did
Mr. Guide respond to the E-mail? A. Q. He did, yes. And what did he respond? What did he say to
Mr. Guide? MR. GODFREY: A. Q. A. Q. A. All right -(By Mr. Underhill) What did he write -The -- the --- in the E-mail to Mr. Guide? The E-mail says: "Are you going to fire me?" Objection as to form.
I'm a bit confused by the -- the sequencing action. Wasn't the -- the first E-mail was sent at
2:48, and the second one was sent at 3:30, according to the sequencing on the E-mail. Q. It's a BP document. That's the best I can
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tell you, sir. A.
Does it say --
It says, "Are you going to fire me," but I
don't know whether the "Are you going to fire me" came before or after the "Can you meet me in the meeting room?" It would be logical to imagine it did, but the And I'm
date and timing doesn't seem to imply that. not being -Q.
Next, behind Tab -- behind Tab 12, Exhibit
96 -- previously marked as Exhibit 96. A. Q. Okay. It's a series of E-mails. What I'd like you
to do is -- is go through them front to back, and the first question will be: E-mails before? A. I was -- I believe I was shown this E-mail in Have you seen any of these
the course of the Congressional testimony. Q. And when you say "this E-mail," the exhibit The first one is
itself is actually a compilation.
from Mr. Kent Corser to some other BP employees, dated Tuesday, June 22nd of 2010, correct? A. Q. Yes. Yes. Well -- correct.
And that top page there, Bates No. 97030, you
have seen that page before? A. I don't think I've seen this page before, no.
I was referring to this page, "dancing to Village
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People." Q.
I don't think I've seen this one. I'll represent to you that the top page was
from Mr. Corser, who was a mem -- do -- do you know that Mr. Corser was a member of the Bly Team? A. Q. No, I didn't know. I'll represent to you that he was and that
he's writing to other Members of the Bly Team. A. Q. Okay. And according to the E-mail, it says what,
"Please read"? A. Q. It says: "Please read."
Does it appear that Mr. Corser is asking the
people listed on the recipient list of that June 22nd, 2010 E-mail to read the attached E-mails; that is, those between Mr. Sims and Mr. Guide? A. Q. It does, indeed. And the exhibit consists of three other pages
Bates-stamped BP-HZN-BLY00097031 through 33, correct? A. Q. Correct. Let's go to the page -- I think you're on the Bates No. 031, do you have that before
correct one. you? A. Q. A. 031.
That's it.
Are you there? I am.
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Q.
Thank you. The bottom part of the string there, who is it
from, and who is it to? A. Q. A. Q. A. Q. A. Q. It's from John Guide to David Sims. And dated when? April the 17th. 2010? 2010. Three days before the blowout? Correct. Could you read the text of the E-mail into the
record for me, please? MR. GODFREY: objection as to form. MR. UNDERHILL: Q. Fine. Objection to foundation,
(By Mr. Underhill) I'll do it for you, and
then could you tell me when I'm done whether I've read it correctly or not. A. Q. Okay. "David, over the past four days there has been
so many last minute changes to the operation that the WSL's have finally come to their wits end. The quote
is," quote, "'flying by the seat of the pants,'" close quote, period. "Moreover, we have made a special boat Everybody wants to do the
or helicopter run every day.
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right thing, but, this huge level of paranoia from engineering leadership is driving chaos. "This operation is not Thunderhorse. Brian
has called me numerous times trying to make sense of all the insanity. Last night's emergency evolved
around the 30 barrels of cement spacer behind the top plug and how it would affect any bond logging," parens, (I do not agree with putting the spacer above the plug to begin with)," close parens. "This morning Brian
called me and asked my advice about exploring opportunities both inside and outside of the company." Did I read that correctly? A. Q. You did. Final paragraph: "What is my authority? With
the separation of engineering and operations, I do not know what I can and can't do. The operation is not
going to succeed if we continue in this manner," period. A. Q. Did I read that correctly? You did. Three days after this E-mail was sent from
Mr. Guide to Mr. Sims, what happened? A. HORIZON. Q. Did Mr. Sims, according to the exhibit, The accident, the DEEP -- on the DEEPWATER
respond with an E-mail to Mr. Guide?
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A.
I think this is -- is this -- is this the
response at the top of the -Q. A. Q. A. Q. A. Q. 2010? A. Q. He did. Let me see if I read it correctly, quote: I think the full -Yeah. -- E-mail is actually on the next page -Okay. -- Bates No. 032. Yes, he did. And did he do so the same day, April 17th of Did he respond?
"John, I've got to go to dance practice in a few minutes. Let's talk this afternoon. For now, until
this well is over, we have to try to remain positive and remember what you said below - everybody wants to do the right thing. their cue from you. The Well Site Leaders will take If you tell them to hang in there
and we appreciate them working through this with us (12 hours a day for 14 days) - they will. It should be
obvious to all that we could not plan ahead for this well" -- "for the well conditions we're seeing, so we have to accept some level of last minute change. "We've both been in Brian's position before. The same goes for him. We need to remind him that this
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is a great learning opportunity, it will be over soon, that the" issues -- "and that some issues - or worse exist anywhere else." Did I read that correctly? Objection, no. You did
MR. GODFREY: not. Q.
(By Mr. Underhill) Let me start all over, that "We've been both in Brian's position We need to remind him
last sentence: before.
The same goes for him.
that this is a great learning opportunity, it will be over soon, and that the same issues - or worse - exist anywhere else." A. Q. You did. Continuing on: "I don't think anything has Did I read it correctly?
changed with respect to engineering and operations. Mark and Brian write the program based on discussion/direction from you or best engineering practices. If we had more time to plan the casing job,
I think all this would have been worked out before it got to the rig. If you don't agree with something
engineering related, and you and Gregg can't come to an agreement, Jon or me gets involved. operational, it's your call." A. Q. You did. Finishing up, it goes on, quote: "I'll be If it's purely
Did I read it correctly?
back soon and we can talk.
We're dancing to the
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Village People," close quote. correctly? A. Q. You did.
Did I read that
Based upon just your normal understanding, the
usage of the word "paranoia" in the English language, can you give me your understanding of what that means? MR. WEBB: Q. Objection --
(By Mr. Underhill) I'm not asking for a
psychological definition, just your understanding. MR. WEBB: A. Q. I will object to form.
My understanding, broadly, would be concerned. (By Mr. Underhill) "Paranoia" is "concerned,"
under your understanding? A. "...huge level of paranoia from engineering
leadership is driving..." -- concern. Q. "Chaos"? Can you give me your layman's
understanding of what that means? MR. GODFREY: A. Q. Unstructured. (By Mr. Underhill) "At their wit's end," can Objection as to form.
you give me your layman's understanding of what that means? MR. GODFREY: A. Same objection. The
I'm not sure how I describe "wit's end."
limit of -- in the limit of something, sort of
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frustrated about change. Q. (By Mr. Underhill) "Flying by the seat of
their pants," can you give me your layman's understanding of that term? MR. GODFREY: A. Same objection.
H'm, not -- not operating in an organized or
structured way. Q. (By Mr. Underhill) If we plug in the positions
for the people that are both writing these E-mails, receiving the E-mails, and referred to in the E-mails, first one, where Mr. Guide is writing to Mr. Sims, the Wells Team Leader for the Macondo Well is writing E-mail to his boss, BP boss in Houston, and using words like "paranoia," "chaos," "level of insanity," "at their wit's end," "flying by the seat of their pants," "the operation is not going to succeed if we continue in this manner." The Well Team Leader is writing to
his boss and using those words and phrases, correct? A. Q. That's what you've shown me, yes. And the WSLs, Well Site Leaders, referred to
by Mr. Guide, the Well Team Leader, those are the BP representatives on -- on the DEEPWATER HORIZON rig, correct? A. Q. I believe that's the case, yes. So if what I represented to you earlier was,
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in fact, correct, in reporting the organizational structure, the Well Site Leaders aboard the rig, their boss in Houston is referring to them as "flying by the seat of their pants" and "at their wit's end," assuming I have my reporting structure correct; is that right? MR. GODFREY: A. Objection as to form. So John
We may have to go over it again.
Guide -- John Guide to David Sims. Leader? Q. Leader. A. Q. A. Q. Well Team Leader, okay. David Sims is his boss. Yeah.
He's the Well Site
(By Mr. Underhill) John Guide is the Well Team
Okay.
You didn't ask, but I'll be glad to tell you,
the Well Site Leaders are -- at that time were Bob Kaluza and Don Vidrine. Do you still have the question
in mind, or would you like me to repeat it? A. Q. A. Sorry. MR. UNDERHILL: Mr. Reporter, could I No, sir, I'm -- I'm clear. Okay. Could you answer the question? What was the question again?
So sorry.
prevail upon you to go back and read my question? (Requested portion was displayed and read as
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follows: QUESTION: "And the WSLs, Well Site Leaders,
referred to by Mr. Guide, the Well Team Leaders, through the -- the BP representatives of the DEEPWATER rig" -THE WITNESS: down. Slow -- slow down, slow
I need to understand the question. (Requested portion was displayed and read as
follows: QUESTION: "And the WSLs, Well Site Leaders,
referred to by Mr. Guide, the Well Team Leaders, through the BP representatives on the DEEPWATER HORIZON rig, correct?") THE WITNESS: the question. Sorry. MR. UNDERHILL: I don't know if you have Let -I still don't understand
it -- I don't think it's complete there. let's -THE WITNESS: MR. UNDERHILL: Q. Okay.
Let's just try it again.
(By Mr. Underhill) If -- if I've given you
accurately the titles and positions -A. Q. M-h'm. -- of the Well Site Leaders, the Well Team
Leader, and Well Team Leaders' boss, Mr. Sims --
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A. Q.
M-h'm. -- BP's Houston Well Team Leader is referring
to the two highest individuals on the rig, three days before it blows out, as "flying by the seat of" their "pants" and at "their wits end," correct? A. He's referring -MR. GODFREY: A. Objection as to form.
He's saying the quote is "flying by the seat
of" their "pants," yeah. Q. (By Mr. Underhill) And, Mr. Guide, the Well
Team Leader in Houston, is telling his boss, using words like "paranoia," "chaos," -A. Q. A. Q. A. Well --- "insanity," he's using --- he's --- those words to his boss, is he not? I think he's using those words to refer to the That's
Engineering leadership concern, the oversight. what it -- what it appears to be.
The "...huge level
of paranoia from engineering leadership," which is, one presumes, the leadership above Mr. Guide, which is therefore, the Leadership -- the -- one presumes Mr. Sims and his colleagues, who are concerned to ensure that things are done appropriately on the well. I think that -- I think that's --
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Q.
Have you ever seen -- have you ever seen a
reference to any well -- other than this document and this particular well, have you ever seen BP Well Team Leaders, and Executives in Houston, referred to -whether it's the Engineering Team or the entire team, and the well, with words like "paranoia," "insanity," "chaos," "wits end," "seat of their pants"? ever seen that before? A. Q. A. Q. A. Q. I haven't. Would you expect to see that -No. -- in a communication like this, between -I wouldn't expect to see that. Is this the standard of care that, when you Have you
were the Chief Executive Officer of BP, is this kind of language, these kinds of references, the standard of care that you would expect for the people that are responsible for a rig, for the people aboard the rig, for the property itself, for the environment? A. I'm not certain -MR. GODFREY: MR. WEBB: question. A. of care. -- the E-mail says anything about the standard It clearly articulates a dialogue that was Objection to the form.
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going on between a number of people on the Team.
It
doesn't in any way allow you to draw a conclusion as to the standard of care that they were exercising -Q. A. Q. A. Q. (By Mr. Underhill) You don't think that --- one way or another. I'm sorry. Go ahead. That's fine.
No, that's okay.
You don't think, just as an example, that Well
Site Leaders flying by the seat of their pants, you don't think that that -- that that has relevance to the standard of care? MR. WEBB: the question. A. The -- the -- the reflec -- that -- that I -- I don't Ob -- object to the form of
reference is a quote on a -- of a quote.
think you can draw any conclusion as to the standard of care that was being exercised by the Well Site Leaders in carrying out their task based on this E-mail. Q. (By Mr. Underhill) You don't think that your
Well Team Leader, Mr. Guide, in this case, referring to Well Site Leaders at their wits end and flying by the seat of their pants, that doesn't have any relevance to the standard of care exercised by the Well Site Leaders aboard the rig? MR. GODFREY: Objection to form.
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MR. WEBB: question. A.
I -- I don't believe that you can draw any
conclusions about the standard of care taken from a couple of E-mail interchanges. Q. (By Mr. Underhill) I'll represent to you, and
I don't have the testimony to quote it, so I'll paraphrase it -- and I'm sure I'll be challenged, but it'll be my duty to connect up at the time of trial before Judge Barbier. Mr. Sims was asked in testimony,
deposition under oath, whether he had more responsibility for safety than the bed maker and the cook employed by Transocean aboard the DEEPWATER HORIZON. And I will further represent to you that
Mr. Sims couldn't answer the question. MR. GODFREY: MR. WEBB: Q. Objection as to form.
What -- what's the question?
(By Mr. Underhill) Would you expect the Well
Team Leaders' boss, that is, Mr. Guide's boss, Mr. Sims, to have more responsibility for safety aboard the DEEPWATER HORIZON than the cook and the bed maker employed by Transocean aboard that rig? MR. WEBB: question. MR. GODFREY: Object to form. Objection to form of the
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A. Q.
I -- I -- I would expect that -(By Mr. Underhill) And -- and let me pref -And I'm asking you for your opinion as
let me go back.
of the time that you held the Chief Executive Officer position -A. Q. Yeah. -- prior to October 1st of 2010. MR. WEBB: question. MR. GODFREY: A. Same objection. Objection to the form of the
I -- I would expect that Mr. Sims had
accountability for ensuring that the -- the right people were in place, the right structures, processes were in place, the operation was being conducted in a safe way. But -- but of course, he wasn't actually on
the rig or anytime on the rig, so I can imagine how you could answer the question rather differently. So if your question is about on the rig in the moment, then it's entirely reasonable for him to say something rather different. But of course in the
context of the -- a more -- a more global view of the operation, then clearly, he has more responsibility. Much more. Q. (By Mr. Underhill) Having looked at these
E-mails, the Guide/Sims E-mails, you've talked a lot
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about during -- during prior testimony here this morning, you were asked questions about process safety, about root cause, root cause analysis. These E-mails
we've just been reading for the last half hour or so, can you see a systemic problem there? A. I don't think in the few E-mails that you've
shown me allows anyone to draw any conclusions about systemic problems. Q. Well, I didn't ask about anyone. I asked
about you. A. Well, it doesn't -- it certainly does not
allow me to draw a -- a conclusion as to a systemic problem. Q. Do you think that these -- whether you think
these E-mails' evince a deeply flawed systemic problem or not, do you think at least these E-mails merited a mention in the Bly Investigation Report? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A.
The Bly Investigation Report was an entirely It was conducted by Mr. Bly and I played no part in
independent Report.
the Team doing the investigation.
dictating what or should -- what should or should not go into it. Q. I -I --
(By Mr. Underhill) I didn't ask you if you
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did.
I asked you a different question.
I asked you:
Can you -- I'll ask you this: strike that. Go back.
Do you think you --
The Bly Report was issued on, I
believe, September 8th or 9th of 2010 -A. Q. Yes. -- correct? And as of that date, you still held the title of -A. Q. A. Q. A. Q. I did --- Chief Executive Officer -Correct. -- for BP Group, correct? Correct. As of the time that the Bly Report was issued,
and at the time you still held that position, do you believe that these E-mails we've just gone through, particularly Exhibit 96, the insanity, paranoia, chaos, et cetera, E-mails, do you think that that merited at least a mention in the Bly Report? MR. WEBB: question. A. that. I -- I -- I don't think I have a basis to say I -- I don't know the context in which they They Objection to the form of the
were -- they were clearly, as you identified.
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were identified by at least someone on the Team that wrote the Bly Report. I -- I'm not able -- able to
judge whether they should or shouldn't have been -have been included, based on what you've presented to me today. Q. (By Mr. Underhill) From that exhibit, quote --
this is the Guide to Sims E-mail, quote, "The operation is not going to succeed if we continue in this manner," close quote. Three days later, did it succeed? MR. GODFREY: MR. WEBB: Q. succeed? MR. GODFREY: MR. WEBB: A. Objection to form. Object as to form.
Objection to form.
(By Mr. Underhill) The Operation, did it
Objection to form.
There was a cran -- tragic accident involving
multiple causes and multiple people. Q. (By Mr. Underhill) Can we conclude from your
answer that it did not succeed? A. Well -MR. GODFREY: Q. Objection as to form.
(By Mr. Underhill) I didn't ask you what I simply asked you: Did the operation
caused it. succeed?
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A.
And what we don't know from this is what
operation were they referring to. Q. Well, let me give you context. My context,
the context of my question. The Operation, from my question, and the context for that Operation, is a blowout, an explosion, a fire, 11 souls who were lost, people that were injured, some severely, a rig that lies at the bottom of the Gulf of Mexico, the largest oil spill known in our nation's history, that's my context. MR. GODFREY: there a question pending? MR. WEBB: Is there a question? I -- I Objection as to form. Is
don't hear a question yet. MR. UNDERHILL: And we'll get to it, so
if you'll do me the courtesy of letting me finish, and I'll do you the courtesy of waiting for your objection. MR. GODFREY: start your question -Q. (By Mr. Underhill) So the question -- so the I'd appreciate that you
question, sir -MR. UNDERHILL: Q. -- and counsel --
(By Mr. Underhill) -- is given that context
that I just gave you, did the operation succeed? MR. WEBB: Objection to form.
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MR. GODFREY: A.
Object as to form.
This -- the E-mail trail refers to an I -- I -- I -- I don't believe it's I don't
Operation.
referring to the totality of the Operation. know that.
But I can't -- I can't determine one way or
another what this reference to Operation -Q. (By Mr. Underhill) My question was: If you
accept -- and perhaps you don't, but if you accept my context for the term "Operation," did it succeed? MR. GODFREY: MR. WEBB: A. Object as to form.
Objection to form.
Clear -- clearly, the -- there was a tragic, That's what you've described. Now,
tragic accident.
whether that links this ref -- reference to Operation, to a tragic accident, I can't tell from this E-mail. Q. (By Mr. Underhill) Can you see how a
reasonable person and, indeed, a reasonable jurist, could look at Mr. Guide's last sentence, and look at it not as a statement, but as prophecy? MR. GODFREY: MR. WEBB: question. A. that way. Q. I can imagine how that could be interpreted Indeed. (By Mr. Underhill) Do you know why the Bly Object as to form.
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Report did not include a root cause analysis? A. The Bly Report was set up to determine the
cause of the -- of the accident, and -- and that's what -- what it did to -- I -- I -- I -- I -- I believe in a rigorous and robust way. And it certainly, to my
knowledge, it has stood the test of time in determining the cause of the accident. And as I understand, the
Presidential Commission agreed with around 90 percent of the Report. Q. A. Q. Are -- were you finished? (Nodding.) Are you aware that Matthew Lucas was a member Do you know who Matt
of the Bly Investigation Team? Lucas is? A. Q.
I don't know who Matthew Lucas is. I'll represent to you that he was a member of
the Bly Report -- or the Bly Investigation Team, and in fact, his -- he's a root cause specialist. day job in BP. A. Q. M-h'm. That he had to seek a dispensation to exclude That's his
root cause analysis from the Bly Investigation and its ultimate Report? MR. GODFREY: Objection as to form. And
I instruct the witness not to answer.
The Magistrate
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has already ruled on that, and you know that. MR. UNDERHILL: I'm sorry. Does the
witness -- I haven't asked him about what counsel said. I'm asking him is he aware that he -MR. GODFREY: That's the subject of a
Motion before Magistrate Judge Shushan on the Bondi document was -- was -MR. UNDERHILL: Bondi document. I'm not asking about a
I'm asking if he knows that Lucas --
regardless of where he got it, that Lucas sought a dispensation. it. Not who gave it to him, not who granted
That Lucas sought a dispensation to exclude root That's the
cause analysis from the Bly Investigation. only question. MR. GODFREY:
Let me consult with my
client to determine whether or not -MR. UNDERHILL: MR. GODFREY: unrelated -MR. UNDERHILL: MR. GODFREY: MR. UNDERHILL: Certainly. -- to privilege. Certainly. Certainly. -- his knowledge is
(Discussion off the record.) MR. GODFREY: question. You may answer the
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A. Q.
I wasn't aware. (By Mr. Underhill) Okay. So you, who at the
time the Bly Report was commissioned, initiated, whatever you want to call it, all the way through the date that it was ultimately issued in September of 2010, you were never aware that root cause analysis, was expressly and specifically excluded from the Bly Investigation? A. I was aware of the terms of reference as we
discussed earlier today, which were very clear. Q. But, actually, the terms of reference include
systemic causes, did it not? A. today. The terms of reference are as we reviewed We can go back and just confirm what was in the
terms of reference. Q. You're right. Be glad to. Do we have it?
MR. UNDERHILL:
(Discussion off the record.) MR. UNDERHILL: Q. My Report.
(By Mr. Underhill) I don't have the exhibit
number, Mr. Hayward. MR. GODFREY: MR. UNDERHILL: Exhibit 2. Exhibit 2. Thank you.
(Discussion off the record.) MR. GODFREY: Well, the terms of
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reference are Exhibit 2.
The Bly Report is Exhibit 1. It -- it -- hold on.
MR. UNDERHILL: Hold on. Q. Hold on.
We'll get there, sir.
(By Mr. Underhill) If you'll take the binder,
which is -- includes the Bly Report, if you open it up, you'll find the appendices. The appendices are Exhibit
2, in this MDL Litigation, and the first page of Exhibit 2 is the -- the terms of reference. What I want to ask you, is that the terms of reference? A. Q. It is the terms of reference. Under Paragraph 3D, why don't you tell me what
that says? A. Q. It says: "Critical factors." Paragraph 3 reads:
Let me back up actually.
"Prepare a report to include" and then colon, correct? A. Q. Correct. And then "d.," critical factors listed under
that are what? A. Q. "Immediate Causes, System Causes." So why were system causes not included in the
Bly Report? MR. GODFREY: A. Objection to form.
To -- to my knowledge and my understanding,
the Bly Report was completed in line with the terms of
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reference described here. before I left BP. Q.
It was issued three weeks
(By Mr. Underhill) So does that mean that you
understand that the Bly Report did, in fact, look to -I'm looking at terms of reference, quoting, "System Causes"? A. It looks at the causes of the accident and --
and identified them -Q. A. Q. ahead. A. And made recommendations based on what they Do you know --- and made recommendations. I'm sorry. I didn't mean to cut you off. Go
found to be the cause of the accident. Q. Do you know -- you don't know whether they
looked at root causes or not, though? A. Q. They followed the terms of reference. Okay. Almost done. Could you go back to the
Annual Report, please?
Page 12. This is the 6033? That is -The big one? -- correct, correct. Okay. Just let me know
MR. GODFREY: MR. UNDERHILL: MR. GODFREY: MR. UNDERHILL: MR. GODFREY: Q.
(By Mr. Underhill) Page 12.
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when you're there, Mr. Hayward. A. Q. Page 12. Page 12? (Reviewing document.) I'm going to focus on Page -On the
There you go.
And this is -- there's some graphs.
right-hand column the middle graph, do you see "Number of employeesa (thousands)"? A. Q. again. Yep. I'm going to do my old reading drill here Tell me if I read it accurately. Quote,
"Employees include all individuals who have a contract of employment with a BP Group entity." "In 2007 we began a process of making BP a simpler, more efficient organization. Since then our
total number of employees has reduced by approximately 18,000, including around 9,200 in our non-retail businesses." Did I -A. Q. Correct. -- quote that correctly? You probably have this figure reasonably at the tip of your hand. A. I would have done a year ago. I don't
anymore, I'm afraid. Q. Approx -- what I was actually going to ask is:
Rough figures, do you know how many people BP employed
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in that period? A. Q.
Was it a hundred thousand, 90,000?
I believe it was around 90,000. Around 90,000. So I'm not going to do this to
you on the math part, but if we wanted to figure out what the percentage of employee cuts were, we would divide 90,000 into 18,000, correct? A. Q. A. That's correct. Okay. In as much as that -- a lot of it was related
to businesses that we sold, in particular retail businesses, which were probably 10,000 people of the 18. Q. A. Q. Actually, it says 9200, does it not? Yeah, yeah. Thank you. When BP decided, when you were at
the position of CEO, to cut employees as part of cutting costs, could you describe briefly the process? Did you come up with a number, 18,000, for example, or did you come up with a percentage, we'll cut 20 percent, 5 percent, 7 percent? A. actually. How did you do it?
We -- we didn't have a going-in target at all, We -- we -- we went through a process of
simplifying our organization, reducing overlap redundancy. We did an analysis of the organization,
and looked at -- as I said earlier, it was focused very
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much on the 30,000 people that operates above the Operations. Q. The -- was there a matrix by which BP, when it
was making employee cuts, tried to balance and calculate the effects upon safety, or not, if you felt there were no effects upon safety? A. No, there was no matrix, because as I said,
this focus was at the overhead level. Q. A. So -At the -- at the level of corporate centers It wasn't about operational people
and head offices. at all.
It was trying to make operational -- the lives
of operational people simpler, by reducing the layers of -Q. A. You know, I'm not a conceptual guy. Go ahead.
-- reducing the layers of Management and the
complexity of the reporting lines. Q. I'm not a conceptual guy, I like concrete HSSE
examples, so let me give you a concrete example.
employees that used to be assigned to the Transocean rig DEEPWATER HORIZON, that job was eliminated. you call that an overhead position? A. I think in that case, as -- as we saw this Would
morning, I was reminded there were three people doing that job on that rig.
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Q. A.
Who? There were -- I -- I don't recall what we
read -- we looked at this morning, but there was a couple of people from -- there's a Transocean HSE rep and a BP HSE rep, and the decision was taken that -that there was over -- overlapping lack of clarity around who was accountable. Q. Well, you're not suggesting Transocean made
the rig or made the decision to cut BP's -A. Q. No, I'm not suggesting that at all. So -- so it was BP that made the decision to
cut those positions, correct? A. Q. It was. So it's not fair to blame Transocean for
cutting those positions in BP's employees? A. No, I -MR. GODFREY: question. A. the case. I wasn't for one minute suggesting that was What I was highlighting is there were Object to the form of
multiple people on the rig doing that task, and that, as I understand it, was the basis for moving the position in BP. Q. (By Mr. Underhill) The word -- the letters
HSSE, what do those stand for?
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A. Q.
Health, Safety, Security, and Environment. DEEPWATER HORIZON tragedy, as you have used
the word, or the phrase, were there effects upon health? A. Q. A. Q. I'm not being -Yes. -- facetious, I'm very serious -Yes. -- about this. Were there effects upon
peoples' health? A. Q. Yes. And, obviously, people that died, had an
ultimate effect on health, correct? A. Q. A. Q. A. Q. A. Q. Correct. Safety, an effect on safety? Yes. Security, effect on that? Probably, yes. Effect on the environment? Yes. So the people who held the title of Health,
Safety, Security, and Environment that used to work aboard the DEEPWATER HORIZON, were cut, those positions cut, prior to, as you termed it, the tragedy, they weren't there to supervise health, safety, security, and environment on April 20th of 2010, were they?
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Objection, form of the
There's no evidence from the investigation
that if they had have been present, it would have made any difference. interpret. They would not have been able to
They would not have been able to oversee They wouldn't They
Halliburton's pumping of the cement.
have interpreted negative pressure differently.
wouldn't have been able to indicate to the drillers that they weren't doing the right thing with respect to what hydrocarbons are coming into the wellbore. They
wouldn't have been able to instruct the drillers as to what procedures to take when the well started flowing. They wouldn't have changed the design of the fire and gas system. And they certainly wouldn't have changed
the outcome of the blowout preventer failing. Q. shows -MR. ROBERTS: Q. Objection, form. (By Mr. Underhill) You said the evidence
(By Mr. Underhill) You said the evidence
shows -- forgive me, sir, but I wasn't aware that Mark Bly or BP was appointed as judge and jury in this case to decide what was the cause of the accident, or not. Or if am I mistaken on that? MR. GODFREY: Objection, move to strike.
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I -- I may have used a word that you interpret For that I
in a legal sense inappropriately. apologize. Q. A. (By Mr. Underhill) Well --
What I was -- what I was trying to indicate I don't
was that the results of the Bly Investigation. believe that the presence or absence of an HSSE
professional on that rig would have changed the outcome given the multiple failures that occurred on that day. Q. Well, how about if -MR. GODWIN: Q. Object to form.
(By Mr. Underhill) How about if the HSSE Rep
did just one thing he was there, or she, for the conduct of the negative pressure test and said "Fellows, not a good test" -A. Q. Well --- "do not proceed, do not pass go, do not
collect $200, stop what you're doing and figure out whether you have a well flowing." A. Q. A. Q. Yeah. Would that be one thing perhaps that -Well -- well -Let me finish, please. Would that be perhaps
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one thing that that position that was cut, would that be one thing that perhaps that person contributed to? MR. WEBB: question. MR. GODFREY: A. Objection, form. Objection, form -- form of the
The HSSE individual would not have had the
training or the skills to interpret a negative pressure test. Q. (By Mr. Underhill) Do you know what a job
hazard analysis is? A. Q. I do. And do you think that the HSSE people, that
position, whether they have anything to contribute in terms of a job hazard analysis? A. Q. Potentially. In terms of -- you -- you indicated that there
were no matrices used when BP decided to cut a position that is relative to safety. said. There was no matrix you
If we cut this, what's the effect on safety.
Does that also apply to the decision, whomever made it, to cut the HSSE positions from the DEEPWATER HORIZON? A. taken. THE COURT REPORTER: A. Tape. I don't know what -- on what basis that was
But I doubt very much there was any -- any
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belief that it was increasing risk. MR. UNDERHILL: Thank you. THE VIDEOGRAPHER: 7:18 p.m., ending Tape 9. (Deposition adjourned at 7:18 p.m., to be resumed Wednesday, June 8, 2011, at 7:30 a.m.) Off the record at Are we out of time?
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CHANGES AND SIGNATURE WITNESS NAME: ANTHONY HAYWARD JUNE 6, 2011 REASON
DATE OF DEPOSITION: PAGE LINE
CHANGE
_______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________
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I, ANTHONY HAYWARD, have read the foregoing deposition and hereby affix my signature that same is true and correct, except as noted on the attached Amendment Sheet.
ANTHONY HAYWARD
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THE STATE OF
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COUNTY OF
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Before me, , on this day personally appeared ANTHONY HAYWARD, known to me (or proved to me on the oath of or through to be the person whose name is subscribed to the foregoing instrument and executed the same for the purposes and consideration therein expressed. GIVEN UNDER my hand and seal of office this day of , 2011. )
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Notary Public in and for The State of
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN RE: OIL SPILL BY THE OIL RIG "DEEPWATER HORIZON" IN THE GULF OF MEXICO, ON APRIL 20, 2010 ) ) ) ) ) ) MDL NO. 2179 SECTION "J" JUDGE BARBIER MAG. JUDGE SHUSHAN
REPORTER'S CERTIFICATION TO THE ORAL AND VIDEOTAPED DEPOSITION OF ANTHONY HAYWARD JUNE 6, 2011 VOLUME 1
I, Emanuel A. Fontana, Jr., Certified Shorthand Reporter in and for the State of Texas, hereby certify to the following: That the witness, ANTHONY HAYWARD, was duly sworn by the officer and that the transcript of the oral deposition is a true record of the testimony given by the witness; That the deposition transcript was submitted on , 2011, to the witness or to Attorney , for the witness to examine, sign, and return to Worldwide Court Reporters, Inc., by , 2011. That the amount of time used by each party at the deposition is as follows: Mr. Cunningham - 3 Hours, 51 Minutes Mr. Sterbcow - 2 Hours, 7 Minutes Mr. Underhill - 1 Hour, 57 Minutes
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I further certify that I am neither counsel for, related to, nor employed by any of the parties in the action in which this proceeding was taken, and further that I am not financially or otherwise interested in the outcome of the action. SUBSCRIBED AND SWORN to by me on this 6th day of June, 2011.
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____________________________ Emanuel A. Fontana, Jr., RPR Texas CSR No. 1232 Expiration Date: 12/31/12 Worldwide Court Reporters Firm Registration No. 223 3000 Weslayan, Suite 235 Houston, Texas 77027 (713) 572-2000
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA
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IN RE:
OIL SPILL
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MDL NO. 2179 SECTION "J" JUDGE BARBIER MAG. JUDGE SHUSHAN
BY THE OIL RIG

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"DEEPWATER HORIZON" IN THE GULF OF MEXICO, ON APRIL 20, 2010
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Deposition of Anthony Hayward, taken at Kirkland & Ellis International, 30 St. Mary Axe, 22nd Floor, London EC3A 8AF, England, United Kingdom, on the 8th of June, 2011.
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A P P E A R A N C E S Magistrate Judge Sally Shushan UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA 500 Poydras Street, B345 New Orleans, Louisiana 70130 APPEARING FOR THE PLAINTIFFS' STEERING COMMITTEE: Mr. Stephen J. Herman HERMAN, HERMAN, KATZ & COTLAR 820 O'Keefe Avenue New Orleans, Louisiana 70113 Mr. Robert T. Cunningham Mr. William E. Bonner CUNNINGHAM BOUNDS, LLC 1601 Dauphin Street Mobile, Alabama 36604 Mr. Ronnie G. Penton LAW OFFICES OF RONNIE G. PENTON 209 Hoppen Place Bogalusa, Louisiana 70427-3827 Mr. John Parkerson Roy DOMENGEAUX, WRIGHT, ROY & EDWARDS 556 Jefferson Street, Suite 500 Lafayette, Louisiana 70501 Mr. Calvin C. Fayard, Jr. FAYARD & HONEYCUTT 519 Florida Avenue, SW Denham Springs, Louisiana 70726 APPEARING FOR THE DERIVATIVE PLAINTIFFS, MDL 2185 SECURITIES PLAINTIFFS SUBCLASS: Mr. Richard Warren Mithoff MITHOFF LAW FIRM 500 Dallas St. - Penthouse Houston, Texas 77002 APPEARING FOR BP, INC.: Mr. Richard C. Godfrey KIRKLAND & ELLIS 300 North LaSalle Chicago, Illinois 60654
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Mr. Michael Brock COVINGTON & BURLING 1201 Pennsylvania Avenue, Northwest Washington, D.C. 20004-2401 Mr. Daryl A. Libow SULLIVAN & CROMWELL 1701 Pennsylvania Avenue, N.W. Washington, D.C. 20006-5805 Mr. James J. Neath ASSOCIATE GENERAL COUNSEL BP LEGAL BP AMERICA INC. 501 Westlake Park Boulevard Houston, Texas 77079 APPEARING FOR ANTHONY HAYWARD: Mr. Dan K. Webb Mr. Thomas L. Kirsch II WINSTON & STRAWN 35 West Wacker Drive Chicago, Illinois 60601-9703 APPEARING FOR ANDY INGLIS: Ms. Kathleen H. Goodhart COOLEY LLP 101 California Street, 5th Floor San Francisco, California 94111-5800 APPEARING FOR TRANSOCEAN: Mr. Steven L. Roberts Mr. Carter L. Williams SUTHERLAND ASBILL & BRENNAN 1001 Fannin, Suite 3700 Houston, Texas 77002-6760 Ms. Heather G. Callender TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC. 4 Greenway Plaza Houston, Texas 77046 APPEARING FOR ANADARKO PETROLEUM COMPANY: Ms. Diane C. Hertz Mr. Robert C. Stillwell Mr. Peter C. Neger BINGHAM MCCUTCHEN 399 Park Avenue New York, New York 10022-4689
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APPEARING FOR CAMERON INTERNATIONAL CORPORATION: Mr. David J. Beck Mr. David W. Jones BECK, REDDEN & SECREST One Houston Center 1221 McKinney Street, Suite 4500 Houston, Texas 77010-2010 APPEARING FOR DRIL-QUIP, INC.: Mr. C. Dennis Barrow, Jr. WARE, JACKSON, LEE & CHAMBERS America Tower, 42nd Floor 2929 Allen Parkway Houston, Texas 77019-7101 APPEARING FOR M-I SWACO: Mr. Steven A. Luxton MORGAN, LEWIS & BOCKIUS, LLP 1111 Pennsylvania Avenue, NW Washington, D.C. 20004 Mr. Hugh E. Tanner MORGAN, LEWIS & BOCKIUS 1000 Louisiana Street, Suite 4000 Houston, Texas 77002 APPEARING FOR HALLIBURTON: Mr. Donald E. Godwin Ms. Jenny L. Martinez Ms. Stefanie K. Major GODWIN RONQUILLO 1201 Elm Street, Suite 1700 Dallas, Texas 75270-2041 Ms. Stephanie T. Bragg HALLIBURTON 2107 CityWest Boulevard, Building 2 Houston, Texas 77042-3051 APPEARING FOR WEATHERFORD: Mr. Wayne G. Zeringue, Jr. JONES, WALKER, WAECHTER, POITEVENT, CARRERE & DENEGRE, LLP 201 St. Charles Avenue New Orleans, Louisiana 70170
452
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
APPEARING FOR THE UNITED STATES: Mr. R. Michael Underhill Attorney in Charge West Coast Office U.S. DEPARTMENT OF JUSTICE TORT BRANCH, CIVIL DIVISION 450 Golden Gate Avenue 7th Floor, Room 5395 San Francisco, California 94102-3463 APPEARING FOR THE STATE OF ALABAMA: Mr. Luther Strange Attorney General Mr. Corey L. Maze Special Deputy Attorney General Mr. Winfield J. Sinclair Assistant Attorney General OFFICE OF THE ATTORNEY GENERAL STATE OF ALABAMA 501 Washington Avenue Montgomery, Alabama 36104 APPEARING FOR THE STATE OF LOUISIANA: Mr. Allan Kanner Ms. Elizabeth "Lili" Petersen Attorneys for Louisiana Attorney General KANNER & WHITELEY 701 Camp Street New Orleans, Louisiana 70130-3504 APPEARING FOR OHIO PENSION FUNDS: Mr. Jeffrey C. Block BERMAN DEVALERIO One Liberty Square Boston, Massachusetts 02109 ALSO PRESENT: Mr. Peter Jennings, Logistics Supervisor Mr. Ray Aguirre, Case Manager Mr. Max Kennedy, Videographer Ms. Lilia Garcia Mr. Chad Paris Ms. Cecelia Aguilar
453
1 2 3 4 5 6 7 8 9 10 11 12
INDEX VIDEOTAPED ORAL DEPOSITION OF ANTHONY HAYWARD JUNE 8, 2011 VOLUME 2
Appearances.............................. Examination-Mr. Strange.................. Examination-Mr. Kanner................... Examination-Mr. Roberts.................. Examination-Mr. Godwin................... Examination-Ms. Hertz.................... Examination-Mr. Beck..................... Examination-Mr. Godfrey.................. Redirect-Mr. Cunningham.................. Changes and Signature....................
449 457 477 539 595 660 734 800 859 903 905
13
Reporter's Certificate...................
14 15 16 17
EXHIBIT INDEX Exhibit No. Description Marked
18 19 20 21 22 23 24 25
1356A
6018A
6055
Drilling Contract No. 980249, RBS-8D Semisubmersible Drilling Unit, Vastar Resources, Inc. and R&B Falcon Drilling Co., December 9, 1998, marked CONFIDENTIAL; beginning Bates number, BP-HZN-MBI00021461, ending Bates, number 21545 Complete Document 14 - From 'BP Parties' database, 2010 Drilling Excellence Update PowerPoint DVD, Tony Hayward, Apology
751
849 458
454
1 2 3 4 5 6
6056
6057
June 25, 2010 E-mail string among Tony Hayward, Andy Inglis, Bernard Looney, Christina Verchere, Kent Wells, Subject: Tech update, marked as CONFIDENTIAL; BP-HZN-2179MDL00965473 BP Media Communication Plan for next 2 weeks, May 3, 2010, marked as CONFIDENTIAL; BP-HZN-2179MDL01890180 1890185 Tony Hayward Townhall GoM Response Update, July 16, 2010, marked as CONFIDENTIAL; BP-HZN-2179MDL01115520 1115523 July 9, 2010 E-mail from Tony Hayward, Subject: Gulf of Mexico update from Tony Hayward, marked as CONFIDENTIAL; BP-HZN-2179MDL01617349 - 1617350 United States House of Representatives Committee on Energy and Commerce Subcommittee on Oversight and Investigations, statement by Tony Hayward, Chief Executive, BP plc, June 17, 2010, marked as CONFIDENTIAL; BP-HZN-2179MDL01164162 - 1164167 Printout of 5/18/10 Forbes.com interview, In His Own Words: Forbes Q&A With BP's Tony Hayward; seven pages Tony Hayward Townhall GoM Response Update, July 16, 2010, marked as CONFIDENTIAL; BP-HZN-2179MDL01124483 1124486 September 8, 2010 E-mail from Employee Communications, marked as CONFIDENTIAL; BP-HZN-BLY00076345 & BP-HZN-BLY00076346 Gulf of Mexico SPU Major Hazards Risk Management Policy, marked as CONFIDENTIAL; BP-HZN-2179MDL02027549 2027569
530
533
6058
7 8 9 10 11
535
6059
537
6060
12 13 14 15
543
6061
16 17
551
6062
18 19 20 21 22
585
6063
590
6064
23 24 25
xx
455
1 2 3
6065
Gulf of Mexico SPU GoM Drilling and Completions; GoM D&C Operating Plan/ Local OMS Manual, marked as CONFIDENTIAL; BP-HZN-MB100193448 - BP-HZN-MB100193520 Exploration and Production, Drilling and Completions, Beyond the Best Common Process, marked as CONFIDENTIAL; BP-HZN-2179MDL00333308 Document GP 10-35, Dated 11/18/2008, Well Operations, Group Practice, BP Group Engineering Technical Practices, marked as HIGHLY CONFIDENTIAL; BP-HZN-2179MDL00407729 - 407747 Article of The Washington Post, June 27, 2010, Headline: Trouble at the tiller; If Hayward beats a retreat, it's unclear who could lead BP; three pages April 8, 2010, E-mail from Tony C. Emmerson to Robert Kaluza with Attachments, marked as CONFIDENTIAL; BP-HZN-2179MDL00305452, 305464 - 305477 2009 Annual Individual Performance Assessment of Robert Kaluza, Period Reviewed: 2009, marked as CONFIDENTIAL; BP-HZN-MBI00193095 - 193098 January 11 and 12, 2010 E-mail string to various parties with Attachment: Process Safety 2010 Plan.ppt, marked as CONFIDENTIAL; BP-HZN-2179MDL01109991, seventeen pages Final Report, Blow-out Prevention Equipment Reliability, Joint Industry Project (Phase I?Subsea), May 12, 2009, West Engineering Services, marked as CONFIDENTIAL, BP-HZN-2179MDL00210163 210280 April 22, 2010, Press Release, BP INITIATES RESPONSE TO GULF OF MEXICO OIL SPILL, marked as CONFIDENTIAL TREATMENT REQUESTED BY BP p.l.c.; BP-HZN-SEC00104535 -104536
689
6066
4 5 6 7 8 9 10 11
692
6067
709
6068
719
6069
12 13 14 15 16
721
6070
725
6071
17 18 19
730
6072
20 21 22 23 24 25
773
6073
805
456
1 2 3
6074
April 25, 2010, Press Release, BP FORGES AHEAD WITH GULF OF MEXICO OIL SPILL RESPONSE, marked as CONFIDENTIAL, BP-HZN-2179MDL02176212 - 2176213 May 5, 2010, Press Release, UPDATE ON GULF OF MEXICO OIL SPILL RESPONSE, marked CONFIDENTIAL, BP-HZN-2179MDL01588108 1588109R809 May 6, 2010 BP Press Release, UPDATE ON GULF OF MEXICO OIL SPILL RESPONSE, marked as CONFIDENTIAL; BP-HZN-2179MDL01588106 - 1588107 July 28, 2010 BP Document, MAKING THINGS RIGHT, marked as CONFIDENTIAL; BP-HZN-2179MDL01830445 - 1830446 March 4, 2009 BP document from David Bickerton to SEEAC, Subject: BP Sustainability Review, attaching BP Sustainability Review, marked as HIGHLY CONFIDENTIAL; BP-HZN2179MDL00085565 - 85595 BP Annual Report and Accounts 2006; seven pages Printout from BP website, Executive management/Governance/BP; three pages
807
6075
4 5 6 7 8
809
6076
812
6077
9 10
814
6078
11 12 13 14 15
837 864
6079
6080
16 17 18 19 20 21 22 23 24 25
882
457
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. GODFREY: Day 2. MR. STRANGE:
Good morning.
Welcome to
I believe we're ready. All set?
THE VIDEOGRAPHER:
On the record at 7:33 a.m., continuing the deposition with Tape 10. ANTHONY HAYWARD, having been previously duly sworn, continued to testify upon his oath as follows: EXAMINATION QUESTIONS BY MR. STRANGE: Q. Strange. Alabama. Good morning, Mr. Hayward. My name is Luther
I'm the Attorney General of the State of Your lawyers have probably told you the
Attorney General is the Chief Law Enforcement Officer for a State. I'm also the coordinating counsel for all the States involved in this multidistrict litigation in New Orleans, so I represent not only the State of Alabama but other States that are involved in this case. I want to put you at ease off the bat, and I'm going to tell you I'm not going to ask you if you've gotten your life back. Frankly, I don't care.
I'm here to talk to you about things you said to the people of the Gulf. My focus is on what has
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
happened in the Gulf and what BP has done and plans to do to make it right. So what I'm going to do is I'm going to play for you a CD of a commercial that you made shortly after the disaster on April 20th. I'd like you to look
at the CD, along with the other folks in the room here, and then will ask you some questions about it. MR. STRANGE: MR. GODFREY: as an exhibit? MR. STRANGE: exhibit. This will be marked as an Kym, I'd like -Is this going to be marked
Counsel, here's a copy of it. (Exhibit No. 6055 marked.) MR. STRANGE: Rick, here's a copy. I'm
also going to distribute for the room copies of the written transcript so that they can refer to that, so -MR. MAZE: end. MR. STRANGE: along. THE COURT REPORTER: Ray. May I have one of the CDs, please? MR. MAZE: It's right here. Mark one of the CDs, -- that should be coming They'll be coming from that
459
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. STRANGE: Kym.
It's right here.
Sorry,
THE COURT REPORTER: MR. WEBB:
6055.
Will there be a date when this
plays, so we know what date this is coming from? (Discussion off the record.) MR. STRANGE: times across the Gulf. this particular -MR. WEBB: Or --- broadcast. It was played countless
I don't have an exact date for
MR. STRANGE: MR. WEBB: when it did play? MR. STRANGE:
-- you don't have a date range
It would have been starting
approximately 30 days after the accident, I guess. THE WITNESS: Yeah, I thi -- I think
probably from sometime towards the second half of May. (Discussion off the record.) THE COURT REPORTER: (Video played as follows:) "The Gulf spill is a tragedy that never should have happened. "I'm Tony Hayward. BP has taken full Okay, Peter.
responsibility for cleaning up the spill in the Gulf. We've helped organize the largest environmental
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
response in this Country's history.
More than
2 million feet of boom, 30 planes, and over 1300 boats are working to protect the shoreline. "Where oil reaches the shore, thousands of people are ready to clean it up. We will honor all
legitimate claims, and our cleanup efforts will not come at any cost to taxpayers. "To those affected and your families, I'm deeply sorry. The Gulf is home for thousands of BP To all the
employees, and we all feel the impact.
volunteers and for the strong support of the Government, thank you. We know it is our
responsibility to keep you informed and do everything we can so this never happens again. "We will get this done. right." (End of video.) Q. (By Mr. Strange) Mr. Hayward, would you like We will make this
to see that again? A. Q. No. To the best of your knowledge, is this a true
and accurate recording of a commercial you made and BP aired after the disaster? A. Q. It is. While we're on the subject of media, would it
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
surprise you, Mr. Hayward, to learn that BP spent $93 million in advertisements such as this for the period April through July of 2010? A. that -Q. A. Q. A. But you wouldn't be surprised at -I was aware --- at that number? -- that we were advertising to try and, in I wasn't aware of the number, but I was aware
essence, provide information to people about what we were doing and what we intended to do on an ongoing basis. Q. So it wouldn't surprise you that you spent 300
percent more in '10 than in '09 on media and advertising in the U.S.? A. Of course, with respect, we weren't faced with
the challenge that we had in -- after the terrible accident in the Gulf. inform people. essence. Q. At the time this commercial was made and So what we were trying to do was
Those were information broadcasts, in
broadcast, you were the CEO of BP, correct? A. Q. That's correct. And you served on the Board of Directors; is
that correct?
462
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q.
That's correct. So when you made these statements, you had the
full and complete authority to make these promises binding, didn't you? A. The statements were accurate and reflected
what we -- what we were doing and intended to do. Q. A. Q. And you had the authority to make them? And I had the authority to make them. Okay. Now, let me turn to some of the First of
specific things you said in the broadcast.
all, you said, "The Gulf spill is a tragedy that never should have happened," correct? A. Q. I did. That's an acknowledgement this whole
catastrophe could have, in fact, been avoided, isn't it? A. I think it's evident from all of the
investigations that have occurred subsequent that it could have been avoided if any number of things had fallen into place. If there had been a good cement If the negative
job, it would have been avoided.
pressure test had been properly interpreted, it would have been avoided. If the well control procedures had If the
been followed, it would have been avoided.
blowout preventer had worked, it would have been
463
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
avoided.
There -- there are multiple things that could
have happened. Q. But it could have -MR. GODWIN: Q. Objection, form.
(By Mr. Strange) -- been avoided? MR. ROBERTS: I'll object. Objection,
form. A. And it could -- could have been avoided,
undoubtedly. Q. That's -A. Q. Yeah. That's what I want to know. Then you said, "BP has taken full responsibility for cleaning up the spill in the Gulf." Is that correct? A. Q. That's correct. Did BP take responsibility for the cleanup (By Mr. Strange) Could have been avoided.
because it was responsible for the spill? A. We took responsibility for the cleanup because
we were a responsible party under OPA 1990, and it was our responsibility to clean up the spill. Q. A. spill. Is that because you caused the spill? Doesn't say anything about who caused the It says very clearly under the -- I believe
464
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
under the statute, that we had a responsibility to clean up the spill. I -- I believe that there were
four parties named by the Government as responsible parties. Q. cleanup? A. Q. A. We took responsibility for the cleanup. Full responsibility? We took responsibility for the cleanup. We But you took full responsibility for the
made it clear that we expected the other responsible parties to share their burden, and that remains -Q. A. Q. I'm just asking you --- in place today. -- what you said about your responsibility, It wasn't conditioned on
which is full responsibility. what you just said on -A. Q. I just --
-- contributions from other parties or
insurance or -A. I -- I -- I said -MR. WEBB: question. You can answer. A. I said that we would take responsibility for That's what -- have we got a I object to the form of the
the cleanup.
465
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
transcription -Q. (By Mr. Strange) Do you say you would take
full responsibility for the cleanup? A. Q. A. Q. A. Q. BP has taken full responsibility -It's a simple question. -- for cleaning up the spill in the Gulf. Thank you. That's what I said. That's all I wanted -- that's the answer to
the question. So BP didn't limit its commitment to any set time period, did it? A. Q. It didn't. BP didn't limit its commitment to any amount
of money, did it? A. Q. there? A. Q. There were no limits to time or to money. No limits to time or to money. Thank you. It didn't. In fact, there were no strings attached, were
That sounds like a pretty unqualified commitment, doesn't it? A. I think what we've done and continue to do has
been pretty unqualified. Q. So that means BP will continue to work until
466
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
every drop of oil is removed and every legitimate claim is paid, correct? A. We've -- we've said all along that we will be
there until we have restored the Gulf to its -- its -what's the word I'm looking for? Restored the Gulf to
the -- the way it was prior to the spill. Q. Good. Well, I'm not just so concerned about
what happened in the past, but there are future concerns, as well. So let me ask you this: There are reports
that 15 miles of oil in the form of tar mats still lie off Alabama's coast. Forecasters are predicting as
many as 18 named storms in the Gulf of Mexico this hurricane season. If one of those hurricanes washes
the remaining oil from the spill onto Alabama's beaches, or any other State's beaches, for that matter, will BP honor its promise to, quote, "clean up the spill," to, quote, "get this done," and to, quote, "make this right," by cleaning up that oil? A. My -MR. GODFREY: A. Objection as to form.
My view is that BP will honor the commitment Clearly, I'm no longer in a position to
that I made.
make a commitment about what might happen in the future with --
467
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A.
(By Mr. Strange) Correct. -- respect to that, because I no longer have
the authority. Q. A. Q. A. Q. A. The commitment has already -My --- been made. My -We covered that. -- expectation is that the company will
fulfill the commitments that I made. Q. region? A. Well, there was -- it was -- we always made it At no cost to the innocent taxpayers of the
very clear that the taxpayer would not bur -- share any burden in this. Q. A. Q. A. case. Q. The next thing you said, you said, "BP will Good. It would be BP -That was your promise. It was. And I believe so far that's been the
honor all legitimate claims," correct? A. Q. A. That's correct. So that included States' claims? It included all legitimate claims. I --
468
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A. claims -Q.
Individuals? I wasn't -- I wasn't -- all legitimate
Let me just go over the categories, and you
can just answer it "Yes" -A. Q. A. Q. A. Q. A. Q. A. Q. Okay. -- or "No." Well, I can -States' claims, "Yes" or "No"? Legitimate claims are legitimate -Right? -- claims. "Yes"? I -- I -That's a "Yes." Individuals? A. Q. A. Q. If it's a legitimate claim, yes. Businesses? Legitimate claim, yes. As it relates to economic damages and losses
due to the spill? A. Le -MR. GODFREY: A. I -Objection as to form. I --
Legitimate claims are legitimate claims.
469
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A.
(By Mr. Strange) As it relates --- don't have the full legal listing of what
the claims might be. Q. I just said covered categories, and I just
want to confirm what you've said. A. Q. A. Q. A. Q. A. Q. A. claims. Q. I'm just trying to make sure I understand what All right. Environmental claims? Legitimate claims. Thank you. I -- I can't speak -That's enough. -- to the -That's all I needed to know. -- comprehensive listing of all the various
you were committing to do when you said "all legitimate claims." A. Q. Yeah, I think -So we've covered, I think, most of the
categories. A. Q. A. the case. And I think -Now --- there's no evidence that that's not been
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
That's not what I asked. Now, you said you know at BP that "...it's our
responsibility to do everything we can so this never happens again," correct? A. Q. That's correct. Wasn't it BP's responsibility to ensure that
this never happened in the first place? MR. GODFREY: A. Objection as to form.
Clearly, the -- no one would have wanted a -And, you
such a tragic accident to have occurred.
know, that is why we had so many systems and processes in place to prevent it from happening. And if, you
know -- if any one of them had not failed, then the accident would not have occurred. Q. (By Mr. Strange) Was it your responsibility at
BP to ensure this never happened in the first place? A. I think -MR. GODFREY: A. Objection as to form.
-- in -- in a situation as complex as this,
where so many parties having so many different pieces of it, ascribing our responsibility to ensure it never happens, you -- you cannot take responsibility for human error. Q. So the answer is "No."
(By Mr. Strange) Well, I'm not sure I agree
with what you just said, but would you give me the
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
answer to the question? Was it BP's responsibility to ensure this never happened? A. Q. If it wasn't BP's responsibility --
It was our responsi --- whose B -MR. WEBB: And I object, asked and
answered. Q. (By Mr. Strange) -- responsibility was it? MR. WEBB: A. -- form of the question.
Well, I -- it was clearly our responsibility,
to -- to the very best of our ability, to ensure that no accidents occurred in our Operations, m-h'm. Q. A. (By Mr. Strange) Right. Whether that describes the responsibility, I'm
not -- I don't know. Q. Well, pre -- to prevent this from happening
again, don't you first have to understand and admit what you did wrong? A. I think -MR. GODFREY: A. Objection as to form.
-- we have den -- identified very clearly in
the Bly Report what -- the causes of the accident and who was involved at which stage. Q. (By Mr. Strange) What did BP do wrong that
could have been prevented -- could have prevented --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. GODFREY: Q.
Objection, form.
(By Mr. Strange) -- the spill? MR. GODFREY: Objection as to form.
A.
I -- I think if you look at the Bly Report,
there are eight causes for this accident, and BP had direct involvement in a part of one of them. design the cement. We didn't pour the cement. Object to form. We didn't
MR. GODWIN: A.
That was Halliburton. MR. GODWIN: Excuse me. Object to form.
Q.
(By Mr. Strange) I know. MR. WEBB:
I'm just asking --
Keep going.
Q.
(By Mr. Strange) -- about BP. MR. WEBB: Go -- go ahead. Finish your
answer. A. We didn't -- we, along with Transocean,
erroneously interpreted the negative pressure test. MR. ROBERTS: A. Object to the form.
BP was not monitoring the well, was not BP was not holding the --
monitoring the mud system.
the drill brake and taking corrective action when the well started flowing. BP did not intervene to send the
con -- the flow to the gas pass diverter rather than the diverter, which is what the well control procedures described. BP didn't design the blowout preventer or
473
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
maintain it. So we acknowledged in the Bly Report -- I think it was a very rigorous piece of analysis which has stood the test of time -- exactly where and where not BP was involved in the accident. MR. GODWIN: Q. Object to form.
(By Mr. Strange) Well, have you learned
anything you could tell me about how to prevent this in the future? A. I think we and the industry have learned an An enormous amount.
enormous amount. Q.
So if this kind of accident happens again,
what can the citizens of our State expect? A. Well -MR. GODFREY: A. Objection as to form.
-- the first thing they should expect is that
the -- BP and the industry will do everything in its power to ensure it never does happen again. If -- if it -- if, God forbid, it ever did happen again, the industry and BP will be massively better prepared to be able to intervene in the subsea, because we've learned from this accident. Q. So if this accident were to happen tomorrow,
how long do you think it would take to stop -A. I can't --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A.
-- the well? -- speculate on that, because it would depend If it was --
on the specifics of the accident. Q. A. The same accident. -- exactly the same? MR. GODFREY: A.
I -- I -- impossible to speculate, but you
would -- you would have to believe that the ability to stop the well flowing would be achieved faster than we were able to in this case. Q. (By Mr. Strange) So had you been prepared, had
you been responsible, you might have saved some time? MR. GODFREY: A. Objection as to form. As I
This isn't about being responsible.
said, we learned a lot in this accident, which, if it was a direct repeat, clearly could be applied. Q. (By Mr. Strange) The last thing you said in Is that
this commercial was you were "deeply sorry." correct? A. Q. I -- I was and I remain deeply sorry.
Does that mean you personally or BP as a
corporation, or both? A. Both. It means me personally, and it means
the company. Q. What would you personally do differently to
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
prevent an explosion -- to have done differently, looking back? MR. GODFREY: A. Objection as to form.
I -- I think it's difficult for someone at --
at the top of a company, with a hundred-thousand people and multiple thousands of operations ongoing every day, to say precisely what they would do differently with respect to an individual accident. Q. on that? A. Q. I don't have an opinion on that. What would you personally do differently to (By Mr. Strange) So you don't have an opinion
contain the spill sooner? A. We did -MR. GODFREY: A. Objection as to form.
-- everything that we could, and I did
everything that I could possibly have done at the time, and I -- I don't know that I could have done anything different, frankly, to contain the spill sooner, given the sit -- sit -- situation and circumstance at the time. Q. (By Mr. Strange) You're a man of your word,
aren't you, Mr. Hayward? A. Q. I am. So could I go back to the people of Alabama
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
and the other Gulf States and tell them that when you promised BP would make this right, you were committing that BP would keep working as long as it takes, whatever it costs BP, to make the people, the States, the businesses, and the environment whole, for the catastrophic damages BP caused with the explosion of April 20th, '10 -- 2010 and the resulting oil spill? MR. GODFREY: MR. WEBB: question -MR. GODFREY: MR. WEBB: A. question. Q. A. Q. (By Mr. Strange) I'll just repeat it for you. Okay. When I go back, can I tell them that you've Form. Objection --
Object, form of the
-- for multiple reasons.
Can I read the question, as it's a very long
promised and reiterated and affirmed your promises to -- that BP will keep working as long as it takes, whatever it costs, to make the people, the States, the environment, and the economy whole for the damages caused by the oil spill? MR. GODFREY: MR. WEBB: A. Objection as to form.
Objection, form.
You can certainly tell them that we
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
continue -- we will -- we have and we will continue to honor our ob -- obligations and meet all legitimate claims, and we will continue to be there cleaning up whatever residual environmental impact there is for as long as it may occur. Q. Okay. Thank you. MR. STRANGE: now. That concludes my time for
I'm going to reserve whatever time I have left
and turn it over to Louisiana. You want to break here and let them come in? MR. WEBB: you want to do. THE WITNESS: MR. GODFREY: to continue. (Discussion off the record.) THE VIDEOGRAPHER: a.m. (Recess from 7:51 a.m. to 7:54 a.m.) MR. KANNER: Ready. All set? Off the record at 7:51 Okay. We're ready -- we're ready I -- whatever -- Kym, whatever
THE VIDEOGRAPHER:
On the record 7:54 a.m., beginning Tape 11. EXAMINATION QUESTIONS BY MR. KANNER: Q. Good morning --
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A. Q.
Hello. -- Mr. Hayward. My name is Allan Kanner, and
with my law partner, Lili Petersen, we're representing the State of Louisiana today. A. Q. Yes. Yesterday, I think the Department of Justice
showed you a number of E-mails, exchanges between Mr. Sims and Mr. Guide. A. Q. I do. I have one question about that: Where was the Do you recall that?
adult supervision? MR. GODFREY: MR. WEBB: question. Q. (By Mr. Kanner) I mean, shouldn't BP have Objection to form.
somebody in there to supervise, work these differences out? A. I think there was -- there was plenty of
people supervising actually. Q. But -- well, okay. We took the HSSE people
out of the equation, correct? MR. GODFREY: A. Objection to form.
We reduced, as I understand it from our
discussion on Monday, the overlapping HSEs -- HSSE roles to create clarity of accountability on the rig.
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Q.
(By Mr. Kanner) Okay.
Who -- you just said I
think that adult supervision was being provided. Who -- who specifically -A. Q. No, I --- with respect to the DEEPWATER HORIZON and
MC 252 was responsible for the adult supervision -MR. GODFREY: Q. well? MR. GODFREY: MR. WEBB: question. A. I didn't say anything about adult supervision. Objection to form. Objection.
(By Mr. Kanner) -- of -- of this exploratory
I said there was supervision of the Drilling Team. There was a management structure in place. don't recall the names of the individuals. Q. (By Mr. Kanner) You would ultimately be I -- I
responsible, though, as Chief Executive? A. I'm responsible for establishing processes, I can't be responsible for
systems, and the tone.
every specific operation in a company of a hundred thousand people operating in a hundred countries. Q. You said during Attorney General Strange's
questioning, you can't take responsibility for human error.
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Do you recall that? A. Q. I do. Shouldn't there be supervision in place to Shouldn't there be systems and
help avoid human error?
processes in place to avoid human error? MR. GODFREY: MR. WEBB: A. place. Objection to form.
Object to the form.
There was a lot of systems and processes in And the -- the investigations have identified
that each one of them in this tragic accident was unfortunately breached. and process in place. But there was a lot of systems And it required multiple
breaches of many systems and processes to result in this accident. Q. (By Mr. Kanner) You don't recall which
individual was supposed to provide supervision of this exploratory well? A. Q. I don't. After you first learned of the tragedy at
DEEPWATER HORIZON, didn't you try to meet with or talk to the person who was in charge? A. What -- what I did was two -- two things:
Firstly, I oversaw the mounting of the biggest re -spill response in history; and, secondly, initiated an investigation to get to, as best as we were able to,
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what has caused the accident. Q. Well, you -- you had to respond. You -- you
had to oversee a response, correct? A. Q. correct? MR. GODFREY: A. Objection to form. I did. Because you had to clean up your mess,
We were clearly a responsible party under the
OPA 1990 Regulations, and we took that responsibility seriously and led, in conjunction with the Coast Guard, the biggest response any company has ever mounted. Q. (By Mr. Kanner) Because this was the biggest
marine spill in history, it would be the biggest response, correct? MR. GODFREY: A. Objection to form.
It was certainly the biggest -- biggest oil
spill in the U.S. history, that is correct. Q. (By Mr. Kanner) And you say that systems and Do you know -- did
processes were -- were breached.
you change any systems and processes before you left the company? A. Q. A. Q. Did I change? Yeah. In order --
I caused --- to avoid these sorts of tragedies?
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A.
I caused as -- as we learned about the causes
of the accident, we changed a number of things, and I'm certain more things have been changed subsequent, as -as is the case across the industry. It is what happens
every time there's an accident, unfortunately. Q. The -- I think you've already said that you're
sorry this oil spill happened, and you are sorry that -- about the severe environmental and human consequences, correct? A. Q. Correct. Do you personally as CEO feel any
embarrassment that this happened during your watch? MR. WEBB: Objection, form. Same objection.
MR. GODFREY: A.
I am deeply sorry, and -- that the accident
occurred, that so many people's lives were impacted, and it caused so much distress for so many people. Q. A. Q. A. Q. changed? A. I think I'm not in a position to say whether (By Mr. Kanner) Do you feel remorse? Of course I feel remorse. And -How could you not feel remorse? And the ecosystem of the Gulf has been Eleven people died.
the ecosystem of the Gulf has been changed or not.
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I've long held the view that we should allow time and science to determine what the environmental impact is, and that remains my position today. Q. In hindsight, would you personally do anything
differently, for example, maybe have a hotline, if people believed they have a "nightmare" well? MR. GODFREY: A. Objection to the form.
I wouldn't advocate the CEO of any company
getting involved in Operations in that way. Q. A. (By Mr. Kanner) Why not? Because, A, I'm not qualified; and, B, it
would -- it had potential to create chaos and short-circuit all of the -- all of the systems and processes that were in place. Q. But you could save lives? MR. GODFREY: A. Objection to the form.
I don't think that would -- that would -- I'm
not certain that you could say that would be the case or not. Q. (By Mr. Kanner) You're aware that this was
described by your own people as a "nightmare" well? A. I'm aware because I was shown an E-mail in my
Congressional testimony that one of the young Drilling Engineers described it as a "nightmare" well. Q. Do you disagree with that assessment?
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A.
I'm not in a position to make an assessment
one way or the other as to whether it was a "nightmare" well. Based on what I have seen subsequent to the
accident, it doesn't appear that it was significantly more challenging than many wells that the company drills in the Gulf of Mexico. Q. As CEO, did -- did you receive any E-mails or
updates or presentations on the progress of wells that were being drilled? A. Q. A. No. Why not? Because there are lots of other people
receiving them, and we would -- BP drills hundreds of wells every year. It's not the role of the CEO to
monitor individual wells. Q. Well, this particular well was behind
schedule, and I guess it was approximately 21 million in payments, extra days with Transocean at this point in time. Is that something that the CEO would be
involved with? MR. WEBB: A. Objection to the form.
It's not unusual for wells to be behind
schedule, and BP was investing close to $20 billion a year, so I'm afraid at the level of the CEO, a $20 million -- $20 million cost overrun actually wasn't
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that significant. Q. (By Mr. Kanner) Because you make about seven
billion a quarter? MR. GODFREY: A. Objection to form.
The First Quarter result was $7 billion, as we
heard from the Department of Justice lawyer on Monday. Q. (By Mr. Kanner) You had said that you were And
determined to see it through, the -- the response.
earlier I think you -- you said you lead the response. Why didn't you stay with the company? MR. WEBB: A. Objection to the form.
I decided with my Board colleagues that the
company needed a new face in America, actually. Q. A. Q. (By Mr. Kanner) Were you fired? No. Do you -- do you still have a relation with
the company as a consultant? A. Q. No. Are you still a shareholder of the
corporation? A. I am as a private citizen.
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Q.
Did you ever specifically talk to either
Anadarko, MOEX, or Transocean CEOs about this disaster? A. Q. A. Q. I spoke twice to Jim Hackett at Anadarko. What did you discuss? We just -- we discussed the response. Did you discuss -- was he just asking what you
were doing, or did you also ask him to chip in his fair share? A. No, I didn't ask him to do anything. We That
discussed the response.
There was no discussion.
discussion was left for the lawyers. Q. You -- you referred a few times to industry For
practices during your testimony yesterday.
example, you said that the BOP was viewed as a fail-safe by the industry. Do you recall that? A. Q. Correct. And I think when you mentioned your Emergency
Response Plan with the walruses, you mentioned, well, just like everybody else in the industry, right?
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A. Q. A. Q.
That's correct. Do you recall that? I do, yeah. Would you agree with me that it's -- it's not
sufficient, that one of the lessons learned is it's not sufficient to just rely on what everybody else in the industry is doing or thinking? MR. GODFREY: A. Objection to form.
I think what I would say is that the -- there
were a lot of lessons for the industry from this accident as the Presidential Commission found. an industry issue, not a BP-specific issue. Q. (By Mr. Kanner) Do you -- do you think the This is
fact that you at BP shared this alleged industry belief that the BOP was a guaranteed fail-safe, do you think that that encouraged scrimping on safety? A. No. MR. WEBB: question. A. Q. A. No, none whatsoever. (By Mr. Kanner) Well, if it was -And there's no evidence from any of the Object to the form of the
investigations there was scrimping on safety. Q. Well, safety was certainly mishandled, and You -- you
there was substantial evidence of that.
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itemized -MR. GODFREY: Q. Objection, form.
(By Mr. Kanner) -- a couple of -- you -- you
itemized some of the material for General Strange: The -- the BOP had not been inspected, there was a hydraulic problem, there was a dead battery, correct? A. Correct. MR. WEBB: Object to the form. Object to the form.
MR. ROBERTS: Q.
(By Mr. Kanner) These are your contractors,
you expect your contractors to be complying with all applicable Regulations, correct? MR. GODWIN: A. Q. again: I do. (By Mr. Kanner) Okay. So -- so I ask you Object to form.
Were -- was it your belief -- because you
believed that this BOP would be a fail-safe, is that one reason you didn't police your contractors, say, with respect to the BOP? MR. GODFREY: A. Objection to form.
To the best of my knowledge, we were providing
the appropriate oversight to the contractors. Q. (By Mr. Kanner) You -- you say "to the best of
your knowledge," but earlier you said that you really had no knowledge of what was going on at the well,
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correct? A. I had no knowledge prior to the accident of
this well at all, other than it was drilling and appeared to have made a discovery. first became aware of this well. Q. In -- in your mind, when -- when -- when this That is when I
catastrophe happened, did -- did you feel that -- that somebody was to blame, maybe Head of Exploration? MR. GODFREY: A. game. Objection to form.
Well, I was never interested in the blame I was interested in understanding the cause of
the accident, which I believe the Bly Report was a pretty good basis. And I was interested in responding
to the accident in terms of the spill response. Q. (By Mr. Kanner) Well -MR. GODWIN: Q. Objection, form.
(By Mr. Kanner) -- leaving aside the blame
game, one way you avoid human error is by holding people accountable for their actions; isn't that true? A. Q. That's true. Okay. So did you make an effort to hold
anybody accountable for their actions or mistakes? A. I -- I said a number of times, if we found any
evidence of people putting costs ahead of safety, we would hold them accountable, but we -- we have not, nor
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has anyone else. Q. right. You -- let me just be sure I've got that Your testimony is BP has never held anybody,
any person accountable for any of the mistakes, errors, that led to the DEEPWATER HORIZON disaster, correct? A. I -MR. WEBB: question. MR. GODFREY: the question. A. I think -- two things I would say. I -- at Objection to the form of Object to the form of the
the time when the Report was published, I was leaving the company. company. So that was beyond my tenure at the
So the honest answer to the question is I
don't know. But based on my reading of the Report, which was published two or three weeks before I left the company, I think it would be difficult to identify anyone in terms of, you know, culpability because it was an accident. Q. (By Mr. Kanner) Well, the Report specifically We --
did not look at Management failures, correct? you discussed -A. Q. The report --- this on Monday.
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A.
The Report was designed to determine the cause
of the accident, and it did so pretty effectively, I think. Q. But it did not -- but it specifically excluded
looking at Management failures, correct? MR. GODFREY: A. accident. Object to the form.
It was designed to identify the cause of the And the terms of reference are clear. We
can go back to the terms of reference if you'd like, but it is -- it's clear what the terms of reference were. Q. (By Mr. Kanner) Well, you agree that
Management failures could be a possible cause of -- of a serious accident, right? MR. GODFREY: A. Q. Object to the form.
In a theoretical context, absolutely. (By Mr. Kanner) Yes. Theoretically, yes, is
that your testimony? A. Q. Theoretically. So when you have an accident like this, why
don't you at least investigate that possibility, as well? MR. WEBB: question. A. The investigation was focused on the cause of Object to the form of the
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the accident. Q.
That's all I can tell you.
(By Mr. Kanner) Well, if it didn't look at all
of the theoretically possible causes, wasn't it an incomplete investigation? MR. WEBB: question. MR. GODFREY: A. Object to form. Object to the form of the
I believe the Report stands on its face as a
vigorous and robust investigation into the accident. Q. robust. (By Mr. Kanner) You say it's vigorous and Did you hire any consultants, independent
analysts to help you design a comprehensive or robust investigation? A. The Investigation Team have certainly had I don't know --
expertise from outside of the company. Q. A. Well, Mr. Bly --
-- to the -- what extent, because I -- I -- I So it was under the
wanted it to be independent.
direction and leadership of Mr. Bly. Q. A. Who has been promoted since then, has he not? I believe he's in -- broadly in the same role,
actually, but -Q. You were shown -- so your testimony is you
don't believe he's been promoted? A. I think -- I --
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MR. WEBB: question. A. anymore.
I don't know, because I'm not in the company I don't -- I don't -- I haven't followed what
he's been doing, but I -- I believe he's in, essentially, the same role. Q. (By Mr. Kanner) You were shown a lot of Do
documents on Monday about safety and cost-cutting. you recall that? A. Q. I do. Okay.
Would you agree that -- that both were
important to you, safety and cost-cutting? MR. GODFREY: A. Object to the form.
As I explained, the first focus was on safe
and reliable operations, and a -- the second focus was on having the right people with the right skills in the right place, and the 3rd focus was on performance. And
part of that performance was reducing the overhead cost factor of the company; simplifying it, removing the bureaucracy and the complexity of the corporate head offices. Q. (By Mr. Kanner) Why is it that prior to the
accident you never wrote a memo or gave a presentation telling your people that cutting cost was important but not at the price of compromising safety?
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A.
I think I said that -MR. WEBB: Objection to the form of the
question. A. -- on multiple, multiple occasions, if you go
back -- and we can do it if you'd like, go back through any one of my speeches and texts, I make it very clear that safety is safety and cannot be compromised by cutting costs. Q. (By Mr. Kanner) You -- you're saying there's a
document where you specifically say that -- that safety's -- that you should not compromise safety when you cut cost? A. Q. A. M-h'm. Which documents are you talking about? My speech to the AGM in 2009 says exactly
that, I believe. Q. A. Q. A. BP. Q. A. You told the shareholders? That -- that communication goes to every Every employee in BP is a shareholder. Who's the AGM? Annual General Meeting. Say that again. The Annual General Meeting of Shareholders at
employee at BP. Q.
Can you think of anything else?
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A.
I think you could go to pretty well anything I
said at my time as CEO and find essentially the same statement. Q. Your testimony is -- you were -- you were
shown a commercial, a television commercial, that y'all paid for by Attorney General Strange -A. Q. A. Q. M-h'm. -- do you recall that? Yes, I do. Why didn't you immediately start spending --
taking that money instead of helping the BP brand and try to do -- direct that money at actually avoiding negative impacts on tourism and maybe the Gulf seafood brand? A. We did. MR. WEBB: I object to the form of the
question for multiple reasons. A. Q. A. We did. (By Mr. Kanner) Later -I gave -- pretty much synchronously with that,
we gave 25 million pound grants to each of the states to promote tourism. Q. A. The 25 million you gave was for tourism? It was designed to -- we -- there were The first 25 million pound grant was
multiple grants.
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to accelerate the area contingency plans for each state. There were then subsequent grants to -- to
support tourism through -- through ad -- advertising and that sort of thing. And I -- I want to be clear that those commercials were about information. advertising the brand of BP. They weren't
They were about
information as to what was happening and what we were doing. We wanted the people of the Gulf Coast to know
the scale and scope of the response that was being mounted and the nature of the commitments that we had made. Q. You wanted to preserve the BP brand. You were
concerned about the BP name, were you not? A. I think -MR. GODFREY: A. Objection to form.
That was not our focus at that point in
this -- in this. Q. (By Mr. Kanner) Okay. Let's break it up. You
were concerned about BP's name, protecting it, correct? A. Q. A. Clearly our brand was being damaged. All right. Those commercials were not designed to restore
the brand. Q. Okay.
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A.
They were designed to provide information to
the people of the Gulf Coast as to the scale of the response and our commitment to stay with it until it was complete. Q. And you're concerned about your brand both for
your share prices and your ability to -- to deal with Regulators in the future, correct? MR. GODFREY: form. A. The brand's the brand, yeah. I mean, it's -I'm going to object as to
but it -- I say the brand was not at all my focus at that moment. The best way of protecting the brand was
to be able to mount the response and stop the well. But -Q. A. Q. correct? A. Q. M-h'm. Did you do anything to ascertain if that was (By Mr. Kanner) You say -- oh, I'm sorry. Go ahead. You say these were grants for tourism,
enough money to actually fix the problem? A. Q. Fix what problem? The people weren't coming to the Gulf. The
people weren't enjoying Gulf seafood. undertake that that was enough money?
I mean, did you Was it an
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arbitrary figure? A. people. It wasn't -- it wasn't designed to compensate It was designed to mitigate the extent to
which people were not coming to the Gulf. Q. And my question is: Did you undertake an
investigation -A. Q. A. Q. No. -- to determine if it fully mitigated? No. So sitting here today, you have no reason to
think that the $25 million grant either did or didn't fully mitigate the problem, correct? A. It was designed to simply support advertising
in the tourist in -- industry. Q. So, really, all you were doing at that point
was mitigating your own corporate damages since you would be responsible for those tourism losses, correct? MR. WEBB: Object to the form. Object to form.
MR. GODFREY: A.
I think we were trying to help the Gulf Coast
States, actually. Q. A. (By Mr. Kanner) Would you also -At the time they all seemed extremely grateful
that it was something we were prepared to do, because I met with each one of the Governors, and they expressed
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their thanks and gratitude for us doing it. Q. Well, they -- they certainly needed help after
the explosion on the DEEPWATER HORIZON, and we certainly appreciated you helping us out of the disaster that was created here. But isn't it true that
by -- by spending that limited amount of money you were at least also trying to mitigate your own corporate damages because, as you said earlier, BP is going to make people whole, put them -MR. WEBB: Q. Object to the form.
(By Mr. Kanner) -- in a position they would
have been in but for the disaster? MR. WEBB: I object to the form of the
question for several reasons. MR. GODFREY: A. Object to form.
Our focus was trying to help the States.
That's what we did. Q. (By Mr. Kanner) Well, the State of Louisiana,
for example, had asked for more money for tourism and for seafood safety testing. that? A. that. Q. Okay. We received less than what we had asked I don't recall that -- I honestly don't recall You -- you're aware of
for, and we -- we had presented our reasons for why we
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thought -A. Q. A. Q. A. M-h'm. -- we needed what we needed. M-h'm. Why wasn't it all provided? I can't -MR. GODFREY: A. Objection to form. I mean, I do
-- can't answer that question.
recall that we -- not only did we do that in Louisiana, we also provided a very large sum of money to build berms and do shoreline protection. Q. A. Q. (By Mr. Kanner) Correct. $350 million is my recollection. I think you spent 260 million on berms. And
that's to be expected in an environmental disaster like this -A. Q. right? A. It would be -- it would have been expected if Well --- that you got to take response actions,
it had been part of any sort of Spill Response Plan, which it clearly was not, and if -- and if there had been a belief that it was going to be an effective mitigant to the spill. But I think time has
demonstrated that that was not the case.
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Q. A.
You -And it certainly was not part of any Spill
Response Plan. Q. You're not criticizing -- you the company with
the Walrus Emergency Response Plan are not criticizing the State of Louisiana for not having a better Response Plan for this tragedy? A. No -MR. GODFREY: A. Objection to form.
-- I'm not -- I'm not criticizing the State of I'm simply making the observation that
Louisiana.
building berms was not part of any approved Oil Spill Response Plan by anyone. Q. (By Mr. Kanner) Didn't Admiral -(Speakerphone conversation.) MR. KANNER: there. MR. WEBB: Did you get the answer? Did we ever get the answer? Okay. Stop horsing around down
(Discussion off the record.) MR. GODFREY: You've got the answer, Kym? Yes.
THE COURT REPORTER: Q. approved. A.
(By Mr. Kanner) You say the berm was not Admiral Allen approved the berms, didn't he? I said --
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Q. A.
President Obama? I simply meant that in terms of the
preapproved Response Plan that was in place prior to the accident there was no notion or obligation or idea of building berms. Q. Yeah. But berms are built all -- throughout
the south.
I mean, in inlets, correct, there are lots
of different types of berms? A. There were berms built in Louisiana comprising There wasn't any other berms
major removal of sand. built, I don't believe. Q.
There are berms built in Florida to protect
certain beaches, correct? A. I don't think so. Not to my knowledge. I'm
honestly not sure, but I don't think so. Q. Okay. You keep saying it wasn't part of an I -- I -- just don't understand what Were you saying that
approved plan.
you're -- you're talking about.
the state was supposed to have a plan in place for each well that you're drilling -A. Q. A. Q. A. No. -- in the event that any of them -I didn't say that at all. All right. I said it was not part of the approved
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Response Plan which the company submitted to the authorities and was approved by authorities. Q. Oh. You're saying once the well started
leaking you developed a Response Plan and the berms were originally not a part of it? A. No. MR. GODFREY: A. Objection to form.
We -- we deployed our Response Plan that had
already been approved prior to commencing operations. There was no part of berms in that Response Plan. Q. (By Mr. Kanner) Okay. And the State felt that The matter was
they wanted some berms for protection.
taken up with Admiral Allen, and he approved it and BP spent the money, correct? A. Q. That's correct, yeah. You, if anybody, I think, might agree that in
the context of a disaster where you've got uncontrolled oil, hurricane seasons, that people have to do -- that -- that a great deal is being done kind of as you go along, people are trying to take precautionary measures, correct? A. Q. M-h'm. And hindsight, that may or may not have been
your first choice, but you're in the middle of a crisis and you're dealing with a crisis; is that fair?
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A. Q.
That's fair. You said a -- a Junior Engineer had described Do you recall that?
this as a "nightmare" well. A. Q. I do.
You certainly want your -- your Engineers to
be expressing their opinions, correct? A. Q. Correct. And you try to take every opinion from a
professional seriously in your company? A. Q. Correct. Do you know why nobody ever followed through
on the -- the "nightmare" well issue? MR. GODFREY: A. Objection to form.
I -- I'm not aware of any of the details
around it. Q. (By Mr. Kanner) You agree that the oil spill
has already caused extensive and severe damage to the marine and wildlife habitats in Louisiana? MR. GODFREY: A. Objection to form.
As I said previously, I think we need to allow
time and science to determine the full extent of the damage. I'm not in a position to make any assessments,
sitting here today. Q. (By Mr. Kanner) I didn't ask you about the I asked you if you agreed
full extent of the damage.
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that, based on what you knew at the time you left the company that, in fact, the oil spill has already caused extensive and severe damage to marine and wildlife habitats? MR. WEBB: question. A. question. Q. (By Mr. Kanner) Okay. You -- you -- you saw The answer is, I don't know the answer to that Object to the form of the
oiled animals, correct? A. Q. A. M-h'm. "Yes"? Clearly -- it was clearly a tragic and serious
oil spill. Q. Right. And -- and I'm asking if you viewed
severe damage to marine and wildlife or their habitats. Would the answer be "Yes," you would? A. We were clearly -- there were clearly birds
impacted, and that was -- that was a tragedy. I -- I can't judge the impact on the habitat. Q. Okay. You were -- you -- you actually went to
some of the marshes -A. Q. A. Yes. -- that were oiled, correct? I did.
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Q.
Did anybody explain to you what the
consequences were of the oiling of the marshes? A. I think the consequences were still being
determined when I was there, and I -- I honestly don't know what the conclusions were. Q. Were you told that marsh grass might die as a
result of the oil? A. die. Q. Were you told that the root system of the I was told that marsh -- marsh grass might
marsh grash -- grass would then cease to hold soil together? A. the -Q. A. Q. You weren't told --- marsh grass. -- that -- that this sort of damage might I didn't go into any details, I'm afraid, of
accelerate erosion, coastal erosion? A. I wasn't -- as I said, I wasn't -- I didn't go
into any of the details that I think that the -- the science that is being progressed as we speak will determine, you know, the extent of the damage. Q. But you agree that the environmental damage
that you observed firsthand and that you were spending money responding to was, in fact, severe environmental
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damage? MR. WEBB: A. Objection, form.
I can't make an assessment about the severity.
It's clear there was oil on beaches and there was oil on marsh. Q. (By Mr. Kanner) How many animals needed to die
before it became severe, in your mind? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A.
In the matter of bird impact, it was clear it In the matter of the habitat impact, I --
was severe.
I have no -- no basis for assessing the impact on marine environment. I've never seen any data.
In the matter of the habitat, I -- I think it's -- without the benefit of science and time, it's -- you can't make an assessment. Q. A. Q. A. (By Mr. Kanner) A full assessment? A full assessment. But you can make an interim assessment? You can make an assessment that says we had to
do -- we had to take steps to remediate, and that's what was -- was happening. Q. Okay. And part of the reason -- by
"remediate," you mean going out to the beaches and picking up tar balls, for example?
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A.
Yeah, and going to marshes and cleaning the
grass blade by blade. Q. Okay. And you understand that even after you
went to the marshes and cleaned blade by blade, there was still oil in the marshes, correct? A. I understand that in some areas, the cleaning
operation is very challenging. Q. And you understand that re-oiling has -- has
occurred, and is still occurring, correct? A. I -- I'm not at all current with the current
state of what is occurring in Louisiana, I'm afraid. Q. As of the time you left the company in
October, re-oiling was still occurring? A. I was aware that the remediation was certainly
not complete, and that if you tell me re-oiling was occurring, then I believe you. I don't remember that,
but I'm sure if that's what you're saying, then it's true. Q. Do -- do you recall rough any metrics, like
600 miles of Louisiana Coastline were oiled? A. afraid. Q. You -- you agree with General Strange when he No, I don't -- I don't recall the details, I'm
mentioned that -- that there were tens of thousands of gallons of oil, or some oil residue still in the Gulf
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today? A. I haven't seen any data to know whether that's If that -- if -- if you're telling me
right or not.
that there is hard data that says that's the case, then, of course, I believe you, but I -- you know, I have not been involved in this now, and I haven't been party to any information for, you know, almost nine months, so I can't -Q. A. Q. As of --- really help you. I'm sorry. As of the time you left the
company, you understood that there was still uncontrolled oil in the Gulf of Mexico, correct? MR. GODFREY: A. Objection to form.
What I understood was that we hadn't completed It was still ongoing, and --
the cleanup operation. Q.
(By Mr. Kanner) As of the time you left the
company, was there a plan to clean up the oil that is loose in the Gulf? A. There was a plan to remediate the I'm not -- I'm sure if someone
environmental impact.
can identify where there is oil in the Gulf, it will be remediated. Q. that. Do -- what is your understanding -- strike
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You're saying that you believed BP has a plan to remediate any and all oil, wherever it's found, that -- that came from this oil spill? A. Q. I believe that's the intent. Do you -- do you agree that the -- the oil
spill has also caused extensive and severe damage to the Gulf fishing industries? MR. GODFREY: A. the time. Objection to form.
It's certainly created a significant impact at I'm not in a position to judge the lasting
impact, because again, I've not seen any current information, so all I can -- all I can say is that at the time, it clearly caused significant impact because many of the fishing grounds were closed. Q. A. (By Mr. Kanner) And -I believe they're now all open, and I believe,
and it's only hearsay, frankly, newspapers, that the fishing catches are as good, if not better, than they've ever been, but I don't know whether that's true or not. Q. That's what I've read in newspapers. Actual -- actually the brown shrimp season has Have you heard about
been quite disastrous this year. that? A. Q. No. Sorry.
You're aware that the oil spill also caused
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extensive and severe damage to Gulf tourism industry? MR. GODFREY: A. Objection to form.
I'm clearly aware that in the middle of the
accident last Summer and the aftermath, a lot of people that would have come to the Gulf Coast didn't. Q. (By Mr. Kanner) The -- do you agree that the
spill also had adverse consequences for deep and shallow water drilling industries operating in the Gulf of Mexico? MR. GODFREY: A. Objection to form.
Clearly, the moratorium imposed by the
Government had a big impact on shallow and deepwater activity. Q. (By Mr. Kanner) I think yesterday you said you
thought that was reasonable, correct? A. I thought it was a reasonable decision at the
time until the nature of the accident was understood. Q. Leave aside the former moratorium, if you
would, for a second. A. Q. M-h'm. And I -- I certainly agree that the response I think you
efforts were -- were unprecedented.
had 48,000 people involved at one point in time, some 6700 vessels, 125 aircraft. I think you -- you --
you bought all the dispersant that was available in the
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United States of America, and most of the boom; is that -- is that fair? A. Q. That's correct. I -- I have one question about that: Had
there been -- would you agree that it was prudent at the -- during the course of your response, at least until the well was plugged, would you agree that there weren't resources available, dispersant or boom, for another spill at another well? MR. GODFREY: A. That's speculation. Objection, form. No, I can't -- I can't --
there was clearly a lot of equipment in the Gulf. Q. (By Mr. Kanner) Well, didn't you specifically
buy all the dispersant that was available at one point in time? A. What -- what we did, actually, was to work
with the dispersant manufacturer to ramp up production. And at no time then was dispersant ever an issue. I suspect if there had, God forbid, been another accident of the same sort, dispersant would have been available -Q. A. Q. A. It would have? -- because of the rampup in production. What about boom? Well, we -- we deployed a lot of -- we had And
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available a lot of boom.
In the end, we didn't -- you
know, it -- we had a lot of boom deployed, but never got anywhere near -- we had millions of feet of boom in Florida, but never saw even a tar ball. Q. And so you don't know what resources would
have been available to other companies if they -A. Q. It's entirely speculation. Did -- did BP shut down its other wells when
this -- when this accident happened? A. Well, we -- we were subject to the moratorium,
so everyone shut down all their wells. Q. A. think. Before the moratorium? The moratorium was announced very early, I I -- I can't recall whether -- the precise
sequencing of the shutdown, but it was -Q. A. accident. Q. But prior to the moratorium, BP was going to But --- it was announced very shortly after the
continue to operate its other wells in the Gulf? A. drilling. We had -- we had no other exploration wells We had no -- to my recollection, we had no
other production wells drilling at the time, but I can't honestly recall. exploration wells. I'm -- I'm certain about the
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Q.
You've talked a bunch about remediation, Is that -- is that
which, to my mind, means cleanup. how you understand it? A. Q. M-h'm, correct.
What about restoration of the ecosystem to its
pre-pollution condition? A. Q. M-h'm, right. Has anything been done in that regard at this
point in time? MR. GODFREY: Q. Objection to form.
(By Mr. Kanner) As -- as of the time you left
the company? A. As of the time I left the company, that
process was beginning, but only had just begun, so I'm afraid I -- I'm just not familiar with the details of what have -- what has occurred over the last nine months. Q. But you agree that the company needs to
restore ecosystem that's been damaged, correct? A. I believe -MR. GODFREY: question. MR. WEBB: A. Objection to the form. Object to the form of the
I believe we have an obligation to restore and
remediate under the environmental damage provision, I
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can't remember the exact -Q. A. Q. (By Mr. Kanner) OPA? Under OPA, yeah. Okay. But that's something you would -- you
believed the company ought to do anyway, whether that law -A. Q. A. Q. A. Q. M-h'm --- existed or not -It was --- correct? -- something I believe the company is doing. Now, to the extent that people were not able
to enjoy recreational fishing, enjoy beaches, you also agree that there should be compensation for their loss of use of those resources during the period that they were contaminated until they were restored to their prepollution condition? MR. GODFREY: A. Objection as to form.
Yeah, I -- I mean, the -- the statement we
made is that all legitimate claims for business impact, personal impact, would be -- would be honored, and I believe that the -- the fund -- the $20 billion fund that we established has to date dispersed on the order of $5 billion. Q. (By Mr. Kanner) Okay. But my question was --
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was different.
My question was:
We talked about
restoring resources, we talked about cleaning up resources, but some of those resources are out of play for a certain period of time, you would agree with that, correct? MR. GODFREY: Q. A. Objection as to form.
(By Mr. Kanner) People can't use them. Well, I -- I -- what sort of resources are you Are we referring to today or are we Clearly last Summer, they
referring to?
referring to last Summer? were out of play. Q. A. Okay.
I -- I had -- I'm not --
-- I'm not in a position to know whether they
are still out of play. Q. A. Q. Fair enough. Right. -- to the extent that people weren't able to With respect to last Summer --
use some of the resources that they typically use, that's something that also ought to be compensated, correct? A. I'm -- I'm -- I'm -MR. GODFREY: A. Objection as to form.
-- I'm not -- I don't understand the -- the --
the -- the obligations around this, I'm afraid, so I don't --
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Q.
(By Mr. Kanner) But you said, "We are taking
full responsibility for the spill, and we will clean it up and where people can present legitimate claims for damages, we will honor them." A. Q. that." A. Q. A. We have been, I believe. Okay. What -- what -That's correct. "We are going to be very aggressive in all of
I can't think of any other accident in history
where $5 billion has been paid out within nine months of the accident. THE COURT REPORTER: you fix your microphone. THE WITNESS: Q. (By Mr. Kanner ) THE WITNESS: Q. Sorry, that's -Well --- apologies. Mr. Hayward, would
(By Mr. Kanner) -- when you're -- when you're
talking about the worst spill, I guess the amount of money is less interesting than whether everybody has been made whole or not, correct? A. I think we -MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A.
-- have to separate whether it was the worst
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spill from it was the largest spill. the largest spill.
It was certainly
We need to determine, with the
fullness of time, whether it was the worst spill. Q. (By Mr. Kanner) And certainly the five billion
may turn out to be just a drop in the bucket. A. I think that's -MR. WEBB: A. Q. A. Q. Objection, form.
-- most unlikely. (By Mr. Kanner) Most unlikely? M-h'm. Did you have -- you made various
representations to your shareholders about the consequences of the spill. When you say "most
unlikely" that it would be -- five billion would be a drop in the bucket, are you relying on any -A. Q. A. Q. A. Q. It sort of depends on how big your bucket is. H'm -If it's --- h'm --- a small bucket, it might be. Well, here the bucket is all of the losses of
the States and -A. Q. Gulf -M-h'm. -- individuals and businesses throughout the
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A. Q.
M-h'm. -- Region until this -- until the environment
is restored to its -A. Q. A. Q. A. M-h'm. -- prepollution condition -M-h'm. -- which could be an enormous bucket. It could or it could be -MR. GODFREY: MR. WEBB: Q. A. bucket. Q. Did you have any consultants help the company Object as to form.
Objection, form.
(By Mr. Kanner) Correct? -- it could or it could be a $6 billion
understand the size of that bucket of damages? A. I -- I'm not aware of whether we did or
didn't, actually. Q. So you don't -- when you say it might be six
billion, you're just pulling that number -A. Q. That's just --- out of the air? MR. WEBB: A. Objection.
-- that's Tony Hayward talking as a private
citizen -Q. (By Mr. Kanner) Okay.
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A. Q.
-- not in any other capacity. You -- you didn't hire any experts to do at
least a -A. Q. A. Not -- not --- quick and dirty assessment? -- in the time when -MR. GODFREY: A. -- I was at -MR. GODFREY: -- to form. A. Q. A. -- BP. (By Mr. Kanner) H'm -To my knowledge. I mean, I don't know, but Objection as --
I'm not aware of any of that. Q. BP committed $500 million for research on
ecological impacts of the spill, correct? A. Q. That's correct. You agree that, to the extent that research
finds problems or damages in the Gulf as a result of the spill, that those are things that BP should pay for whether they find them today or 20 years down the road, correct? A. I think if there is -MR. GODFREY: A. Objection as to form.
-- clear and unequivocal linkage between the
damage and the spill, then we've made it clear that we
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will restore and remediate. Q. A. Q. A. Q. A. (By Mr. Kanner) "Unequivocal linkage"? Yeah. That's -- that's your standard? Well, I -- I -I mean, how much science --- I'm not a lawyer, so I'm not going to split
hairs with you about legal terminology, okay? Q. A. No, no, no. What I'm --
If there is -- if there is clear linkage
between the science and the spill, then I believe the company has made it clear that it will take the necessary action to restore -- restore any damage. Q. Well, what about a situation like we have
here, where there -- there hasn't been a lot of science with massive oil spills in the deep Gulf, you would agree with that, correct? MR. GODFREY: A. Q. That's true. (By Mr. Kanner) Okay. So if you -- the Objection as to form.
standard were unequivocal linkage, I mean, isn't that certainly -A. As I said, I don't want to get into a lawyer If there is a
debate about what "unequivocal" means.
clear linkage, I'm certain -- I -- I -- I can't say.
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Q. A.
And -Because I no longer have any authority. But I
can imagine that the company would honor the obligations that we made. Q. Well, when you said you were going to be very
aggressive about paying all claims, would you agree that, to the extent the science comes out 50/50 on some of these ecological issues, that those are things BP should take responsibility for? A. Well, I -MR. WEBB: Objection, form. Objection as to form.
MR. GODFREY: A.
-- I think that's for someone in BP to make
that decision today, not myself. Q. (By Mr. Kanner) What was your intent when you
told people that you were going to be very aggressive about paying all claims? Would it have been that if
there's a -- if there's a doubt 50/50 that that's something BP will probably -A. Q. A. It was -- it was --- ought to take care of? -- it was about two things: It was about
getting money into the hands of people fast, which I believe we succeeded in doing. And -- and it -- it was
in -- in the -- in -- in the matter of individuals and
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small businesses, which was our focus, erring on the side of generosity, which I believe is what has happened over the last year or so with the fund. Q. But with respect to the $500 million dollars
dedicated to research in the Gulf, your goal at BP, when -- when you authorized the -- the establishment of that sum of money, was to discover all harms, and ultimately remedy those as to which there's a linkage? A. That's true. MR. GODFREY: A. Q. That's correct. (By Mr. Kanner) You also paid a hundred Objection as to form.
million dollars to workers hurt by the moratorium? MR. GODFREY: Q. A. Objection as to form.
(By Mr. Kanner) Yes? We established a fund for work that's impacted
by the moratorium. Q. A. deployed. Q. Okay. And was part of the reason for that, a Well -I don't know to what extent it has been
feeling that the moratorium was connected to the spill? A. No, it was a -- it was a -- a request of the
Administration. Q. The President asked you to put a hundred
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million into -A. Q. A. a fund. Q. A. And you agreed to, why? Because we were trying to reach a broad-based The President --- a fund? -- the President's team asked us to establish
agreement with the Government at the time to allow us to move forward together to deal with the spill. Q. Well, you certainly had an obligation to your
shareholders to be -- to only pay money as to which you thought you might have some responsibility, correct? A. As I said -MR. WEBB: Objection, form. Objection as to form.
MR. GODFREY: A.
-- we were trying to reach a broad-based
agreement which would be beneficial to the Government, to BP, and, therefore, to its shareholders. Q. (By Mr. Kanner) H'm. Let's see. Oh. BP has
subsequently put money up for mental health issues associated with ecological damage to the Gulf. you involved in any of that? A. afraid. Q. Would that have been after your time? I have no knowledge of that at all, I'm Were
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A.
As I no -- have no knowledge, I surmise it was
after my time. Q. Do you agree it's important to monitor, for
possible problems associated with the spill, things that might manifest in the future? A. I -- it -MR. GODFREY: A. do, yes. Q. Objection as to form.
-- it seems like an entirely sensible thing to Excuse me. (By Mr. Kanner) The -- you've worked on rigs,
have you not? A. Q. A. A very long time ago, yes. Okay. They were very different operations when I was
working on them, of course. Q. The -- safer or less safe? MR. GODFREY: A. Objection as to form. Today the industry has
Undoubtedly less safe.
gotten massively safer over the last 20 years. Q. (By Mr. Kanner) You agree drilling muds
contains some toxic materials? A. I think some drilling muds have some materials
that are potentially tox -- potentially toxic in -toxic in some situations. Q. You -- you told Congress that, during the top
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kill, that no toxic materials were used. correct, or not? A.
Was that
I subsequently, under advice of my Technical
Team, corrected that to say that in some particular circumstances, some components of the mud that we are using could possibly be toxic. That the point I was
trying to make is that we were using water-based mud with no oils or anything of that sort. So it was then
the most benign mud that you could use in -- in terms of mud systems available. Q. So at the very least, you could have been a
little clearer with Congress on that point? A. It was -MR. GODFREY: MR. WEBB: form of the question. A. Q. It was simply a misunderstanding on my part. (By Mr. Kanner) Okay. It was a Objection as to form.
Object to the -- object to the
misunderstanding on your part, and that misunderstanding led to a miscommunication, correct? MR. WEBB: question. A. It was a misunderstanding which I communicated Objection to the form of the
and subsequently clarified with Congress. Q. (By Mr. Kanner) H'm --
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A. Q.
I believe to their satisfaction. It seems that most of the safety eff -It
efforts that in -- you talked a lot about safety.
seems that most of the emphasis was focused on the high incidence events: The slip and falls, people hurting
themselves working on rigs, those sorts of accidents. Does that seem right to you? A. Q. A. No. Okay. And in the time that I was the CEO, we focused It was completely not right.
extensively on process safety, and implemented a whole series of new systems and standards which were focused on process safety. Q. A. Q. A. And who was in charge of that? The --- reported to you on that? -- the Head of that -- of the organization Who --
accountable for creating those standards and then implementing them, was Mark Bly. Q. A. Q. A. Q. Who? Mark Bly. The author of the Bly Report? Correct. So he really investigated his own work, right? MR. GODFREY: Objection --
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A.
No, he -MR. GODFREY: -- as to form. He
A.
-- didn't investigate his own work.
investigated the accident.
He was the most qualified
person in the company to lead that investigation. Q. A. (By Mr. Kanner) H'm -It was done with a team of 55 Engineers and
professionals, some of them drafted from outside of the company, to ensure that the full skills of the industry were deployed in the investigation. Q. Did you have a -- one or more E-mail accounts
when you were at the BP? A. Q. E-mails? A. I had an E-mail account. I'm sorry, I thought No. You did not -- you -- you didn't receive
you said if I had one -- more than one, sorry. Q. A. Q. A. Q. A. Q. A. Okay. I had an E-mail account. Okay. It was a BP E-mail --
It was a BP --- account? -- E-mail account, yes. Did you also have a private E-mail account? No.
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Q.
So if you're sending an E-mail to a friend at
that time, it would have been -A. Q. A. Q. It was BP. -- it would have been BP? Yes. And were you -- in any of the -- did you send
your own E-mails, or was this something you had your assistants do from time to time, or both? A. Both. Sometimes E-mails were sent from my --
from my E-mail, you know, communication broadly to BP and the company employees, then it would go -- go from my E-mail box or would be -- or would be sent by one of my assistants. Q. H'm. Just one moment. THE COURT REPORTER: MR. KANNER: you've got four minutes? THE VIDEOGRAPHER: a.m., ending Tape 11. (Recess from 8:50 a.m. to 9:01 a.m.) MR. GODFREY: please. Shut the door down there, please. to go. MR. KANNER: Ready. We're ready Okay. We're ready to go, Off the record at 8:50 Four minutes.
Can I take my break here if
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THE VIDEOGRAPHER:
All set?
On the record at 9:01 a.m., beginning Tape 12. Q. (By Mr. Kanner) Okay. In Exhibit 512 -I just want to read a It
Exhibit 512 is the Baker Report.
quote from you and ask if -- if you agree with it. says: "Preventing process accidents requires The passing of time without a process
vigilance.
accident is not necessarily an indication that all is well and may contribute to a dangerous and growing sense of complacency." can forget to be afraid. Do you agree with that? MR. GODFREY: A. Objection as to form. And it goes on to say people
I think it's undoubtedly one of the things
that can -- could create a process accident, yeah. Q. (By Mr. Kanner) Complacency. MR. KANNER: MS. PETERSEN: MR. KANNER: mark that as 6056. (Exhibit No. 6056 marked.) Q. (By Mr. Kanner) So we'll mark this one. Do I'd like to --
Has this been marked? No. Tab 9, please. I'd like to
you have that in front of you? MS. PETERSEN: Q. It's --
(By Mr. Kanner) It should be in your --
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A. Q. that.
I'm sorry.
Tab 9, did you say?
I -- I'm just going to read a quick quote from This is an E-mail from Tony Hayward, June 25th,
to Andy Inglis and a few others. A. Q. A. Sorry, can you -Tab 9. Tab 9. MR. WEBB: MR. KANNER: MR. GODFREY: three? THE WITNESS: it? MR. KANNER: MR. WEBB: No. It's 5473. Is the Bates No. 861, is This is Exhibit 6056? Correct. Bates No. 861 are the last
I don't think he has -- he
does not have the right exhibit in front of him. THE WITNESS: MR. GODFREY: THE WITNESS: MS. PETERSEN: MR. GODFREY: from what you gave me. Q. and -A. Okay. (By Mr. Kanner) Let me just read from this, It's not in -It's not Tab 9. Not -- not Tab 9. Here, take this one. I -- I -- I removed Tab 9
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Q.
It says:
"Andy" -Tab 10? Yes.
MR. GODFREY: MS. PETERSEN: Q.
(By Mr. Kanner) The very bottom two lines:
"Andy can u make sure we get the technical briefing on the relief well out today - there are all sorts of ridiculous stories going around - it's the main reason behind" the -- "the share price weakness Tony." Do you recall writing that? A. Q. No, I don't. Were -- were -- were one of the goals of the
tech -- technical briefings and the -- the -- the -the media blitz, if you will, to keep share price up? A. No. MR. GODFREY: A. Objection as to form.
The -- the objection -- the objective of the
technical briefing was to provide clear, coherent, factual information as to what was and was not going on at any moment in time. Q. A. (By Mr. Kanner) With respect to -And then people could form their own view as
to whether that was good or bad for the share price. Q. If -- if it was informational, as you said
earlier, why were you buying ads in New York Times, Washing -- you know, Wall Street Journal, in California
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papers, Connecticut papers, Ohio papers? A. Such -- such that the -- so the -- the
American people knew what we were doing. Q. Why -- why was it more important to spend the
money in Connecticut than on the Gulf? A. to. It wasn't more important. It was in addition
The focus was in the Gulf, clearly, because that's
where people were being impacted. Q. A. And -And the -- the nature of the adverts was much
more specific in the Gulf, as -- as I recall, and more generic, but, you know, we found it was equally important to let the American people know what we were doing by way of responding. Q. The -- I'd like to show you Tab 7, which is a
Media Communication Plan for the next two weeks. MR. WEBB: number? MR. KANNER: for it. MR. WEBB: MR. KANNER: 60 -That would be 6057. Let's get an exhibit number Does this have an Exhibit
(Exhibit No. 6057 marked.) Q. A. (By Mr. Kanner) On the first page -I -- I have not seen this document previously.
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Q. plan was? A. Q.
Okay.
Do you know what a media communication
Yes, I do. Okay. And the first -- the -- the second page
of the document, there would be a daily press release from your press office and a daily press conference? A. Q. A. Q. Yeah. You see that? Yes. And on the third page, your consistent -- big,
consistent, leadoff messages every day were supposed to be: "We're doing everything possible. We are working
in partnership. responders."
Deeply appreciate the efforts of all
Do you see that? A. Q. I do. Is -- is that -- is that your recollection
that those were your talking points? A. Q. It is. As a practical matter, wasn't it true that --
that only the relief well could ever really stop the leak? You never really thought that the top kill, the
junk shot, or any of those other things would -- had a chance of working, did you? A. Of course. It wasn't the relief well that
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stopped the leak. stopped the leak. Q. A. Okay.
It was the capping stack that
So whatever we thought, it was not relevant.
What we had to -- what we determined to do was to apply every intervention we could design, as soon as we could design it, as soon as we could make it available. And
in the -- in the -- in the final analysis, the capping stack stopped the leak well ahead of when the relief well would have stopped the leak. Q. And why wasn't the capping stack used earlier? MR. GODFREY: A. Q. Objection as to form.
It wasn't available earlier. (By Mr. Kanner) On Tab 14, the last -- this is
a Tony Hayward Townhall Gulf of Mexico Response Update, July 16. MR. KANNER: I'm sorry, Exhibit 6058. (Exhibit No. 6058 marked.) Q. (By Mr. Kanner) The very last page, one -MR. GODFREY: MR. KANNER: MR. GODFREY: Q. 6058? Correct. Thank you. And we'll call that Tab --
(By Mr. Kanner) One, two, three, four, five
Q's up from the bottom.
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MR. GODFREY: MR. WEBB: MR. KANNER: MR. GODFREY: MR. KANNER: Q.
What page?
What page are you on? The last page. 5523? Yeah.
(By Mr. Kanner) It's how -- underlined "How do It says: "When we stop the
we know when we are done?"
leak, clean up the oil, remediate any environmental damage, and get the communities back on their feet (...the way they use to)." You meant that then? A. Well, I don't -- can -- can we just ascertain I don't know whether
the veracity of this document?
this is a recorded transcript, a description of someone taking notes, I have no idea what the -- what this is. But -- so I don't -- so -Q. I -- I -- when I saw this document, I assumed
it was talking points that were prepared for you for Town Hall in or about that -- that period of time. that incorrect? A. I don't -- I don't know. I don't ever Is
remember seeing this, to be quite honest with you. Q. A. Q. Do you disagree with the sentiment? I don't disagree with the sentiment. As read?
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A.
When we stop the leak, clean up the oil,
remediate any environment and damage and get the communities back on their feet. Correct.
(Discussion off the record.) MR. GODFREY: time, or are you -MR. KANNER: minute. One last exhibit. MR. GODFREY: the track of the time. MR. KANNER: MR. GODFREY: MR. WEBB: Okay. Q. (By Mr. Kanner) This is 6059. It's an Tab 11. Is he over his time? Just as long as we keep on I think I have another Have you been ceded more
Someone keep track of time.
employee communication from Tony Hayward, July 9th. Have you seen this document before? A. I'm certain at the time I saw it. But this -I don't
recall now, I'm afraid.
(Exhibit No. 6059 marked.) A. Q. -- these were going out on a regular basis. (By Mr. Kanner) You say at the -- about this "You should also be in
far down, you go -- you say: no" -A.
Sorry, where are we, please?
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Q. A. Q.
Right -- right here. Okay.
Right before --
Down at the bottom, yeah. "You should also be in no doubt that
You say:
we fully intend to hold all parties responsible for the cost of the oil spill to their obligations." You see that? A. Q. I do. Did you take any actions to hold other parties
responsible for their share of the cost? MR. GODWIN: A. Object to form.
As I said earlier, at this point in time, on
the 16 -- or 9th of July, four parties had been named as responsible parties under OPA 1990, and you would therefore expect that they would be paying their share as reference to that. billed other parties. At this point in time, we had They had not been forthcoming. Object to form. Right. Thank you. That's
MR. GODWIN: MR. KANNER: my time. THE WITNESS:
Thank you very much. Off the record at 9:11
THE VIDEOGRAPHER: a.m., ending Tape 12.
(Recess from 9:11 a.m. to 9:15 a.m.) MR. ROBERTS: Ready. All set?
THE VIDEOGRAPHER:
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On the record at 9:15 a.m., beginning Tape 13. EXAMINATION QUESTIONS BY MR. ROBERTS: Q. Doctor, my name is Steve, and the most What
important question I'm going to ask you today is: do you think of my tie? A. It looks like a great British tie, to me. MR. ROBERTS: that: Q. A. Q. A. He likes my tie.
I just want y'all to hear
(By Mr. Roberts) Do you know Transocean, sir? I do, yeah. How do you know it? As one of the world's largest and most
respected drilling contractors. Q. How long have you, in your industry, worked
with Transocean? A. I've -Q. A. BP. I've -- yeah. Well, for many years, decades. Personally, or as BP -- with BP? I'm not --
I mean, since the company was formed through the merger of -- I'm trying to remember who it was formed through. Q. A. Global/Santa Fe? Global/Santa Fe and -- was it Global Santa
Fe -- Global and Santa Fe, wasn't it?
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Q. A. Q.
M-h'm. Yeah. Is -- was BP, at least as of the time you
left -- excuse me. Was Transocean, as of the time you left BP, one of the preferred providers throughout the world for BP in drilling its deepwater wells? A. Q. It was. Who -- who would be some of the other
companies that would have been preferred providers? A. Q. A. Q. A. Q. A. Pride. Which is no longer there. Which is no -Been sold to Ensco? Ensco. Now. I'm trying to think of who are the other big Ensco now.
deepwater -- give me some names, and I'll tell you whether -Q. Well, I can't give you the names of my -- my That -- that would seem
client's competitors. inappropriate.
But getting back to Transocean, during the period that you were with BP, was Transocean, as a drilling contractor, held in a high regard?
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A. Q.
Yes, they were. All right. Did anyone in your Senior
Management or lower down ever come to you and suggest to you that Transocean, as a corporation, had a philosophy of indifference to the welfare of the environment? A. Q. No. Or that any of its employees were indifferent
to the welfare of the environment? A. Q. No. Did anyone in your Senior Management ever come
to you and say Transocean was indifferent to the welfare of individuals, the employees and -- and their health? A. Q. No. All right. Have you ever heard that suggested
by anyone? A. Q. Not in the time I was at BP. As -- one of the roles that I gathered
yesterday from your conversation with one of the lawyers was you were at -- at least over HSSE while you were at BE -- BP? A. Well, I -- the CEO is, by definition, over
everything. Q. Yeah. Including depositions.
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A.
Including depositions. I was the Chair of the Group Operating Risk
Committee, which was the focal point in the company for reviewing safety performance and HSSE matters. Q. If anyone in your company had ever come to you
and suggested that Transocean was callous, indifferent, or just didn't plain give a damn about the welfare of the environment or individuals, wouldn't it have been your obligation as CEO to either terminate the relationship with Transocean or appoint someone to look into those allegations? MR. WEBB: Objection, form. Object as to form.
MR. GODFREY: A.
The reality, of course, that if that was --
had been the case, other -- others would have taken action before it got to me, I'm certain. Q. (By Mr. Roberts) Yeah. But you've never heard
any of that? A. Q. A. Q. A. Q. I haven't heard any of that. Do you know any individuals with Transocean? I knew from a -- I knew the Chairman, Bob -Bob Long? Bob Long. Okay. Did he seem to be a conscientious
individual concerned about the industry you were both
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involved in? A. Q. He did. Did he seem, from your discussions with him,
to be concerned about the safety and welfare of both the environment and the people? A. Q. He did. Okay. Did he express the same type of goals
that you would want expressed as a partner to BP in the offshore drilling business? A. I -- I -- we -- neither -- Bob and I did not
at any point talk in any detail about goals and objectives, but I have no reason to believe that he wouldn't. Q. Okay. MR. ROBERTS: exhibit number is. MR. GODFREY: were talking about? MR. ROBERTS: MR. GODFREY: Yes, sir. The next exhibit number Is that the Is this the new one you I don't what the next
should be 6060, according to my record. correct number -MR. ROBERTS: 6060.
(Exhibit No. 6060 marked.) THE COURT REPORTER: Mark one of them.
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MR. ROBERTS:
Yes, sir. No, no, no, not you,
THE COURT REPORTER: not you.
I'm talking to my manager. MR. ROBERTS: The court reporters from
Houston are testy sorts. THE COURT REPORTER: (Laughter.) MR. ROBERTS: Oh, God, help me. Objection, form. Objection, form.
(By Mr. Roberts) Doctor, I've handed you a It -- it appears
document that's been produced by BP.
to be your testimony before -- a transcript of your testimony before the House Representatives' Committee on Energy and Commerce. MR. GODFREY: Excuse me. Do you have
another copy that I might have, please? MR. ROBERTS: MR. GODFREY: it. I'm sorry. His personal counsel has Do you need this --
The company counsel does not. MR. ROBERTS: MR. GODFREY: MR. ROBERTS: No.
Okay, thank you. There's so many BP lawyers
here, I just didn't bring enough copies, right? Q. (By Mr. Roberts) Let me go back over this.
This appears to be a transcript of your testimony on
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June 17 before the House Committee -- Subcommittee on the Oversight and Investigations. recall that particular day? A. Q. How could I forget it? I have highlighted for your attention a -- a And I'm sure you
couple of parts in that. A. Q. Yeah. The first is the paragraph that begins: "When
I learned that 11 men had lost their lives in the explosion and fire on the DEEPWATER HORIZON, I was personally devastated." comments? A. Q. I do. It goes on to say: "Three weeks ago I Do you recall making those
attended a Memorial Service for those men, and it was a shattering moment. I want to offer my sincere I can only
condolences to their friends and families. imagine their sorrow." A. Q. I do.
Do you recall saying that, sir?
That -- that service, the Memorial Service you
attended, was that the Transocean Memorial Service? A. Q. It was. It was.
And -- and at that service, you met a number
of the families? A. I did.
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Q. A. Q.
A number of the people involved in the rig? Yes. And you at least got a sense of their
feelings, their attitudes, and their emotions, correct? A. Q. A. I did, yes. What did you think about those folks? I thought they were great people, and I was
deeply touched by the sorrow that they were feeling and the loss that they experienced. Q. Did you get any inim -- any impression from
them that they were callous or hardened people that didn't care about the welfare of others? A. Q. No. Quite the contrary, did you -- did you get the
impression that those employees that you met were deeply care -- deeply cared about others and their own family? A. Q. A. Indeed, yes. Their own drilling family, I'm talking about. Yeah. I -- I understand your -- entirely your
sentiment. Q. Did you get the impression of how close the
family on the drilling rig was; that is, the men that worked together on the -A. I did.
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Q.
-- drilling rig? Did you get a chance to talk to some of your
employees who worked on the DEEPWATER HORIZON with these men? A. Q. I did. And did you get the impression that they all
considered themselves one big family, even though they were from different companies? A. Q. Yes. Do you remember any of the names of the
individuals who lost their lives? A. Anderson. Q. A. Q. A. Q. Yes, sir. Gordon Clark. Yeah. One -Karl Kleppinger, I think. I -- I remember some of them. Ja -- James
I can't remember any more of them, I'm afraid. On April 20th of this year, BP filed a
lawsuit, a legal pleading, claiming, among other things, that these men were callous, indifferent, and grossly negligent in causing this explosion. aware of that, sir? A. Q. A. It's after I left the company. Sir? It was after I left the company. I've had no I -Are you
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involvement in it. Q. life? A. Q. A. Q. A. Of course, it does. It's the anniversary of -I know exactly what it is. It's the anniversary -I remember the anniversary. I spent an hour Does April 20 have any significance in your
in the church on my own, reflecting. Q. A. Q. As did many. I'm sure that's right. I -- I gather that you weren't consulted in
the decision by BP, on the anniversary of these men's deaths and these many injuries that you knew took place -- you weren't consulted on whether they should be accused of being incompetent, not knowing what they were doing, or grossly negligent? A. I have -MR. GODFREY: A. Objection as to form.
-- not been consulted on anything with respect
to BP since I left the company on the 30th of September. Q. (By Mr. Roberts) You saw these people at the
Memorial Service, and you saw the families of the deceased workers, and you saw the surviving workers and
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their families.
Can -- can we agree just as humans --
can we agree that it would have been insensitive, at the minimum, on the anniversary of these folks' tragic incident, to file a claim saying they were grossly negligent? MR. WEBB: I object to the -Objection as to form.
MR. GODFREY: MR. WEBB: A.
-- form of the question. I'm
I had no part or parcel in any of that.
not -- I'm not -Q. A. (By Mr. Roberts) Oh, I understand that, sir. -- prepared to pass any judgment one way or I don't know
the other as to the sensitivity or not.
the context, I don't know the legal context, so I'm afraid I'm not prepared to pass a judgment. Q. You're not prepared to say that it's
insensitive to claim that these dead men were incompetent on the anniversary of their deaths? MR. WEBB: A. Objection, form.
As I said, I'm not prepared to pass a judgment
because I don't know the context in which that decision was taken. Q. (By Mr. Roberts) Whatever the context the
decision was made by BP, are you seriously telling me you're not in a position to say that that would have
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been, at a minimum, insensitive? MR. WEBB: Objection, form. Objection as to form. I
MR. GODFREY: A.
As I said, I was no part of the decision.
had left the company almost nine months, it was. Q. A. Q. (By Mr. Roberts) You -- you met those wives? I did. Can you imagine what it would have been like
for them to find out on the year anniversary of the deaths of their husbands and loved ones, that those men are being accused of incompetence? MR. GODFREY: MR. WEBB: Objection as to form.
Objection, form. Move on.
MR. GODFREY: A.
I'm not aware of what they've been accused of.
I'm very sorry, but I don't -- I have no basis to make -Q. (By Mr. Roberts) I'm asking you to assume that If that is the case, can you understand
was the case.
how that might have been at least insensitive? MR. GODFREY: on, please. A. Q. A. I can -(By Mr. Roberts) Sir? I can imagine how -- how, on the anniversary Objection as to form. Move
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of the accident, the families and particularly the wives were very upset. accident. Q. Thank you, sir. Let me make sure -- (tendering). A. Thank you. MR. GODFREY: MR. ROBERTS: we have -- pass 6061. reporter. (Exhibit No. 6061 marked.) Q. (By Mr. Roberts) What I've handed to you is a Is this 6061? I -- no, no, no. I think It's the anniversary of the
I need one for the court
transcript of a -- it's actually a copy of a "Forbes" magazine interview entitled, "In His Own Words: Forbes
Q&A With BP's Tony Hayward," and dated May 18, 2010. Do you see that, sir? A. Q. A. Q. A. Q. A. Q. I do. Do you recall giving this interview? I don't, no. Sir? I don't recall it, no. You were giving a lot of interviews -I was doing lots of -- lots of things. It -- it says: "Last" -- it begins: "Last
week Forbes sat down with BP Chief Executive Tony
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Hayward at the company's emergency response center in Houston," then goes on to say something that I am sure is inaccurate: thoughts..." I can't imagine you were well-rested at that point. A. It's the definition of "well-rested," of "A well-rested Hayward shared his
course, but at the time I was getting probably four or five hours' sleep a night. Q. Yeah. I want to go to the last page. There's a
question that's asked of you beginning at the top: "That makes me think...you didn't mean a real insurance policy of course, but if one was to go to Lloyd's of London and insure against a 25 billion hit to my market cap and 5 billion in punitive damages, what kind of premiums would you have to pay?" The answer that's written down here is: can't insure. That's why we're self-insured. You "You
can't insure risks you want to insure.
And the things
you can insure, premiums are so high that it makes no sense for a company like" P -- "BP to do anything other than self-insure." A. Q. I do. Do you recall giving that answer? Do you see that, sir?
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A.
I -- I don't, but it's -- it's not an I don't recall it, no.
unreasonable answer. Q. A. Q. A. Q. A. Q.
You're not denying that you gave it? No. You just -Yeah, yeah. -- don't recall giving it? I don't recall, yeah. And the answer that is there is certainly
consistent with your thought process and your understanding of the situation? MR. GODFREY: A. Objection as to form. We don't
Certainly that BP is self-insured.
have insurance policies in place, correct. Q. A. Q. (By Mr. Roberts) Right. Certainly -It goes on to say that if you did get
insurance, "...the premiums are so high that it makes no sense for a company like BP to do anything other than self-insure." A. Is that accurate as well? The -- you -- you mean the next
Can -- sorry.
question, or is -Q. No, the next statement, "...and the things you
can insure, the premiums" -A. I'm sorry.
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Q. A. Q.
-- "are so high..." I'm sorry. All right. Yes. M-h'm, yeah. Yes. What does
Let's start with that.
"self-insurance" mean to you, at least when you were CEO of BP? A. It meant that the company didn't have an
insurance policy against the risks it was -- it was undertaking, in essence, and the -- and as it says here, we self-insured and took those risks onto our balance sheet. Q. Is -- is "self-insured" an -- another way of
saying "no insurance"? A. Yes. Well, no -- no external third-party
insurance, yeah. Q. A. Q. A. Q. All right. Yes. So BP elected to have no external insurance -M-h'm. -- for terms of the environmental risks that
might be occasioned in connection with deepwater drilling? MR. GODFREY: A. BP. Q. (By Mr. Roberts) For anything at BP? Objection as to form.
We had no external insurance for anything at
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A. Q.
That's correct. Okay. I don't know about the cars y'all drive I'm -- I'm only interested in
or that kind of stuff. deepwater drilling -A. Q. A. Q.
Obviously we're think -- thinking of --- particularly the Gulf of Mexico. -- any other operational activity. Okay. The statement here that the premiums
are so high that it makes no sense, like BP, to do anything else other than self-insure, am I right that BP, some years ago, made a corporate decision that the differential between the cost of having insurance in connection with the claims that it was covering were such that BP might as well not have insurance, handle the claims itself, and in the end save itself money? A. That's cor -- that was a decision taken in
about 1991. Q. And that was still the decision in effect at
the time -A. Q. A. Q. A. Q. M-h'm. -- you undertook your -That's correct. -- undertook the CEO position? That's correct. That was still the situation as of Macondo?
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A. Q.
That's correct. Is there any reason, in your mind, to think
that deepwater well pollution insurance, if it's not affordable on a practical level to BP, would be affordable on a practical level to somebody like Halliburton or MI or Dril-Quip or Transocean? MR. WEBB: MR. GODWIN: A. Object to the form. Objection as to form.
I don't know anything about the insurance
market, I'm afraid, so I can't make that -- take that view. I think everyone, every company, looks at the
risks that they're undertaking, the cost of insurance, and weighs that against the likelihood of occurrence, and makes a decision appropriately. I -- I'm -- I --
but I'm not an expert in the insurance market, so I can't answer your question, I'm afraid. Q. (By Mr. Roberts) Did you have any expectation
that your subcontractors would go out and purchase insurance for you, since you had a -- made a corporate decision not to purchase insurance for yourself? MR. WEBB: Objection, form. Same objection.
MR. GODFREY: A.
We had no expectation of what our contractors
did and did not -- insur -- what insurance our contractors did and did not purchase with respect to
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risks that they were undertaking. Q. (By Mr. Roberts) As -- while you were CEO of
BP, as between BP, on the one hand, and its contractors that were involved in drilling of wells, in the other hand, was there a normal allocation of environmental risks in the contracts that BP entered into? MR. GODFREY: A. Q. Object as to form.
Would you just repeat your question again? (By Mr. Roberts) Sure. You know what
environmental risks are? A. Q. Yeah. Yes. And you know that in your
All right.
contracts with subcontractors, there is an allocation of who's responsible for those risks? A. Q. M-h'm. You're familiar with the term of indem --
you're familiar with the term "indemnity"? A. Q. Yes. All right. While you were CEO, what was the
policy with respect -- at BP -- as to who would assume environmental risk for blowout pollution, for instance -- BP or its subcontractors? MR. GODFREY: A. Objection as to form.
I think the -- it de -- it de -- in the
contracts, of course, it's -- I -- I -- I -- I don't
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have a contract in front of me, and I won't remember the right language. But if there was -- if there was
reasons to believe that the contractor was at fault, then the indemnity may or may not apply. Q. (By Mr. Roberts) "At fault" meaning what? MR. WEBB: Well, object to the form.
Object to the form of the question, without a document. MR. GODFREY: A. fault. The same objection.
A -- a -- a -- some sort -- some form of I'm not a lawyer. I'm not going to try and
describe a legal description. Q. A. Q. A. Q. (By Mr. Roberts) All right. Well, let's --
I certainly won't try and do it without the -Let's go back up --- without the contract in front of us. Let's go back up to your level, the And I don't mean that
40,000-foot level of a CEO. disrespectfully.
I understand you don't read the
details of every contract -- of all your contracts. But what -- what was the industry -- you talked yesterday at length about the industry. general, what was the industry allocation of environmental risk between an Operator such as BP and subcontractors who worked for the Operator while drilling wells for the Operator? In
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MR. WEBB:
Object to form. Same objection. Object to form.
MR. GODFREY: MR. GODWIN: A.
The industry norm would be, in most
circumstance, that the Operator would take that risk. Q. A. (By Mr. Roberts) Okay. But circumstances, of course, differ in time
and place. Q. A. Q. A. Right. But that was the industry standard?
M-h'm, yeah. Has been that way for years, hasn't it? Yeah, it is. MR. GODFREY: Object to form. If you would,
Q.
(By Mr. Roberts) All right.
that notebook that's in front of you, turn to Tab -let's see if this helps. Tab 4. THE COURT REPORTER: marked, Mr. Roberts? MR. ROBERTS: No, sir. It's been Do you want it I've got mine upside down.
previously marked as Exhibit 1488, and it is on the -the disc that everybody has. THE COURT REPORTER: MR. ROBERTS: Q. Thank you, sir.
You're welcome, sir.
(By Mr. Roberts) Do you have Tab 4, sir?
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A. Q.
I do. It is the -- as you can tell, it's Amendment It's dated -- it's
No. 38 to the Drilling Contract. for the DEEPWATER HORIZON.
It's dated September 28th
2009, and it goes into effect, I believe, in September of 2010. So to put this in perspective, it was signed before Macondo, concerning the DEEPWATER -A. Q. M-h'm. -- HORIZON, to go into effect after Macondo.
Are you with me, sir? A. Q. I am. The day rates are specified there with
Mr. Suttles -- and, by the way, do -- you do know Mr. Suttles? A. Q. A. Q. A. Yes, I do. Yes, I do.
He was the COO of the company? That's correct, yeah. Was he the -He was Chief Operating Officer of the
Exploration and Production Company. Q. A. Q. A. Okay. No. Okay. Who did he directly report to? Was he a direct report to you?
To Mr. Ingalls.
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Q. to you? A. Q. PLC? A.
Mr. Ingalls.
Was Mr. Ingalls a direct report
He was. And what was his position with respect to BP
Mi -- Mr. Ingalls was the Chief Executive
Officer of Exploration & Production. Q. A. Q. Did he serve any ca -- in -And was on the Board of BP PLC. All right. And did he have any other position
other than being on the Board of PLC? A. He was the Chief Executive of Exploration and
Production. Q. A. Q. artful. Is Exploration and Production part of PLC? A. It's -- yes, it's one of the -- it -- it's not It's an internal organizational All right. That's --
Well, I don't think I understand -No, not -- it's -- it's -- my question is not
a legal subsidiary. unit. Q. Okay.
It's an organizational format created
under PLC, or within PLC? A. Q. It's within PLC, yes. All right.
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A. Q.
That's a better way to think about it. So when we talk about him being a COO of
Exploration and Production, that -- that is a position, it's not a company that he's over? A. Q. A. That's correct. It's a group? Well, within the Exploration and Production
business, there are a series of legal entities. Q. This Amendment 38, I did the math with
Mr. Suttles, and the value of this contract over its lifetime is in excess of a half a billion dollars. And
I asked him whose authority it would have required for this contract to be approved by BP. And he said this
contract would either have been approved by Mr. Ingalls or by yourself. A. Q. (Nodding.) And so I'm asking yourself, are you the one
that approved the entering in -A. Q. A. Q. A. It was Mr. Ingalls that approved. That's a great answer. Well, it -- it is a fact, though. And I'm not suggesting it's not. On long -- long-term capital commitments, we
made a distinction between capital allocation and long-term commitments, of which this contract is one.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
Did Mr. Ingalls need to consult with you
before he approved this contract? A. He probably -- I don't recall, but he probably
would have made me aware he was going to sign a contract, but not in any formal sense. Q. A. Q. A. Q. Not in any detailed sense? Not in any formal sense or detailed sense. Would he have been -It was within his delegated authority. That's a good word. I hear it throughout this
case, "delegated authority." A. It's -- it's a fact. If you go and look at
the delegated authorities from -- brought to me and from myself to my reports, you'll find that this contract -- a contract of this type is within the delegated authority of Mr. Ingalls. Q. So Mr. Ingalls would have been the one who had
the delegated responsibility to review the details of the contract, decide whether it should be approved, and then would have simply advised you of the generalities, and approval would have been agreed downstream? MR. GODFREY: A. Q. Objection as to form.
That's broadly correct. (By Mr. Roberts) All right. This contract --
and if you would, turn to Page 9 of the document.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. GODFREY: please? MR. ROBERTS: document.
Page, or the Bates number,
Yeah, it's 9 of the
It's -- it's -- the BP number is 41484. MR. GODFREY: Okay, thank you.
Q. A. Q.
(By Mr. Roberts) Do you see that, sir? I do. It -- it -- and I will tell you generally, you
see highlighted the words "indemnity and willful misconduct"? A. Q. A. Q. M-h'm. You see that, sir? I do. Did Mr. Ingalls have the authority to, on
behalf of BP, enter into an agreement that included indemnity for another party's willful misconduct? MR. GODFREY: A. so -Q. (By Mr. Roberts) Whatever is in here, he had Objection as to form.
He had the approval to approve this contract,
that authority? A. Yes. Actually, he had the authority to
approve this contract, not the approval to approve this contract. Q. I'm sorry, I couldn't hear you.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
I, inaccurately, said he had the approval to What I meant to say was he had I was just
approve this contract.
the authority to approve this contract. correcting the court recorder here. Q. document. MR. GODFREY: MR. ROBERTS: MR. GODFREY: MR. ROBERTS: Q.
If you would, turn to Page 15 of that same
Is that No. 490 of that? 41490. Thank you. M-h'm.
(By Mr. Roberts) You see in the middle there
is the BP Code of Conduct -A. Q. A. Q. Yes. -- as part of this contract? I do. Let me just start there. It says in the
middle, "BP wishes to make it clear that it intends its business dealings to be characterized by honesty, and freedom from deception and fraud, and that it finds unethical behavior unacceptable. Practices that BP
considers dishonest, unethical or unacceptable include," and the second bullet point is "Deception." Is that correct, sir? A. Q. It is. What is the BP Code of Conduct in general,
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
what -- what -A. It's -- it's the Code by which we expect It sets out the
everyone in BP to conduct business.
norms and standards of performance and behavior -Q. A. Q. A. Q. A. Q. So you would --- in business. I'm sorry, did I -Yes. -- interrupt you? No, no. Go. I finished.
You would expect all representatives of BP to
conduct themselves at the highest level of professionalism consistent with this Code of Conduct? A. Q. I would. You would, for instance, expect all levels of
BP representatives to honor contractual commitments that they make? A. Q. I would. You would, of course, expect all BP
representatives not to enter into contracts that they didn't intend to honor? MR. GODFREY: MR. WEBB: A. Q. Indeed. (By Mr. Roberts) Did I say that wrong? Let me Objection, form.
Objection, form.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
say it again. A. Q. No, you -- indeed. All right. I said, "Indeed," yes.
I got a lot of objections, and I
wondered if I said something nasty. A. I think it was to your question rather than --
the phrasing of your question, perhaps. Q. A. Q. Yeah, but -But I'm not a lawyer, so -I'm obviously not much of one with all the
objections I'm getting, but the -A. Q. There are plenty of experts in the room. But shorthand is, is you expect your
representatives, when they're entering into contracts, to intend and to honor the contractual -- the contractual obligations they enter into? A. That's correct. MR. GODFREY: Q. Conduct? MR. GODFREY: A. Q. It is. (By Mr. Roberts) Don't enter into agreements Objection, form. Objection, form.
(By Mr. Roberts) That's part of your Code of
and be deceptive, meaning don't enter into an agreement that you really don't intend to perform under? MR. WEBB: Objection, form.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
That's correct.
We also expect those who
enter into contracts with us to perform. Q. A. Q. since -A. Q. It's a binary process, two sides of the party. It's worked that way since you've been in this (By Mr. Roberts) No doubt about it. So -That's the way the oil industry has worked
business, hasn't it, sir? A. Q. That's correct. It's worked that way since you did your first
handshake deal with your first opposition in drilling a well, hasn't it? A. I'm not sure I ever did a handshake deal
drilling a well, but, yes, correct. Q. Well, you know that this industry, the
industry that you've been a proud member of for over 30 years, is characterized by men of great integrity and honesty? MR. WEBB: A. Q. A. Q. Objection, form.
I agree with that. (By Mr. Roberts) Well -I agree with that. Despite your lawyer, I knew you were going to And you know that men in this
agree with that.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
industry expect others to honor their contractual commitments? A. That's correct. MR. GODFREY: Q. Objection to form.
(By Mr. Roberts) And that's been a cornerstone
of this industry throughout its existence? A. Q. That's correct. It's the only way it works, isn't it, sir? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A. Q. It is.
(By Mr. Roberts) And you're still in this
industry, aren't you? A. Q. A. again -Q. A. Q. I -- I saw --- in the relatively near future. You -- you've got a -- what do you call it, an I'm sort of in the industry. I saw -I intend to become part of the industry I --
IPO, investment group going in the energy business that's starting up now? A. Q. A. That's correct. What's the name of that company? It's called Vallares.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A. Q.
Vallares? M-h'm. Sounds like a song, "Vo-la-re." That's not
that same group, though, I guess. Anyway, what is this company going to do? A. It's -- it's going to invest in oil and gas
opportunities. Q. A. As in drilling? Potentially in drilling, almost -- almost
certainly at some point will be involved in drilling, I expect. Q. If -- if the opportunity comes up, any reason
you wouldn't use Transocean to drill one of those wells? MR. GODFREY: A. Objection as to form.
We would look very hard at all the potential
contractors and make an appropriate decision. Q. (By Mr. Roberts) All right. Barbara Yilmaz, And I may have
what is her position with your company? said her name incorrectly. A.
She -- she certainly was last year -- I
don't -- I don't know what her position is now, but she was last year the Head of Global Drilling Operations. Q. What does that mean in terms of her
responsibilities over the Gulf of Mexico drilling?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
She had global oversight of the Drilling
Operations Worldwide, which was not in a -- in -- to have sort of direct operational oversight on a day-to-day basis, but to ensure that the right people with the right skills are in the right places to insure that we had the right standards in place to take a leading role in managing the global rig fleet that BP was contracting on an ongoing basis. Q. Was she still with the company as -- as of
when you left? A. Q. Yes, she was. So ultimately all drilling responsibilities go
to her worldwide? A. Yes, not in the -- not in the matter of
specific operational decision-making, but in the matter of people, the rig fleet, with systems and processes that we use. She wasn't involved in the day-to-day
operational decision-making around any particular well, because there were people beneath her doing that. Q. Yes, sir, I understand. She's not going to be
deciding what mud weight to be putting down a hole, but she is going to be involved in a decision as to what drilling contractor will be -A. Q. That's correct. -- retained --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q.
That's correct. -- what rig will be used, high-level decisions
of that sort? A. Q. That's correct. Would you turn to -- same document, turn to
Page 41561. MR. GODFREY: you say? MR. ROBERTS: MR. GODFREY: Q. Yes, sir. Thank you. This is in 1488, 41561 did
(By Mr. Roberts) Beginning at the bottom,
there's a Section E.2.3, "Ram Pipe Preventers," and it carries over to the next page with E.2.4, "Stack Configuration"? A. Q. A. Q. Yeah. Do you see that, sir? I do. How is it determined within your company how
you decide what the stack figuration will be on deepwater drilling rigs that your fleets use? A. Q. A. I honestly don't know. That would be in Barbara's area? I would certainly believe that it's in
Barbara's area, but I don't know the -- the basis for that sort of decision.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
You are aware that your company decides what
the stack configuration will be, aren't you, sir? A. Q. I believe that's the case. Okay. You are aware that your company
instructs not just Transocean, but other drilling contractors what type of rams and where the rams are to be located in a BOP? A. I'm -- I wasn't personally aware of that. If
that's -- if that's your assertion to be true, then I accept it. Q. I wasn't personally aware of that.
Well, we can look at this document, this
contract, and you can see that the location and types of rams have been specified by BP? A. Yeah. MR. GODFREY: Q. Objection as to form.
(By Mr. Roberts) Are you aware that some of
your rigs under contract are equipped with two blind shear rams and some are equipped with only one? A. Q. I am aware of that now. Okay. Is the reasoning for equipped --
equipping some of the rigs with two blind shear rams opposed to one based upon on how the rig is going to be utilized or what pressures are expected to be seen or what? A. I don't -- I don't know the basis for that
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
decision-making. Q. Do you know why it was that of the six rigs in
the Gulf of Mexico, for instance, that Transocean had under lease to BP, four of them had two blind shear rams and two had one blind shear ram? A. Q. A. Q. A. I don't know. Were you aware that -I wasn't aware that was the case -Okay. -- prior to the accident. And I don't know
what the basis of that situation was. Q. Were you -- were you aware that the two rigs
that had one blind shear ram were the two rigs that were placed and instructed by BP to go to Macondo, the MARIANAS and the DEEPWATER HORIZON? A. I wasn't aware of that -- I wasn't aware of
the configuration of either of those rigs with respect to whether they had one or two blind shear rams. Q. Were you aware that all of the relief rigs
that BP asked Transocean to redeploy were two blind shear rams? A. response. Q. Has BP gone to a system where it requires its I became aware of that in the course of the
rigs to be equipped with two blind shear rams in
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
deepwater drilling? MR. GODFREY: Q. A. Q. A. Q. A. Objection as to form.
(By Mr. Roberts) At least as of when you left? I -- I don't -- I don't know. Sir? I don't know. I don't know. I don't recall.
That would be a question for Ms. Yilmaz? I'm certainly -- I would imagine that
Ms. Yilmaz would be able to answer that question, but I don't know the answer to it. Q. Okay. Well, is there anybody else that you
would suggest that I ask that of BP other than Ms. Yilmaz? A. Well, I -- I'm not certain what role
Ms. Yilmaz now has. Q. I -- I'm sorry, it's an inartful question. At
least as of the time you left BP, can you -A. Q. She would be the best person to ask. She would be the best person to discuss blind
shear rams in drilling rig allocation? A. Q. A. Q. but -I believe so. All right. I believe so. She'll probably hate you for saying that,
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. fact. Q. A. Q.
I said I believe so, I didn't say it was a I said I believe so. Okay. It's a truthful answer to your question. Is there any difference in the blind shear ram
utilization by BP in other parts of the world, any difference, from your understanding, between what BP did in the Gulf of Mexico and what BP did in other parts of the world? A. I'm not aware. I don't know the -- the
details of blind -- of BP's blind shear ram utilization. Q. Okay. I have a couple of questions to ask
you, sir, and -- and -MR. GODFREY: Are we done with this
notebook or at least this Tab? MR. ROBERTS: MR. GODFREY: MR. ROBERTS: MR. GODFREY: Q. Yes, sir. Thank you. Yes, sir. I'm juggling things here.
(By Mr. Roberts) Want to ask you a couple of
statements and see if you agree or disagree with them, okay? I have a feeling I know what the answers are
going to be. Statement No. 1, that BP's history is littered
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
with inappropriate actions and decisions pertaining to wells with little or no accountability? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: Q. A. Q. A.
(By Mr. Roberts) Agree or disagree? I disagree. No. 2, for too long -Can I -- are you citing from a document, can
I see what -Q. A. Q. A. No, sir, I'm reading my notes. Okay. So where --
I'm reading my notes. I'm not allowed to know where these are from, I guess you'll
or they're just from you, are they? let -Q. A. Q. I may be making it up. Okay. Okay.
No. 2, for too long BP treated wells as There is little or no
one would treat a hire car.
oversight or ownership of our wells, outside the drilling and completion construction phase. disagree with that? MR. WEBB: Objection, form. Same objection. Agree or
MR. GODFREY: A.
I -- I disagree with it.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
(By Mr. Roberts) Okay.
No. 3, there is a lack Agree or
of accountability in BP's Well Engineering. disagree? MR. WEBB: Same objection. Same objection.
MR. GODFREY: A.
I don't know -- I don't have a basis for
agreeing or disagreeing on any of this. Q. (By Mr. Roberts) So there may be a lack of
accountability in BP's Well Engineering from your -MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A.
I'm -- I'm not -- I'm just not in a position
to make -Q. A. Q. (By Mr. Roberts) As of when -Today or when I left or -As of when you left BP. All of my questions Was there a
are as of the day you walked out the door.
lack of accountability from your standpoint as CEO in Well Engineering? A. Q. Not to my knowledge. All right. As of the day you left BP as CEO,
do you agree or disagree that the only time there was crystal clear accountability in Well Engineering was during the construction phase? MR. WEBB: Objection, form.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. GODFREY: A.
Same objection.
I don't have a basis for forming a judgment,
I'm afraid. Q. (By Mr. Roberts) All right. So there could
have been -MR. WEBB: Q. Objection, form.
(By Mr. Roberts) -- this lack of
accountability? A. Could have been, there could not have been.
I just don't have a basis for -- to forming a judgment. Q. (By Mr. Roberts) You agree or disagree that as
of the period you were CEO, that the greatest obstacle in delivering appropriate levels of integrity across BP's well stock is the lack of clear accountability? MR. WEBB: question. A. I -- I don't have any basis to agree or Objection, form of the
disagree on that. Q. (By Mr. Roberts) Well, you sure wouldn't want
that to have been the case, would you? MR. WEBB: A. Objection, form.
I say I don't have any basis to agree or
disagree whether that's the case. Q. (By Mr. Roberts) No, that wasn't my question.
You wouldn't -- you would not have wanted that to be
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
the case while you were CEO -A. Q. A. Q. That's correct. -- right? That's correct. If that was the case, it wouldn't have been
with your approval? MR. WEBB: A. Q. Objection, form.
That's, indeed, the case. (By Mr. Roberts) All right. Do you agree or
disagree that all BP's major well integrity incidents prior to Macondo were due to simple bad practice? MR. GODFREY: Q. Objection as to form.
(By Mr. Roberts) That the well integrity --
that well integrity is no more than an output of competent, basic operation practice, complexity and cost is a product of having to replace failed wells? MR. WEBB: A. Objection to form. I
I don't have a basis to agree or disagree.
don't know what you're -Q. A. Q. (By Mr. Roberts) Well, let me --- referring to or assuming. Would you agree that you would not want -- you
wouldn't have wanted, while you were CEO at the company, all of your well incidents to have been due to simple bad practice?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. WEBB: A. Q. Correct.
Objection, form.
Do you agree that
all of BP's well integrity train wrecks resulted from simple bad practice? MR. GODFREY: Q. Objection, form.
(By Mr. Roberts) As an example. FIRE ALARM VOICE: The fire alarm system
is about to be tested. (Fire alarm drill sounding.) FIRE ALARM VOICE: Attention, please. building. THE COURT REPORTER: me. FIRE ALARM VOICE: Please leave the Somebody just shoot Attention, please.
A fire has been reported in the
building immediately by the nearest exit. The fire alarm test is now completed. MR. ROBERTS: arranged this. (Laughter.) MR. GODFREY: There -- there actually was I know -- I know you
a sign coming in this morning that informed us of this. I -- it was somewhat disbelief, but the building is unrelated to Kirkland, so I apologize on behalf of the
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
building, but we're also -MR. ROBERTS: Gerkin anymore. I don't know who owns the
It used to be Swiss Reed, didn't it? Yep.
MR. GODFREY: A. Q. know. A. I don't know. MR. ROBERTS: It did.
(By Mr. Roberts) Who owns it now?
I don't
All right.
Are we back on?
We never left. Back to my
questions.
Do you agree that all of BP's well
integrity train wrecks resulted from simple bad practice? As an example, the Alaska A22 procedures
were not followed, and there was little or no understanding of the effect of a cement retainer? MR. GODFREY: Q. A. Objection as to form.
(By Mr. Roberts) Sir? I don't have a basis to agree or disagree
about cement -Q. A. Q. A. Q. Do you know the Alaska A22? No, I don't know the Alaska A22. Okay. Do you know the OLA A5?
I don't. Do you know the Colombian blowout?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q. A. Q. A. Q. A.
The Colombian blowout, no, I don't. What is an SPU? Strategic Performance Unit. Is that an -- an -It's an --- important part of your business? It's an organizational entity within BP.
There were around 30 of them. Q. SPU? A. Q. A. It was an organizational unit. I mean, what did they do? A business -- organizational business unit. It ran -- they ran a business. MR. GODFREY: A. and -Q. (By Mr. Roberts) Excuse me, sir. MR. GODFREY: I was going to shut the Hold on for Excuse me. What -What was the function or the intention of an
A production business, a retail business,
door because we had some background noise.
one second, please, I apologize for interrupting. Okay. Q. (By Mr. Roberts) Was an SPU an important part
of the business Operations of BP at least as of when you --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q. A. Q.
Yes. -- left BP? It was. What types of individuals were appointed to
head an SPU? A. Q. Relatively Senior Executives. Senior Executives. Would you agree with me,
sir, that the SPUs of BP were motivated by greed and fear? MR. GODFREY: A. Q. No, I would not. Would you agree with me, sir, that the wells Objection to form.
were BP's biggest asset, yet they were treated with much indifference at the corporate level? MR. GODFREY: A. Q. A. Q. Object to form.
I wouldn't agree with that, sir. (By Mr. Roberts) Okay. I don't know. You don't know him to be the Global Well Who is David Andrews?
Integrity Lead of the segment Engineering Technical Authority part of that SPU? A. afraid. Q. A. Part of which SPU? I don't know the name, I'm
I'm sorry, but I don't know him. You've never heard of him? I haven't.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
I gather you've never seen the paper he did in
August of 2009 about well integrity? A. I haven't. MR. ROBERTS: exhibit? THE COURT REPORTER: (Exhibit No. 6062 marked.) THE COURT REPORTER: exhibit sticker. MR. GODFREY: MR. ROBERTS: Q. Is this 6062? Yes, sir. Here comes the 6062. Okay. What's the next
(By Mr. Roberts) Exhibit 6062 has been
produced by BP, and it appears to be your working notes or Town Hall notes for a July 16, 2010, meeting. Do you see that, sir? A. Q. I do. On Page 2 there is -- there's a bullet point And -- and I guess these are
that I've highlighted.
notes that -- or comments, thoughts that you were making at this time? A. I -- I didn't write this document and I -- I I
don't recall it and I don't know that I've used it.
think this was written by someone else for -- for me -Q. A. By? -- but I certainly didn't write it.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
By an Executive Assistant, I expect. Q. A. Q. By a PR person or whom? No. By a -- an assistant, one of mine. Is this something that you worked
All right.
from while you were making your -A. Q. A. Q. A. No. -- presentation? No. What was -- what was to be done with this? I hon -- honestly don't know. I didn't use
this in the presentation. Q. Fair enough.
I -- I don't know.
Let's go to the -- the second page, and let's start with -- there -- there is a bullet point that says: "Accusations and blaming going on is rubbish." Do you see that, sir? A. Q. I do. Is that something that you would have agreed
with at that time? A. I probably wouldn't have expressed it that
way, actually. Q. A. Q. "Rubbish" is a little bit too strong a word? Yeah. But you did express earlier in this deposition
that you're -- you're not going to endorse the blame
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
game.
That wasn't your role? MR. WEBB: Objection, form.
A.
I said -- I don't recall exactly what I said, I
but I think I was referring to -- I can't remember. mean, if -- I mean, if we have to go back to the record, we should look at it, but -Q.
Have you engaged in any blaming of anybody for
the cause of this incident? A. I have not, no -MR. WEBB: A. Q. Objection, form.
-- I don't believe so, no. (By Mr. Roberts) Okay. You need to let your
lawyer yell at me first, and then you get to answer, because I -- even with hearing aids, I can't discriminate two conversations. So what was your answer again, sir? A. Q. I don't believe so. All right. The second part of the bullet
point was that the "accident was not about poor well design," end quote. Do you see that, sir? A. Q. case? A. I believe that the Bly Investigation, which That's correct. All right. Do you believe that to be the
588
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
was only part way through at this point, at the poi -at the date of this -- this Town Hall, has concluded that well design was not part of the accident. Q. So at least as of the time you left BP, you
believed that poor well design was not a reason, an underlying reason for this incident? A. Report. MR. GODWIN: Q. Object to form. I believe that's what is documented in the Bly
(By Mr. Roberts) I don't care about the Bly
Report, but -A. Q. A. Well, that's what my date -- that's what my -But --- my statement was based on. So it's
important that I preface my statement with that was in the Bly Report, I accepted the Bly Report, and that's the basis for my statement that well design was not part of this accident. Q. All right. So maybe -Object to form. Anybody else? Let me approach
MR. GODWIN: MR. ROBERTS: Q.
it this way:
Do you have any understanding from any
other source about the cause of this incident aside from what's in the Bly Report?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
I have the Bly Report and a very high level
cursory overview of what the Presidential Commission found. Q. A. Q. All right. That's the extent of my knowledge. So from -- as we sit here today, from all
sources you've reviewed, you can find no evidence of well design being part of the cause -A. From the two sources that I've reviewed, the
Bly Report and the cursory inspection of the Presidential Commission. Q. A. Q. A. Q. A. Q. You get to let me get my -I'm sorry. -- question out. I apologize. I'm -I'm sorry. I'm a Texan, and I talk slow. From your review of the two documents that you looked at, the Bly Report and the cursory review, and no other things that you reviewed, you have no reason to believe that well design played any role in the cause of this incident? A. Q. Correct. And you have reviewed nothing else and have
590
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heard nothing else that would give you any reason to believe that well design played any role in this incident? A. Q. That's correct. All right. (Exhibit No. 6063 marked.) THE COURT REPORTER: Five minutes. MR. GODFREY: is it -MR. ROBERTS: MR. GODFREY: MR. ROBERTS: getting tired of hearing me. THE COURT REPORTER: Q. Getting? Turning to No, sir. Thank you. Even the court reporter's Is it in the notebook, or 6063.
Exhibit 6063, do you recognize this, sir, as a communication -- employee communication by you and Mr. Bob Dudley? A. Q. A. Q. I do. Dated September 8th, 2010? Yes. Is this the communication that -- that was
issued as you were leaving the company? A. Yes. I believe it was issued on the day that
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we published the internal investigation, which is, I guess, 20 days before I formally left the company. Q. It -- it says in this, and I quote: "Based on
the report, it would appear unlikely that well design contributed to the incident, as evidenced by the fact that hydrocarbons flowed up the production casing through the bottom of the well," unquote. Do you see that, sir? A. Q. I do. I'm intrigued by that. Are you intending to
suggest that the fact that well -- that "hydrocarbons came up the production casing" means that well design could not have played any role in the incident? A. I think you have to go back to the -- the
alternative theory, where well design was an issue, where the flow was up the annulus, up the back side of the production casing, and there is no evidence of that. So on that -- on the -- on that basis, I think the Bly Report concluded that well design did not contribute to the incident. Q. But that's a little bit -MR. GODWIN: Q. Object to form.
(By Mr. Roberts) That's a little bit different Your
than -- than your communication here.
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communication indicates, it says as the -- as evidenced by the fact that hydrocarbons flowed up the production casing through the bottom of the well, it appears that well design didn't contribute to the incident. what you said, isn't it, sir? A. Q. That is what I said. So, therefore, I conclude that you concluded That's
that since the hydrocarbons came through the production casing from the bottom of the well that means that well design wasn't implicated? MR. WEBB: A. Object to the form.
The conclusions of the Bly Report was that
well design wasn't implicated, and that is paraphrased in this communication. Q. (By Mr. Roberts) But you adopted -MR. GODWIN: Q. A. found. Q. A. You're not communicating -And I was not any -- any position to make any Object to form.
(By Mr. Roberts) -- that philosophy. I re -- I communicated what the Bly Report
other judgment. Q. Sir, this is your communication and Bob This isn't
Dudley's communication to the employees. Mr. Bly's communication. You --
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A. Q. A. Q.
But what -Let me finish. Sorry. You and Mr. Dudley have told your employees
that since hydrocarbons flowed up the production casing and through the bottom of the well, that it appears unlikely that well design contributed to the incident? A. Q. That's correct. All right. So as I understand what you're
saying, the fact that it came through the production casing, that means it couldn't have been due to bad well design? MR. GODFREY: A. Objection as to form.
Which meant it did not go up -- the flow
through the production casing excluded the -- the flow through the annulus, which was the ba -- which had been a basis for concerns around the well design. Q. (By Mr. Roberts) So to the extent that the Bly
Report looked at well design, it concluded that since hydrocarbons came up through the production casing well design was not implicated? MR. GODFREY: A. Objection as to form.
It concluded that based on this and other --
other things that are documented in this Bly Report. MR. GODWIN: Object to form.
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A.
And we can go to the Bly Report to understand
exactly how that conclusion was drawn. Q. (By Mr. Roberts) And -MR. GODWIN: Q. A. Q. Object to form.
(By Mr. Roberts) And you accepted that as a -And I accepted the Bly Report. You accepted that as a thorough analysis of
how well design could have contributed to this incident? A. I accepted the Bly Report as a thorough
analysis of the incident, which effectively ruled out well design as a cause of the accident. MR. ROBERTS: a pleasure talking to you. THE WITNESS: MR. ROBERTS: THE WITNESS: Thank you. Nice meeting you. The same. Thanks. Thank you, sir. It's been
THE VIDEOGRAPHER: 10:14 a.m. Ending Tape 13.
Off the record at
(Recess from 10:14 a.m. to 10:25 a.m.) MR. GODFREY: there, please? We're ready to go. Thank you. On the record at Can you shut the door down
THE VIDEOGRAPHER: 10:25 a.m., beginning Tape 14.
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EXAMINATION QUESTIONS BY MR. GODWIN: Q. A. Q. Good morning, Dr. Hayward. I'm very well, thank you. Good. Good. You and I, I think, met on How are you, sir?
Monday briefly, to exchange -A. Q. A. Q. Pleasantries. -- pleasantries, if you will. Yes. Is that the first time that we have spoken
about any matter whatsoever? A. Q. It is. Okay. As you know, having been introduced by
me or to you, by Rick Godfrey, I represent Halliburton. A. Q. Yes. And I'm here accompanied in your deposition
today by my partner, Jenny Martinez, seated here to my immediate right. A. Q. Hi, Jenny. Have you at anytime prior to Monday or at
anytime during this deposition spoken to Jenny about any subject pertaining to this litigation? A. Q. No, I haven't. Okay, sir. Thank you.
And a couple of things I want to have an
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understanding with you about is, is that while I'm asking you questions, if you don't understand one of my questions, I want you to ask me to repeat it or clarify it. I know you've given in your life, I believe in your career, you said a number of depositions, but it's important that -- that you allow me to ask my question, and it's equally important that I allow you to give your answer. So if you're trying to give an answer and
I start asking another question, either hold up your hand or say something if your lawyers don't do it, and I'll definitely stop because I want to give you the courtesy of answering my questions and for you to do so completely, okay? A. Q. Thank you very much. You're very welcome, sir. Now, I understand -- understood you to say on Monday that you have a Ph.D., did you say in Geology? A. Q. Ph.D.? A. Q. 1982. Okay, sir. And I understood you to say during That's correct. Okay. Sir, in what year did you get that
the course of your deposition, that a long time ago, you had worked on a -- on a drilling rig?
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A. Q.
That's correct. And had you -- have you ever worked on an
offshore drilling rig in deepwater? A. Q. A. It wasn't in deepwater. It was -It was an offshore drilling rig in a few
hundred meters of water. Q. A. Q. Okay. In shallow water?
Shallow water. Okay. Have you at any time been onto a
drilling rig in the deepwater in the Gulf of Mexico? A. Q. I have, yes. Okay, sir. With regard to the relief wells,
relief well that was drilled here next to the Macondo following the incident on April 20, did you ever go out to the relief well -A. Q. A. I didn't go to the relief well. -- to the -I went to other operations, but not to the
relief well. Q. A. Okay. Never flew out to the rig? Okay.
I flew out to the ENTERPRISE, which was the
production vessel -Q. A. Right. -- that was actually -- to the drilling.
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Q.
Okay.
I understand, sir.
Now you had you had said that I believe it was in the latter part of July of 2010, you ceased being the CEO of BP? A. Yeah. I -- I announced my intention to step
down on the 27th and went through a transition to Bob Dudley and left the company on the first of October. Q. Okay. I believe you said you, quote, "handed
over the reins" at the -- in late July -A. Q. A. Q. That's correct. -- to Mr. Dudley? That's correct. Since late July of 2010, have you spoken to
Bob Dudley at any time regarding any subject pertaining to the incident on April 20, 2010? A. We spoke regularly -- regularly in the period
between July the 27th and the 1st of August -- 1st of October, and we've not spoken about it since then. Q. Okay. So up until when you left the company,
you said -- was it in -A. Q. company. On the 30th of September. 30th of September, you actually left the Since that date, you and Mr. Dudley have not
had a single conversation pertaining to anything regarding the incident of April 20, 2010; is that
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correct? A. Q. That's correct. Now, Mr. Mark Bly, you said that he was the
gentleman that you appointed to head up the internal investigation of BP, as I understood your testimony? A. Q. That's correct. And since you left the company, effectively
September 30 of 2010, have you spoken to Mr. Bly concerning any aspect of his internal investigation of what is referred to as the Bly Report? A. Q. I have not. You have not. I understood you to say here earlier today, that the reason you chose Mr. Bly was that you felt that he was the person that was most qualified within the company to head up the investigation? A. Q. That's correct. Okay. And I believe you said that you thought
by selecting him, that you would be getting a -- a -what was it you called it, a -A. I said I thought that the investigation or the
Report that resulted from that investigation was both rigorous and robust. Q. Okay. And I believe you -- and did I
understand you to say that you thought that -- that
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even though Mr. Bly was employed by BP, that you thought that his heading up the investigation, it would be an independent investigation? A. I believe that it was an independent
investigation. Q. Well, you believe that it was, but was it your
intention when you chose him that it be an independent investigation, even though he was an employee working within the company? A. It was my intention that it would be an
inde -- independent investigation. Q. A. Okay. He was outside of the line. He was outside of
the operating line. Q. A. All right. And he had a role that was not in any way to
do with the operations where the accident occurred. Q. Okay. And he was outside of the line, and as
I understand it, he appointed all of the people that were on his in -- his investigative team, both internal and external? A. Q. That's correct. Okay. Now, while he may have been outside of
the line, he reported to you, did he not, with regard to the investigation?
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A.
He reported to me, and he reported to the
SEEAC and the Board. Q. Okay. And, of course, the Board had the That
interest of BP stockholders always at -- in mind. would be part of its function, would it not? A. Certainly part of its -MR. GODFREY: A. Objection to the form.
It's part of any Board's duties to take care
of the shareholders of the company. Q. (By Mr. Godwin) Okay, sir. And -- and that
is -- and doing that, as long as the law is followed, to do it to the exclusion of all others? A. Q. I'm sorry? Even -- and while carrying forth and carrying
out its duties as a Board Member or as a Board as a body is to look after the interest of the shareholders to the exclusion of others, so long as the law -- the law is followed? MR. GODFREY: Q. Objection.
(By Mr. Godwin) Would you agree with that? MR. GODFREY: Objection to the form.
A.
I would say that to protect the interest of
shareholders -Q. A. (By Mr. Godwin) Okay, sir. -- in the context of ensuring that other --
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other people are equally taken care of as well. Q. A. Q. Okay. All right.
It's not to the exclusion of. I understand, sir. Now, let me ask you this, Dr. Hayward: You --
I understood you to say here earlier today that you accepted the Bly Report? A. Q. (Nodding.) Did you mean to convey when you said you
accepted the Report, that you agreed with all aspects of the Bly Report? A. Q. A. Q. A. Q. I had no basis to disagree. Okay. I --
So the answer would be "Yes"?
Yes, I had no basis to disagree. Okay. I accepted the Report as it was written. Okay. Now, let me ask you this: Whenever
you -- when you chose Mr. Mark Bly, who you know who has been deposed in this case, you're aware of that? A. Q. I am. Let me, before I go there, how much time have
you spent preparing for your deposition today, in terms of number of days, and then in terms of number of hours? A. I've spent of the order of three full days
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reminding myself of the events because, you know, as I think you're well aware, I -- I've been out of the company now for a long time, and I've been pursuing my future. Q. A. Right. I'm not really spending any time at all on any
of the events of 2010. Q. Well, from what I read in the paper and the
Internet, it sounds as though you have a bright future in the business that you spoke of earlier today, and I congratulate you on that. A. Q. Thank you. I hope that's the case.
You -- you're welcome. But in terms of -- in terms of the appointing
of -- of Mr. Bly to report to you with regard to the investigation, why was it that you did not go to the outside of BP to hire someone to perform the investigation as opposed to using an insider? A. I think one -- one of the reasons is we wanted
to initiate it very quickly. Q. A. Okay. And finding someone from outside and getting So
organized would -- would have taken a lot of time. Mark was very well qualified. Q. Okay.
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A.
He was outside of the business line.
He had
no accountability for the operation where the accident occurred. So he was in some -- and he was the ultimate
"expert" is the right -- is the wrong word, but he was the ultimate -- he was at the pinnacle of the knowledge of safe -- safe -- Safety and Operations in the company, so he was -- I -- I believed he was the right person to lead the investigation. Q. A. Q. Okay, sir. All right. And did you -- did you even try to look for
anyone outside of the company prior to when you chose Mr. Bly to conduct an -A. Q. A. Q. Well -Let me finish. I'm sorry. Of course.
Prior to the time that you selected Mr. Bly
for the investigation, did you try to locate someone outside of the company to head up the internal investigation? A. Q. I did not. Thank you, sir. Did anyone do so on your behalf? A. Q. No. Thank you, sir.
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Now, when the Report was issued September 8 of 2010, you had, of course, as you say, "handed over the reins," but you still were employed by BP up -- for about three weeks longer after that, were you not? A. Q. That's correct. Once the Report was finalized, did Mr. Bly
and/or others on his team, did they make a presentation to you regarding the Report itself? A. Q. A. They made a presentation to the Board of BP -Okay. -- and to the Safety, Ethics and Environmental I was present in both
Assurance Committee separately. of those presentations. Q.
And in terms of the date of the Report being It's been
September 8, I'll just show it to you.
marked as Exhibit No. 1 in the deposition a long time ago, if you will, in these depositions, was the -- was the meeting or the meetings that you attended where the re -- where the Report was discussed after it was finalized, were those on or -- on or before or after September 8? A. I can't remember. I think it was probably a I
meeting -- well, I'd have to go back to a diary.
honestly can't remember whether the review with the Board preceded the formal publication or post-dated the
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formal publication, but I'm certain that will be available in the -- in the Minutes of the Board meeting. Q. All right, sir. Let me ask you this: Did
you -- did you have a draft of the Bly Report or any parts of it presented to you for any reason prior to when it -- the Report was finalized? A. There -- there were interim presentations to
inform myself and others as to where the findings had got to -Q. A. Q. Okay. -- for information. And -- and would this have been on a chapter-
by-chapter basis -A. Q. A. No. -- or some other way? No. It was a summary of the overall findings
of the investigation at a moment in time. Q. Okay. So when was it that you actually hired
or asked Mr. Bly to -- to conduct the investigation? A. Q. Within 48 hours of the accident. Okay. And about how long was it before he or
anyone under his jurisdiction on the investigation actually started giving you reports about the findings of that team?
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A.
I think some of the early insights were
provided to Congress and to myself at about the same time, which was -- would have been, I believe, in early June. Q. A. Q. Okay. And -- of 2010?
Of 2010. Okay. And when you were receiving these
reports or meetings, interim reports from Mr. Bly and perhaps others on his team, were there notes made of those meetings? A. Q. A. Q. A. Well, I certainly didn't make any notes. Did anybody make any notes -I -- I -- I --- to your knowledge? Not to my knowledge. I'm -- I'm not aware
that they did. Q. Where did those meetings take place? Were
they in person or by phone or both? A. They were -- they were in person and by video
conference. Q. Okay. All right. And -- now when they were
in person, where did the meetings take place? A. I can remember one meeting in Houston, and a
second meeting in London. Q. In London?
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A. Q.
Yeah. Okay. When was the one in Houston, your best
estimate as time? A. It would have -- would have been in the course
of late May, early June, I think. Q. Okay. And how about the second one, the other
one you say that was in London? A. I think that would have been sometime in the
second half of July. Q. Okay. All right. Now, did Mr. Andy Ingalls,
did he attend any of those meetings where they -- where there were interim reports that were provided to you and others regarding the Bly Investigation? A. Q. A. He did, yes. Okay. Not -- I don't recall all of them, but he He did. He did.
certainly was present in some of them. Q. Okay, sir. Now, with regard -- I understood
you to say that the only knowledge you have about the events leading up to the incident and the terrible accident on April 20, came from your reading the Bly Report and what the Members of the Investigative Team told you. Did I remember that correctly? MR. GODFREY: A. That's correct. Objection as to form.
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Q.
(By Mr. Godwin) Okay.
Now, in terms of the --
in terms of the investigation itself, you were not personally involved in the investigation, were you? A. Q. I was not. Okay. And did you have any personal knowledge
of the design or execution of the cement job on the production casing? A. I had no personal knowledge prior to the
investigation. Q. After the incident, did you go back and ask to
review a copy of the design -- the well design? A. Q. I didn't, no. You did not. After the incident, did you --
did you go -A. Q. A. I don't -- sorry, I apologize. I'm sorry, sir. Had you finished?
My rationale was simply that I had launched an
investigation -Q. A. Right. -- to get to the cause of the accident, and I
wanted the intervent -- investigation to take its course and determine the accident, so I did not do anything over and above the investigation. Q. Okay. Well, you, as a Ph.D. in -- a Ph.D. in
Geology, you certainly --
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MR. GODWIN: MR. WEBB: Q.
Do you need some water, Dan? I'm fine.
(By Mr. Godwin) Yeah -- you certainly had the
ability to go back and look at the well design and understand it, had you chosen and had the time to do so? A. I would have been able to make a layman -I'm -- I'm -- I'm And that was
take a layman's view of it, frankly.
not a Drilling Engineer, I'm a Geologist. a long time ago, as well -Q. I understand, sir. Okay.
Now, did you --
with regard to my client, Halliburton, are you familiar with the name Sperry? A. Q. Sperry-Sun, yes. Okay. Used to be, I think, referred to as
Sperry-Sun and now referred to as Sperry -A. Q. A. Q. M-h'm, m-h'm. -- as a -- a unit of Halliburton? Yes. Did you have any -- did you -- after the
incident on April 20, did you form any opinion regarding the mud logging services that were provided by Halliburton Sperry there prior to the incident on April 20? MR. GODFREY: Object as to form.
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A.
I had -- I -- I had no view prior to, and I
form no view post -Q. A. (By Mr. Godwin) Okay, sir. -- until such time as I read and received
the -- the Bly Report. Q. Okay, sir. And other than the Bly Report, did
you undertake to talk to anyone, other than Members of the Bly Investigative Team, about the -- the mud logging services that Halliburton Sperry had provided? A. Q. A. Q. No -Okay. -- I did not. With regard to the cementing services that my
client provided, Halliburton, the foam cement slurry, you're aware that a foam cement slurry was used on the Macondo Well in the production casing string, are you not? A. Q. I -- I am. Okay. Now, other than Members of the Bly
Investigative Team, did you speak to a single person about any aspect of the cementing job that Halliburton provided to -- to BP in connection with the production string casing? A. Q. I did not. You did not. Thank you, sir.
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Now, you, of course, know the company Halliburton as -- as one of the significant third-party providers of services to BP, do you not, sir? A. Q. A. Q. I don't know them very well. You do not? I do know them very well. You do know them very well. Okay, sir. And
over the years that you served as -- for three years, as the CEO of BP, and prior to that as a Senior Officer of the company, did you form an opinion about the company Halliburton? A. Q. I did. And what was your opinion of Halliburton
during the time that you were with BP, particularly in those last years when you were the CEO, sir? A. They were a very good provider of services to
the oil field across a broad -- broad range of activities, and had -- were well-respected in the industry and -- and well thought of. Q. And -- and in terms of your familiarity with
Halliburton, did you form an opinion as to whether or not their leadership would -- mandated, if you will, and expected of its people to always perform at the highest level of service, when providing services to a company such as BP?
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MR. GODFREY: Q. about BP. A.
(By Mr. Godwin) And I'm speaking only -- only
I don't -- I don't know for certain, based on
personal knowledge, but I have a belief that the expectation was set by the leadership of Halliburton, that services were performed -- performed properly and appropriately. Q. And in accordance with the expectations of BP,
and certainly to the extent of your involvement and knowledge, would you agree with that? A. I'd agree with that. MR. GODFREY: Q. A. Q. A. Q. Object as to form. Had you --
(By Mr. Godwin) Thank you. I would agree with that. Thank you, sir. I do.
Do you know Mr. Dave Lesar?
And the Chairman and CEO and President of
Halliburton? A. Q. A. I do. How long have you known Dave? I have known him a long time. Twenty-five
years probably. Q. I understand. A long time. What's your
opinion of Dave Lesar as a -- as --
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A.
He's -- he's a very -- he's been a very good He's been a very good Leader of
CEO of Halliburton.
the oil and gas industry over a long period of time. Q. Based upon your dealings and -- and being
around Mr. Lesar, do you believe that he would expect at all times that everyone working for Halliburton would provide to the very best of their abilities the very best service that could be provided to BP when engaged by BP to perform any service? MR. WEBB: A. Object to form.
I'm certain that is Dave Lesar's expectation
of his employees. Q. (By Mr. Godwin) Thank you, sir. I understood
you to say here earlier today that whatever happened there on the well, on the -- on the day and evening of April 20, you thought whatever happened was as a result of human error. A. Did I understand that correctly?
I think the Bly Report found that to be one of
the causes of the -- of the -- of the accident, not the sole cause -Q. A. Q. Right. -- but certainly one of the causes. Well, I'm certainly not going to go off into You spoke of that this morning and that
that again.
record will speak for itself.
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My question is this:
In all of your
conversations with Members of the Bly Team, the Investigative Team, did you learn from any source that anybody on that team thought that Halliburton did anything with the intent of -- of not performing at the very highest level with respect to the services to be provided to BP under its contract? MR. WEBB: A. Object, form.
I don't think there was any conversation that
said that their intent -Q. A. Q. A. (By Mr. Godwin) Right. -- was not to do that. Okay. Whether that was the result, of course, is a
matter for debate -Q. A. Q. Right. -- of the intent. And -- and with -- and did all the time that
you were meeting with Members of the Bly Investigative Team, did you see anything that suggested to you in any way that anyone with Halliburton did anything in a conscious matter to -- to in any way harm BP? see anything like that? A. Q. I didn't see anything, no. Did you hear anything from Mr. Mark Bly or Did you
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anyone else -A. Q. No. -- with his team that would suggest to you
that Halliburton had done anything with a conscious effort, if you will, made to not do it, not perform in the interest of BP? A. Q. I did not. The whole time that you were talking to Did you see anything like that?
Mr. Mark Bly and others on his team -- or let me ask this: Other than Mr. Mark Bly, did anyone else on his
team make any presentation to you? A. Q. A. Q. They -- they did not. They did not? It was -- it was just Mark. Okay. So there -- he was the only one that
ever spoke to you about it -A. Q. A. Q. M-h'm. -- from his team? Yes. Okay. Did you read anything that others had
prepared, other than perhaps Mark Bly, with regard to the investigation? A. Q. I did not. You didn't? MR. GODFREY: Objection as to the extent
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you're calling for anything privileged. Q. (By Mr. Godwin) Well, let me say this: These
lawyers know I certainly -- and Rick knows, worked with me a lot -- I'm not going to ask you any questions which are designed to elicit a response that would be privileged. And if I should ask you one there, stop
me, don't ask, say, "Don, you're going in -- in the wrong direction," or whatever, sir. I certainly
don't want to violate that privilege, okay? MR. GODFREY: Or -- or we could do it
simply, which is, I'm assuming you're asking about nonlawyer -MR. GODWIN: MR. GODFREY: MR. GODWIN: MR. GODFREY: MR. GODWIN: MR. GODFREY: Right. -- conversation? Absolutely. So his company counsel -Right. -- not his personal
counsel, but as his company counsel I'm assuming you're asking that about anything. I may have had
conversations with him at the time he was CEO -MR. GODWIN: MR. GODFREY: was company counsel. MR. GODWIN: Same thing applies to Rick Right. -- or his company when I
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as your -- as the company counsel as it does to Don as your personal lawyer. MR. GODFREY: MR. GODWIN: Right. I'm not after back --
anything you talked to him about. MR. GODFREY: I -- I assumed that, but
I -- I thought we just should -MR. GODWIN: MR. GODFREY: Q. Yeah. Okay. Fair enough.
(By Mr. Godwin) Okay.
So you understand that
the rules are in that regard, Dr. Hayward? A. Q. I do. Thank you, sir. Now, I understand that the only person on the Bly Team you spoke with was Mark Bly, no one else, and you didn't read anything or see anything that anyone else prepared other than Mark Bly? A. Q. That's correct. Okay. And your belief is that the ultimate
Report that was prepared, while others may have assisted him in preparing it, he had actually put his name on it as the author of the Report when it was finalized? A. Q. He certainly did. Okay, sir. Thank you.
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Now, the -- did you -- and -- and, again, so I'll understand, with regard to the Bly Report itself, and say with particular reference to the negative test, my understanding is, is that you -- all opinions you formed regarding this case, no matter what aspect of it, came from the Bly Report? A. Q. That's correct. Okay. Okay. Now, did the -- you talked about
Process Safety in the first day of your deposition, as well as today. A. Q. I do. Would you agree that one goal of Process Do you recall that, sir?
Safety is to postulate what events could happen, say, on a -- on a deepwater drilling wig -- rig such as the Macondo? MR. GODFREY: A. Objection as to form.
The primary goal of Process Safety is to -- is
to have the right systems and procedures in place such that accidents don't happen. Q. ahead. A. -- part of that is to do what amounts to job And part of -Go
(By Mr. Godwin) I wrote down -- I'm sorry.
risk assessment to understand what risks may be associated with a particular activity to ensure that that's been properly managed and eliminated.
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Q.
And to have Process Safety in place, that Would you
would prevent incidents from happening. agree with that? A. I would. MR. GODFREY: Q.
(By Mr. Godwin) And would you also agree that
you have Process Safety in place -- systems in place that would -- that would prevent potential incidents from happening that may not have yet occurred? A. Q. That is the intention of Process Safety. Okay. Do you believe that it is critical
that -- that BP with regard to Process Safety get it right, and that is understand it and have the procedures and systems in place so that they make the very best effort, if you will, to protect the interest of the well and the people on it and the property? MR. GODFREY: A. Q. I do. (By Mr. Godwin) Okay, sir. Do you know Objection as to form.
Mr. Sam DeFranco with BP? A. Q. No, I don't. Okay. Have you read Mr. DeFranco's
deposition? A. Q. I have not. Have you read Mark Bly's deposition?
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A. Q. A. Q.
I have not. Have you read any depositions in this case? I haven't read any depositions in this case. Okay, sir. All right. Would you agree that
there's really nothing worse on a deepwater rig from a Process Safety perspective than act -- than a blowout of a well? A. A blow -- a blowout of a well in any situation
is clearly a -- a catastrophic incident. Q. Okay. Do you -- do you agree that there are
always going to be risks associated where it is shown that a well is flowing in an uncontrolled manner? A. Where -- I do agree that where a well is
flowing in an uncontrolled manner there will be risk -Q. A. Q. Thank you, sir. -- significant risk. Do you believe that any thorough Process
Safety study for a deepwater well should consider a blowout as a possible hazard? MR. GODFREY: A. Q. I do. (By Mr. Godwin) Okay, sir. Do you believe Objection as to form.
that all steps should be taken by BP in the terms of -of executing on its Process Safety Plan and Procedures? Do you believe that all steps should be taken to ensure
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against the remote possibility that a blowout could occur? MR. GODFREY: A. Object to the form.
And I think the way you do that is through
looking at the breakdown of the activities that take place. So you can't say we're going to do an
assessment of a blowout because it -Q. A. (By Mr. Godwin) Right. -- could occur through many different things.
So you need Process Safety in place to put the relevant barriers in place to prevent a blowout occurring. Q. Right. And another way of saying that is, is
that to the extent that BP is involved in the well as an owner and an operator BP is going to try to put in place procedures to do its very best with regard to everything it has oversight over to ensure that a blowout would not occur? MR. GODFREY: MR. WEBB: A. Object to form.
Object to the form.
BP is going to endeavor to ensure that the
people in involved constructing the well -Q. A. (By Mr. Godwin) Yes, sir. Thank you.
-- many people have in their systems and
processes the right systems and processes in place to prevent a blowout.
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Q.
They may be doing that, as well, but I'm You would expect as the former CEO
talking about BP.
for everybody involved in the well, specifically one such as the DEEPWATER HORIZON, for all the people there working on that well for BP to do everything they could to carry forward with the Process Safety procedures to ensure that the likelihood of a blowout would not exist? MR. GODFREY: A. Q. sir? A. I would agree with that in -- inasmuch as, of That's -(By Mr. Godwin) Would you agree with that, Object to form.
course, the -- let's talk about the well control, for example. The well control procedures are not BP's They're the procedures of Transocean.
procedures. Q.
And I'm talking really about just -- about
just what BP was doing -A. Q. What BP was doing --- not what others were doing. MR. ROBERTS: A. Objection to form.
What BP was doing was endeavoring to ensure
that respective contractors had the right processes in place and that they were being followed. Q. (By Mr. Godwin) Thank you, sir.
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A.
Because BP was not actually undertaking the
processes. Q. Would you expect if BP received
recommendations from a contractor there on the Horizon well that would put the well at risk? Would you expect
BP to follow the recommendations of the third-party contractors? A. Q. I would. Okay. And if you were to learn that BP
employees were told by a third-party contractor, one of its employees, that what BP was doing could put the well at risk and the lives of those working on the rig, would that give you some reason for wanting to have some study, investigation made to see why BP was making that decision? MR. GODFREY: MR. WEBB: A. Objection as to form.
Objection, form.
I believe that was investigated as part of
this investigation. Q. (By Mr. Godwin) Are you aware -- do you know
a -- an Engineer, an experienced Engineer, with BP by the name of Greg Walz, W-a-l-z? A. Q. No, I don't. All right. Do you know the name Greg Walz
insofar as he was one of the Engineers that was
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actually working on the Macondo Well? A. I don't. I don't know the name, and I've not
come across the name previously. Q. Okay, sir. Sometime ago we took the
deposition of a Mr. Greg Walz in New Orleans, a senior level Engineer there for BP working on the -- on the Macondo, and he testified in his deposition that on the morning of April 19, 2010, he and Mr. Jesse Gagliano of Halliburton, who designed the cement job, they met there at BP's office in Houston. A. Q. M-h'm. And he testified further that during the
course of that meeting that Mr. Gagliano told him that BP's decision to only put six centralizers on the casing string would give rise to a -- the possibility, or the potential, for a severe gas flow problem. And
he testified that he heard that from Jesse and that Jesse had, in fact, put that in what is known as an OptiCem Report the night before, on the 18th. And he
said, "But we did -- I did have him tell me that, and re -- and even though he told me that on behalf of Halliburton, that there was going to be a severe gas flow problem, we assumed the risk," BP did, "We made the decision to run the casing with only six centralizers."
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Other than through lawyers, have you heard anything to that effect prior to me just stating it? MR. WEBB: question. MR. GODFREY: A. Object to the form. Object to the form of the
I haven't heard anything even through
lawyers -Q. A. Q. A. (By Mr. Godwin) Okay. -- about that meeting. All right. What I do know is that the Bly Report
concluded that it was very unlikely stabilizers had anything to do with this accident -Q. A. Okay. -- as the flow of the hydrocarbons was up the
production casing -Q. A. Q. A. All right. -- not the annulus. Okay. And as I understand the findings, it would
have been an issue if the flow was up the annulus, but it wasn't. Q. Well, that's what the Bly Report says. And
you, of course, know nothing about that opinion you just gave other than what you read in the Bly Report?
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A. Q.
That's correct. Okay. Now, let me go back and ask this
question from this perspective, and forgetting what the Bly Report said about what caused the blowout. after that at this point. I'm not
I'm talking about Process
Safety, doing things to ensure that -- that the well is not put at risk and the lives are not put at risk. Would you expect as the former CEO of BP if one of your Senior Engineers on a deepwater rig, deepwater well, such as the Macondo, were told by a company, a third-party provider of services, Halliburton, that what BP was going to do was going to create a severe gas flow problem, would that cause you to be concerned about what that BP employee did? MR. WEBB: Objection to form. Object to the form.
MR. GODFREY: A.
I would expect that the BP employee would take
that input, discuss it with his colleagues, and take the appropriate action. Q. (By Mr. Godwin) If you were to learn that
Mr. Walz testified in his deposition that after he learned from Jesse Gagliano that there was going to be a severe gas flow problem on the morning of the 19th of April, that he did not discuss that with anyone at BP, he simply allowed the decision to go forward to have
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the casing run with only six centralizers, would that concern you about his action in that regard of not discussing what Mr. Gagliano told him with other members of the BP Team? MR. WEBB: Objection to form. Object to the form.
MR. GODFREY: A.
With no context, it's very difficult for me to
make a judgment. Q. (By Mr. Godwin) You understand where I'm going
with that, don't you? A. In -- in -- so I'm not -- you know, I'm not
prepared to make a judgment about whether that was the right thing to do or not, the right thing to do without the full context of the meeting and the situation at the time. Q. Well, you remember, you testified,
Dr. Hayward, a little while ago, you said that -- that there's always going to be risk where gas could be shown to be flowing in an uncontrolled manner? Remember that? A. Q. A. Q. I don't remember -You said --- that, actually. Earlier today, you said that -- when I asked
you, you said that -- that there would be risk
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associated in terms of doing -A. Q. A. manner -Q. A. Q. A. Q. There would be risks? -- there is risks. There would be risks? M-h'm. And -- and my point being is with that I think when a well --- a Process Safety? If a well was flowing in an uncontrolled
backdrop, with that knowledge that you testified about, if the Senior Engineer there on the Macondo Well were told by Halliburton that, "If you run the casing with only six centralizers, you're going to have a severe gas flow problem of a..." then would that cause you to think, "Well I would expect that BP Engineer to make certain that what was being done was the right thing"? Is that the conclusion you would reach? A. I would -MR. WEBB: Object to the form. Object to the form.
MR. GODFREY: A.
I think it's reasonable to expect that the
Engineer would take that information into account and make the right decision. Q. Okay. And would you expect before the cement
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job were to be run, that if BP had that information from Halliburton, through Mr. Gagliano, that BP would want to stop whatever was going on with the well to make certain that it made the right decision regarding the number of centralizers, in view of the warning that it had been given by Halliburton? A. I -- I think -MR. GODFREY: A. Q. A. Objection as to form.
-- trying to take one Report, one meeting -(By Mr. Godwin) Yes, sir. -- out of context and make judgments about
what I wouldn't -- would and would not expect is -I -- I don't have a basis for making a judgment. don't know anything about the credibility of the Report, I don't know anything about the circumstance in -- in which -Q. A. Right. -- the meeting took place. So in a -- in a I
normal situation, yes, I think -Q. A. Okay. -- I think the answer is "Yes." But without
the context -Q. A. Right. -- I think it's not possible to make a -- a
sensible judgment.
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Q.
Well, according to -- according to Mr. Walz,
he had received, on the night before at about 9:00 o'clock in the evening, an OptiCem Report, as well as had several other peoples, many of whom are BP employees, from Jesse Gagliano, showing that -- what would happen if they ran seven centralizers. would be a severe gas flow problem. Mr. Walz said that the next morning, that he was approached by Mr. Gagliano, who came in expressing concern. That if you're going to run six or seven And it
centralizers and not run the 21 Halliburton recommended, you're going to have a big problem. Even though I know there are other factors you'd want to consider, it's my understanding you're saying that, if you had an Engineer that received that Report from an employee of a provider of services, such as Halliburton, with its credibility, if you will, that you would expect your employee to make certain that he had looked at all the necessary aspects of going forward so to make sure that it was done safely. MR. WEBB: Q. Object to form.
(By Mr. Godwin) Would that be a -- would that
be a fair conclusion to reach? MR. WEBB: question. Objection to the form of the
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MR. GODFREY: A.
Objection, form.
Provided the Report was a -- based on accurate
set of input data and it was a credible Report, in terms of the projection of what might happen, then I would expect that to be the case. Now, I don't -- I
don't know whether it was or it wasn't. Q. (By Mr. Godwin) Well, if you were to learn
here that Mr. Walz testified in his deposition when I deposed him, that once Mr. Gagliano told him that, I asked him, "Would you have any reason to disagree that there would be a severe gas flow problem," he said "No." Does that help add to further you say if it's a credible Report and Mr. Walz said that it was -A. Q. M-h'm. -- would that give you some reason for concern
about the decision Mr. Walz participated in -A. Q. Well --- to allow -- excuse me -- to allow only six
centralizers to be run? MR. WEBB: question. MR. GODFREY: Q. A. Objection, form. Objection to the form of the
(By Mr. Godwin) Would it, sir? I think I would have expected him to at least
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understand that the -- what the Report said. Q. Okay, sir. And why Mr. Gagliano was making
the recommendation that he was recommending, would you expect him to also look into that; that is, Mr. Walz, your BP Engineer? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A. Q. I would.
(By Mr. Godwin) Thank you, sir.
Let me hand
you, if I can, please, a sen -- Tab 66 in the materials that we passed out, there's a document that was formerly marked as Exhibit 862, Dr. Hayward. it's -- you spoke of it on Monday. And
It's GP 48-02. And
It's a "Hazard and Operability (HAZOP) Study."
it's from the BP Group Engineering Technical Practices. You spoke of -- of this document on Monday. been previously marked. Have you read this document before, sir, or all -- or any part of it? A. Q. No. Okay. Are you familiar with this document or And it has
any part of it? A. Q. No. It shows that the date of it is June 12th,
2008, in the upper right-hand corner, does it not?
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A. Q.
It does. Okay. And at that time, you were the CEO of
the BP, what, Group? A. Q. I was. Okay, sir. Now, do you know -- are you
familiar with what is known as a HAZOP? A. Q. A. Q. A. Q. I am. Okay, sir. In -- in a -- in a -Broad sense? -- broad sense, yes. I understand, sir. I respect that.
Is it your understanding that one of the reasons for a HAZOP is so as to include barriers to prevent a blowout? A. is -Q. A. Q. A. Q. A. blowouts. Q. Okay, sir. Okay. -- to provide barriers to prevent an accident. An accident -I don't --- that could result in a blowout? -- I don't believe this is focused on It's -- one of the reasons of a HAZOP is --
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A. Q. A.
It's a broad-based -All right. -- description of how to preserve -- how to
undertake -Q. A. Q. Okay. -- hazard operability studies. Okay, sir. And are you aware that BP Policy,
specifically Exhibit 862, requires that the HAZOP Study be in a written form manner? A. Q. Yes. Okay, sir. And are you aware that, on the
Macondo Well, that there was not a written HAZOP prepared by BP or anyone in connection with the Macondo Well? A. Q. Are you aware of that? I wasn't aware of that. Okay. Well, have you learned through any
source, from Mr. Mark Bly, or anybody else, that the Macondo Well was considered to be, by BP's definition, a critical well? MR. GODFREY: Q. A. Objection as to form.
(By Mr. Godwin) Have you learned that, sir? I -- I don't -- no, I don't believe I have Critical in
heard it described as a critical well. what sense? Q.
Well, critical well according to the
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deposition -- excuse me, the definition that -- that BP uses. And -- and Mr. David Rich, who's a -- was
formerly an Interim Vice President there for BP, he testified that a critical well is -- let me give you that -- he said that a critical well is any -- any deepwater well in the Gulf of Mexico, in his opinion. A. Okay. Well, I wasn't aware that Macondo was Or that someone had
classified as a critical well.
identified any well in the deepwater Gulf of Mexico as a critical well. I -- I don't know whether that's an
official designation. Q. Okay. You're familiar with the designation of
a well's Director at the Gulf -A. Q. A. Q. A. Q. A. Q. M-h'm. -- of Mexico? Yes. Do you know that -- do you know David Rich? No. Okay. Do you know Pat O'Bryan?
I know Pat O'Bryan. Do -- have you learned through any source that
Mr. Pat O'Bryan was involved there with the relief well effort? A. Q. I was -- I was aware of that, yes. Have you learned through any source that his
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replacement as a Vice President of BP in the Gulf of Mexico -A. Q. M-h'm. -- that his replacement, while he was on the
relief well, was Mr. David Rich? A. Q. No, I didn't know that. I deposed Mr. Rich recently, and he testified
within the last several days, that while he was operating as a -- as a Vice President in the place of Pat O'Bryan, that he formed the opinion that the Macondo Well was, in fact, a critical well. MR. GODFREY: Q. Now --
(By Mr. Godwin) -- and I asked him, "What did
you mean by critical well?" He says, "My opinion is, as a Well's Director for BP and an Interim Vice President, is that any deepwater well in the Gulf of Mexico." Would you dis -- would you disagree with his conclusion -A. Q. A. I -- I --- in that regard? -- I'm not -MR. WEBB: of the question. A. I'm not qualified to determine -Object -- object to the form
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Q. A.
(By Mr. Godwin) Okay. -- which wells are critical or not. I'm not a
Drilling Engineer, so -Q. A. I understand, sir. Okay.
I presume that's based on some
technical assessment or -Q. A. Q. A. Q. A. Q. It could --- challenges of the well. It could well be. And I -But that's what he said. -- have no opinion with regard to that. Now, my question to you, is: Is -- with re -And I --
are you aware that, on the Macondo Well, that over the life of the well, that the Presidential Commission Chief Counsel Report you spoke of quite extensively today, reported that this well had lost 16,000 barrels of mud during the drilling of the well? A. Q. I wasn't aware of that. Are you aware that the Chief Counsel Report,
Fred Bartlit's Report for the Presidential Commission, which you said you had some familiarity with, that the losses -- that the cost to BP for the losses of the mud was in excess of $13 million in time and materials? Are you aware of that?
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A.
I was not -MR. GODFREY: Objection as to the form of
claiming the Presidential Commission when it was the Chief Counsel's Report. MR. GODWIN: Q. Okay.
(By Mr. Godwin) Now, with regard to -- going
back again to the HAZOP, are you aware that, in the Exhibit 862, that requires that the HAZOP be in writing, that if there's going to be any deviation from that Policy, that that deviation would also have to be in writing and approved? A. Q. A. I -Q. A. Q. Okay. -- I can't recall that. All right. We deposed here yesterday, a lady Are you aware of that?
I've -- if I was, I've forgotten it. Okay. I probably was at the time, but I'm not --
by the name of Gill -- Gillian Cowlam, C-o-w-l-a- -l-a-m. A. Q. Do you know Ms. Cowlam? I don't. She's a for -- or she is a BP employee based
in the U.K., and she's worked in -- in -- she -A. Q. M-h'm. -- worked on the investigation for about three
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weeks over in the Houston area. And she testified yesterday in her deposition, that she thought that it would be almost virtually impossible for a well like the Macondo, for there to be an exception that the HAZOP Report not be reduced to writing. A. Were you aware of that? I wasn't aware -MR. WEBB: A. Objection to form.
-- of it and I clearly -- I have none of the
technical knowledge and understanding -Q. A. Q. (By Mr. Godwin) Okay. -- that she can have to make that judgment. Okay. Well, with regard to a HAZOP as you
understand it, and you said that you were aware of a HAZOP, you have not read Exhibit 862, but you know what a HAZOP is, within the confines of BP. A. Q. (Nodding.) Are you aware of any incident -- instant --
instance when the HAZOPs can be changed or modified without the change being reduced to writing? MR. GODFREY: A. Well, I -MR. GODFREY: A. this --- as to form. Objection --
-- I believe that -- and I haven't read
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Q. A.
(By Mr. Godwin) Yes, sir. -- but I think you said, and I don't have any
reason to disagree with you, that in here it says if you want to change the HAZOP, you need to achieve dispensation, you have to do it in writing. Q. A. Yes, sir, it does that. Where -- where does it say that? I'm sure
it's true. Q. Let's see here. Let's look at -- is terms of
the "in writing" part of it, you can look at pa -what's number -- Bates No. 7797. A. Q. Okay. If you see there where it says -- talks about,
under e., "A HAZOP report" shall include the following sections," and it talks about all others. And then
there's other places in here that I'm not going to take the time to find it, talk about if there's going to be any changes or amendments, they must be in writing, as well. But that is a part of a HAZOP, and that is what Ms. Cowlam testified to, as well. Now, my question to you, sir, is -- is: Would
it surprise you -- or does it surprise you to learn here today, that with a -- that with a well that was almost three and a half miles below the seabed, would
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it surprise you that there was not a written HAZOP prepared for the Macondo Well? MR. WEBB: Objection, form. Objection as to form.
MR. GODFREY: Q.
(By Mr. Godwin) In the face of Exhibit 862,
which required that it be in writing? MR. WEBB: Objection, form. Same objection.
MR. GODFREY: Q. A.
(By Mr. Godwin) Would that surprise you, sir? I don't -- I honestly don't feel that I'm
qualified to express surprise or otherwise -Q. A. Q. A. Q. Well --- because --- as -- I'm sorry, sir. I have. As -- as the former CEO of BP, would you Have you finished?
expect that the policies and the procedures pertaining to a HAZOP, would you expect them to be performed by -A. Q. A. Q. I would. -- and followed by all employees of BP? I would. Okay. And if the -- if the HAZOP document,
which is marked 862, required that it be in writing, you would expect that that be done in accordance with the terms of the document for each well that it would
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be associated with, would you not? A. I would -MR. GODFREY: THE WITNESS: A. Objection to form. Sorry.
I -- I would, and I'd like to -- I -- I would
like to understand why it was not done in this case if, indeed, it was not done. Q. (By Mr. Godwin) And if you were the CEO today,
and you learned, as you've learned here, that Ms. Cowlam said that it was not -- that it was not reduced to writing, that is, a HAZOP, if you learned that, would you want to go back and check with someone to find out why on the Macondo Well we had no written HAZOP plan, would you -A. Q. A. I would like to understand --- would you expect to do that? I would like to understand the full context of
what did and did not go on with respect to the HAZOP. Q. A. Q. A. Q. Okay. Although I don't feel I -Mister --- have a basis today. I understand, sir, and I respect that.
Mr. DeFranco also testified in his deposition -A. Who is Mr. DeFranco again, sorry?
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Q. Engineer.
-- Sam DeFranco of BP, Process Safety He testified sometime ago in this
litigation. A. He -- he was a member of the Bly Team, or what
was -- what was his -Q. He was a member -- there was a -- there were
different members of the Bly Team, but only one aspect of the Bly Team dealing with certain parts of it, it was a team that was made up of Ms. Gillian Cowlam. testified yesterday. A. Q. A. Q. A. Q. M-h'm. Mr. DeFranco. Okay. And there was a third member of that team. Okay. And there were other member -- members of She
different parts -A. Q. A. Q. M-h'm. -- of the team -M-h'm. -- that Mr. Bly put together. And
Mr. DeFranco, he also testified in his deposition that he was unaware that there was a written HAZOP plan that was done on the Macondo Well, and that he had looked and could not find one, had asked about it, and there
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was no -- not one prepared, to his knowledge. Now, having heard that now from me, where it's been testified by two members of the Bly Team that there was not a HAZOP plan that was in writing pursuant to Exhibit 862, do I understand you to say that that would concern you, as -- as the CEO of BP, and you would want to look into it? A. I would cert -MR. WEBB: form of the question. MR. GODFREY: Q. A. Objection, form. Objection -- objection to the
(By Mr. Godwin) Go ahead, sir. I would certainly like to understand fully the
situation surrounding the presence or absence of the HAZOP, the basis of why the decision was taken, if it was taken, not to do one, and what the grounds for it were. Q. Okay, sir. And -- and do you -- are you
aware, sir, that with regard to the HAZOP plan, that that would have been, pursuant to Exhibit 862, the responsibility of the BP Operation Leader, Mr. Pat O'Bryan, to have prepared that report -- that plan or had it done under his direction, are you aware of that? A. I wasn't -MR. GODFREY: Objection as to form.
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A.
I was not aware of who was deemed to be the
accountable person with respect to a HAZOP study that may or may not have been done on the Macondo Well. Q. (By Mr. Godwin) Well, Mr. DeFranco testified
that the person -- the position -- it changes with different wells, if you will, but the position of the person doing the HAZOP written document would have been the BP Operation Leader, who on the Macondo Well was Mr. Pat O'Bryan. A. Well, I have no basis to disagree with
Mr. DeFranco's testimony. Q. Okay, sir. And if you were still the CEO and
you were to learn that, in fact, there was no written report prepared by Mr. Pat O'Bryan, as the BP Operation Leader, or anyone on -- on his behalf and his direction, would you want either him or Mr. Andy Ingalls to give you some explanation why that did not occur? A. I would like to und -MR. WEBB: MR. GODWIN: MR. WEBB: Objection, form. May the witness finish? Well, no. I -- I don't have
time to get my objection in because -THE WITNESS: MR. WEBB: Sorry.
-- the form of the question
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was improper.
He now can answer the question. MR. GODWIN: Okay. Well, the form of the
question was not improper, but you made your objection. Q. (By Mr. Godwin) Will you give your answer,
please, sir? MR. GODFREY: improper question. Q. A. (By Mr. Godwin) Go ahead, sir. I was -- I would certainly want to understand I join the objection to the
the basis on which the decisions were made around the HAZOP -- HAZOP Operability Report. Q. And -- and you would really want to understand
why it was not reduced to writing, would you not, sir? A. I would like to understand the full
circumstances of the decisions around this. Q. Thank you, sir. Now, with regard to the
negative test that was performed -A. Q. Yes. -- did you learn, from talking to Mr. Bly and
reading his Report, that he and others on his team formed the opinion that BP had misinterpreted the negative test? A. No, I -- from the Report and from the
discussion we had, I -- I learned that the negative test was misinterpreted by three people: the
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Transocean Toolpusher, the Transocean Driller, and the BP Well Site Leader. Q. Okay. So what you're -MR. ROBERTS: Q. Objection, form.
(By Mr. Godwin) -- you're stating then that in
terms of the negative test, that it was interpreted by -- your understanding is by BP and also by TO? A. Q. By TO and by BP, yeah. Okay. And is your understanding that Mr. Bly
and his Investigative Team formed the opinion that TO and BP had misinterpreted the test? A. Q. That's correct. Did you learn, from talking to Mr. Bly or
reading his Report, that, in fact, there were two negative tests that were performed? A. I did, at the -- at the insistence of the BP
Well Site Leader, who was not satisfied with the procedure that had been followed for the first negative -Q. A. Q. Was that Mister --- pressure test. Was that Mr. Don Vidrine, or was that Mr. Bob
Kaluza that made that decision? A. Q. I -- I -- I don't know. And it was one --
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A. Q.
I can't recall. Were you aware that there were two Well Site
Leaders there -A. Q. A. Q. I was. -- for BP on the rig? I was. Okay. And your understanding is the second
test was -- was requested by BP's Well Site Leader, one of those two gentlemen? A. Q. That's correct. Because he was not satisfied with the
procedure that was use -- being used in the first one? A. Q. A. Q. A. That's my understanding. Okay. Based on the Bly Report. I understand. Yeah. But in talking to Mr. Bly?
In -- in essence, based on what's in
the Report. Q. Okay. Do you have familiarity with what a
negative test is performed for -A. Q. A. Q. A. I cert --- on a deepwater well? I certainly didn't, ahead of this accident. Do you now? And I suspect no one else in the room did.
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Q. A.
Okay.
Do you know, sir?
I -- I have a layman's knowledge now of what a
negative pressure test is, and -- and how you -- some idea as to how it's conducted, but I certainly couldn't conduct one, nor could I interpret the results of one. Q. Had -- and the Bly Report speaks to a negative
test, and it states that a -- and words to this effect: That a properly conducted interpreted negative test would have eliminated or mitigated the consequences of the cement job that failed to isolate hydrocarbons. In terms of your reading of the Bly Report, did you understand that -- that if the negative test had been properly interpreted, that any consequences associated with an unsuccessful cement job could have been determined? MR. GODFREY: Q. Objection as to form.
(By Mr. Godwin) Did you -- did you understand
that from Mr. Bly? A. I -MR. GODFREY: A. Same objection.
I think there were many things that went on in
the rig that could have mitigated the effects of what was clearly an unsuccessful cement job. none of them did. Q. (By Mr. Godwin) Okay. And I'm talking about Unfortunately,
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right now the negative test. A. Q. (Nodding.) And in terms of your speaking with Mr. Bly,
did he tell you that it was his belief that if the negative test had been properly interpreted, one or both of them, if they had been properly interpreted, that that would have eliminated or mitigated the consequences of an unsuccessful cement job? MR. GODFREY: A. Objection as to form.
It certainly could have mitigated the -- the
consequences of -- of a bad cement job. Q. A. Q. (By Mr. Godwin) Of a bad cement job? M-h'm. Okay. And when you say that if they had
properly interpreted the negative test, that that could have mitigated the consequences of a, as you define it, bad cement job, what did you mean by that, sir, when you just said it? A. If they had been taking the correct remedial
action, it may -- may -- it may not have been too late to prevent flow into the well. Q. Okay, sir, which could have ultimately
prevented the blowout? A. Q. Exactly. Thank you, sir. Now --
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THE COURT REPORTER: MR. GODWIN: Q.
Three minutes.
Three minutes, okay.
(By Mr. Godwin) When you -- I want to close on When you said,
this point before we take our break.
"They could have then taken the proper remedial work or efforts or -- or moves," if you will, tell us, if you will, briefly, what you meant by that. A. Actions to control the flow of hydrocarbons Exactly what they would have done,
into the wellbore.
I'm not certain, because I'm not a Drilling Engineer, but I'm certain that they would have taken some action. Q. Would one of those things have been the
performance of a cement bond log? MR. WEBB: A. Q. A. Objection, form.
I think that's unlikely at that point in time. (By Mr. Godwin) Okay. I assume what they would have wanted to do is
to control the well. Q. it in? A. Q. Probably shut it in, yes. So that nothing further could go on, so that Want to control the well, would that mean shut
no hydrocarbons could be allowed to escape to the surface? A. Correct.
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Q.
And by doing that, had the negative test been
properly interpreted, proper remedial efforts could have been taken, part of which would have been shutting in of the well. Had that occurred, we likely would not
be here today, would we, sir? MR. WEBB: question. MR. GODFREY: question. Q. (By Mr. Godwin) Had that occurred, we likely Objection as to form of the Objection to the form of the
would not be here today, would we, sir? MR. WEBB: question. MR. GODFREY: question. A. Q. question. A. The same would be true -(By Mr. Godwin) Would that -- just that All I'm asking is that question. The same would be true if the cement job had Objection as to form of the Objection to the form of the
been good, if the well control procedures had been followed, if the correct actions had taken once the well started flowing. Q. A. So in terms -As the Bly Report very clearly stated, which So as the --
is the only basis I have to assess --
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Q. A. Q. A.
Yes, sir. -- the cause of this accident -Right. -- the misinterpretation of the negative
pressure test was one of eight causes of the accident. Q. But -- but just -MR. ROBERTS: Q. Objection, form.
(By Mr. Godwin) -- limiting it right now to
the negative test -A. Any -- any one of them could -- any one of
them could have prevented the accident. Q. Let's talk about the negative test. You've
already said that if they properly interpreted, the improper remedial efforts could have been taken that could have pre -- that would have allowed for the shut-in of the well, which would have -- would precluded the existence of the blowout, would you agree with that, sir? MR. GODFREY: MR. WEBB: Q. sir? MR. GODFREY: MR. WEBB: Q. Objection, form. Objection as to form.
Objection, form.
(By Mr. Godwin) Would you agree with that,
Object to the form.
(By Mr. Godwin) Sir?
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MR. GODFREY: MR. WEBB: Q.
Objection, form.
Same objection.
(By Mr. Godwin) Did you agree with that, sir? MR. GODFREY: MR. WEBB: Objection, form.
Objection, form.
Q. A. Q.
(By Mr. Godwin) You did? Yes. Thank you, sir. MR. GODWIN: We'll take a break. Off the record
THE VIDEOGRAPHER: at 11:24 a.m., ending Tape 14.
(Recess from 11:24 a.m. to 11:34 a.m.) MR. GODWIN: MR. GODFREY: Ready, Rick? Yes. All set?
THE VIDEOGRAPHER:
On the record at 11:34 a.m., beginning Tape 15. Q. (By Mr. Godwin) Dr. Hayward, I thank you for
your time, sir. MR. GODWIN: witness at this time. And I appreciate your patience and the way you've handled yourself in answering my questions. THE WITNESS: MR. GODWIN: Thank you very much. Thank you, sir. Halliburton passes the
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THE WITNESS: MR. GODWIN:
Thank you very much. Thank you. Off the record at
THE VIDEOGRAPHER: 11:34 a.m., ending Tape 15.
(Proceedings on the stenographic record only.) MS. HERTZ: As you know, Anadarko and
MOEX have historically had an hour and fifteen minutes to conduct their examinations. has recently settled with BP. As you also know, MOEX I believe that the
position -- MOEX attorneys are not here, the counsel -THE COURT REPORTER: hold it, hold it. MS. HERTZ: There -- there is -- there Hold it, hold it,
are no coun -- there is nobody here representing MOEX. I intend -- and -- and we have been repre -- Kathy McCollum, who's in-house at MOEX, represented to Deb Kuchler, who you know, that there was no problem with the time that we could have if they weren't coming to London. I have, based on the representation, prepared
to examine Mr. Hayward, Dr. Hayward, for an hour and fifteen minutes. The other point I would like to make is that, you know, Anadarko, next to TO and BP, have as much skin in this game as anybody. You know, we're possibly And
liable for OPA damages, we've got Clean Water Act.
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so to try to relegate us to half of an hour and 15 minutes seems like it would be extraordinarily prejudicial. I have a good deal to explore with this
witness, and based on the Mitsui representation, I had planned to take up a -- an hour and 15. MR. GODFREY: Let me state our position.
First, I'm not aware of the Mitsui representation. What I asked for today was to be put
on the record so that we could have a basis as to who made it. It's news to us. I'm not going to say it
wasn't given, but I'd like to know who made it. Second, I think that the assumption that Anadarko has that they get all MOEX's time has not been true in the events subsequent to the settlement. I
know Anadarko -- that MOEX asked some questions the other day at a deposition. And third, if we want to talk about prejudice, I'm relegated to half an hour, while my witness has, you know, 16 and a half hours of hostile questioning from every lawyer in the one -- room. And I think it's
a fundamental due process issue to get Anadarko more time and have me less time. Now, fortunately, in this instance, Weatherford has been gracious enough to save me its time, unless they want to take it back for some reason
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that comes up due to a unique issue, which I don't anticipate. But I want the representation on the record, and if the Court thinks that that's appropriate that they have the time, I don't think so, but I do not think anyone should assume that because MOEX has settled in part -- it still has skin in the game -that Anadarko, therefore, gets twice the time that BP gets, when BP is the one producing most of the witnesses, most of the documents, and is undergoing most of the discovery effort in this case. MAGISTRATE SHUSHAN: Let me ask counsel:
Is this one of the depositions that we reallocated time on before we came over? MR. GODFREY: You gave -I just don't recall.
MAGISTRATE SHUSHAN: MR. GODFREY: Your Honor. MAGISTRATE SHUSHAN: MR. GODFREY: Yes.
You gave additional time,
Right.
MAGISTRATE SHUSHAN:
Exactly.
Did we We did
allocate time relative to Anadarko and MOEX? not. MR. GODWIN: case.
I don't believe that's the
There's an additional time limit for the PSC,
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Your Honor. MAGISTRATE SHUSHAN: MR. GODWIN: intact -MAGISTRATE SHUSHAN: MR. GODWIN: Everything else -Right.
You left everything else
-- the way it had --- was intact.
MAGISTRATE SHUSHAN: MR. GODWIN:
That's right, Judge. But because of the
MAGISTRATE SHUSHAN:
settlement, we did not reallocate the time like we did on a couple of the others? MR. GODWIN: That's right. Okay. All right.
MAGISTRATE SHUSHAN: MR. CUNNINGHAM: MR. GODWIN: MR. GODFREY: understanding, Your Honor. MAGISTRATE SHUSHAN: reallocated. MR. GODFREY: to us, and that -MAGISTRATE SHUSHAN:
As far as I understand.
That's correct, Your Honor. That's -- that was my
Okay.
So we've not
That -- that would be news
And it's your
representation that the time has been ceded to you? MS. HERTZ: That's what I was told. And --
MAGISTRATE SHUSHAN:
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MS. HERTZ: the --
And that's the inception of
MAGISTRATE SHUSHAN:
-- it is my
understanding that, by agreement, cessation of time has been agreed to, right? MS. HERTZ: Many times. Does anybody besides I'm sorry, but
MAGISTRATE SHUSHAN:
BP disagree with the ceding of time?
we're going to allow the ceding of time. MR. GODFREY: Thank you, Your Honor. Okay.
MAGISTRATE SHUSHAN:
(Recess from 11:39 a.m. to 11:43 a.m.) THE VIDEOGRAPHER: 11:43 a.m., beginning Tape 16. EXAMINATION QUESTIONS BY MS. HERTZ: Q. A. Q. Good morning, Dr. Hayward. Good morning. My name is Diane Hertz. I'm here with my On the record at
colleague, Robert Stillwell. Petroleum Corporation.
We represent Anadarko
You understand that Ana -- and
I'm going to call them "Anadarko" for short. You understand that Anadarko was a nonoperating investor in the lease for the Macondo Well?
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A. Q.
I understand they're a nonoperating party. Nonoperating party. And before the blowout and explosion on
April 20th, 2010, did you personally ever speak with anyone from Anadarko or any entity which you knew to be affiliated with Anadarko regarding the Macondo Well? A. Q. Not regarding the Macondo Well, no. Okay. To the best of your knowledge, no one
from Anadarko played a role in the design of the Macondo Well, correct? A. Q. I don't have any knowledge of that. Okay. Do you have any knowledge as to whether
or not Anadarko played a role in connection with the operation of -- the operations at the Macondo Well? A. Q. A. I don't have any detailed knowledge. Do you have any general knowledge? I -- I believe that they were provided with
information as to how the operating was proceeding, but that's the extent of my knowledge. Q. Thank you. You mentioned you had two discussions with Jim Hackett -A. Q. A. That's correct. -- the CEO of Anadarko? That's correct.
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Q. A. Q. A. Q.
And those were after April 20th, correct? They were. And in connection with the relief efforts? With -- in connection with the response. With the response. Okay.
What role did Anadarko play in connection with the -- the response efforts? A. To -- to my knowledge, they provided some of
their people and some of their -- their Technicians, Engineers -Q. A. Q. A. Q. Okay. -- to help with the response. So they were assisting? They were assisting, yes. Are you aware of -- of any decisions that
Anadarko made with respect to the relief efforts or leading the relief efforts in any way, or was it your understanding they were simply assisting? A. Q. They were assisting. Okay. Have you had any other communications
with Anadarko since April 20, 2010, other than those two discussions with Jim Hackett? A. Q. I haven't. Thank you. Go back to an old, familiar subject, the OMS.
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Did you know in April of 2010, that the OMS had not been fully implemented in the Gulf of Mexico? A. I -- yeah. I believe I was aware that it had It was in the process of
not been fully implemented.
being implemented as it was in other parts of BP. Q. But specifically with respect to the Gulf of
Mexico, that's your answer? A. Q. A. Yes. Okay. When did you come to learn that?
I would have been aware of it prior to the --
you know, in the course of doing my -- my job. Q. A. Okay. Because we had a -- as I've explained a number
of times through this deposition, the Group Operations Risk Committee was looking at the progress of implementation. Q. So you were getting reports as to where it was
implemented, where it was not yet implemented? A. speak. Q. Okay. Were there any parts of OMS, to your And where it -- where it was entrained, so to
knowledge, that were applicable in the Gulf of Mexico in April of 2010? A. I'm -That were applicable? It was all applicable.
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Q. A.
That were implemented then? I'm -- I'm not aware of the precise status on
that date of the implementation. Q. Okay. Now, I want to read you something from
BP Magazine, Issue 3, 2006, and it's a statement made by -- you're welcome to look at it if you want. Tab 1, but you don't need to. It's
It's a statement that
John Mogford made in an article entitled, "Safety, THE NUMBER ONE PRIORITY." Let me ask you first: A. Who is John Mogford?
He was the Head of Group Operations -- Group
Safety and Operations prior to Mark Bly. Q. Okay. All right. On page -- the numbered
Page 13 of this article, he's talking about OMS, and he says: OMS: "It is about" -- and he means -- he's discussing "It is about how we make our operations people
understand more of the context, increase their awareness of inherent risk, empower them to continually improve what they do, and enable them to build their learning into the system for future use." Do you agree with that -A. Q. A. Q. I do. -- description of OMS? I do. Okay. And in the same magazine on, let's see,
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numbered Page 19, Mr. Mogford also says at the top right corner: "Whatever we say in the centre, if it
doesn't help people who are conducting hazardous activities day-to-day in our plants, we have failed and have only a management piece of paper." And, again, he's referring to the OMS. agree with that statement? A. Q. I do. Okay. Thank you. Do you
Now, you said on Monday that although -although OMS was not rolled out across the entire company, that you said, quote, "That's not to say there wasn't a Process Safety system in place before OMS. OMS was designed to bring all our Process Safety systems to a common, consistent standard." Do you remember that testimony? A. Q. M-h'm. Okay. Yes. So I take it that it's your position,
then, that there were, in fact, BP Process Safety systems and procedures applicable to the Gulf of Mexico -- implemented and applicable to the Gulf of Mexico on April 20th, 2010? A. Q. Correct. And that you believed that those were designed
to mitigate against major accidents or -- such as the
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DEEPWATER HORIZON? A. Q. That's correct. Okay. And these were BP Process Safety
systems, correct? A. The BP Process Safety systems are in the They were systems
matter of the drilling operation.
and processes designed by Transocean, which BP had oversight of. Q. Okay. So is it -- is it your position, then,
that BP had none of its own safety processes in place in April 2010? MR. GODFREY: A. Objection as to form.
It -- it had many of its own -- a -- a
complete suite of Process Safety systems in place in April 2010. The point I was making is that the systems
and processes on the rig were Transocean systems and processes, which were required to be consistent and verified by BP. Q. (By Ms. Hertz) Okay. So just so I understand,
are you -- are you saying that BP -- the BP processes and systems didn't apply on the Transocean rig, or they applied in conjunction with Transocean processes? A. Q. HORIZON? They applied in conjunction with. So they were fully applicable to the DEEPWATER
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A. Q.
Correct. You also testified on Monday that the
identification of a blowout was the sort of accident that was, quote, "part of the Group wide risk assessment," and that such risk was, quote, "believed to have been mitigated by the things we had in place"? A. Q. A. Q. That's correct. Do you recall that? (Nodding.) Okay. And when you were asked by Mr. Sterbcow
what those things were in place, you stated you didn't recall discussing that with anybody in detail, but that one such thing that would have mitigated it would have been a blow -- a functioning blowout preventer. Do you remember that? A. Q. Correct. Okay. What other things in place were you
talking about, other than the blowout preventer? A. Q. A. Q. system? A. It is a set of procedures that, if implemented Effective well control systems -Okay. -- as an example. Okay. And what is an effective well control
when a well begins to flow, as I -- as I understand it
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
because I'm not a driller, but -- and I'm going to give you the -- my layman's version as to what a well control system is. It's a system of measurement and
monitoring to determine the state of the well, and it's a system of interventions to be taken in the event that a well starts flowing. Q. And, again, the effective well control system,
is that something that is both part TO's and part BP's? A. Yes, very largely Transocean, because it is a
Transocean Drilling Team that implement the well control procedures. There's no one from BP involved in
implementing well control procedures. So what we have to do is determine that the well control procedures that Transocean has and that are documented as their well control procedures are appropriate, and, of course, that they're -- they're followed. Q. Okay. But if there are well control
procedures and process procedures in place in the Gulf of Mexico, BP procedures, those are applicable as well as the TO procedures? A. Well, I don't want to be pedantic, but BP
doesn't have well control procedures to manage a well that is beginning to flow, because we're not actually drilling any of the wells that our contractors are. So
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what we want to verify is that those procedures are in place, and they're deemed to be appropriate, and people have been trained such that they know them, and when a situation occurs, that they implement and follow them to control the well. Q. Well, does BP have procedures regarding well
operations that apply to wells being drilled off someone else's rig? MR. GODFREY: A. Objection as to form.
Do we have procedures relating to -- sorry, I
don't understand the question. Q. A. Q. (By Ms. Hertz) Related to BP drilling -Okay. -- from a rig that's not owned by BP. MR. GODFREY: A. Objection as to form.
Well, again, not to be -- we're not -- BP is
not conducting the drilling operation. Q. A. (By Ms. Hertz) Is BP is not the operator? BP is the operator, but we're not actually
physically conducting the operation. Q. Okay. Well, I'm going to show you some
specific procedures because I want to understand -A. Q. Yeah. Sure.
-- how they relate to the drilling that was
going on in the Gulf of Mexico on a non-BP-owned rig.
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A. Q. A. Q.
All right. So -I will try and help you to the best I can. Thank you. I'll appreciate it. Let's turn to Tab 2, please,
MS. HERTZ:
and we need to mark this as -- what is this going to be? THE COURT REPORTER: MS. HERTZ: 6064.
Thank you.
(Exhibit No. 6064 marked.) Q. (By Ms. Hertz) Tab 2 is the "Gulf of Mexico
SPU Major Hazards Risk Management Policy," and have -I just wanted to know first if you've ever seen this document before. A. Q. A. Q. it says: I haven't. Okay. Not to my recollection. All right. On the first page of the document,
"SPA Integrity Management." What do you understand the term "SPA" to mean
in BP's -A. Q. Single point authority, I think. -- the way that BP uses it? Single point of authority? A. I think.
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Q. A.
And what do you understand that to mean? That there's an account -- who has the
authority for this -- this document. Q. Okay. And single point of authority is --
would mean the only person that has the authority for whatever? A. document. Q. Okay. Thank you. The -- the person who has authority for this
If you would turn to Page Bates 551, please. A. Q. A. Sorry. Q. A. Q. That's all right. Sorry. I wanted to direct your attention to 1.2 (Complying.) Okay. In the same tab, 55 -- right, yeah. Sorry.
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And I'm going to stop there. "Shall" is mandatory; is that right? MR. GODFREY: Q. Objection as to form.
(By Ms. Hertz) As you understand it and
used -- as used in the BP document? A. Yeah, will -- "shall be achieved," an
expectation that they would be achieved. Q. All right. But you understand "shall" to be a
requirement? MR. GODFREY: A. Q. A. Q. the -A. Let me read this. (Discussion off the record.) A. Q. Yeah. "Shall," will, I mean, it's -Object to form.
Yeah, I think so, yes. (By Ms. Hertz) Okay. Let me just -All right. Now a document like this from
It's mandatory, right? MR. GODFREY: Object to form. It
A.
It doesn't actually say "are mandatory." So we can have a debate about the
says "shall."
interpretation of "shall," but it said "shall," so I would say -Q. (By Ms. Hertz) You would understand it as a
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requirement? A. I would say -- I would use -- yeah, it --
it -- you would -- I would believe it implies a requirement. Q. Thank you. Okay.
And now with that context that, the -- the purpose of this document, is it your understanding that something -- that a policy such as Major Hazard Risk Management Policy would apply to the drilling of a well in the Gulf of Mexico from a rig that is -- where BP is the operator but not the owner of the rig? A. I would expect that it would be -- sorry,
could you say again the question so I was half reading -Q. A. Q. A. Okay. As in the deepwater --
-- and half -As --- half reading the document and half
listening to you. Q. Okay. As with the DEEPWATER HORIZON, BP's
drilling a well -- or BP's the operator on a rig owned by Transocean, and what I'm wondering is: Is this
procedure or policy applicable to that kind of situation? A. Yes.
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MR. GODFREY: A. Q.
I would expect that it would be. Okay. Thank you. If you'd turn to Bates 553,
All right. please.
One more quick question on the first page, because I just didn't establish this. I know you
haven't seen it, but it indicates an issue date of September 1, 2007, correct? A. Q. That's correct. Okay. So unless it had been revised, would it
be your understanding, just from looking at this document, that it was in effect as of September 1, '07? Is that how you would interpret that? A. Q. I think that's how I would interpret it. Okay. So Bates 553, I wanted to look at
Section 2.2 called "Hazard Identification, Risk Assessment and Prioritization." A. Q. reads: I do. Okay. The first line under that heading Do you see that?
"Hazard identification and risk assessment is
an evergreen process through a Facility's life-cycle." Do you have an understanding as to what an "evergreen process" is? A. Continuous.
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Q.
Continuous.
And "throughout a facility's
life-cycle," how would you interpret that to apply to the drilling of a deepwater well? A. I don't think that terminology is really
focused on a deepwater well, to be honest with you. It's focused on a production facility. I think as
applied to a deepwater well -- I'm -- I'm not honestly certain how you would apply that terminology to a deepwater well, actually. I don't know whether that
would mean that the identification risk assessment was continuous through the course of the drilling -drilling operation. interpretation. Q. That would be a reasonable interpretation. I think that would be a reasonable
You certainly wouldn't stop, want to stop hazard identification and risk assessment in the middle of a drilling procedure, would you? A. Q. I agree. Okay. And then again -- the next sentence
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Now, again, with our understanding of the word "shall," that appears to be a mandatory pro -provision; is that correct? A. Yes. MR. GODFREY: Q. Objection as to form.
(By Ms. Hertz) And the reason for a policy
such as this, to identify hazards and to conduct a continual risk assessment, is to mitigate the risk of a major hazard, correct? A. Q. It's to manage and mitigate. To manage and mitigate. And it's extremely
important, right? A. Q. It is. Okay. And failure to comply with this policy
could potentially lead to a catastrophic event, couldn't it? MR. GODFREY: MR. WEBB: A. Q. Object to the form.
Object to the form.
In some situations, that could be the case. (By Ms. Hertz) Okay. And the sentence that I
read, the second sentence, talks about the fact that risk evaluation and hazard identification should be updated throughout the facility's life cycle, or I would translate that as drilling operations; is that right?
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A.
Well, it says "Facility's life-cycle," and as
I said, it is written with, I think, a specific thought around, you know, a production facility. So we have to
determine how it would and should have been translated to a drilling operation, and I can't determine that from this line, I'm afraid. that translation takes place. Q. I understand. But if, in fact, this policy And I'm not aware of how
applies to deepwater drilling in the Gulf of Mexico, then that would certainly mean that throughout the -A. It could apply. Sorry. Q. A. Q. A. Q. Sorry? Sorry. I apologize for -I apologize.
That's okay. -- interrupting you. If it, in fact, applies -- and we think it
does -- then we would -- then wouldn't you agree, then, that this provision requires them to continually identify hazards and risk assessments throughout the drilling operations? MR. GODFREY: MR. WEBB: A. Object to the form.
Objection to the form.
I agree that it certainly applies to drilling
operations and there should be ongoing assessment of
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risk in a drilling operation. Q. (By Ms. Hertz) Okay. Okay. And the last line
Does that appear to be mandatory language to you? MR. GODFREY: A. It is. Objection as to form.
I'm just troubled by this referral
back to "Facility" and whether and how this -- this sort of policy is then translated to a -- a mobile drilling unit, drilling an exploration well. Q. (By Ms. Hertz) Well, I understand. Do you --
do you have a familiarity with the term "Risk Register"? A. Q. Yes. All right. And what is that, to the best of
your understanding? A. It's documentation of the principal risks in
any operating business. Q. Okay. And are risk registers to be part of
the evergreen process, meaning that they are to be continually updated, or at least reviewed as the operations are continuing to identify hazards and
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continue the risk assessment process? A. I think there's an important distinction -Okay? But there
again, I don't want to split hairs.
is an important distinction to -- to separate between a Risk Register -Q. A. M-h'm. -- which is a periodic assessment of risk, and
the management of risk on an ongoing operation minute by minute, hour by hour. Q. A. M-h'm. So you would not look at a Risk Register to
see it being updated every minute -Q. A. M-h'm. -- because of the way in which an operation
was developing. Q. A. helpful. Q. All right. But you would anticipate that a It's not like Facebook? It's not Facebook. It wouldn't be very
Well Team would consider and review a Risk Register throughout the operation? A. I would expect the Well Team to be reviewing I'm
and managing risks on a -- on an ongoing basis. not certain how that relates to, you know, the establishment of a Risk Register.
The Risk Register
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concept is much more about a sort of periodic assessment of risk at a more macro level. So the Risk Register for the Gulf of Mexico is a risk of a deepwater well blowing out and the risk of pipeline failing, the risk of a hurricane impact, the risk of -- sort of macro level risks. Q. A. So you don't -It's not a -- it's not a -- I don't believe
it's -- a Risk Register is a tool that is used in the hour to hour, minute to minute oversight of an operation. Q. Okay. Do you consider it to be static; once
it's created, it should -A. Q. A. No, it's not static. -- just been put aside? It's clearly not static. It's something that
should be updated on a regular basis. Q. Okay. Just not hour to hour, minute by
minute, but it is certainly something that should be updated and risks should be documented; is that correct? A. Q. Correct. Okay. MR. GODFREY: withdraw that. Object to the form -- I'll
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THE WITNESS: MR. GODFREY: withdrawing my objection. (Laughter.) MR. GODFREY:
I apologize. No. I was -- I was
You're very quick, but I
decided I was going to withdraw. Q. (By Ms. Hertz) Now, again, back up to the
second paragraph, it talks about a Hazard and Risk Evaluation Plan, that "Every Facility shall have," and I understand that you're not quite sure how "Facility" translates to deepwater drilling. But my question is:
If you were told while you were the CEO of BP that the DEEPWATER HORIZON Wells Team did not have a Hazard and Risk Evaluation Plan, what would your ex -- what would your reaction be? A. I would want to know why -MR. GODFREY: Q. Objection as to form.
(By Ms. Hertz) You'd want to know why,
wouldn't you? And would you want to know if there was a dispensation to -- that -- that allowed them not to have one? A. Q. one? I'd want to know why they didn't have one. Okay. Would you have expected them to have
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A.
I think it's reasonable to expect that there
should be one. Q. A. one. Q. Okay. You would have looked into it and Okay. And I'd want to understand why there was not
investigated it? A. I would have someone look into it and
investigate it. Q. Okay. All right. Let's turn to Tab 3,
please, which is previously been marked as Exhibit 910. And this is a PowerPoint on the Major Hazard and Risk Management Policy Leadership Action. Have you ever seen this document before, Dr. Hayward? A. Q. I have not. All right. Could you turn to Bates 983 for
me, please. A. Q. A. Q. (Complying.) Have you ever seen this slide? No. No? Well, this appears to be a -- a
presentation or a slide deck internally created at BP, and page bearing Bates 983 is entitled "Risk Ownership." Do you see that?
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A. Q.
I do. And it says: "Who Owns The Risk?" And at the
bottom of the page, it says: Wells Team." A.
"Ultimately it is the BP
Do you agree with that statement?
Well, I -MR. GODFREY: Object to the form.
A.
-- I think it's very difficult to make any And, again, I'm not trying to be I've got no
sensible comment.
cute, but, you know, this is a view graph. idea what the context is.
It's got three lines on it,
and it says "Ultimately it is the BP Wells Team," but I -- we don't know which risk they're talking about. Q. Well, they're talking -- it says: "The key
drivers associated with management of risks around drilling, completions and intervention" actions. So
around those intervention actions, who owns the risk? A. Well, it says here -MR. GODFREY: A. Q. A. Object to form.
-- it ultimately is the BP Wells Team. Do you have any reason to disagree with that? I don't have any reason to disagree with it
with -- without -- other than I have no idea what context they're talking about -Q. A. Okay. -- and exactly what risk they're talking
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about. There are many risks involved in drilling, completions, and intervention activities. Some of
which it is right for the BP Wells Team to own and some of which it is right for others to own. Q. Okay. Will you turn to Bates 989, please. If you'll look in the box at the
All right.
top of the page, it's entitled "GoM SPU Major Hazards Risk Management System," and it -- below is discussing the Gulf of Mexico SPU Major Hazards and Risk Management Policy, which is the document that we just looked at and marked as the previous exhibit, which it says came into effect on the 1st of September 2007. Below that, it says: "The policy has five
components shown in the boxes with a goal of achieving" continuous -- "Continuous Risk Reduction." And in the five boxes, one of them is "Implementation & Operation." A. Q. M-h'm. Okay. And then at the bottom of the page, it Do you see that?
says, quote, "Implementation and Operation addresses the practical development of plans to implement the decisions taken to reduce risks. The Operation
component involves verifying that the hazard identified are fully accounted for in the emergency response plans
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and that people who work on the facilities are aware of the hazards and controls in place to manage them." you see that? A. Q. I do. Okay. And above -- again, back to the box, Do
there's a section that says "Tools" for "Hazard Identification, Risk Assessment & Prioritization." you see that? A. Q. I do. Okay. And you've already talked about -- I Do
believe you identified a "HAZID" and a "HAZOP"? A. Q. a -A. Q. Hazard Identification. -- Hazard Identification. "LOPA" is a Layer Yes. A "HAZOP" is Hazard Operations. "HAZID" is
Of Protection? A. Q. A. Q. A. Q. Correct. Do you know what a "What If" is? I don't actually, no. Do you know what a "QRA" is? Quantified Risk Assessment. Okay. Quantified Risk Assessment. All right.
And the other two, I believe, are probably self-explanatory.
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Let me ask you something:
Are those
documents, or those tools, as you understand them, are each of those a written document? MR. GODFREY: A. Objection as to form.
HAZID, HAZOP, and Layers Of Protection I'm -- I'm not certain about What If.
certainly is. Q. A. document. Q.
(By Ms. Hertz) Okay. Quantified Risk Assessment is a written
All right.
And would you presume that Fire &
Smoke Studies and Blast Studies are also written -A. Q. A. Q. Yes. -- assessments? Yes, I would. Okay. And what is the purpose of documenting
perceived risks? A. Q. Such that they can be managed and mitigated. Thank you. And when a risk is identified in
these documents as it says in here, you would agree, right, that it's imperative that the people who work on the facilities are made aware of the hazards and controls in place to manage them? A. Q. That's correct. Okay. So when risks -- risks are identified,
the Well Site Leaders and others on the rig who are in
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charge of operations must be told about the risks so that they can be aware of the hazards and be in a position to manage them, correct? A. Well -MR. GODFREY: A. Objection as to form.
-- the way it would normally work is that they There's not some sort
would be identifying the risk.
of higher authority sitting up somewhere identifying risk. The people who are most able to identify the
risk are those ones involved in managing it, so documenting it and then ensuring that the right action is taken is -Q. (By Ms. Hertz) But you're not just saying the
guys on the rig were identifying, were you? A. No, I'm -- but I'm also -- the -- there are
many people involved in risk identification in drilling operation. Q. A. Right. Clearly the people on the rig are intimately
involved in risk identification. Q. A. M-h'm. The Well's Team who designed the well are
involved in risk identification. Q. A. M-h'm. And mitigation, right? And there may be
And, of course, mitigation.
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some higher generic concern about risk in a -- in a drilling operation. Q. Okay. So let me restate my question, or -- or
just sort of try to pinpoint that then. A. Q. All right. So where risks are identified by the Drilling
Team, the Well's Team Leader, or somebody like that, it's important that those risks are communicated to the folks on the rig, the Well Site Leaders and the others, so that they're in a position to be aware, to look out for, and to mitigate against those risks; is that right? MR. GODFREY: A. Q. That is correct. (By Ms. Hertz) Thank you. All right. Could Objection as to form.
you turn to Tab 4, please. A. That's good.
See, we're moving quickly.
You may not take your hour
and 15 minutes. Q. A. Q. A. Q. Oh, no, no. That whole big debate will not -No, no. -- have been necessary. I'll need it all. Okay. Tab 4 is -MS. HERTZ: We need to mark this as a new Sorry.
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exhibit -- oh, 6065, please. (Exhibit No. 6065 marked.) Q. (By Ms. Hertz) This document is entitled Gulf
of Mexico Drilling & Completions "Operating Plan/Local OMS Manual." And the authority for this document is
shown on the front page as Kevin Lacy, and the date of this document is November 1, 2009. read, as well? A. Q. before? A. Q. I haven't, no. All right. Can you turn to Bates 452, please. And I'd It is. Okay. Have you ever seen this document Is that what you
And we're back to your favorite subject, OMS.
like to direct your attention to the fourth paragraph, I think fourth letter -- fourth sentence that says, quote: "We use two main procedures for managing work Beyond the Best Common Process, and Major The" Gulf of Mexico "D&C Risk
processes:
Project Common Process.
Management Plan will bring our process into alignment with OMS so that the risk is managed effectively and consistently, in compliance with OMS requirements. All
risks shall be recorded in and managed by the BP RAT." Do you see that? A. I do.
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Q. of OMS? A. Q. Process"? A.
And does that comport with your understanding
Indeed, it does. Okay. What is "Beyond the Best Common
It's a process designed to continuously
improve the drilling operations in all dimensions, be it safety or -- or drilling performance. Q. Okay. Now, if there are requirements in
Beyond the Best Common Practice [sic], they're supposed to be followed, correct? MR. GODFREY: Q. Objection as to form.
(By Ms. Hertz) As opposed to recommendations
if there's -A. No. Beyond the Best Common Process is a --
it's -- it's not mandatory -Q. A. Q. A. Q. is: RAT." A. confess. It's not? -- in the sense that you're trying to imply. Okay. It's not mandatory. Okay. All right. The last sentence I read
"All risks shall be recorded and managed by the BP Do you know what that is? I don't know what the BP RAT is, I have to
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Q.
If I were to tell you it was a Risk Assessment
Tool, would that -A. Q. A. Q. A. Q. Sounds --- refresh your recollation -- recollection? Sounds sensible, yes. Great name, right? Great. Okay. And that appears to be a requirement as
well, right, all risks shall be included -A. Q. A. Q. A. Q. Process? A. Again, it's the -- it's the -- a process used M-h'm. -- and managed by the -Yes. -- BP RAT? Yes. Okay. And what is Major Project Common
to measure performance safety and -- and business performance in the delivery of major projects, big facilities, or things of that sort. Q. Okay. And would you consider these two
documents to be the cornerstones of Process Safety within BP prior to the implementation of OMS? A. Not really the cornerstones of Process Safety.
They're the cornerstones of improving performance, a
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component of which is -- is safety, but they weren't the cornerstones of Process Safety. Q. A. Okay. There were some other tools in place, such as
things like the control of work standard, the integrity management standard, that are the cornerstones of Process Safety. Q. Okay. Can you turn to Tab 5, please. And
this is a document called "Beyond the Best Common Process." This is Exhibit 6066. MR. GODFREY: MS. HERTZ: MR. GODFREY: What number, please? 6066. Thank you.
(Exhibit No. 6066 marked.) Q. (By Ms. Hertz) And you've seen this document
before, I assume? A. Q. A. Q. A. I haven't. Oh, you have not? I don't think so, no. Is this the one you were just referring to? It's the one I was referring to, but I haven't
seen this document, no. Q. A. Q. Oh, okay. You just knew it existed?
I knew it existed, yes, yes. Okay. The second page, Bates 309, indicates
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that "Drilling & Completions - Beyond the Best Common Process," dated June 2008. in the bottom? A. Q. A. Q. A. Yes. Okay. I do. All right. And Barbara Yilmaz you said was -Do you see that small print
Is the -- she's -- official title is the
Technical Vice President for Drilling and Completions -Q. A. Okay. -- TVP, in essence, the functional Head of
Global Drilling. Q. Okay. And if you just quickly look at her
letter on 309, "Dear Colleagues," and then she goes on, she says that this is the third edition of this handbook. "Our mission in Drilling and Completions is
to" delivery -- "deliver industry leading wells that maximize the recovery of BP's global asset base. Beyond the Best remains a key component of the strategy since its development in 2001." So this is a document that had been in place prior to -- not this particular document, let me back up -- this Best Common Process Handbook had been in place prior to Texas City, correct?
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A. Q.
Right. And -- but this edition came out in '08, so
this postdates Texas City; is that right? A. This had nothing to do with a refinery. This
is about how to drill wells more effectively on an ongoing basis. Q. correct? A. Q. Yes, yes, it is. Okay. If you'd look at Bates 315, please. I understand, but this is post Texas City,
Now, you had mentioned that it wasn't your understanding that this document was mandatory, but I'd like to draw your attention to the second paragraph on this page: "Due to its extreme importance, its use is
mandatory," referring to this document, Beyond the Best Common Process, "stressing rigour and consistency. Common processes address both the design and execution of well programmes through cross-discipline application of four components." A. Q. I do. So it was -- does that change your Do you see that?
understanding as to whether this document is, in fact, mandatory or not? A. You know, I -- I have to confess, I --
certainly we had at the time eight common processes,
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and certainly some of the others were not mandatory, so obviously, what's written here suggests that this document is mandatory. Q. it's not? A. Q. says: No. Okay. In the last paragraph on that page, it Okay. You don't have any reason to believe
"Since the conception of" Beyond the Best Common
Process "in 2000 we have learned new lessons and identified better practices. This updated publication Do you see
captures those lessons and best practices." that? A. Q. I do.
Do you know if any of the lessons learned from
Texas City were in any way incorporated into this document? A. Q. A. I don't know. Would you expect that they would have been? I think there were other processes that were
focused on Process Safety that the lessons from Texas City were incorporated into. Q. A. And what would those have been? As I said, the Control of Work and Integrity
Management Standards. Q. Okay.
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A.
Which were the two key Process Safety tools to
improve Process Safety performance across the company. Q. And you consider Risk Management part of
Process Safety? A. Q. I do. So if this document contains a section -- and
we'll look at it -- called "Risk Management," then this document will also inherently pertains to Process Safety, right? A. In -MR. GODFREY: A. Objection as to form.
Inasmuch as Risk Management is part of Process
Safety, that's correct. Q. (By Ms. Hertz) Okay. And Risk Management is
not something that is necessarily different in concept from a facility such as Texas City to deepwater drilling, is it? MR. GODFREY: A. Objection as to form.
Certainly, there are some risks that are
common, such as the containment of hydrocarbons. Q. (By Ms. Hertz) And there certainly were
lessons learned from Texas City that BP applied or attempted to apply -A. Q. Correct. -- to deepwater drilling; is that right?
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A. Q. A. Q. A. Q. A.
Correct. Okay. Such as layers of protection analysis. Okay. Which -And others, right? And -- and, yeah, Integrity Management
Standards and that sort of thing. Q. Okay. I'm going to ask you to jump, please,
to 361, Bates 361. MR. GODFREY: MS. HERTZ: MR. GODFREY: Q. 361? Yes. Thank you.
(By Ms. Hertz) And this is a page entitled
"Element 5 - Risk Management," and I'd like to draw your attention to the bottom of that page under "Risk Management Process." It says, "The Risk Management
Process has four main, cyclical steps (identify, assess, respond, control) the outputs of which are recorded in a database known as a Risk Register. The
cycle is not a once-per-well or even a once-per-stagegate process. It is a continuous loop by which risks
are captured and worked throughout the well life-cycle..." And do you see that?
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A. Q. that -A. Q. A. Q.
I do. Does that comport with your understanding
It is --- of --- it does. -- let -- let me just finish my question for
the record -A. Q. Sorry. -- that's okay. Does that comport with your understanding that a Risk Register is, in fact, an evergreen -A. Q. A. Q. Yeah, a continuous --- process document, continuous document? Indeed. And that risks need to be continually
identified -A. Q. Assessed and managed. Exactly. Thank you.
Next page, under "Risk Management Roles and Responsibilities," it says, "It is important that the Project Manager set" his or her "expectations" arouse -- "around" misk -- "risk management early, clearly and concisely. This is the primary purpose of Day-to-day responsibility
the Risk Management Plan.
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(not accountability) for running the risk process may be delegated to a Risk Champion." So at least with respect to that paragraph, it does talk about day-to-day responsibility for risk process, doesn't it? A. Q. It does. And it -MR. GODFREY: Q. Objection as to form.
(By Ms. Hertz) -- and it is something that
needs to be done every day, right? A. Certainly the assessment of risk should be
done on an ongoing basis. Q. A. Q. A. Q. On a day-to-day basis as operations -M-h'm. -- continue, correct? Yes. Okay. Do you have any understanding who would
be the, quote/unquote, Project Manager on -- in deepwater drilling? A. Q. A. Q. A. I -I'm sorry the Well's Team Leader? I don't know. Okay. I don't know. Is that the Well's Team Manager?
Do you know what a Risk Champion is?
Well, it says here, "(typically an
office-based member of the engineering team)."
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Q. A. Q. A. Q.
Had you ever heard the term "Risk Champion"? No, I hadn't. You never heard that? No. So you wouldn't know, then, what their
responsibilities are? A. are. Q. A. Q. Other than what you see there. Probably not. Okay. Let's turn to the next page, Bates 363. Well, it says here what their responsibilities
All right.
If you look at "Project Manager" on that
page, it says, "(typically" Well's Team Leader). Do you see that? A. Q. It does, yes. You don't have any reason to believe that
that's not the case, do you? A. Q. A. Q. No, that seems -Okay. -- only reasonable. And it says -- next to the Well's Team Leader
it says, "Single Point" of "Accountability, Owns risk process, Assigns risk process, Monitors overall risk exposure," and "Monitors response progress." Do you see that?
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A. Q.
I do. Okay. And as I read it, those are some of the
roles and responsibilities of your Project Manager, typically the Well's Team Leader. it? A. Q. It is. Okay. And those are obviously extraordinarily Is that how you read
important tasks in connection with Risk Management -MR. GODFREY: Q. Objection as --
(By Ms. Hertz) -- isn't that right? MR. GODFREY: -- objection as to form.
A. Q.
It would certainly appear that way, yes. (By Ms. Hertz) Okay. And, again, as -- as you
stated, Risk Management is something that needs to be done on an ongoing -- needs to be monitored on an ongoing basis, correct? A. Q. A. Q. A. Q. please. Correct. And mitigated, correct, as -Correct. -- necessary. Correct. Okay. All right. Let's go to Bates 365,
All right.
This doc -- page is entitled "Risk
Register," and it says, "The risk register captures all the outputs of...identify and assess steps. The
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response and control steps may be recorded in the register...in a separate action..." Do you see that? A. Q. I do. And then below it says, "Two Risk Register
tools in particular are recommended for use in" drilling and completions. And there you are with the
"BP RAT - An intranet-based tool designed to meet the needs of BP's Major Projects." And as we saw earlier, there's a requirement in the Gulf of Mexico that all risks be implemented -or, excuse me, input into the BP RAT, correct? MR. GODFREY: Q. A. Q. A. Q. A. Q. A. Q. Objection as to form.
(By Ms. Hertz) You recall -Yes --- that? -- I think that's what you said is. I think that's what we read, right -Yes. -- in the prior document? Yes. Okay. All right. Let's go to Tab 6. This
has previously been marked as Exhibit 93.
And it's the And
"Drilling and Well Operations Practice" for E&P. I'd like to know first if you've ever seen this
703
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document before. A. Q. A. Q. A. I don't believe so. Okay. Were you aware of its -- its existence?
Yes, I was aware of its existence. Okay. What did you understand it to be?
It's to set out the operating practice for
drilling wells. Q. A. Q. Okay. In E&P. Okay. And was this the type of process or
system that you were talking about that was in place in the Gulf of Mexico in April that you had believed would mitigate the risks involved with deepwater drilling? A. It was certainly one of the pieces of process
that were in place to mitigate risks in the deepwater -Q. A. Q. Okay. -- correct. Let's go to Bates 263, please -- why am I
doing that -- just to point out that this is dated October 2008. It's issue 1, and I'll just represent to
you that the gentlemen on the Well's Team have indicated that this is the version that they were operating under when they were working on Macondo. All right. 276, please, Bates 276. Under
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"1.3 Application," it states, "This practice applies to all drilling and wells operations comprising well construction" -A. Q. A. Q. Sorry. I'm on the wrong page.
I'm sorry. Apologies. It's all right. MR. WEBB: He's got the right page.
A. Q.
Apologies. (By Ms. Hertz) "This practice applies to all
drilling and well operations comprising well construction, drilling, testing, completion, workover, well operations and intervention activities related to wells performed under the control or supervision of BP, or on behalf of BP as the operator." You see that? A. Q. I do. So is it your understanding that this was, in
fact, a document that governed the drilling of wells in the Gulf of Mexico in April of 2010? A. That was my understanding.
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Q.
Okay.
And what do you understand that
sentence to mean? A. Q. It says what it -- is what it says. That you shall follow this procedure --
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Q.
Now, if, in fact, there was no documented and
auditable Risk Management process in place on the Macondo Well, that would have been a violation of BP Policy without a written exception; isn't that -MR. GODFREY: Q. Object to the --
(By Ms. Hertz) -- correct? MR. WEBB: Objection to form. -- form of the question.
MR. GODFREY: A.
Well, I -- I'm not aware whether there was or
wasn't, so if there wasn't, it would certainly not be consistent with this document, would it. Q. A. Q. (By Ms. Hertz) Or BP Policy, correct? Well, this is BP Policy. All right. And let's look at 292, Bates 292,
Do you see that? A. Q. I do. If that was not done, that would have been a
violation of BP's Policy as well, correct?
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MR. GODFREY: A.
If it was not done, it would not be consistent
with this Policy, correct. Q. (By Ms. Hertz) Okay. And I could walk you
through lots of those examples, but I don't want to take your time up with that. So generally, if -- if --
if -- if the requirements of this document are not followed, that's a violation -A. Q. A. It's not consistent --- of this BP Policy? -- with this Policy. MR. WEBB: Q. Well, wait, I -- I --
(By Ms. Hertz) It's not -MR. WEBB: -- object to the form of the
question. Go ahead answer. A. Q. It's not consistent with this Policy. (By Ms. Hertz) All right. Thank you.
Are you familiar with the Traction reporting system? A. Q. A. Yes. What do you understand that to be? It's a database to record all safety-related
incidents -Q. Okay.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q. it says:
-- in BP. On Page Bates 308, if you want to look at it, "A Well Control Incident Report shall be
completed and documented within the Traction reporting system following any Well Control Incident." What do you understand the term "Well Control Incident" to mean? A. A Well Control Incident is a well control
incident where -- where, at least for a period of time, the well is not under control. Q. Okay. Would -- would a kick be considered a
well control event in your mind? A. Q. In most situations, probably, yeah. Okay. So if there was a kick at the Macondo
Well and it wasn't recorded in Traction, ever, would that be a violation of BP policy? MR. GODFREY: MR. WEBB: question. A. There's an expectation that all safety-related Objection.
incidents are recorded in Traction. Q. (By Ms. Hertz) Well, it's not just an It's a requirement -Objection as to the form.
expectation, right?
MR. GODFREY: A.
There's a -- there's --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A. Q. A. on? Q.
(By Ms. Hertz) -- without a dispensation? There's a re -10.2? 2.10 you mean, no. 10 -- which page are you
Oh, I'm sorry, excuse me, 15.2.12.
apologize. A. Okay. (Reviewing document.) That's what it
says, yes. Q. A. Q. A. So it's a requirement? Yes. Okay. And you would expect --
You would expect that if there had been a
kick, provided it was designated a Well Control Incident, then it would be reported. Q. A. Q. In Traction? In Traction. Okay. Tab 7, please? MS. HERTZ: this? What are we going to mark
This will be Exhibit 6067. (Exhibit No. 6067 marked.)
Q.
(By Ms. Hertz) Have you ever seen this
document before? A. Q. No, I haven't. It appears to be a BP Wells Operation Group
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Practice dated November 18, 2008. see? A. Q. It is. All right.
Is that what you
If you turn to Bates 730, the "All Well Operations activity shall
second line says:
conform to Engineering Technical Practice GP-1035 Well Operations." That appears to be a mandatory requirement, doesn't it? A. Q. right? MR. GODFREY: A. Q. right? A. Q. Objection as to form. It certainly says "shall." And "shall" is -- appears to be mandatory,
It is what it says there, "shall." (By Ms. Hertz) Well, "shall" is not "should," Can we agree on that? Yeah, "shall" is -- is not "should." Okay. (Laughter.)
Q.
(By Ms. Hertz) All right.
All right.
Let's
go to Bates 738, and under 7.2.1, "Minimum Requirements," do you see that? A. I do.
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Q.
What do you understand "critical operational
tasks" to be -A. Q. A. I don't know. -- in drilling? I don't know what the definition of that is
for drilling. Q. Okay. Well, I can represent to you that
everyone on the Macondo Well Team who's testified who's been asked considers the negative pressure test to be a critical operational task, all the way from the Engineering Team Leader to the Well Site Leaders, and that the negative pressure test is -- and the reason it's critical is because it's the last clear chance to ensure well integrity has been achieved before temporary abandonment. So with that --
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A.
It's part of the process to assure well
integrity has been achieved. Q. A. It's the last test, though? It's the last test. It's the last test. It's
not the exclusive test -Q. A. Q. A. you use. Q. No, no. And let me back up. No, no, that's not what I said. -- or -- or anything else -No. -- that implies that it's the only thing that
So what the folks on the Wells Team had said it's the last clear chance to test the integrity of the well. A. Q. A. Q. A. I have no reason to -Do you have any reason to -I apologize. -- disagree with that? I have no reason to disagree with the views of They are far more qualified than I am
the Well Team.
to make that judgment. Q. Based on that representation, and the
testimony of the Wells Team, and this procedure -excuse me, this minimum requirement set forth in the DWOP, 7.2.1, would you have expected there to be a
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written procedure for how to conduct and interpret a negative pressure test at BP? MR. GODFREY: A. Objection as to form. Well, the
I don't know is my honest answer.
only reason I say that is because with the benefit of hindsight, which is a wonderful thing, it turns out that no one has got written procedures for conducting negative pressure tests, whether should have they done. With the benefit of the hindsight, the answer is probably "Yes." Q. (By Ms. Hertz) Do you know for a fact that no
one has negative -- written -A. Q. I -- I don't --- negative pressure tests, or is that what
you have been told? A. I have been -- I -- I don't know for a fact.
I haven't done my own independent research, so -Q. Okay. So back to my question, there certainly
would be no downside -A. Q. A. There would certainly be --- from having --- no downside -MR. WEBB: Let me -I apologize.
Tony, you keep interrupting
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her question which means -THE WITNESS: MR. WEBB: transcript. Okay. Sorry.
-- we're getting an incomplete
And so we're going to just ask you to
listen to her question, then go ahead and answer. THE WITNESS: Q. Thank you. So there certainly would
(By Ms. Hertz) Okay.
have been no downside to having a written negative test procedure and instructions on interpretation of that procedure in as far as the Wells Team has deemed this a critical activity? MR. WEBB: question. MR. GODFREY: Q. A. Objection to the form. Objection to the form of the
(By Ms. Hertz) Right? There would have been -MR. GODFREY: Same objection.
A. Q.
-- no downside. (By Ms. Hertz) Okay. THE COURT REPORTER: Three minutes.
A.
I believe that is what the Bly Report
concluded and made as a recommendation. Q. (By Ms. Hertz) Well, let -- let me just ask Do you know that BP
you if you're aware of something.
has strict guidelines, written guidelines barring
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employees from carrying a cup of coffee without a lid or walking down a staircase without holding a handrail? Are you aware of that? A. We certainly have guidelines to prevent people
doing that sort of thing, yeah. Q. Okay. So you have written guidelines not to
walk down a stairwell without holding on to the handrail, but no written guidelines for a negative pressure test? MR. WEBB: question. MR. GODFREY: That's false. MS. HERTZ: MR. GODFREY: record. I haven't even asked one yet. You just stated it on the Objection to the form. Object to the form of the
I thought that was a question. MS. HERTZ: That was not yet a question,
and don't accuse me of saying anything false. MR. WEBB: You didn't. Well, you just said that BP
MR. GODFREY:
had no guidelines, nothing in writing about a negative pressure test. That is not accurate. MR. HERTZ: question then. MR. GODFREY: Fair enough. Well, let me restate the
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
(By Ms. Hertz) Isn't it the fact that BP has a
written guideline directing its employees not to walk down stairwells without a hand on a handrail, and the fact that does -- did not on April 20, 2010, have a written procedure for how to conduct and how to interpret a negative pressure test seem like the focus is more -- is on personal safety versus Process Safety? MR. WEBB: Objection as to form. Objection, form. I don't
MR. GODFREY: A.
That can be your interpretation.
believe it was the case. Q. case? A. That our focus was on personal safety versus (By Ms. Hertz) You don't believe what was the
Process Safety. Q. Okay. Did you attend BP's Operations Academy
program at MIT? A. Q. A. I did. All right. And why?
Because I wanted to set an example to the
leadership of BP that the -- the operational safety -focus on operational safety, the roll-out of the Operating Management System, and Process Safety were all important. Q. All right. The Process Safety lessons taught
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
at the Academy include, "Critical procedures should be formalized and carried out with rigor." Do you agree with that? A. Q. I do. "It is essential to maintain multiple
safeguards against an accident." Do you agree with that? A. We can short-circuit this, if you want to. I
agree with everything that was taught at the Academy, because it was a program that I was instrumental in -Q. Let me just run through my little points,
though, if you don't mind. Is it dangerous to change operational plans on the fly? MR. GODFREY: A. Q. question. The process safety lessons taught at the Academy include the fact that it is dangerous to change operating plans on the fly. A. Do you agree with that? Yes. (By Ms. Hertz) I'm going restate that Objection as to form.
I agree with all of the suggestions at the
operations Academy, all of the -- the long list of things that you're about -Q. It's not that long.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q. A. Q. A.
-- to go through -Just let me get through it. -- I completely agree with. All right. So you agree that anomalies --
There should be no ambiguity as to whether I
do or do not agree -Q. A. Academy. Q. A. Okay. I cert -- I was instrumental in setting up Are --- in what was being taught at the operations
that program. Q. A. that -Q. A. Q. Okay. -- they taught. Three more. Do you agree that anomalies need Okay. And I absolutely subscribe to everything
to be clearly resolved? A. Q. Of course. Do you agree that small incidents are warning
signs that conditions are ripe for a disaster? A. Q. They are. "A long stretch without a serious accident
breeds complacency because people forget to be afraid."
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Do you agree with that? A. Q. That is correct, as well. Okay. (Discussion off the record.) Q. (By Ms. Hertz) All right. And -- and also is
it dangerous to change operating procedures on the fly? A. It is. MS. HERTZ: All right. We'll go off.
Off the record at
(Recess from 12:42 p.m. to 12:51 p.m.) (Exhibit No. 6068 marked.) MR. GODFREY: Ready. On the record at
THE VIDEOGRAPHER: 12:51 p.m., beginning Tape 17. Q.
(By Ms. Hertz) I -- I ask you please to turn
to Tab 13, which is an article from "The Washington Post," dated June 27th, 2010, headed -- entitled "Trouble at the tiller." This is Exhibit 6068.
And if you would turn to the second page of the document, it states in the -- about fourth paragraph down, quote, "The top of the organization doesn't listen hard enough to what the bottom of the organization is saying," and it indicates that you wrote that in a memo in 2006.
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Do you -- do you agree with that statement as a general matter? A. I didn't write it in a memo. I did say it in
a Town Hall meeting, which was then written by an employee into a memo, and at the time it was a serious concern that I had, that -- and a lot of what occurred in BP in the subsequent three or four years was a real focus on engaging the operational people and ensuring that the right decisions were taken. Q. So it's important then, and it was something
that you strived to implement -A. Q. A. Q. It was. -- at BP? It was. If you'll turn to Tab 14, we've got an E-mail
from Tony Emmerson to Bob Kaluza, dated April 8th, 2010. Do you know who Bob Kaluza is? Have you --
Robert Kaluza? A. Q.
Have you heard that name?
I believe he was one of the Well Site Leaders. Okay. And this is attaching a TH, or
Thunderhorse, Pulse Check, which was apparently a survey taken of the individuals on the Thunderhorse rig in March of 2010. MR. GODFREY: this as an exhibit, Counsel? Are -- do you want to mark
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MS. HERTZ: MR. GODFREY: MR. WEBB: MS. HERTZ:
Yes.
6069.
Thank you.
Thank you.
You said 6069? Yes.
(Exhibit No. 6069 marked.) Q. (By Ms. Hertz) You -- you haven't seen this
document, have you? A. Q. A. I haven't, no. Okay. Thunderhorse was one of BP's rigs?
It was -- it was one of -- it was a BP
production facility, not a -- not a drilling rig. Q. Okay. Now, if you turn to Bates 468, the page
is entitled "Common Themes (Perceived Gaps) from Face to Face Breakout Session." What do you understand a gap to be? A. Probably the same as what you understand a gap
to be, some -- something that -- something that needs to be filled. Q. Okay. So -- so something that needs to be
fixed or filled? A. Q. Yeah. All right. And these appear to be -- and your
reading is probably the same of mine -- as mine, that these perceived gaps were indicated by folks on the rig in the Pulse Check.
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And I was just wondering, given the importance of Management listening to folks at the bottom and, thus, surveys like this, which I -A. Q. A. Q. A. Q. M-h'm. -- assume are designed to -M-h'm. -- help the folks higher -M-h'm. -- up understand what the operational people
are thinking, did anyone from the Gulf of Mexico ever tell you about any of these -- any perceived gaps or problems that resulted from surveys taken on the rigs? A. They didn't tell me, but they would have told
people who could have taken action to do something about it. And I think it's in -- interesting to see
the context of this -- these comments, which were part of the Pulse Survey. "Do you understand the process of 96 percent said
how to report an unsafe condition?" "Yes."
"When you report an unsafe" position -"condition, do you believe it is addressed in a reasonable time?" Q. 97 percent said "Yes."
I appreciate that, but that doesn't really
answer my question, so -A. Well, it's just important to have --
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Q.
-- let me just ask you a couple of things.
If
anybody ever brought to your attention -A. Q. M-h'm. -- the belief that Management places a higher
priority on production compared to safety, and an example of -- and that's an example of BP breaking its own safety rules? A. Q. Sorry. Where are you referring to? I'm -- I'm looking at the "Gaps," I'm just wondering if anybody
Page 468.
the "Perceived Gaps."
ever brought that to your attention. A. page? Q. Under "Miscellaneous," "Hurricane Ida Where -- where are you referring to in this
Response - Decision to not shut-in production was viewed as management placing a higher priority on production compared to safety and an example of BP breaking its own safety rules." Did anybody ever bring that to your attention? A. Q. They didn't. Okay. Did anybody ever tell you that folks on
the Thunderhorse rig believed that requirement and procedure changes were causing confusion and frustration? A. Where are you referring to now?
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Q.
Under "COW Management," "Requirement change This is
constantly from one hitch to the other. causing confusion and frustration."
Did anybody ever bring that to your attention? A. Q. They didn't. Okay. If you turn to the next page, if you
want to follow along, under "Leadership" -- "Leadership Style," it says -- or excuse me. Did anyone ever tell
you that there was a general feeling that -- of being fired if you stop a job, get hurt, or question your -A. Q. A. Where -- where --- Supervisor? Where does it say that? So that is one comment at the back of a survey, where at the front of the survey -Q. A. Q. that. A. Q. Mr. Hayward, your --- it says --- your counsel can get you to talk about I -- and -Well -And I understand that. I'm just asking if
anybody ever told you that -A. Q. They didn't. -- comment, with or without respect to the --
the document, because I know you've never seen it.
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A. context. Q.
But, seemingly, you're taking sentences out of
Well, they're in the section called "Gap" --
"Perceived Gaps," and I'm simply asking if anybody communicated to you that there were these perceived gaps? A. Q. They did not. Okay. But you said it was your belief or
expectation that these concerns would have been elevated to somebody and that some -- they would have been addressed or -- or some action would have been taken; is that correct? A. Q. That's correct. Okay. And if you turn to the next tab, 15,
this is Robert Kaluza's performance review from 2009. MR. GODFREY: for this? MS. HERTZ: 6070. Is there an exhibit number
(Exhibit No. 6070 marked.) Q. (By Ms. Hertz) And if you'll turn to Bates
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
Okay.
Now, I will represent to you that
Mr. Kaluza was the Well Site Leader on the Thunderhorse when the -A. Q. M-h'm. -- Safety Pulse was taken on that Thunderhorse
rig in March of 2010, and it was under his watch, then, that certain people on the crew felt a fear of being
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fired -A. here. Q. A. Leader. Sure. As I understand it, Kaluza was a Well Site Thunderhorse is a production facility. And I I think we need to be -- back up a minute
don't think you can take a survey of a production facility and apply it in a narrow way to the area that Kaluza may have been supervising. I -Q. A. Even if it has to do with safety? Kaluza had a very narrow area of supervision I may be wrong.
on the -- on the Thunderhorse facility. Q. A. producer. You know that for a fact? Because he's a driller. So he's not a
Most of the people on the drilling facil --
on the Thunderhorse facility are involved in
which was a narrow drilling operation, but I don't think you can link Mr. Kaluza to a survey of Thunderhorse. (Discussion off the record.) Q. (By Ms. Hertz) Well, all right. Okay. I don't know
what you're talking about.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
My understanding is that Mr. Kaluza was on the rig not during production, but during drilling. A. No, but this is -- I don't want to be
difficult. Q. A. facility. Is there one Thunderhorse or two? There's one Thunderhorse. It's an enormous
It has very significant production As part of
operations, where most of the people work.
that facility, there is a small drilling operation where Mr. Kaluza was. Q. A. Q. A. Ah. Okay. I see what you're saying.
The survey was across the whole -Okay. -- production facility, so, you know, it's not
reasonable to link Kaluza to what was going on at Thunderhorse. Q. I understand. Thank you very much for that
clarification. Okay. Nonetheless -- then let's put the -Nonetheless, looking at
the Pulse Check aside.
Mr. Kaluza's Performance Report, and we note that there are a number of issues re: safety, are you aware that he was put onto the DEEPWATER HORIZON four days before the Mon -- Macondo Well blew out? A. I -- I wasn't, no. I --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A. Q.
You weren't aware of that? Huh-uh, no. And that this had been referred to, as you
previously mentioned, a "nightmare well" and the "well from hell"? A. Well, I didn't mention that. MR. WEBB: question. Q. A. Q. (By Ms. Hertz) Oh, you -I didn't -You mentioned that you -- that an Engineer had Object to the form of the
referred to it as that; is that correct? A. Q. That's correct. Okay. And are you aware that Mr. Kaluza was
an individual who did not stop the job to resolve the anomaly of 1400 psi on the drill pipe, that we all now know about? MR. GODFREY: A. Objection as to form.
I don't know who was involved in that decision Reading the Bly Report, I
because I wasn't there.
don't believe there's a reference to the individual. Q. (By Ms. Hertz) So you have no understanding as
to whether Mr. Kaluza or Mr. Vidrine was the Well Site Leader on tour at the time the well blew? A. I -- I -- I don't recall. If I did know, I
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
don't know now. Q. A. Q. Okay. I don't remember. All right. All right. Tab 17. This is going
to be Exhibit 6071. (Exhibit No. 6071 marked.) Q. (By Ms. Hertz) This is a document from Steven
Ruehle, an E-mail dated January 11, 2010 to a number of individuals, entitled "Process Safety 2010 Plan," and attached to it is a PowerPoint entitled "Process Safety Plan 2010." see that? A. Q. I do. All right. I'm going to ask you to turn to It is not And it's dated January 12th, 2010. Do you
the seventh page of the PowerPoint.
numbered, but it's entitled "Process Safety, 2010 Plan (Major Hazard Awareness)." And the "Problem Statement" under that states: "As we have started to more deeply investigate process safety incidents," it become -- it's become apparent that process safety major hazards and risks are not fully understood by engineering or line operating personnel. Insufficient awareness is leading to missed
signals that precede incidents, and responses after incidents; both of which increases the potential for,
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and severity of, process safety related incidents." you see that? A. Q. I do.
Do
If, in fact, that's true, do you consider that
to be a serious problem? MR. WEBB: question. A. I think it's difficult to determine whether Object to the form of the
it's a seri -- how serious the problem is on the basis of that statement alone. I'd like to know a lot more
about it before I drew a conclusion. But what it is pointing is that people are endeavoring to continuously improve, which is what you always want people to do. based on that statement. Q. (By Ms. Hertz) Did anybody ever bring this I can't make a judgment
issue of the problems in Process Safety in the Gulf of Mexico to your attention? A. Q. No. All right. And as the CEO who was focusing
like a laser on safety, wouldn't you have expected to have known about these deficiencies in Process Safety, especially when they had led to a, quote, "number of serious and potentially serious process safety incidents"?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. GODFREY: A.
Well, that -- certainly, the -- any incidents
would have been reviewed at the Group Operations Risk Committee. So in that -- in that context, I may have
become aware of them, because everything that occurred in -- in the matter of Process Safety incidents in the company were documented and recorded in something which we referred to as the Orange Book. It was a sort of And that
database of everything that was happening.
was -- the trends and the incidents that occurred across the company were -- were reviewed at the GORC in that way. Q. (By Ms. Hertz) And was it your understanding In
that Process Safety incidents were going down?
fact, I think you said that in an article, right? A. Q. They were going down -They were going down -All right. A. Q. Last page.
-- across the company. Okay. Let's look at the ninth page, please,
two pages back. MR. GODFREY: MS. HERTZ: Q. The same exhibit? Yes.
(By Ms. Hertz) "Process Safety Incidents" I understand that you've
across the Gulf of Mexico.
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stated that Process -A. Q. A. Q. Sorry. Which page are we -So two more past where you were.
The ninth. Okay.
Entitled "Process Safety Incidents."
Now,
according to this page, it indicates that Process Safety incidents, in fact, in the Gulf of Mexico went up in 2009 from previous years; isn't that correct? A. It -- it would appear that there was a small
increase in this -- in this particular area. Q. A. Q. In the Gulf of Mexico, correct? In the Gulf of Mexico. An increase in Process Safety accidents; is
that correct? MR. GODFREY: A. Objection --
There -- an increase -MR. GODFREY: -- as to form.
A.
-- an increase in Process Safety incidents,
which may or may not have been accidents. Q. (By Ms. Hertz) All right. We'll call it
incidents.
There was an increase in Process Safety
incidents in 2009 in the Gulf of Mexico, correct? A. Q. That is correct. Okay. MS. HERTZ: I have nothing further.
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THE VIDEOGRAPHER: p.m., ending Tape 17.
Off the record at 1:07
(Recess from 1:07 p.m. to 1:49 p.m.) MR. BECK: All right. Let's go.
THE VIDEOGRAPHER: 1:49 p.m. Beginning Tape 18. EXAMINATION QUESTIONS BY MR. BECK: Q.
On the record at
Dr. Hayward, my name is David Beck, and I
represent Cameron. A. Q. A. Q. A. Q. Yes. And I'm sure you know who Cameron is -I certainly do. -- do you not? I do. I don't have a lot of questions. That's one
of the advantages of going toward -- till -- toward the end of the questioning, but the bad news is I have some. So what I'd like to do is to go through about a handful of subjects with you. And I -- I'm going to
ask you to do the same thing for me that you did for some of the other lawyers, and that is, if I ask you something, because I clumsily ask it, and you don't understand what I'm asking you, will you stop me and
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say, "Please repeat the question." A. Q. I will. All right.
Will you do that?
Now, you do not hold yourself out
as a BOP expert, do you? A. Q. I certainly do not. And as a Geologist, I'm sure that, in fact,
you are not a BOP expert? A. Q. I'm not a BOP expert. Okay. Now, is it true that no one from
Cameron has ever told you that a BOP, blowout preventer, during its lifetime would never fail regardless of the circumstances in which it was asked to function? A. No one -- excuse me. No one from Cameron has
ever said that to me. Q. And, in fact, you know there are other blowout
preventer manufacturers in the industry, do you not? A. Q. There are, indeed. And would it be equally true that no other BOP
manufacturer, if you will, has ever made such a statement to you? A. Q. Not to me, no. And furthermore, is it also true that no one
at BP has ever made such a statement like that to you? A. That blowout preventers can never fail?
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Q. A. Q.
That's correct. That's correct. Now, you have testified before the United
States Congress on June 17, 2000 [sic], correct? A. Q. Correct. And during your testimony, as I'm sure you
remember, you referred to the blowout preventer on the DEEPWATER HORIZON as the ultimate fail-safe mechanism. Do you recall that? A. Q. A. Q. Yes, I do. Your answer's "Yes"? I do, yes. And is -- is that a phrase that you came up
with on your own? A. from. Q. A. Q. You don't know where the phrase came from? I don't where the phrase came from. Okay. As you've used it, did you mean the I honestly can't recall where the phrase came
word "ultimate" to mean final, the final fail-safe mechanism, if you will? A. Q. Yes. All right. Now, just so -- and you understand
that the ladies and gentlemen of the jury, assuming we have a jury, or the Judge is going to see and hear your
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testimony given here on Monday and today? A. Q. A. Q. A. Q. I do. You understand that's a definite possibility? Yeah, I do. Okay. Indeed, I do. Now, I want to ask you some questions with
respect to during the period you were Chief Executive Officer of BP. talking about. A. Q. M-h'm. While you were Chief Executive Officer of BP, Okay? So that's the time frame we're
was it BP's intention to rely upon this mechanical device, the BOP, as BP's last line of defense in the end -- in the event of a potential blowout? MR. GODFREY: A. Objection as to form.
I think before the accident on April the 20th
I -- I had never considered the details of a drilling operation and a blowout preventer in the -- in the sense that you're describing it today. What would I --
what I would say is based on my 30 years in the industry that I think it was acknowledged that the blowout preventer was the last line of defense, and in the event that a well was out of control, the blowout preventer would be operated.
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Q. A.
(By Mr. Beck) M-H'm. And it was designed to close the well. That
was -- that has been the design basis of a blowout preventer since they were created 50 or 60 years ago. MR. BECK: unresponsive. Q. (By Mr. Beck) My question, though, is: Was it I object to the answer as
BP's intention to rely upon the blowout preventer as this last line of defense that you just described? MR. WEBB: Object to the form. Object to form. So I
MR. GODFREY: A.
I never considered it in that sense.
can't answer the question. Q. (By Mr. Beck) Well, what sense did you
consider it? A. I considered it to be the -- the ultimate
piece of equipment in the event that a blowout was occurring. Q. A. It's the last line of defense? I mean, you -- if you -- if you want to use I -- I -- I haven't
those words, you can use them.
used them, and I wouldn't use -- I hadn't -- certainly hadn't used them ahead of the -- the accident. Q. A. All right. Well, let's use -I
I hadn't talked about blowout preventers.
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apologize. I hadn't talked about blowout preventers -well, I hadn't talked about blowout preventers at all, frankly. Q. Now, let me use your words, then. Would you
agree that if a blowout preventer is the -- as you described it, the ultimate fail-safe mechanism, would you agree that it would be imprudent for BP to do anything to diminish its effectiveness? MR. GODFREY: A. Objection as to form.
Certainly if -- if anything had been done to
diminish its effectiveness, that -- that would be imprudent. Q. (By Mr. Beck) And would you also agree that it
would be imprudent for BP to do anything to diminish the blowout preventer's ability to function under appropriate circumstances? MR. GODFREY: A. Q. Objection as to form.
I agree that it would be imprudent to -(By Mr. Beck) All right. And would you also
agree that BP should do whatever it can to make certain that what it considers to be the ultimate fail-safe mechanism is effective and properly used? A. Q. I would agree with that. And that BP should take whatever steps it
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reasonably can to make certain that the BOP is and remains effective? A. Yes -MR. GODFREY: A. Q. Object to form.
-- I agree with that, as well. (By Mr. Beck) And during the time you were
CEO, that's something you agreed with, correct? A. Well, hang on. During the time I was CEO,
I -- not at one point did I have any conversations about blowout preventers. Q. I'm not -- not asking you about conversations I'm simply asking you about
about blowout preventers.
in your capacity, in your position as CEO of BP during the time period you served in that role, do you agree that BP should do whatever it takes to make certain that a blowout preventer which you considered to be the ultimate fail-safe mechanism is effective and properly used? A. I agree. MR. WEBB: form of the question. Answer the question, then, Tony. A. I agree that BP should make every endeavor to I'm going to object to the
ensure that whatever -- however you described it -Q. (By Mr. Beck) Okay.
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A.
-- most certainly the blowout preventer was
operating effectively. Q. And that do you also agree that your company,
when you were with the company as Chief Executive Officer, should do nothing to increase the risk that a blowout preventer would not do what it was supposed to do? MR. GODFREY: A. Q. I agree with that. (By Mr. Beck) All right. Let me hand you what Object to form.
has been marked as Exhibit 731. (Tendering.) MR. WEBB: Q. Thank you.
(By Mr. Beck) And this Exhibit 731 is a
document dated October 11, 2004, is it not? A. Q. It is. And it is on Transocean stationery, and it is
addressed to BP America Production Company, correct? A. Q. in 2004? A. Q. I was. And you will see where it says the subject, It is. Were you part of the Senior Management of BP
it's a Drilling Contract, is it not, that's referenced? A Drilling Contract is referenced?
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A.
(Reviewing document.) Yes.
Q.
And you see that it refers to a December 9,
1998 contract between R&B Falcon Drilling Company and a company called Vastar Resources, Inc., right? A. Q. It does. And so that the Judge and perhaps the jury who
may see this will understand, Vastar Resources was a company that you-all bought or acquired, right? A. Q. That's correct. And was Vastar Resources, Inc., acquired
during the time you were with Senior Management at BP? A. Q. It was. And so, essentially, in layman's terms, once
you acquired or took over Vastar Resources Inc., BP stepped into the shoes of Vastar? A. Q. That's correct. And if I -- I want to refer you to the third And this is a Letter
paragraph of this letter. Agreement, is it not? A. Q.
That's what it said it is. And it pertains to the conversion of a VBR to Do you see that?
a test ram. A. Q.
I do. And a VBR is a variable bore ram, correct?
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A. Q. it not? A. Q.
I believe that's the case. And that is a part of a blowout preventer, is
Yes, it is. And in the third paragraph in the first "Company acknowledges that
sentence, it says, quote:
the Conversion will reduce the built-in redundancy of the BOP, thereby potentially increasing Contractor's risk profile and corresponding cost structure," end of quote. Is that what this letter states? A. Q. It does. Now, increasing the contractor's risk profile
means, does it not, that you are increasing the risk, in this case, that R&B Falcon Company has with respect to the BOP, does it not? MR. GODFREY: the objection. A. That's what I would imagine it -- it is Objection -- I'll withdraw
referring to based on this letter. Q. (By Mr. Beck) And I take it from what you told
us earlier about just general information you had with respect to blowout preventers you know that one of the features which is commonly known with respect to blowout preventers is what is called "redundancy"?
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A. Q.
Correct. In other words, you -- you have the blowout In
preventer that can react to a certain situation.
the event there's a problem, you have a backup system called a "redundant system," correct? A. I'm not certain it's a redundant system.
There are elements of redundancy I think is how I would describe it. Q. It's not a complete and separate system. And -- and -- and I think -- I
Fair enough.
think you're absolutely accurate in that respect. What is happening here is that the redundant -- built-in redundancy of the BOP is being reduced, correct? A. That appears to be what this letter
determines. Q. And -- and as a result of this built-in
redundancy of the blowout preventer being reduced, it is increasing the risk profile of R&B Falcon Drilling Company, which was a predecessor to a Transocean entity, correct? A. Q. That's what the letter says. And are you aware of what the purpose of a
variable bore ram in a blowout preventer is? A. Q. No. So you, at least as you sit here today, don't
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have any idea of the significance or the effect of reducing the built-in redundancy of the BOP in this regard? A. In -- the answer is -- to that is "No." I do
not -- I do not -- I am not -- I am not -- not able to judge the extent to which redundancy has been reduced or risk has been increased by what's written here. Q. But you will see that as a result of
increasing the risk for the contractor, that Vastar, your predecessor, or BP's predecessor, is actually agreeing to reimburse the contractor for any problems that occur with respect to the MMS requiring certain activities to be done -MR. GODFREY: Q. A. Objection as to form.
(By Mr. Beck) -- correct? I'd have to honestly read it, because I
haven't seen it before. Q. A. That's fine. After one -- (reviewing document).
What they're -- what it appears to be saying is if there's a require -- if there is any mechanical reason or the MMS requires the variable bore ram is to be replaced, then the contractor will bear the cost. Q. A. Yeah. That's the -- what I understand this to say.
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Q.
And I -- I think you understand it correctly.
In other words, if the MMS requires the contractor to do such things as pulling the BOP out of the water, and by the way, that involves substantial expense, doesn't it? A. Q. A. Q. A. Q. It does, yeah. "We're going to pay for it"? Yes. BP is going to pay for it, right? Yes. Now, do you know who it was who actually
requested that one of these variable bore rams be converted to a test ram? A. Q. I don't. Do you know whether anybody at your company
believed that converting a variable bore ram to a test ram was, in fact, financially beneficial to BP? A. I don't. It -- it would imply in this letter
that it was not. Q. A. And that's because of the indemnity? Because of the additional -- the indemnity on
the additional cost that could be incurred if there was a mechanical reason to change it or if the -- the Regulator required us to do -Q. Well, if --
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A. Q.
-- something with it. -- if someone who has personal knowledge of
this transaction says that it was done at BP's request because BP believed it was to its advantage, you would not dispute that? MR. WEBB: the form of the question. A. Q. A. Q. I -(By Mr. Beck) What's your answer? I clearly have no basis to agree or disagree. All right. In your capacity as CEO, during Well, I'm going to object to Answer it.
the time period you served in that capacity, did you believe that it was important for BP to select the best available technology as this ultimate fail-safe mechanism? A. I did. I -- I believed it was important for
us to select the best available technology full stop. Q. All right. And this is consistent with what
you said earlier, where you said that BP should do whatever it takes to make certain that the BOP is effective, and it's safe, and it provides the best mechanism to prevent a potential blowout? A. Q. That's correct. All right. Now, you testified this morning
that BP didn't design the blowout preventer on the
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DEEPWATER HORIZON. A. Q. (Nodding.)
Do you remember that?
Don't you just love it when a lawyer starts
out with that kind of a question? A. I -- I believe it's accurate. I don't think
we designed the blowout preventer. Q. Now, if the evidence in this case shows that
Vastar, the company you quire -- acquired and purchased, actually specified the BOP configuration, then would you agree that at least one of your predecessor companies had an involvement in the design of the BOP on the DEEPWATER HORIZON? MR. WEBB: form of the question. A. We can have a very convoluted debate about When I said I'm going to object to the
what design is and what design isn't.
"design," I meant the engineering design behind the fundamentals of a blowout preventer. Q. A. Q. A. (By Mr. Beck) Well -What you've -Excuse me. Go ahead.
What you've illustrated is that there was
clearly a -- an involvement of Vastar in determining which -- which of the various configurations that are available for a blowout preventer was deployed.
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Q.
All right.
Well, let me hand you, just to
kind of help us in this discussion here -MR. WEBB: MR. BECK: Thank you. And just for the record, there
apparently, Rick, have been multiple copies of this produced, and so the Bates numbers are different on these different copies that have been produced, so I just want to kind of alert you to that. MR. WEBB: Are you putting an exhibit
number on this, or is there already one on -MR. BECK: already an exhibit. MR. WEBB: (Nodding.) The writing on the Yes. It's Exhibit 1356. It's
MR. GODFREY:
left-hand side looks like it's not on the original. MR. BECK: Yeah, the writing up on the
right-hand corning is my handwriting. MR. GODFREY: And then -- and then the
writing on the left-hand side, not the initials, but the arrows, and that's added after the fact, too, and that's added during the course of litigation? MR. BECK: I think that's right, and I'll
agree to redact it if that's the case. MR. GODFREY: MR. BECK: Okay.
Okay?
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MR. GODFREY: stamp numbers in so it's -MR. NEATH: MR. GODFREY: to 21545.
You want to read the Bates
Yes. -- just as -- 21461
Oh, well, it looks like there's -MR. BECK: No. This is not a complete
MR. GODFREY: document, I guess. MR. BECK:
It's not a com -- I mean -Okay.
MR. GODFREY: MR. BECK: amendments. MR. GODFREY:
-- it -- it has multiple
So this is a couple of
selected pages from a longer document? MR. BECK: That's correct, and -- and
I'll try to go through this with the witness. MR. GODFREY: marked this way as 1356? MR. BECK: Correct. Okay. Thank you. Okay. But this has been
MR. GODFREY:
(Discussion off the record.) MR. BECK: The full document is 1356. All right. Well, then we
MR. GODFREY:
ought to give this a new number then, because it's -it's -- if it's less than the full document, I don't
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want -MR. BECK: Why don't we call it 1356A. That will be fine. I just
MR. GODFREY:
don't want someone thinking the witness saw the full document -MR. BECK: That's fine. -- when it's just --
MR. GODFREY: MR. BECK:
We'll call it 1356A. Okay. That's a document we
MR. GODFREY:
THE COURT REPORTER: need. MR. GODFREY:
Thank you.
(Exhibit No. 1356A marked.) Q. (By Mr. Beck) Okay. All right. Dr. Hayward,
you will see that this document that is marked as Exhibit 1356A is a Drilling -- or at least excerpts of a Drilling Contract for a semisubmersible drilling unit between -- the agreement's between Vastar and R&B Falcon. A. Q. Do you see that? Yes. And if I could direct your attention to the
page ending in the Bates Nos. 1464, and the "RECITALS," and -- and specifically the second full paragraph starting out, "Whereas this CONTRACT and the attached exhibits establishes the terms and conditions contained
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in this document entitled 'DRILLING CONTRACT' and the attached exhibits." A. Q. M-h'm, I do. And then you see the third exhibit is Exhibit Do you see that?
B-2, called "MATERIAL EQUIPMENT LIST"? A. Q. I do. So this document establishes the terms and
conditions between what was formerly Vastar and what was formerly R&B Falcon? A. Q. A. Q. A. Q. M-h'm. Is your answer "Yes"? Yes. Okay. My answer is "Yes." Now, if we can turn to the page beginning -Sorry.
or ending in 1507, and at the top it says "Exhibit B-2, MATERIAL EQUIPMENT LIST"? A. Q. Yep. And Section E pertains to "WELL CONTROL/SUBSEA Do you see that, sir?
EQUIPMENT." A. Q.
I do. And then if you go over, and -- and
specifically if you look at E2, it talks about the "Primary BOP Stack." A. I do. Do you see that?
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Q.
And then, if you go over to the page ending in
Bates Nos. 1537, you see it says, "Primary BOP Stack from top to bottom." A. Q. I see that. And you see that there are a number of items Do you see that?
on here in which the party acquiring the BOP and having the BOP built is saying, "Yes, we want this," "No, we don't want this." A. Q. I do. And, for example, you have the parties to this Do you see that?
agreement, and the parties requesting that this be built even specifying such things as the bore size, correct? A. I do. Could -- could I just ask a point of
clarification? Q. A. Sure. It's a -- was this a contract to specify the
construction of a rig, or to enter into a contract to use a rig and its associated equipment? clear what this contract is for. Q. I'm just not
Was it --
Well, I only know what the contract says.
This is a Drilling Contract between Vastar and R&B Falcon, and this is one of the attachments to the contract. A. Because the Drilling Con --
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Q. A.
Cameron is not a party to this. No. The Drilling Contract would normally be
with -- to engage a drilling rig that was already constructed. So I'm -- I'm -- what I'm not clear about
is whether this contract refers to construction or, you know, putting in place a long-term contract for utilization of a piece of equipment already built. Q. for you. Well, I -- I -- I can't answer your question My question to you, though, is, does this
document, Exhibit E-2, which is part of the material equipment list, specifically go through very precise terms of the primary BOP stack? A. Q. A. Q. A. It specifies the sort of BOP that was -Right. -- was required. And it's -I -- I -- I don't believe it's a -- a design
basis for a new BOP. Q. A. Q. Well, whether it is -It's specifying --- or not is for somebody to decide. But my
point is that each of these items on here -- or excuse me, strike that. Some of these items on here are very specific, are they not?
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A. Q. A. Q. correct? A. Q. A. Q.
They are.
Some of these --
For example, the -- the -Some of them are specific. -- the bore size specifies the inches,
Sorry.
Where are you now, please?
Sorry.
The page ending in 1537. (Reviewing document.) Yep.
The working pressure, the psi working pressure
is specified -A. Q. A. Q. Correct. -- is it not? Correct. And then if you look at the next page, under
the "RAM TYPE PREVENTERS," specifically talks about the bore size, correct? A. Q. A. Q. A. Q. It does. The working pressure, correct? It does. The stack configuration, correct? It is, that's correct. And then when you look at the ram locks, blind
shear rams, the number, and the number specified is one, one set of -A. M-h'm.
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Q. A. Q.
-- blind shear rams, correct? Yeah. And I think you've testified earlier that --
well, let me just ask you, just to make sure I'm right. Do you know when the first time BP specified it wanted two blind shear rams -A. Q. A. Q. A. Q. I don't. -- sets of blind shear rams -I don't. -- on any of its rigs? I don't. I don't, no.
And then we go to E.2.4, "STACK
CONFIGURATION," again, very specific, right? A. Q. Yes. And without going through each of these, it
even goes through the annular type preventer, correct? A. It doesn't actually have any description of an
annular type preventer. Q. A. Q. A. Q. A. Ah. Look at Page 1539. I am. And it says "Size," not applicable.
Size inch 18 and three-quarter inches. I'm sorry. I --
Do you see that? Sorry. I must be looking at a different --
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Q. A. E.3.2. Q. A. Q. A. Q. A. Q. A. Q.
Correct? I was looking at E.2.5. You're looking at
Correct. I apologize. And that is correct, is it not? Yes. Quantity, two of them, right? Correct. Working pressure, 10,000 psi? That's right. Correct. Correct?
And did you notice in here that in some
instances, it is specified that the product or a part of the product need not even be Cameron? A. No. It says equivalent -- Cameron or
equivalent. Q. A. Q. A. Right. So --
So I interpret it to say -Pardon me? I interpret this document to be the
specification of the piece of equipment the -- the contractor wished to employ. It's not a design
specification for the piece of equipment. Q. Well, would you -MR. BECK: And object to the answer as
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unresponsive. floor. Q.
There wasn't even a question on the
(By Mr. Beck) But my question is:
Would you
at least agree, Dr. Hayward, that your predecessor company that you acquired while you were part of the senior leadership was at least involved in specifically specifying the -- the type of BOP preventer it wanted and some of the component parts? A. I -- I would. (Discussion off the record.) MR. BECK: I don't understand. I'm
sorry, my colleague says that I referred to this -referred to the letter as 731. MR. ROBERTS: the reference? MR. BECK: It was the first document I It's 7031. What was
What was that?
referenced, the conversion of the VBR to the test ram. It's 7031. I think erroneously said 731. MR. ROBERTS: Q. Thank you.
(By Mr. Beck) You also testified before
Congress that the BOP failed, quote, "when it was activated," end of quote, on the drilling rig. Do you remember saying that? A. Q. I don't remember saying that. All right.
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A. Q. A. Q.
I'm sure I did if you have a record of it. Okay. I'm not going to dispute that. And -- and you're welcome to look at your
testimony -A. Q. A. Q. correct? A. Q. A. Q. A. Q. Correct. And you agree with it? I did. Had no reason to disagree with it? I don't have basis to disagree with it. Okay. Now, in fact, doesn't the Bly Report No, I'm sure --- if you'd like. I'm sure that's the case. You've told us you read the Bly Report,
say that the well sealed after the BOP was activated? A. Q. "The well sealed after the BOP was activated"? And let me refresh your recollection. This is
an excerpt from Exhibit 1, which is the Bly Report. It's just too big to mark other copies of it. A. Q. A. Q. M-h'm. And I specifically want to refer you to -Ah, okay. -- to Section 3.5 --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q.
Yep. -- which, for the record, is Page 123 of the The first sentence --
Bly Report. A. Q. A.
Yeah. -- reads -That's -- I've -- you jogged my memory. I
didn't understand what you meant when you said "seal." Q. A. Q. Okay. The BOP sealed around the drill pipe. Right. It says, quote: "The INVESTIGATION
TEAM believes that the BOP was closed (but did not fully seal) around the drill pipe at approximately 21:" -A. Q. Yeah. "42 hours and that the BOP fully sealed around
the drill pipe at approximately 21:47 hours." Correct? A. Q. That's what it says, yeah. All right. And you have no reason to disagree
with that? A. Q. I don't. Now, do you know a man by the name of
Fereidoun Abbassian? A. Q. I do not. Fereidoun Abbassian was an appointed to lead
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BP's Blowout Preventer Investigation Team, and he has testified that he was actually in the Head Office in London as an Executive Assistant in 2003. in the same building you were? A. Q. A. Q. For part of the time, that's correct. But you -- you've never met him? I don't -- if I have, I don't recall. Okay. Well, he -- he is a Ph.D. in He's still with BP. Would it be
Engineering. A. Q.
M-h'm. And he testified under oath within the last
few months that there was no indication of any flow out of the drill pipe at 2147, which I think you will agree was consistent with what the Bly Report says, correct? A. Q. Yeah, that's right. And you would have no reason to disagree with
what Dr. Abbassian testified? A. I have no basis to agree or disagree with
Dr. Abbassian. Q. A. All right. I'm certainly -- if that's what he said, then
that's what he believes and is -Q. Okay. All right. And -- and so based on what
we know today, after the blow -- the Bly Investigation, the Bly Report, what PhDs like Dr. Abbassian have
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testified to under oath, would you agree that the statement that you had made to Congress that the well failed to seal when activated is incorrect? MR. WEBB: question. A. I think what I was referring to is that Object to the form of the
despite the fact that the blowout preventer was activated and it may well have sealed around the drill pipe, it clearly did not seal the well. There was
still hydrocarbons flowing through -- from the well into the rig and ultimately into the seabed. Q. (By Mr. Beck) But you don't know why it didn't
seal the well? A. Q. A. well. Q. Well, if you were making the same statement -I don't know why it didn't seal the well. All right. But it is evident that it had not sealed the
if you were testifying before Congress today, would you still make the statement that whenever the BOP was first activated, it failed to seal the well? A. Q. is: It failed seal the well, yes. No, sir, that's not my question. My question
If you were testifying today before the United
States Congress, would you still testify that when the
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BOP was activated, it failed to seal the well? MR. WEBB: question. A. Well, I'm sorry, I must be missing something. Object to the form of the
I don't understand the question. Q. A. (By Mr. Beck) All right. Because as far as I -- I can -- I understand,
the BOP did fail to seal the well. Q. Well, if Dr. Abbassian has testified under
oath that the blowout preventer did, in fact, seal the well, you've told us you have no basis to disagree with that, correct? MR. WEBB: with it. A. Well, he said he didn't agree
That he's what he just testified. Can I -MR. BECK: I understand.
A.
I just need to -- I'm sorry, I'm not trying to I'm just trying to understand what you
be difficult.
mean by sealing the well, given that hydrocarbons continue to flow to surface. My -- my definition of
sealing the well is you prevent hydrocarbons flowing to surface, prevent hydrocarbons flowing through the blowout preventer. Q. (By Mr. Beck) Well, my definition of sealing Okay?
the well is no flow.
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A. Q.
(Indicating.) And my question to you is, if Dr. Abbassian
has testified that there was no flow out of the drill pipe at 2147, no flow, would you still tell Congress -A. Q. A. Q. If --- if you were testifying today -Well --- that when the BOP was activated, it failed
to seal the well? MR. WEBB: question. A. I -- my un -- I'm completely confused now by Objection to the form of the
my understanding of what occurred in this accident, frankly, because does that mean that Dr. Abbassian does not agree with the findings of the Bly Report? Q. (By Mr. Beck) Well, do you know, for example,
whether or not the flow was through the annulus? A. All I know is the findings of the Bly Report
which is -Q. A. What do you recall? -- which was that the -- the findings of the
Bly Report was that the flow was up the production casing and through the blowout preventer and likely through the drill pipe that was across the blowout preventer.
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Q. A.
And that -That's my understanding, and I have no -- I And I
have no basis to make any other understanding.
haven't seen Dr. Abbassian's Report, and I've not seen any analysis of the blowout preventer, so I -- I can't make an informed judgment. Q. A. All right. And I can't -- certainly can't make a decision
based on with respect -- so I can't make a decision based on this conversation about whether I agree or disagree with what I said in Congress -Q. A. Fair --- because it was based on what I understood
at the time and what I understood to be the case until you brought all this up in the last five minutes. Q. All right. Fair enough. Fair enough. Let's
move on to another subject. To kind of close it out, you don't know anything other than what's in the Bly Report, with respect to this -A. Q. A. Q. Well, that is the basis -Let me finish my question. I'm sorry, apologies. You don't know anything with respect to what
happened or why it happened other than what you've read
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in the Bly Report? A. Q. The basis of my knowledge is the Bly Report. All right. Now, there were a few documents
that I want to show you -- and by the way, you told us -- by -- did you ever read the Presidential Commission Report? A. I didn't -- I didn't read it in detail. I
read the press reports at the time.
I asked my PA to
print it, and I skimmed it, but I did not read it. Q. And you were asked earlier about the Chief
Counsel's Report, Chief Counsel to the National Committee on the BP Deepwater Horizon Oil Spill and Offshore Drilling? A. Q. I haven't read the Chief Counsel's Report. Did you -- has anybody ever advised you or did
you read a statement by the Chief Counsel, and I quote, "Hydrocarbons had entered the riser well before the crew attempted to activate the BP, and even a perfectly functioning BOP could not have prevented the explosions that killed 11 men on April 20th." Had you ever seen that statement before? A. press. Q. A. And do you agree with that? I don't have the basis for agreeing with it, I -- I think I saw it referred to in the
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because I wasn't part of the investigation. know. Q. All right.
I don't
You were asked about a number of
documents on Monday, and time does not allow me to go into a lot of them. But I want to hit a couple of
them, and then I want to ask you about another document. A. Q. M-h'm. With respect to your testimony about blowout
preventers, I'm sure you haven't had the opportunity to read BP's Well Control Manual. A. Q. A. Q. I'm afraid I haven't. Okay. M-h'm. -- okay? Volume 2 is entitled "Fundamentals And I'm not going to ask you, It is a multivolume set of documents -Is that --
of Well Control."
mercifully, about a -- a lot of these pages in the document, but I do want to just refer you to something in the document. to -MR. BECK: And by the way, this is And specifically, I want to refer you
Exhibit 2390 for the record. Q. (By Mr. Beck) And if you would look -- it's
toward the end, Doctor, it's the pages ending 0797. MR. GODFREY: 7 -- what was the last one?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. BECK: Q. A. Q.
0797.
(By Mr. Beck) Do you have that page? I do. BP's own Well Control Manual recognizes, does
it not, that over time, over the history of a blowout preventer, that there can be instances and circumstances where it will fail, correct? A. You are asking me to confirm that it says it
here or -Q. A. Q. Yes, sir. Yeah, I would -And look at Paragraph 1 entitled "General" on
the page "Fundamentals of Well Control," Paragraph 1? A. Q. All right. All right. Paragraph -- one second. Okay.
You see where BP's own Well
Control Manual specifically recognizes what it believes are common causes -A. Q. A. Q. M-h'm. -- of failure? I do. Correct? So this is an indication, is it not, that BP's own Well Control Manual recognizes that there can, in fact, over time be instances where a BOP could fail? MR. WEBB: Object to the form of the
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question. A. Q. It does. (By Mr. Beck) All right. And without going
into them, such things as "Casing wear," correct? A. Q. Correct. "Wellhead or BOP connections working loose
through vibration"? A. Q. A. Q. system"? A. Q. Correct. "Deterioration of seals in valves and BOPs"? Correct. "Leaks and faults occurring in control Is that correct? That's -- right. Let me show you what was previously marked as
Exhibit 6032. MR. GODFREY: MR. BECK: Are we done with 2390?
Yes. Thank you.
MR. GODFREY: Q.
(By Mr. Beck) And this was a document that was
marked earlier, Doctor. MR. BECK: notebooks here? THE COURT REPORTER: David? MR. BECK: 6032. What's the number, Is that in one of these
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THE COURT REPORTER: THE WITNESS: number? THE COURT REPORTER: THE WITNESS: Q. 32.
(Tendering.) Tab num -- Tab
Thank you.
6032.
(By Mr. Beck) It's entitled "RB FALCON
DEEPWATER HORIZON BOP" -A. Q. A. Q. A. Q. M-h'm. -- "ASSURANCE ANALYSIS." Yeah. You see that? I do. And I have a couple of questions to ask you And by the way, this was issued
about this document.
in March of 2001, was it not? A. Q. 3050. Yes. I refer you to page ending in Bates number I think down in the left corner it says,
"Issue" -A. Q. A. Q. A. Q. Yep. -- "Date"? Yep. Is that correct -Correct. -- March 2001?
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If you will just jump to the page ending in 53052, please, sir. MR. GODFREY: MR. BECK: A. Q. Yep. (By Mr. Beck) This is the "EXECUTIVE SUMMARY" 52?
Correct.
and this was what is called an interect -- "Integrated Project," correct? A. yes. Q. And it was intended "...to provide a high It's referred to as "Integrated Project Team,"
level of confidence that the BO system on the Deepwater Horizon is a reliable and safe system," right? A. Q. That -- that's correct. And in -- in -- involved in this effort was,
among others, BP, correct? A. Q. A. Q. Correct. Cameron, right? Correct. And you had other members of industry that
participated, right? A. Q. Correct. And then if you'll look at the second -- or
the third bullet point, it talked about "A risk assessment" of focusing on reliability being completed,
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right? A. Q. Correct. And then it talked about "Engineering and
operations personnel from RB Falcon, BP, Cameron, TSF and West identified 260 failure modes that could require pulling of the BOP or" the "LMRP," right? A. Q. Yes. And it talked about the -- the -- the type of
malfunctions that were identified during this Project; is that correct? A. Q. Correct. Would it be safe to say that at least BP was
aware that these type of failure modes can, in fact, occur with respect to a blowout preventer? MR. GODFREY: A. Object to the form.
I guess what they're identifying is potential
failure modes. Q. A. on. Q. A. Q. All right. And -(By Mr. Beck) Right. And to identify that these issues are focused
In the course of its utilization. And these are potential failure modes that BP,
among others, would be aware of? MR. GODFREY: Object to form.
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A. Q.
That's what it says here. (By Mr. Beck) All right. As well as other
members of the industry, right? A. Q. Correct. And the purpose of this Study was to identify
hazards with respect to blowout preventers, right? A. Q. I believe so, yes. Okay. Let me show you --
(Discussion off the record.) MR. BECK: Q. document. MR. BECK: for the record. Is there another one? short one. MR. WEBB: MR. BECK: MR. WEBB: it in this binder here? MR. BECK: It's -- it's going to be in -Here we go. I'll look over his shoulder. Okay. But is that one for him or is Dan, I think we're And it's on one of the CDs, Let's do this.
(By Mr. Beck) Let me hand you a -- a new
it's going to be -- I just handed him one. (Exhibit No. 6072 marked.) MR. BECK: MR. WEBB: I apologize -No problem.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. BECK: get it made. MR. WEBB:
-- we just didn't have time to
That's okay. 6072.
THE COURT REPORTER: MR. BECK:
What's the number? 6072. The witness has
THE COURT REPORTER: MR. WEBB: All right.
Exhibit 6072 in front of him. Q. (By Mr. Beck) Exhibit 6072 is a Report dated
May 12, 2009, entitled "Blow-out Prevention Equipment Reliability Joint Industry Project," correct? A. Q. A. Q. A. Q. Correct. And this was done by West Engineering, right? Yes. And are you familiar with West Engineering? I'm not. West Engineering -- or do you know whether
West Engineering has done any projects for BP? A. Q. I -- I'm sure they have. This Project was intended, was it not, to
examine the historical reliability of subsea well control systems in the Gulf of Mexico? A. Q. A. I don't know what this study was -Well --- designed to do, because I haven't seen it
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
to say -Q. A. Q. A. Q. Look specifically -This? -- on the page ending in 164. Okay. And do you see where it says, "The Blowout
Preventer Reliability study was conducted to examine the historical reliability of subsea well control systems operating in the Gulf of Mexico under the jurisdiction of the Mineral Management Service," correct? A. Yeah. It says the Study was -- "The goal of
the study was to understand BOP reliability and the extent that testing impacts that reliability." Q. A. Q. Where -- where does it say "testing"? It says it in the second sentence. Okay. Well, let -- let me -- just -- the And
first sentence says what the purpose is, correct?
that's to examine the historical reliability of subsea well control systems operating in the Gulf of Mexico, under the jurisdiction of the Mineral Management Service. A. And it then goes on -- that's correct. And it
then goes on to say, "The goal of the study was to understand" --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A.
All right. -- "BOP reliability and the extent that
testing impacts that reliability." Q. And the information upon which the Study in --
is based, incorporated data from 238 subsea wells in the Gulf of Mexico, right? A. Q. Correct. And that involved, I think it was at least 37
different semi -A. Q. Yes. -- submersible or drillship units during the
2004-2006 period, right? A. Q. That's what it says here. Okay. Now, refer to the page ending in Bates This reflects, does it not, that during
number 0200.
the period of the Study, which was a three-year period, from January 1, 2004, through December 31, 2006, there were a number of control system failures identified, right? A. Q. A. It says 89 failures. And then if you look in the second par -In the initial BOP test for the first time the
BOP was landed. Q. And then if you look in the second paragraph,
it says, "...39 were identified as control system
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
failures," correct? A. Q. Correct. And then "The next largest equipment category
of failures to the controls system failures was ram and annular failures..." right? A. (Reviewing document.) I'm just reading here. Correct. Q. And then the next category, most common, were
valve failures, right? A. Q. A. Q. Of which there were two. Is that correct? Correct. And the data included in this Study,
Dr. Hayward, were for a number -- from a number of industry sources, right? A. M-h'm, well, I -- I don't know, but I -- I
imagine that's the case. Q. And would you also believe that the -- this
Report was disseminated in the industry? A. industry. Q. And would you also expect that the results I would expect that it was disseminated in the
would have been made known to the industry? A. I would expect that they were made known to
the industry.
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Q.
All right.
So in looking at the last three
documents, which is BP's own Well Control Manual, which is Exhibit 2390, the R&B FALCON BOP ASSURANCE ANALYSIS in March of 2001, marked as Exhibit 6032, and then also what we've just marked as Exhibit 6072, this Blow-out Prevention Equipment Reliability Joint Industry Project, it shows, does it not, that at least during about a nine-year span, there are at least three studies that have been done to identify potential problems with BOPs? MR. WEBB: question. A. I think the -- you know, I haven't had a What Object to the form of the
chance to read what this study actually does.
it -- what it's identifying is failures that occur on -- let me just read it again -- immediately on landing the BOP. So has it identified failures, yes. Q. A. Q. (By Mr. Beck) All right. And -And that's all I'm asking, is it -- that there
are at least three studies, if you will -A. Q. A. So this is -Let me finish my question. Apologies.
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Q.
There are three studies, if you will, from
2000 through 2009 that identify potential problems with BOPs, correct? A. I think -MR. WEBB: form of the question. A. I think what this says was failures were I'm going to object to the
identified which occurred on the initial -- the initial BOP test. Q. A. (By Mr. Beck) All right. I.e., when it was being tested, to assure
it's -- it was going to operate or the first time the BOP was put in the water at the beginning of the well. And what people are doing is testing the reliability of it before they start using it. So I -- I just want to be clear, that's what this Report is. Q. Well, your own Well Control Manual isn't
limited to BOPs simply -A. Q. A. Of course, but this --- this -- beginning? Of course. But this Report is about failure
at initial deployment -Q. A. Well, let me --- on the first test on when the BOP was first
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put in the water. Q. Well, let me come at it this way: Of the
documents you have seen just during this deposition, would you agree that there have been many instances where someone in the industry or a consultant hired on behalf of the industry have identified potential problems with BOPs or potential common causes of BOP failures? MR. WEBB: question. A. I would agree that there have been problems Object to the form of the
identified with BOPs and common causes around those problems. Q. (By Mr. Beck) All right. And that was known
to the industry, correct? A. I believe that was known to the industry
because -Q. A. Okay. -- you told me, and I'm sure you're right,
that this was widely circulated. Q. Now, since the DEEPWATER HORIZON occurrence,
you have seen many documents related to that occurrence, have you not? A. Q. Yes, I have. And of all the documents that you have seen,
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have you seen any Cameron document that says that a BOP would never fail during its lifetime regardless of the circumstances in which it was asked to function? A. I haven't seen any Cameron doc -- documents
full stop. Q. Have you seen any Cameron document that refers
to its product as the ultimate fail-safe mechanism? A. stop. THE COURT REPORTER: Mr. Beck. Q. (By Mr. Beck) Let me change subjects, and I'm Microphone, I haven't seen any Cameron documents full
almost finished. I want to talk to you a little bit about OMS -A. Q. A. Q. M-h'm. -- the Operations Management System. Okay. I think you've told us earlier that OMS was
the cornerstone of achieving safe, reliable, and responsible operations in all of BP's activities, correct? A. Q. That's correct. And you also told us that OMS focused on
Process Safety?
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A. Q.
It did. Now, you testified this morning that while you
were CEO, "We focused extensively on Process Safety." And that's a true statement? A. Q. That's correct. Now, on April 20, 2010, BP was in the third
year of a five-year implementation of OMS, correct? A. Q. That's correct. So that as of the time of the DEEPWATER
HORIZON incident, you were three years into the implementation of OMS, correct? A. Q. Correct. Now, is it true that the risk of a deepwater
blowout was one of the highest risks for BP -A. Q. A. Q. That's true. -- in its business? That's correct. And was it also true that the risk of a
deepwater blowout in the Gulf of Mexico was a very serious and a high risk for the company? A. Q. That's correct. Do you recall offhand what the revenues
produced for the company by wells in the Gulf of Mexico were? MR. WEBB: For when? Any given year
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or -MR. BECK: A. Just -- just general.
I think it would be best just to talk about
barrels of production because revenue depends on the price -Q. A. Q. A. Q. Of course. Of course.
A lot of oil. A lot of oil? (Nodding.) So, again, so that the Judge and perhaps the
jury might know, the revenues that your wells that you owned or operated in the Gulf of Mexico produced for the company were very significant, were they not? A. Q. They were. Now, who was it in BP that made the decision
that OMS was going to be implemented over five years? A. It's not a decision. It's the reality of the
time it takes to design, build, and then implement change processes in a very large organization. Q. And who was it who concluded that that was all
going to take five years? A. It's not a conclusion. It's a fact. It's not
physically possible to do it any faster.
So it's not
a -- it's not a predetermined conclusion or a -determined by a person. It's a consequence of the time
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it takes to implement a program. Q. Is it your testimony that BP could not have
done that in less than five years? A. I think it's very difficult to conceive how it
could have been done in a shorter period of time. Q. No, sir, I didn't ask you if it was very Is it your testimony that it was impossible
difficult.
for BP to fully implement OMS in less than five years? MR. WEBB: question. A. Q. I don't know whether it was impossible. (By Mr. Beck) Well, weren't you the one that Object to the form of the
was in charge of this whole process? A. Q. A. Q. A. Q. I was. Was there any -And -Excuse me. Apologies. Was there any financial impediment to BP
implementing this process in less than five years? A. There was no financial impediment. It's not
about financial.
It's about how do you actually go
about putting in place new systems and processes in an organization of a hundred thousand people. unfortunately, that takes time. Un -- and,
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Q.
Any other reason why OMS was not fully
implemented in less than five years, other than what you just said? A. Q. No. Can you tell us who it was that decided the
order in which OMS was going to be implemented? A. What we were doing was transitioning from an
existing Process Safety Management System to a new one, and the process was to assess what we had, measure against OMS, and figure out the most appropriate way was minimizing the risk to the operation of transitioning from one to another. So that -- those
decisions were taken by the experts accountable for putting in place OMS. Q. A. Q. A. Who? So the -Who -- go ahead. Who?
So it was -- the overall implementation of OMS
across the company was under the guidance of Mark Bly. Q. A. Mark Bly? The -- the -- the person who designed much of
the system was a gentleman called John Sieg, who we recruited from DuPont. Q. A. I'm sorry, could you say that again? John Sieg, who we recruited from DuPont.
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Q. A. Q. A.
How do you spell that last name? S-i-e-g. (Nodding.) And the decision to proceed was a -- an
agreement between some combination of the Safety and Operations function and the business unit concerned. Q. And did you ever meet with Mark Bly or John
Sieg about the implementation, the rate of the implementation, how it was going to be implemented? A. Q. A. We discussed it on a monthly basis. And were you the ultimate decisionmaker? I wasn't the ultimate decisionmaker, because I What I
didn't have the knowledge to make the decision.
listened to was where the experts concluded was -- you know, what was the right pace to go and ensured that the resources that were necessary to make the implementation happened were available. Q. And the experts were Mark Bly, who was in
charge of implementation, correct? A. Q. A. Q. Mark Bly. Did I say John? You did. I'm sorry, Mark Bly. I apologize.
And then John Sieg, S-i-e-g? A. Correct.
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Q. A. Q.
He was the expert in charge of what? The design of the OMS system. And who was it that was the expert in charge
of deciding the order in which it was implemented? Would that be Mark Bly? A. Well, it wasn't the case of order. It was a
case of at what point was a business unit or operating entity sufficiently well-prepared to proceed with the implementation. Q. A. Um -So there was multiple implementa -- multiple
parallel implementation going on over a three-year period. Q. How long did it take BP to actually begin
implementation? A. I can't remember the precise date, but I --
I -- I think the first implementation occurred probably in the Fall of 2007, early 2008. honestly. THE COURT REPORTER: A. Q. A. Q. A. The cause of that. (By Mr. Beck) The fall of 2007, 2008? (Nodding.) Is that correct? Yeah. One minute. I can't recall,
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MR. BECK: tape.
Okay.
Why don't we change the
I've just got a few more minutes, and I'm done. THE WITNESS: Okay. Off the record at
THE VIDEOGRAPHER: 2:48 p.m. Ending Tape 18.
(Recess from 2:48 p.m. to 2:58 p.m.) THE VIDEOGRAPHER: 2:58 p.m., beginning Tape 19. Q. (By Mr. Beck) Dr. Hayward, as of April 20, On the record at
2010, what part of OMS was implemented? A. We were in the middle of companywide
implementation, so a lot of the -- in fact, all of the -- if I can call it the superstructure was in place. We had completed implementation at the
operating level in around 80 percent, I think, of the operations and were -- in the case of the Gulf of Mexico, I -- I think my recollection is we had begun that process in the Fall of 2009. And we, in fact,
were on target to complete implementation by the end of 2010, which would, in fact, have been in three years, not five. Q. The -- and just see if I understand what When you say that the OMS was
you're -- you're saying.
implemented 80 percent at the operating level, the operating level would include what?
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A.
The -- the operations down through to the So all of the -- you know, the
front line.
superstructure was complete, and in -- I think it was 80 percent of the operations that had gone through all the way down to the front line operations. Q. All right. When you say the "superstructure,"
you're talking about the plan? A. The -- the -- yeah, the -- the -- well, not --
not only the plan, but the systems and processes would make -- that would make a plan become alive. Q. All right. And then you said that you were on
target to implement OMS in the Gulf of Mexico in 2009? A. I -- my recollection is that we began the
process of cutover to OMS in the Fall of 2009. Q. A. Q. And -That's my recollection. And your recollection also is that you would
have completed that implementation in the Gulf of Mexico by the end of 2010? A. Q. That's correct. In -- in -- in other parts of the world, at
the operating level, was OMS fully implemented? A. Q. A. In some places, yes. What places? A relatively large number. Colombia, Egypt, I
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think, all of our refineries in the United States, our refineries in Europe and places like Australia. I'm
not -- I can't remember exactly the -- the list, but -but we -- we had made a lot of progress. Q. Were any other areas begun in 2009 other than
the Gulf of Mexico Operating -A. Q. A. Q. Yes, they were. -- Division? And what areas were those?
I can't recall, but we can certainly find out. All right. And, again, just so we're clear,
who was it who made the decision to begin implementation of the process in 2009 in the Gulf of Mexico? A. I -- I don't know who was actually involved in
the decision to begin the process, but I can imagine that it was the Business Unit Leader of the Gulf of Mexico, along with Mark Bly and people in his organization. Q. A. Q. A. Q. A. Q. And who was the Business Unit Leader? A gentleman called James Dupree. James Dupree? Correct. Where is he located? In Houston. Do you recall his title or position?
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A.
Strategic Performance Unit Leader. THE COURT REPORTER: THE WITNESS: Dupree. And what other areas Dupree?
Q.
(By Mr. Beck) All right.
would not have had OMS fully implemented until the end of 2010, other than the Gulf of Mexico? A. I can't remember the list, but, you know, we
have a list that's in many of these reports, that -that document -- if you refer to the thing called the Orange Book, it's very clear which areas are complete, which areas are in -- in transition. And I think by
the time we're talking about, everywhere was in transition. I don't think there was anywhere that had
not started the process. Q. All right. And just again so I'm clear, when
you're implementing OMS, do you do it by well site at a time? Do you do it by group? I mean, how -- how --
how do you specifically do it? A. You do it by operating activity. So
Drilling -- Drilling, broadly. broadly.
Production Operations,
And then within Production Operations, at an But I
indepen -- individual production facility.
believe that Drilling would have been done as Drilling, not rig by rig. Q. All right. It would have been done across the
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board simultaneously? A. Q. Yeah, essentially. And you testified earlier that this was -- one
of the ways it was implemented, that it was determined when the Business Unit was sufficiently prepared. determined when the Business Unit was sufficiently prepared to implement OMS? A. That was a -- as I said earlier, a combination Who
of the Safety and Operations Team, led by -- Safety and Operations Team, led by Mark Bly, and the Business Unit Team. Q. All right. I want to ask you two questions, I
and I'm going to ask you to assume something for me. know you're not going to agree with the assumption, so I'll alert you to that right now, okay? ask you anyway. MR. GODFREY: object? MR. BECK: Q. No. Should I preemptively But I want to
(By Mr. Beck) And -- and my question is this:
If OMS had been implemented over a three-year period instead of a five-year period, wouldn't there have been a better chance of avoiding the April 20, 2010 incident? MR. WEBB: Object to the form of the
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question. MR. GODFREY: A. Q. A. Same objection. I don't know.
The answer is I don't know.
(By Mr. Beck) There is certainly -Do you think -- excuse me. Do you think I But
haven't thought about that?
Of course, I have.
do -- can I sit here today and say one way or the other? Q. The answer is I can't. If it had been implemented by April 20, 2010,
by Drilling, which would have included the Gulf of Mexico, would you agree that at least there's the potential, Dr. Hayward, that this terrible catastrophe would have been averted? MR. GODFREY: MR. WEBB: question. A. Q. A. There's lots of assumptions in your question. (By Mr. Beck) (Nodding.) There -- on the basis of your assumptions, it Objection as to form.
is potentially possible that it may have been avoided. There are many other things that potentially possibly may have prevented the accident. Q. Not -- not -- and, again, I'm not saying But -- but -- but -- but, If OMS had
they're -- they're not.
again, to get back to my two questions:
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been implemented in the Gulf of Mexico before April 20, 2010, is there not the potential for having avoided this terrible catastrophe? MR. GODFREY: MR. WEBB: A. Q. A. Q. Objection, form.
Objection, form.
There is possible potential -(By Mr. Beck) All right. -- undoubtedly. All right. And, similarly, if OMS had been
implemented during a three-year period instead of a five-year period, there was at least the potential that the April 20, 2010 incident could have been avoided? MR. GODFREY: MR. WEBB: question. A. There's potential for all sorts of things in a Objection as to form.
theoretical world, which is the one we're talking about. Q. A. (By Mr. Beck) So would you agree -It wasn't the real world. It was a
theoretical world. Q. All right. So would you agree, then, that at
least there's the potential? MR. GODFREY: MR. WEBB: Object as to form.
Objection, form.
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A.
There's a potential for anything in a
theoretical world. Q. (By Mr. Beck) All right. By the way, just so
I'm clear, ha -- have you had any conversations with anybody at Cameron related to the DEEPWATER HORIZON? A. I've never had any conversations with anyone
at Cameron. Q. And you consider Cameron to be well-respected
in the industry? A. I consider them to be very well-respected in
the industry. Q. And then my last question to you: If the
Judge or Jury who decides this case determines that the safety culture at BP on April 20, 2010 was either poor or not what it should have been, who would have been responsible for that? MR. WEBB: question. MR. GODFREY: A. Q. answer. A. Q. A. That's another -- completely -I'm asking the question now. -- theoretical question. Same objection. Object to the form of the
I'll cross that bridge when I come to it. (By Mr. Beck) I'm not sure I understand your
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Q.
Well, there -- you know there's going to be a You
Judge and/or Jury who's going decide this case. understand that? A. Q. A. Q. That's one possible outcome. Okay. And --
There are, I believe, others. And you know that some of the positions that
BP has taken in this case are, in fact, disputed? A. Q. I do. And you understand that even though you may
testify a certain way, others may disagree with your testimony -- legitimately so. A. Q. I do. And so I'll ask my question again, that if You understand that?
whoever decides this case determines that the safety culture at BP was not what it should have been on April 20, 2010, my question to you is: responsible for that? MR. WEBB: And I object -Objection as to form. Who would have been
MR. GODFREY: MR. WEBB: question. A.
-- to the form of the
It would depend on what it is they find with If they find that there
respect to the safety culture.
was no leadership from the top, no systems and
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processes being implemented, no people being put in the right place, no people being recruited from the external world, then I would take that responsibility. I don't believe that was the case. MR. BECK: very much, sir. THE WITNESS: Thank you. Off the record at 3:09 That's all I have. Thank you
(Recess from 3:09 p.m. to 3:15 p.m.) MR. GODFREY: the record. THE VIDEOGRAPHER: All set? On the Are we ready to go back on
record at 3:15 p.m., beginning Tape 20. MR. ROBERTS: I've got a clarification. I just want to make sure Weatherford yesterday
donated its time to BP and today, as I understand it, has ceded all of its time to BP. We are all operating
under an obligation to report any formal or informal cooperation agreements or standdown agreements, so I don't want any -- another MOEX issue to come up. So
I'm -- I'm proceeding as if there is still adversity and there are no agreements between Weatherford and BP. And I do appreciate your hospitality, and I don't mean anything against you professionally. I just
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want to get that on the record and -- and get your agreement that that is the situation. MR. GODFREY: If you are asking me
whether or not BP and Weatherford have, what? MR. ROBERTS: Whether you have any formal
or informal standdown agreement, cooperation agreement, time arrangement, or deal. MR. GODFREY: Well, what we have is I've
asked Weatherford, as a matter of professional courtesy several weeks ago, whether they would cede me 45 minutes, and they agreed. MR. ROBERTS: That's -I have no -- no objection
to that as long as there is -MR. GODFREY: Thank you.
MR. ROBERTS: -- no overriding agreement, deal, standdown arrangement, or anything else in the works. The -- the MOEX thing kind of surprised all of But as
us, and I applaud you for working that out.
long as -- as there's true adversity amongst the parties, then the working arrangement and time allocation stands. MR. GODFREY: I'll make two observations.
One, two weeks ago or three weeks ago, Weatherford sued my client. stands. Two, that stand -- that complaint still
And, three, there is no Settlement Agreement
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that has been reached between Weatherford and BP, at least as far as I know. MR. ROBERTS: I -- I -- I -- I didn't ask What I'm asking about is
about a Settlement Agreement.
a formal or informal standdown arrangement. MR. GODFREY: Well, I'm sorry, Steve. I'm very well aware
I'm not going to comment further.
of the informal agreements among Halliburton, Transocean, and the PSC to blame BP in this, because I've seen it repeatedly of every deposition. MR. ROBERTS: MR. GODFREY: MR. ROBERTS: anything. I -- I -- I'd -I don't think I need --- be glad to disclose
I don't have an agreement with anyone. MR. GODFREY: Well, I'm going to proceed
with the deposition the way I want to proceed. MR. GODWIN: Rick, we -- you know, we --
we didn't need that sidebar remark about Halliburton. We have defended the depositions to the best of our ability, without trying to attack anyone. So I would
just ask you respectfully, save your self-serving remarks for somebody that cares, because I don't care to hear them. MR. GODFREY: the deposition. I'd like to proceed with
I've been very --
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MR. WEBB:
So would the witness. -- cautious and -- and
MR. GODFREY:
patient with everyone else here. MR. ROBERTS: objection. But let me raise my
If it turns out that there is some formal
or informal standdown, then I'm going to move to strike the deposition. MR. GODFREY: MR. ROBERTS: MR. GODFREY: You don't have a -Your portion of it. Well, I'm sorry,
Mr. Roberts, but that's not something that I think is provided for by the Rules. I'm going to proceed. I
have the agreement that I've reached with Mr. Lemoine. I've told you that Mr. Lemoine's client has sued my client. I've told you that as far as I know, we have
no Settlement Agreement with them, and I think I'm not obligated to go any further than that. MR. ROBERTS: on another day. Okay. We'll work that out
And I appreciate the hospitality; I
didn't mean to indicate otherwise. THE COURT REPORTER: Dan, your phone.
(Discussion off the record.) EXAMINATION QUESTIONS BY MR. GODFREY: Q. Dr. Hayward, good afternoon.
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A. Q.
Good afternoon. As you know, I'm Rick Godfrey. I represent
the company.
You're here with your personal counsel,
Mr. Webb, right? A. Q. Correct. I think I misspoke yesterday when I said I
wanted to confer with you one time as my client, because for much of last Summer, you and I spent some time together, as you recall. A. Q. We did, indeed. So we've known each other for some time. Where do you live, sir? A. Q. A. Q. A. I live in Sevenoaks, south of London. Are you married? I am. What's your wife do? She's working with a couple of non-Government
organizations, one a think tank, and another, I guess you'd call it a charity in the U.S. Q. A. Do you have children? I have a son of 20 who's at University,
finished his last second-year exam yesterday, and a -a daughter of 16, who is -- as I'm going through this, is doing French and Physics exams. So I probably got
the better part of the -- of the deal today.
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Q. A. Q. A. Q. A.
Of which country are you a citizen, sir? I'm a citizen of the U.K. United Kingdom? Correct. What is your educational background? I have a B.S.C. in Geology from the University
of Birmingham and a Ph.D. in Geology from the University of Edinburgh. Q. The -- I -- I think I have a layman's
understanding of what a Geologist does, but what -what does a Geologist in the petroleum industry do? What -A. Q. Tells drillers where to drill. I see. Is that what you did the first couple
of years in your job? A. For the first almost ten years, I was -- I was
trying to identify which basins were going to have hydrocarbons in them or trying to determine within a basin where was the best place to drill to find hydrocarbons. Q. And what, just in a few minutes, if you could,
tell us from the time you started working for BP or a Heritage B key -- BP company, through today, what your jobs basically entailed. A. I began my career as a rig Geologist in the
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North Sea, working a week offshore and a week in the office over a couple of years. And then I moved to
Paris and then China for a couple of years and then back to Scotland. And then I had a brief period in
London for about a year, as we discussed on Monday, in the role of an Executive Assistant. And then after that, I went to Colombia for about four years, where my daughter was born, and then to Venezuela. And then I returned to London in '97,
held a couple of roles in Exploration and Production, and then became the Group Treasurer in 2000, the CEO of Exploration and Production in 2003, and the Group CEO in 2007. Q. A. Q. Are you appearing here voluntarily today? I am. Are you currently a private citizen; that is,
someone not working for BP or BP PLC? A. Q. That's correct. All right. Let's -- I'd like to begin by And I'll
discussing with you the oil spill response.
discuss subsea containment secondly, but I'd like to get your perspective on the oil spill response; that is, from the time you learned that there had been an explosion on the rig, to the -- whatever you did or did not do with respect to responding to the spill, okay?
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A. Q.
(Nodding.) You testified on Monday that you learned of
the rig explosion in the early morning of April 21st, London time. A. Q. Do you recall that?
That's correct. And after you learned of the explosion, when
did you decide to go to Houston? A. I decided to go to Houston about two days
later, after the rig -- as the rig was sinking, in fact. Q. And when you went to Houston, for what purpose
did you go to Houston after -- you know, two days later? A. To -- to lead the response to what -- what was
clear at that time was going to be a very serious -- a seri -- a serious accident, or had been a serious accident. Q. In general terms, when you first went to
Houston, what -- what did you do in terms of either organizing or to lead the response? A. Well, really, two things. One, to ensure that
we had launched the -- to the best of our ability, the maximum surface response to the spill, to make certain that everyone understood that no resources were to be spared, the full power and resources of BP were at the
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disposal of those responding. And then secondly, to -- with the -- with the Subsea Technical Team, to conceive a plan of intervention to plug the well. Q. All right. Turn to -- I've handed you a Turn to Tab 1,
notebook, I think you have before you. please. A. Do you have that? I do. MR. GODFREY:
And, Kym, what's the next
exhibit number that we'll apply to this? THE COURT REPORTER: (Exhibit No. 6073 marked.) MR. GODFREY: Q. Thank you. 6073.
(By Mr. Godfrey) Placed before you,
Dr. Hayward, is Exhibit 6073, which is a press release dated April the 22nd, 2010, entitled "BP INITIATES RESPONSE TO GULF OF MEXICO OIL SPILL." that? A. Q. A. I do. Have you seen this document before? I certainly saw it at the time that it was put Do you see
out, I'm sure. Q. Looking at this document, does this document
refresh your recollection as to the nature of what BP's response had been to the spill as of April 22nd, 2010,
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which is the day that the -- the rig tragically sank and two days after this -- this accident, this casualty? What was the nature -- if you can summarize
BP's response as of April 22nd, 2010, in terms of the oil spill? A. By that time we had mobilized a flotilla of
vessels, 32 spill response vessels, including large storage barges, skimming capacity of 170,000 barrels a day. Storage capacity offshore of 120,000 barrels a The supply of more
day, with a further 175 on its way.
than a hundred-thousand gallons of dispersant and -and four aircraft to -- to -- to deploy. We had on --
on location 500,000 feet of boom, and it was expected to increase to a million feet of boom by the end of the day. Q. Now, the -- the Transocean rig, the DEEPWATER
HORIZON, it had diesel fuel on it, right? A. Q. It did. Did Transocean mount any type of oil pollution
response, to your knowledge? A. Q. Not to my knowledge, no. All right. Let's go to the next document It's Tab 2, please. And, Kym, we'd like to mark
which is in the book.
MR. GODFREY: this as Exhibit 6074.
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THE COURT REPORTER: (Exhibit No. 6074 marked.) Q.
(Nodding.)
(By Mr. Godfrey) Do you have that,
Dr. Hayward? A. Q. I do. This document is dated April 25th, 2010, and,
again, it -- it summarizes -- if you take a look at it, it summarizes the then state of the BP response to the oil spill. A. Q. Do you see that?
I do. First of all, the second page of the document Are
refers to the Marine Spill Response Corporation. you familiar with that corporation? A. Q. A. I am.
What is the Marine Spill Response Corporation? It's the not-for-profit organization that was
established by the oil industry post EXXON VALDEZ to deal with oil spills at sea, in the marine environment. Q. Is BP the only company that uses the Oil Spill
Response Corporation? A. The entire industry uses the Oil Spill
Response Corporation, and all of our major peers and competitors are partners in the Oil Spill Response Cor -- Corporation. Q. Now, it refers here in this document which
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we've marked as Exhibit 6074 that -- it quotes the CEO and President of the Marine Spill Response Corporation of saying that it had worked for many years with BP on drills and exercises. A. Q. Do you see that?
That's correct. Can you give us a general sense of the types
of drills and exercises, if you know, that BP had worked on previous to this -- this tragedy on April 20 and 22nd, with the Oil Spill Response Corporation -Marine Spill Response Corporation? A. We, on regular -- on a regular occurrence,
mounted both desktop and actual physical response practices, in essence, whereby we would deploy the -the equipment in -- in -- in essential training exercises. Q. If you turn to the first page of Exhibit 6074,
which is Tab 2 in the notebook, can you summarize for us, for the Judge or Jury, if there's ever a Jury in the case, what was the nature or scope of BP's response to the oil spill as of April 25th, 2010, five days after the -- the explosion and three days after the sinking of the rig? A. In the -- in the subsea, we were assisting We were preparing
Transocean on the blowout preventer.
to drill relief wells, was -- the first drilling rig
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was moving into position, and the second drilling rig was -- was on its way. And we had a very significant
response on the surface, 30 stoo -- 32 spill response vessels, skimmers, tugs, barges, and recovery vessels, five aircraft, and 100,000 gallons of dispersant, which at the time was a third of the world's available dispersant. Q. It refers here in the last paragraph, on the
first page of Exhibit 6074, to Houma, Louisiana, with field operations of about 500 people. referring to, if you know? A. The surface response was coordinated out of a Robert was the basis for the Houma was the operational base There was one in -- in What is that
number of centers. Unified Command.
essentially for Louisiana.
Mobile for Alabama, and Pensacola, ultimately, for Florida. And this is the 500 people that have been
assembled in Houma to coordinate the oil spill response. Q. Turn to Tab 3, please, sir. MR. GODFREY: Kym, we'll mark this, if
it's agreeable to you, as Exhibit 6075. (Exhibit No. 6075 marked.) Q. (By Mr. Godfrey) This is a document dated May
the 5th, 2010, "Update on Gulf of Mexico Oil Spill
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Response." sir? A.
I assume you've seen this document before,
Yeah.
I saw it at the time it was released,
I'm pretty certain. Q. All right. So it refers here on May 5th, 2010
to something which I think you discussed earlier this morning. I don't recall whether it was with Attorney
General Strange or with the counsel for The state of Louisiana, Mr. Kanner -- the 25 million block grants to each of the States of Louisiana, Alabama, Mississippi, and Florida. A. Q. I do. What's the background -- or what was the Do you see that?
reason for why BP gave $25 million in block grants to each of the States of Louisiana, Alabama, Mississippi, and Florida on or before May the 5th, 2010? A. The -- the foundation stone to the oil
still -- oil spill response for any of the States was something that was referred to as Area Contingency Plan. And we wanted to be absolutely certain that
resources -- that is to say, financial resources -were not in any way getting in the way of the rapid and effective deployment of the Area Contingency Plans. Q. Did -- as of this date, did Transocean, the
owner of the drilling rig DEEPWATER HORIZON -- had it
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given the States of Louisiana, Alabama, Mississippi, or Florida any money whatsoever to assist them in response to the spill? A. As of this date, BP was unique in responding
in any shape or form, and certainly -Q. A. Q. As --- in terms of providing grants to States. As of the time that you left BP as the CEO of
BP PLC, had you heard of Transocean giving any money of any type to the people of the State of Louisiana or Alabama, Mississippi, or Florida or to the Governments of those States, for that matter? A. Q. Not to my knowledge. All right. What about Anadarko? Had they
given any money, as a co-owner -- or co-operator of the well, I should say, 25 percent co-operator -- or co-owner of the well. Had Anadarko given any money, as
of the time you left as CEO from BP PLC, to any of the States of the Gulf Coast? MS. HERTZ: A. money. Q. please -MR. GODFREY: -- which, Kym, we'll mark (By Mr. Godfrey) Turn to Page -- Tab No. 4, Object to the form.
To my knowledge, Anadarko had not given any
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as Exhibit 6076, if that's agreeable. (Exhibit No. 6076 marked.) Q. (By Mr. Godfrey) This is a document dated May Do you have that, sir?
the 6th, 2010. A. Q. I do.
I assume you saw this on or about the date of
May 6th, 2010? A. Q. Correct. As of May 6th, 2010, does -- does Document
6076 -- does it summarize the -- the general nature of BP's response to the -- to the oil spill? A. people. Q. A. All right. Can you -Yes. Particularly, I think, in terms of
This says more than 11,000 people have
volunteered and more than 4,000 have already received training. Q. All right. Can you summarize with this
document, or based on your recollection as refreshed by this doculet -- document, what the state of BP's response had been as of May 6th, 2010 to the oil spill in the Gulf of Mexico? A. We had thrown everything at the response. We
had over 10,000 people, of which nearly half had been trained. We had deployed boom to protect over a
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hundred miles of shoreline.
And on this day, it says
here -- I clearly would not remember this, but we had carried out 12 flights over the spill and delivered 4 -- 34,000 gallons of dispersant, in addition to conducting in situ burning of oil on the surface. Q. Did, to your knowledge, Anadarko ever deploy
boom or pay for -- let's just strike that. What -- tell us what "boom" is, just so we're clear on the record. A. "Boom" is floating plastic baffles which are
used to prevent oil from contacting the shore in the near-shore environment. Q. To your knowledge or the best of your
knowledge, did Anadarko ever deploy bloom to try to -booms to try to protect the environment from the oil spill? MS. HERTZ: A. Q. No. (By Mr. Godfrey) Did Transocean ever deploy Object to form.
booms to try to protect the environment or the shoreline from the oil spill? A. Q. They did not. Turn to Tab 5, please -MR. GODFREY: as Exhibit 6077. -- which we'll mark, Kym,
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(Exhibit No. 6077 marked.) Q. (By Mr. Godfrey) This is dated July the 28th,
2010, it's another two-page document ending in Bates stamp Nos. 445 and 446. Do you recall -- if -- if you would take a moment to look at this document, sir, and refresh your recollection, and I'll have some questions about the total commitment that BP made in its actions up through July the 28th, okay? A. Q. (Nodding.) Now, on July the 28th, the oil was no longer Is that -- is that
flowing out of the Macondo Well. your understanding? A. Q. That's correct.
That's correct.
As of the end of the oil flowing out of the
Macondo Well in July 2010, what steps or what had been the nature of BP's response to cleaning the spill? A. We had deployed almost 4 million feet of boom,
we had 7,000 boats and 125 aircraft in the sky, and 4,700 people engaged in cleanup operations. Q. A. How much oil had you recovered from the water? We had recovered almost 35 million gallons of And they captured
oil and water, using skimmers. 826,000 barrels of oil.
We'd estimated that we'd
succeeded in burning off at the surface around
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11 million gallons. Q. Now, it refers in Document 6077, Exhibit 6077,
to compensating residents and businesses for losses. Do you see that? A. Q. I do. And as of this time, July the 28th, 2010,
approximately how much had BP spent to compensate individuals and businesses for claimed losses resulting from the spill? A. We had disbursed $256 million to more than We established a claims structure with
125,000 people.
37 field offices, 17 of them had foreign language capability to recognize the large number of, Vietnamese-speaking in particular, fishermen. Q. And --
How many people were working to pay claims
that were being made to BP under the -A. Q. A. There were --- Oil Pollution Act? I'm sorry. There were 1,550 people working on
pay claims, process claims in this facility. Q. And turn to the next page, sir. I'd like to
ask you about these, these other comments about supporting the Gulf Region, if I could. It says, on
the second page of Exhibit 6077, that the 555 million in grants have been given by BP to Louisiana,
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Mississippi, Alabama, and Florida. Do you see that? A. Q. States. A. Q. (Nodding.) What were the nature of the grants that were That's correct. Actually, it says the Governments of those
given by BP that total $555 million as of July the 28th, 2010, from BP to those four State Governments? A. There was a $25 million grant as I -- as we've
discussed to implement the Area Contingency Plans, and we added a further $25 million in the case of Florida given their length of the shoreline. We had made
$70 million available for state tourism and promotion, and we had set up a $360 million escrow account for the construction of berms in Louisiana. Q. A. Q. Is that for the barrier islands? That's correct. What about it then has another section here,
this document which is marked as Exhibit 6077, referring to restoring the environment. Do you see that? A. Q. I do. What does that refer to, sir?
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A.
We had established a research fund to study
the impact of the -- the spill and the response to the spill and were already taking very comprehensive samples. It says here three and a half thousand, 3,600
water samples analyzed with 300 water testing stations along the Gulf Coast. Q. As far as you know, has any other corporation
ever mounted such a response as quickly or as -- with the size of the massivity of the resources to an oil spill or to an environmental event that B -- than BP? A. I don't think any other corporation has
mounted a response of the scale and int -- and intensity that BP mounted last Summer. Q. Did BP set up a compensation fund for persons
who had claims, legitimate claims under Federal law? A. We established a compensation fund. We made
very early -- said early on that we would not stand behind the hundred million dollar cap. Q. A. Is that the OPA cap you're referring to? The OPA cap. And in the course of the Summer, we transitioned that fund to an independent ind -- an -an -- an individual who was independent to administer the fund. Q. Who was that?
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DEFENSE COUNSEL: A. Q. A. Q. That was --
Object to form.
(By Mr. Godfrey) Who was that individual? That was Ken Feinberg. Did -- and what was the size of the
compensation fund that BP established last Summer, in the Summer of 2010? A. The -- the fund that we finally agreed to
establish was $20 billion. Q. When you say "you finally agreed to establish
the fund," with whom did BP agree to establish the $20 billion fund? A. We -- we agreed to the -- the fund with the
White House, with President Obama and his Administration. Q. I see. Has, to your knowledge, Transocean
established a compensation fund? A. Q. Not to my knowledge. Has Transocean, to your knowledge, spent any
money to clean up the environment, the pollution? A. Q. Not to my knowledge. To your knowledge, has Transocean spent any
money to prevent the oil from spreading in the Gulf? A. Q. Not to my knowledge. To your knowledge, has Anadarko spent any
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money to prevent the oil from spreading in the Gulf? A. Q. Not to my knowledge. To your knowledge, has Anadarko set up a
compensation fund for persons claiming losses under OPA? MS. HERTZ: A. Q. Objection, form.
Not to my knowledge. (By Mr. Godfrey) Has Halliburton set up a
compensation fund for people claiming losses under OPA? MR. GODWIN: A. Q. Objection, form.
Not to -- not to my knowledge. (By Mr. Godfrey) Do you know whether or not
Halliburton spent any money to clean up or restore the environment of the Gulf? MR. GODWIN: A. Q. Objection, form.
Not to my knowledge. (By Mr. Godfrey) Now, the United States
Government, it spent a certain amount of money in connection with the oil spill as far as you know, right? A. Q. that. Do you know whether or not the United States Government billed BP for its oil spill response costs? Correct. Did the United States Government -- strike
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A.
BP was billed for all of the Coast Guard
response to the oil spill and all of the other agency responses to the oil spill. Q. Do you know whether or not, based on your
knowledge, whether or not BP paid or reimbursed the United States Government for its response costs? A. Q. A. Q. To my knowledge, they did. Thank you. To my belief. Let's -- let's change topics then. We've discussed part of what BP did, which was the response to the spill. subsea containment efforts. A. Q. effort"? A. It was the interventions that we were making M-h'm. Just, basically, what is a "subsea containment Now, let's discuss the
on the well to try and stop flow through -- stop the flow of the oil into the Gulf prior to having the relief valves in place, and those interventions -those containment efforts took various forms. Q. Were you involved, at least in a general sense
or some -- strike that. What was your involvement, generally speaking, in the intervention efforts, the subsea containment
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efforts? A. Well, my involvement was in determining, I So we
suppose, the strategy of the intervention.
agreed very early on, in the first two or three days, the way we would approach it is to pursue multiple potential options to intervene in parallel, to engineer them, to resource them, and to make them available in the fastest possible time, and to deploy them in the time sequence which was driven by their availability. So the easiest engineering options were those that were conducted first, and the more complex, more difficult engineering options were those would clearly take a longer time and were deployed later. Q. recall? A. The first intervention option was something What was the first intervention option, if you
called a cofferdam which had been used successfully -successfully by BP and the industry following Hurricane Katrina and -- and later Rita to contain leaking wells in shallow water, in water depths up to about 300 feet. Q. Prior to the cofferdam, do you know whether or
not there were any efforts to activate the BOP using ROVs? A. There was a period of over two weeks where
efforts were made to activate the BOPs using ROVs.
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Q.
And what two -- two-week period was that, if
you recall, Dr. Hayward? A. accident. It was from immediately following the I think there are ROVs in the water whilst And then
the rig was still on fire on the surface.
they were -- once, obviously, when -- when the rig sank, it was clearly a lot of turbulence in the water. It became impossible to see anything, so we couldn't use the ROVs for probably 12 hours. And soon as the
turbulence cleared, then the ROVs were on location, working on the BOP, trying to get the BOP to close. Q. And what was the -- how -- how -- can you
describe just briefly how the ROVs were trying to get the BOP to close and for what purpose? A. They were latching on to various valves on the
BOP to use hydraulic pressure to pump on the valves and try and get one or other of the rams in the BOP to shut. Q. And why was the attempt being made to get one
or other of the rams in the BOPs to shut? A. Because the well -MR. BECK: Object to form. Objection, form.
MR. ROBERTS: A.
The well was evidently flowing, and,
therefore, it meant that the BOP had not sealed the
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well. Q. (By Mr. Godfrey) What was the purpose, if you
know, of the ROV intervention with the BOP? A. Q. It was to close the BOP, to the seal the well. And if the ROV intervention with the BOP had
been successful, what would the result have been with respect to the flowing well? A. It would have shut the well in. It would have
stop flowing. Q. A. Q. Would it have stopped the oil spill? It would have stopped the oil spill. Was there any discussion at any point in time
about drilling relief wells? A. The relief wells were -- the first relief well
was initiated within a couple of days of the -- the accident, and the second relief well was initiated within a couple of weeks of the accident. Q. And were these -- describe briefly, if you What
can, how -- what it is to drill a relief well. does that mean -A. Q. A. It's to drill --- in layman's term?
Is to drill a well to -- to intersect the well
that was leaking the while it was blowing out in such a way that you can plug the well and seal it off. So, in
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essence, we had a -- if can you imagine a well in the middle, two relief wells targeting it from either side. Q. During this period of time -- that is, between
April 22nd and the time cofferdam was -- was used or implemented -- were you dealing at all with anyone from the United States Government? A. I was dealing some days every hour with My
someone from the United States Government.
principal contact after the first four or five days was Thad Allen, who was ultimately appointed as the incident -- Incident Commander for the -- for the accident and the response, and he and I talked many times most days. Q. What was the role of the Incident Commander in
the subsea containment efforts that BP was engaged in? A. He was the ultimate decisionmaker. We would
recommend to the Commander the interventions that we were intending to make, and he -- we needed his approval before we could go ahead. Q. A. Cofferdam -- did the cofferdam work? The cofferdam didn't work. It was -- it It was, of course, a
wasn't a surprise it didn't work.
great shame that it didn't, but it was accepted by many people, not everyone but many -- many people, including myself, thought that the likelihood of success was low,
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but it was worth trying because it was -- it was available and could be deployed. Q. Approximately when did cofferdam not work?
About what date? A. To my recollection, it was sometime in the
early, middle part of the 9th. Q. A. What was -- I'm sorry. It was the 8th or 9th of May, I think, I'm not sure.
something like that. Q.
Do you know some -- what -- what's something
called a RIT insertion tool is? A. That's something called the riser insertion
tool, which was designed to be inserted into the riser. The configuration on the seabed was a -- a wellhead with a 5,000 feet of riser trawled around the seafloor like a piece of spaghetti, and the oil was leaking from the end of the riser. And we designed something that
we could stick into the end of the riser in an attempt to produce the oil and gas to surface. Q. A. I -Q. A. Was it able to stop the well from flowing? It was able to produce oil and gas to surface Was that -- was the RIT used? It was used for a period of several weeks.
in variable volumes.
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Q.
After the riser insertion tool, what was the
next attempt that BP engaged in, if you recall, to shut the well in? A. The next effort was something that we referred
to as a top hat, which is -- was simply like an inverted cup, really, that was put over the -- the leak and allowed us to produce oil and gas to surface. And
if I remember, we -- we designed and built around ten of those various dimensions, shapes, and sizes. Ultimately I think only used one of them. Q. Was the top hat able to stop the oil from
flowing or just collect some of the oil coming out of the pipe? A. It was not able to -- it was neither able nor It was
designed to stop the well from flowing.
designed to contain -- produce oil to surface to the greatest extent possible. Q. Who was designing or working on all these --
these -- the riser insertion tool and the cofferdam and the top hat, who -- who was working on these things in Houston? A. It was a -- a Multidiscipline Engineering Team
lead by BP with input from various contractors, various others from -- from engineering and science input. And
it was being engineered and built on a sort of 24-hour
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basis. Q. A. What was top kill or -- and junk shot? The top kill and then junk shot was an attempt
to stop the flow of the well by pumping heavy mud at high rates into the well to stop the flow. When that
was not successful, what we tried to do was to bridge the flow through the blowout preventer by pumping various materials, which the drillers refer to as "junk," into the blowout preventer to try and create an impediment to the flow path of the hydrocarbons. If we
could do that, then we would have a reduced flow rate, and we could perhaps use the top kill to kill the well. Q. well? A. Q. I'm afraid they didn't. What was the reaction among the Engineering Did junk shot or top kill work to kill the
Team down in Houston when they -- the -- were you -first of all, were you in Houston at the time -A. Q. A. I was. -- of the top kill and junk shot? When we did the top kill, it was -- it was There was a -- it was a
analogous to a moon shot.
control room with a very similar set of displays and screens. A large number of Engineers intensely focused And when it became evident
on executing the operation.
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that it had failed, many of them were in tears, actually. Q. It was a very emotional time. When you say "a moon shot," have you by any
chance seen the movie Apollo 13? A. Q. I have. The Crisis Command Center, when you compare
that to the what I think -- many people in the United States have seen the movie -- what it was -- what it was like compared to the Crisis Command Center for the NASA event in 1970 or '69 versus the event last Summer in Houston? A. It was very analogous in terms of the -- the
structure, the display, the intensity of the effort, the commitment of people. I think I wasn't, of course,
part of the -- I only saw the film, but if the film was an accurate -- accurate portrayal, then what was going on on the third floor in West Lake in Houston was very comparable to what was shown in the Apollo 13 movie. Q. How many Engineers came to Houston to try
to -- try to work on this shutting in the well? A. We had a team of more than a thousand
Engineers and Scientists from -- from BP, from across the industry, and from all of the major science and engineering institutes in the United States. Q. When you say from "across the industry," did
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you have Engineers there from Exxon? A. I think we had Engineers from Exxon, from
Chevron, from Shell, from Conoco, from Total, from many of our major contractors. Q. Did anyone from Exxon say, "Hey, we've got
we've got a -- we've got a cofferdam or a top hat or a riser insertion tool. A. Just borrow ours"?
They didn't, because, of course, they didn't
have them. Q. Did Exxon have any equipment available to
offer to BP for any price that would have shut this well in before BP shut it in? MS. HERTZ: MR. ROBERTS: A. Q. A. Q. They did not. (By Mr. Godfrey) How do you know that? Because we asked them. Did Shell or Chevron or ConocoPhillips have Objection, form. Objection to form.
any equipment of any type available for any price to shut well in before BP did it? MR. ROBERTS: A. Objection, form.
There was no one in the industry who had
anything that we hadn't already acquired. Q. A. (By Mr. Godfrey) Did you ask them? We asked them.
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Q. A.
How was the well eventually shut in, sir? The well was eventually shut in with a --
something that we refer to as a capping stack, which is a -- in essence, a very large valve that was designed and engineered and -- and built and machined, was lowered onto the wellhead once it had been cleared of the debris, and it had a valving system on it that allowed us to progressively shut separate valves and ultimately to stop the flow. Q. Once the flow was stopped using the capping
stack, were there any discussions with anyone about whether that was something that should have been done? A. There was a very intense dialogue ongoing
between BP and the Government in the buildup to putting the capping stack on the well and for probably two or three weeks after the capping stack was put in place. There -- there was a strongly held view in Government -- in the Government in the -- amongst the -- some of their technical people that closing the capping stack would cause the well casing to fail, and we would get a breach of the well in the subsurface. BP's view of that was that we could measure very clearly what was going on in the well. If there
was any indication of that, we would know it from our measurement, and we'd be able to take the appropriate
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action.
The -MR. ROBERTS: Objection, for --
A.
The -MR. ROBERTS: Whoops.
A.
-- the outcome, of course, was that the well It became clear within 24 hours of
did have integrity.
putting the capping stack on that -- certainly to the BP Engineers, that the well had integrity. We had what
is referred to as a pressure buildup chart, which followed a completely normal pressure buildup trajectory. And it was clear to BP that the well had
integrity, the casing had integrity, and that there was no breach or flow into the subsurface. It took us some time to convince the Government that that was the case. MR. ROBERTS: Q. Objection, form.
(By Mr. Godfrey) What was the Government's
position as expressed to you with respect to the use of the capping stack? A. The Government didn't want us to put the
capping stack on in the first instance and then wanted us to remove it shortly after we put it on. Q. After the well stopped flowing, did the
Government of the United States ask you to consider removing the capping stack to let the oil flow back
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into the Gulf? A. Q. A. They did. And what did you say? I said I thought we had sufficient data to
give us comfort that that was not -- there was not an issue with the well and that we should keep the capping stack on. And at the end of the day, the view of the
BP Team and myself prevailed. Q. One more question: You referred to all these
vessels on the surface. A. Q. I do.
Do you recall that?
How many vessels were around relief wells that
were being drilled and on the surface in the immediate vicinity, do you know? A. There was of the order of 20 or 30 in very It was, perhaps, akin to -- I heard
close proximity.
someone describe it as a -- a sea of skyscrapers, all floating around and being held in position and not interfering with each other. It was a very complex
operation to manage the simultaneous operations on the surface. Q. Had anyone seen that before? Have you ever
seen that before? A. industry. I don't think it had ever been done in the
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Q.
Okay.
Let's change topics.
I'd like to
discuss a few -- a few topics -- a few questions about flow rate. Do you recall being asked some questions last Monday by Mr. Underhill from the United States about flow rate estimates? A. Q. I do. And do you recall saying in answer to one of Do you recall that?
his questions that there was no credible way at the time to measure flow rate, do you recall that? A. Q. I do. Can you explain what you meant by that, that
there's no credible way during -A. Q. A. What --- the crisis to measure flow rate? Well, what I meant was that to measure flow
rate you either need a -- a -- a dial, a measurement of the flow, or you need some engineering-based assessment of flow. What -- what we had was a videotape of a
plume of oil and gas emerging from the end of a riser with no way of calibrating how much was oil and how much was gas. We had no way of knowing what the --
what the real flow path was from the reservoir through three and a half miles of casing, through a damaged blowout preventer, and then along 5,000 feet of riser
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to the end of the riser.
And we weren't -- we -- we
had no real knowledge of what the -- what reservoir section was actually flowing. So if you took all of
those things together, it was very difficult to come up with any form of credible estimate as to what the flow rate was. And -- and as I think I said on Monday, I wasn't focused on the flow rate because it wasn't changing anything that we did with respect to the surface response or the subsea response. Q. Do you also re -- remember being asked some
questions by Mr. Sterbcow about top kill? A. Q. I do. And do you recall being asked whether the
failure of the top kill operations showed that the well was flowing more than 18,000 barrels at the time, and you -- do you recall that question? A. I do. And that was certainly one of the It wasn't the re -- the
reasons it could have failed.
view favored by the Government Scientists working with us. The favorite reason for the failure of the top
kill was that the casing was damaged, and we had pumped mud into the well, and then out of the casing into the formation. So, you know, whilst it -- it could have been
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an indication of flow rate, it could also have been an indication of many other things. And, as I say, the --
the view that was most favored by the Government Scientists was that it was a -- the casing was -- was broke, breached. Q. I'm going to switch topics again. I'm going
to ask you a few questions following up with some questions that Mr. Godwin asked you earlier today. Do you recall Mr. Godwin stating to you his view of what BP Engineer Greg Walz had testified to earlier? A. Q. I can barely recall it, I'm afraid. That's fair enough. It's been a long two
days, I understand. First, have you ever seen the Halliburton written Job Recommendations sent on the night of April the 18th, 2010 to BP's Engineers about pouring this cement job? A. I -MR. GODWIN: A. Q. Objection to form.
I have seen none of the Halliburton Reports. (By Mr. Godfrey) Have you seen any post-Job
Reports sent on April 20, April 23rd, or May 3rd from Halliburton about the success of the cement job that was poured?
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A. Q.
I have not. If Halliburton had an Engineer or Engineers
who thought that the cement job that they were pouring was dangerous, did -- would you, as the CEO of BP, expect them to call a halt and not pour the cement? MR. GODWIN: A. Object to form.
I would certainly hope that they would,
particularly given that there were clearly Halliburton people involved in running the operation. Q. A. Q. (By Mr. Godfrey) You mean on the rig? On the rig. Okay. You don't think Halliburton Engineers
would knowingly endanger their own people on the rig, do you? MR. GODWIN: A. Object to form.
I don't believe they would knowingly endanger
either their own people or other people. Q. safety. A. Q. (By Mr. Godfrey) Okay. You became CEO when? In 2000 -- early 2007. All right. I'd like you to turn to Tab 7, Let's talk about
please, which is a document we've given Exhibit No. 6078 to. MR. GODFREY: Kym? Thank you. 6078?
THE COURT REPORTER:
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MR. GODFREY: THE WITNESS:
Yes. Thank you.
(Exhibit No. 6078 marked.) Q. (By Mr. Godfrey) It's entitled "BP It's dated March 2009. Do you
Sustainability Review." have that? A. Q. A. I do.
What is a Sustainability Review, if you know? It's the nonfinancial report on BP, which --
which is produced every year, so it covers Safety, Environment, Government affairs, expectations of society, all of the nonfinancial reporting that a company is doing in the 21st Century. Q. And does B -- has BP produced -- or did BP
produce a Sustainability Review each of the three years that you were CEO? A. Q. They did. All right. And did the Sustainabil -- what
were -- what were you reporting in the Sustainability Review? A. What was the purpose of it? It was to report on our environmental
performance, our health performance, our safety performance, our societal performance, what we were doing with respect to community relations, what we were doing with respect to developing our own people.
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It's -- it's all of the things that you need to do to be a successful company that goes above and beyond financial reporting. Q. If you turn to the page that's Bates-stamped You see
No. 50 -- 570, it's the third page in, please.
the first question which says, "With so much of your focus on improving BP's performance, does this mean that the environment and your other sustainability commitments to shareholders are less important?" Do you see that question? A. Q. I do. And what was your answer with respect to
safety, if you can find it in that answer? A. Well, I first mentioned safety when I say we
measure our performance not only with financial notices, but also with data on safety, the environments and employees. Q. answer? A. "This reflects my top three priorities as What -- what was the next sentence of your
chief executive: safety, people and performance." Q. And when you came Chief Executive, did you --
in light of those three priorities, what did you do to focus on safety, if you recall? A. I did an enormous amount, actually. Firstly,
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of course, I made it clear it was -- it was the priority, and it set the agenda. But over and above
that, we created management processes at the top of the company, to measure and monitor and intervene in our safety performance. The Group Operating Risk Committee was one such system. We began the implementation of the
Operating Management System, which we've talked at length about in this deposition. We created new
standards for -- to govern the integrity of our operations, new standards to govern the control of work in our operations, so-called Integrity Management Standard and Control of Work Standard. We recruited extensively into our operations to ensure that we had the right people with the right skills doing the right things. We recruited
extensively into the Safety Leadership of the company from places which had a reputation for good safety, such as the nuclear industry such as DuPont, and areas of the petrochemical industry. Q. A. Who did you recruit from the nuclear industry? We recruited the Head of Engineering of BP
now, a guy called John Baxter, who had, prior to joining BP to set the engineering standards, had run the Dounreay Nuclear Plant in Northern England.
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Q.
And the Group Operations Risk Committee that
you created, what is that? A. It was the Committee that reviewed on a pretty In
well monthly basis the safety performance of BP.
much the same way as I would have a business review, we had a review of safety with each one of the Chief Executives of the different businesses. So the Group Operations Risk Committee comprised myself, the Head of E&P, Exploration & Production, the Head of Refining and Marketing, the Head of our Alternative Energy business, plus the right sort of functional skills and capabilities. So Mark
Bly, the Head of Safety and Operations attended, John Baxter, the Head of Engineering attended, and often John Sieg, the man who was given the task of implementing the Operating Management System across BP. Q. And did John Sieg -- was he the person you
recruited from DuPont? A. Q. A. That's correct. What was the forward agenda? The forward agenda was the agenda that I When I became the CEO, it had three
created for BP. components. operations.
The first component was safe reliable The second component was people, having
the right people, the right skills in the right place.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
And the third component was performance, ensuring that we had good business performance. Q. Now, several times you referred to on Monday
and then again a minute or so ago about recruiting people. But you also were asked a number of questions Do you recall
about whether or not you cut costs. that? A. Q. Yes.
And several times you attempted to explain in
answers that you were cutting costs and cutting staff above the operational level. A. Q. That's correct. What do you mean when you're saying you're Do you recall that?
cutting staff above the operational level? A. We were cutting layers of management,
management in various Head Offices and Corporate Centers around the world. So at the same time as we
were doing that, we were adding to the operations staff. We recruited thousands of Engineers into the
operations at the same time as we reduced and streamlined the -- the Head Office and the sort of management oversight functions. Q. A. What's SEEAC? SEEAC is the Safety Environment Ethics It's --
Assurance Committee.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A.
Do you participate in SEEAC? It's a Subcommittee of the main Board, and I
attended every SEEAC as -- not as a member of the SEEAC, but as a participant in the meeting. THE COURT REPORTER: MR. GODFREY: Five minutes.
Five minutes left total, or
five minutes left before the tape change? THE WITNESS: Must be tape change. Five minutes before
THE COURT REPORTER: the tape change. MR. GODFREY:
Thank you. You've got 20 minutes
THE VIDEOGRAPHER: left. MR. GODFREY: Okay.
I was going to say,
that's the fastest hour and 15 I've ever had. Q. (By Mr. Godfrey) How many times a year does
SEEAC meet, if you recall, during the time that you were CEO? A. It was -- on a typical year, it would be
probably six times, that sort of number. Q. A. Q. A. I see. I do. Who is Dwayne Wilson? He was the independent expert that we Do you know a man named Dwayne Wilson?
appointed following the recommendation of the Baker
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Panel. Q. A. Q. A. An independent expert to do what with -To --- respect to BP? -- oversee the implementation of new --
oversee implementation of a renewed focus on safety in our U.S. refineries. So he was, in essence, to oversee
the implementation of the Baker Panel recommendations in our U.S. refineries. Q. A. Q. A. How often did the GORC meet a year? The GORC met around once a month. And what was the purpose of the GORC meetings? The GORC meetings was to review the safety
performance, to review the progress we were making with respect to implementation of OMS, to review the audits that -- that the Safety Audit Group had conducted to assess safety perfor -- performance broadly and in detail, and to make interventions as necessary. Q. Did you just have meetings with Business
Managers, or did you ever go out into the field? A. I spent as much time as I sensibly could in I would try and visit an operation at Typically I'd spend a day in the
the operations.
least once a month.
operation and perhaps spend an hour with the Plant Manager before visiting the plant, spend five or six
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hours walking the plant, talking to the Operators, understanding what their concerns were, understanding how they were doing with their work systems and other safety-related issues. And then at the end of the -- at the end of that time, I -- I'd sit with the Plant Manager and his Team to review what it was I found. at least once a month. Q. What were the Engineering Technical Practices, I tried to do that
if you know? A. They were the standards by which any
engineering activity in BP was required to take place. Q. safety? A. It was a focus of mine. It was under the Was that a focus of yours in respect to
leadership of John Baxter, the person we'd recruited from the nuclear industry. He was tasked to put in
place the right set of engineering standards across BP's operations. Q. You mentioned earlier today when you were -Did you have Town
in questioning Town Hall meetings.
Hall meetings ever devoted to safety? A. I had Town Hall meetings in -- in some se --
some senses they -- some cases they were entirely devoted to safety. In other cases, safety was a part
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of the Town Hall agenda.
It was always the first part
of the Town Hall agenda, if there were other things to discuss. MR. GODFREY: time, Kym, to -- to stop? THE COURT REPORTER: before I die. MR. GODFREY: to happen. MR. WEBB: We want to avoid that. Off the record at 4:14 Okay. We don't want that (Coughing) Sure, Would this be a convenient
(Recess from 4:14 p.m. to 4:23 p.m.) MR. GODFREY: start, please. Thank you. THE VIDEOGRAPHER: 4:23 p.m., beginning Tape 21. Q. (By Mr. Godfrey) Dr. Hayward, could you turn On the record at Ready. We're ready to
to Tab No. 9 in the notebook I've placed before you, please. Do you have that, sir? A. Q. I do. What you have before you in Tab 9 is a copy of
Exhibit 6002 that was used with you the another day. Do you see that?
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A. Q.
That's correct. Now, the other day you were asked about one or
two pages in this document. Do you recall that? A. Q. I do. Let's take a look at Page 3 of Exhibit 6002.
Do you recall being asked any questions by counsel for the Plaintiffs the other day about Page 3? A. Q. I was not. What does Page 3 reflect in Exhibit 6002,
which is entitled, "Leading from the top," sir? A. It shows BP's improving safety performance
over the last 20 years. Q. A. Q. I see. Including the last several years?
Including the last several years. Page 4, what is that title of Exhibit --
Page 4 of Exhibit 6002, what is that entitled? A. H'm, actually it's entitled, "BP'S HSSE
performance." Q. A. And what does that show, sir? It shows recordable injuries falling over
time, the number of oil spills falling over time, the number of fatalities falling over time, and the number of major incidents falling over time. Q. And, of course, the one tragic exception here
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was 2005 where there's the Texas City, right? A. Q. Right. Go to Page 7 in Exhibit -- by the way, were
you asked any questions the other day by Plaintiffs' counsel about Page 4? A. Q. I wasn't. Go to Page 7, please, of Exhibit 2000 -- 6002. What's the title,
What is on Page 7 of this document? first of all, of Page 7? A. risk. Q. A. Q. That's for BP? For BP.
What's the title of it?
It's "Strategic model" for -- for safety and
And then, finally, sir, go to the last page,
the conclusion page, the summary page of Exhibit 6002, which is Page 11. Do you have that? A. Q. I do. Can you tell us what the summary points were
of this document and just read them into the record for us, the first several of them, on Page 11 of Exhibit 6002? A. It's "...about getting the" basic -- "basics It's "not just occupational Delivering --
right, consistently."
safety but also process safety."
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deliver -- pardon -- "developing and maintaining integrated and consistently delivered systems and processes which underpin learning and sharing; ensuring risks are owned and managed locally, in a sustainable way; developing well-trained, competent people and teams who have Pride in what they do; creating and sustaining a world class operating culture, supported by a few clear and well-understood values and behaviours and an environment of continuous performance improvement... And most of all, it's about leadership." Q. That's the entirety of what appears on that
Page 11, the summary of Exhibit 2000 -- 6002, right? A. Q. costs? A. Q. A. Q. There's nothing about costs on this page. It's all about safety, right? It is. Okay. If you turn, sir, to page -- to Tab That's correct. Is there anything on that page about cutting
No. 14, do you have that, sir? A. Q. I do. Do you recognize Tab 14 as Exhibit 6018 marked
the other day? A. Q. I do. Now, Tab 14 is marked and shown to you as how
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many pages in length, sir? A. Q. It's two or three with the cover. Right. Turn to Tab 15, which I'd like to mark
for the record as 6018A. (Exhibit No. 6018A marked.) Q. (By Mr. Godfrey) Have you seen this document
before, sir? A. Q. I haven't. Okay. Is the cover page or the second page of
Tab thousand -- strike that. Is the first color page, Page 2 of Exhibit 6018, the same as 6018A? A. Q. It is. Go to Page 21 of Exhibit 6018 and compare that Are they the same?
to Page 21 of 6018-A. A. Q. They are.
Go to the last page of Exhibit 6018 as shown
to you, which is marked as Page 25 of Exhibit 6018A. Do you have that? A. Q. I do. Is 6018 that you were shown the complete
document, or is it 6018A which is the complete document? A. 6018A is the complete document, and the first
document is three slides or three viewgraphs from a
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53-page pack. Q. All right. So let's look at 6018A, the Turn to Page 17, please.
complete document.
Do you have that? A. Q. I do, at 17. Yeah, 17. It says, "2010 Collective
Priorities Continued"? A. Q. It does. And what does it say with respect to
implementing OMS? A. Q. A. Q. 6018A. A. It says, "Implement OMS, close gaps 1Q." 1Q of 2010? Yep. Turn to page to 20 of the document, please, What's the title of Page 20? "Drilling excellence, driving" -- "driving
consistency through standardization." Q. costs? A. It says nothing about costs. It says about Does it say anything on Page 20 about cutting
equipment standardization, Engineering procedures guides, and operating Engineering guidelines. Q. I see. To understand the document, that is
Exhibits 6018 and 6018A, can you look at a couple of pages, or should you read the entire document for
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context? A. I think it's important that you read the
entire document for context. Q. Take a look at Page 38 of Exhibit 6018A. Do
you have that? A. Q. Mexico." A. Q. I do. It says at the top, "No. 1 in the Gulf of Do you see that? I do. And what are some of the objectives listed on
the No. 1 in the Gulf of Mexico? A. Top quartile HSE performance, largest
producer, well objectives are clearly achieved, rely -reliability of wells, productivity of wells. Q. And what is the big bullet at the top? Does
it say, "It's not just days or 10,000K or days completion"? A. Q. It does. It refers to things like top quartile HSSE
performance and reliability, among other things, right? A. Q. notebook. A. Q. It does. Okay. Turn to Tab 16, please, in the
Do you have Tab 16? I do. All right. This is entitled, "Gulf of
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Mexico... Drilling and Completions, The Way We Work"? A. Q. It is. Do you recall the suggestion made on Monday
that on April 1st, 2009, as reflected in 6019, BP had a plan to have HSSE Managers out on the rigs in the Gulf of Mexico. A. Q. Do you recall that?
I do. And then do you recall the reference to your
speech at the Annual General Meeting a week or so later, which is found in Tab 11, April 16th, 2009. Do you see that? A. Q. I do. All right. Do you recall a suggestion made
that after your speech, that's when BP decided to get rid of the HSSE Managers to cut costs? that suggestion? A. Q. I recall that suggestion. When was the plan to have HSSE Managers Do you recall
issued, which is reflected in Exhibit 6019, was it issued and approved after your speech or before your speech? A. Q. please. It was issued and approved after my speech. All right. Let's take a look at Tab No. 17,
This is Exhibit 6020, marked the other day. Do you have that?
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A. Q.
I do. Now, this is the organizational change that
you had not seen the other day with respect to the HSSE organization in the Gulf. A. Q. That's correct. And looking at the first two bullet points, Do you recall that?
does that explain, at least as far as you can tell, the reasons for why there was a change with respect to HSSE Managers out on the rigs? A. It says: It seems a very credible basis for the change. "D&C has reached the place in our HSSE
journey where the Drilling Contractors must take full responsibility for HSSE on their rigs, while BP retains accountability" for "verification. There are currently
duplicate HSSE roles on the MODU rigs and triple redundant HSSE" role -- "roles on BP owned facilities..." Q. please. Turn to the second page of the Exhibit 6020, Was it your understanding, after reviewing
this document, that -- well, what was your understanding with respect to HSSE advisors? Would
there still be HSSE advisors by BP out on the rigs? A. It says on the first two bullets here that
there will be full-time Field HSSE Advisors. Q. Okay. The final document, since I'm running
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out of time, turn to Tab 18.
It's Exhibit 1351.
Do
you recall being shown this the other day? A. Q. I do. Do you recall being shown on the second page,
which is Bates stamp No. 6378 toward the bottom, where someone from Transocean, someone unidentified person, was complaining that it would be nice to have a BP HSSE advisor onboard? A. Q. I do. First of all, you've never seen this document
prior to being shown it the other day, right? A. Q. I had not. All right. So before we get to the comments
on the page, the second page, let's get to the first comments, the very first paragraph of comments on the first page. Do you see that? A. Q. I do. The first question was, quote: "How do you
think our senior management visits could be more effective? Duration, frequency, structured meetings?
What is it the guys would like to hear/see" -A. Q. "Visit" --- "when the VIP's visit?" Do you see that?
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A.
It says:
"Visits are fine as long as they Too many times are doom and
have substance.
gloom...talking about all the incidents we are having throughout the fleet." Q. Do you understand, looking at this -MR. ROBERTS: question and the answer. Q. (By Mr. Godfrey) Do you understand, looking at Objection to form to the
this document, that the first complaint by this unidentified Transocean was that they didn't like to have safety visits talking about other safety incidents in the fleet? A. That is what -MR. ROBERTS: A. Q. Objection, form.
That is what this seems to imply. (By Mr. Godfrey) All right. Let's take a look
at second question on the first page that you weren't shown the other day. Do you see where it says, quote: With a TOI audit one
"Audits have become overwhelming.
week and BP doing the exact same audit the next week"? Do you see that? MR. ROBERTS: A. Q. Yes. (By Mr. Godfrey) Do you see where it says: Objection, form.
"Weekly BP HSE visits" during -- "doing their audits"?
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MR. ROBERTS: A. Q. I do.
Objection, form.
(By Mr. Godfrey) So the person that you were
shown that was complaining about the BP HSE Rep no longer being onboard 24/7, someone is complaining -maybe it's the same person, maybe someone not -- that there are too many gloom-and-doom meetings about safety incidents and that there are too many safety audits. Is that how you understand this? A. That's what this -MS. HERTZ: MR. ROBERTS: A. Q. Objection, form. Objection, form.
That is what this document says. (By Mr. Godfrey) All right. MR. GODFREY: How many more minutes do I
have? THE VIDEOGRAPHER: MR. GODFREY: very much time. Q. (By Mr. Godfrey) Dr. Hayward, I have a lot (Indicating.) Well, that's not
Three?
more questions I could ask you, but I'm unfortunately limited by the amount of time allotted. So I'd like
to, if I could, turn to Tab 13, which is the BP Sustainability Report for the Year 2009. And the very
first -- not the very first cover page, but the page --
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and this is dated April 15th, 2010, the very first printed page has on the top "A Systemic Approach," right? A. Q. page? It does. Can you read, please, what you wrote in that And I think that will take our three minutes,
which is all I have time for, unfortunately. A. "BP constantly seeks to improve its safety
performance through the procedures, process, and training programs that we implement in pursuit of our goal of no accidents, no harm to people, and no damage to the environment. Our commitment to safe, reliable,
and responsible operations starts with the Group Chief Executive, Tony Hayward, and his leadership Team, a commitment that filters down through the organization is regularly communicated to all staff. Safety
performance is a regular focus of the Group Chief Executive's formal communications such as BP quarterly results, and in less formal communications such as his regular town halls with BP staff. BP's leadership has
continued to reinforce the importance of safety when undertaking regular site visits to BP facilities around the world and from all parts of the business. proud of BP's 2009 safety performance. I'm
It reflects a
sustained effort across all of our operations over many
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years." Q. During the time that you were CEO of BP, PLC,
did you do your level, utmost best to focus on safety and to focus the organization on safety? A. Q. I did. Did you ever make a decision, from your
perspective, where you were cutting costs at the expense of safety? A. Q. I did not. When you said the other day that you'd hired
thousands of Engineers, for what purpose did you hire thousands of Engineers? A. reliable. Q. A. Is that the reason why you hired John Baxter? That's the reason I hired John Baxter. That's To make our operations safer and more
the reason I hired John Sieg.
That's the reasons those
beneath me hired many thousands of other people into our operations over that period of time. MR. GODFREY: very patient with us. Dr. Hayward, you've been
I know it's a long process, and
I very much appreciate your willingness to come voluntarily before us to give your testimony. I -- I have many more questions, but my time is not -- is up, so I thank you very much, sir.
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THE WITNESS:
Thank you. Off the record at
(Recess from 4:38 p.m. to 4:42 p.m.) MR. CUNNINGHAM: THE VIDEOGRAPHER: I'm ready. All set?
On the record at 4:42 p.m., beginning Tape 22. REDIRECT EXAMINATION QUESTIONS BY MR. CUNNINGHAM: Q. Dr. Hayward, you've briefly described the
Apollo Crisis Command Center, do you recall that? A. I -- yeah, but I briefly described the Houston
Crisis Center. Q. Okay. Is that -- is that the correct
terminology for it -A. Q. A. Q. A. Q. That's correct. -- the Houston Crisis Center? Correct. Located in Houston, obviously? In West Lake Houston, yeah. Okay. Would you describe the room, what it
consisted of and what was-A. Q. A. Well --- in it? It -- it con -- has many rooms to it. There
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were -- it -- it covers many thousands of square feet, I don't know exactly how many, on one level. And there
were rooms set up for oversight of the ROV Operations. There was a room set up for Simultaneous Operations. There was a room set up for the Drilling Operations. There was a room set up for the Containment Operations, a sort of engineering design of the Containment Operations. Operation. There was a separate room for the Top Kill It was -- you know, there were -- at the
peak, there were almost a thousand Engineers and scientists, operating in that Center. Q. I think what I heard you describe was the --
the room set up for Drilling Operations for the relief well. A. What -- what did that consist of? It was where the relief wells were -- were
being planned from. Q. Is it where monitoring of the relief wells was
conducted? A. There was some monitoring of the relief wells
going on there, I believe, yes. Q. Well, if you could describe the room itself.
Is -- is it a room with a lot of Engineers and a lot of monitors? A. Q. It's a room with Engineers and monitors, yeah. Okay. 24-hour operation?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
It was a -- a 24-hour operation, by
definition. Q. And it was compared, for those of us who have
never seen such a room, to what we might have seen in the Apollo Crisis Command Center, that type of room -A. Q. A. Q. Absolutely --- correct? Yes. All right. And this is what was set up after
the blowout to monitor the drilling operations of the relief wells -A. Q. A. Q. A. Well --- to try to stop --- it was --- the flow of oil, correct? It wasn't set up to monitor the drilling It was set up to monitor all of the
operations.
intervention activity that was taking place. Q. A. Well, the po -There was a room that had Drilling. There was
another room that had Simultaneous Operations, all of that sort of thing. Q. Right. But I'm talking about the one that was You've described that
set up to monitor drilling.
accurately thus far, haven't you?
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A.
What was your -- what do -- how do you believe
I described it? Q. I thought you described it as a room full of
Engineers and monitors, or with Engineers and monitors -A. Q. I --- that operated a 24-hour day it -- a day --
24 hours a day to monitor the Drilling Operations. A. monitors. Q. All right. And the room you're describing was I had a room of Drilling Engineers and
set up after the blowout? A. Q. A. Q. It was set up --- right? -- as part of the crisis response. All right. I want to talk about the Command
Center for Drilling that you had set up to prevent a blowout in the Gulf of Mexico for a minute, all right? Tell us where that room was located. A. I'm not aware that -MR. GODFREY: A. Objection as to form.
I'm not aware where that room was, I'm afraid.
I don't know what was in place prior to the accident. I was only in Houston post the accident. Q. (By Mr. Cunningham) Have you ever been in any
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room that you could characterize as a Command Center, used for the purpose of monitoring offshore drilling to prevent the very kind of blowout we had -A. Q. A. A --- on the 20th? There are drilling -- drilling centers that
provide oversight of Drilling Operations. Q. I'm talking about the oversight of the Have you ever
Drilling Operations on the Macondo Well. been in that room? A. Q. A. Q. No, I have not. Have you ever seen that room? I have not.
Do you know that it has been decide --
described as about the size of a closet? MR. GODFREY: A. Q. Objection as to form.
I was not aware of that. (By Mr. Cunningham) Not aware of that? Do you
know that it was closed on weekends? A. As I said, I haven't been to it, and I'm not
aware of it. Q. You've described deepwater drilling as similar
to or comparable to exploring out of -- outer space, haven't you? A. I've made that analogy --
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Q. A. Q.
All right. -- yes. And so BP, the Apollo Crisis Center that it
had for monitoring the outer space that was being explored at the time of the Macondo incident, was the size of a closet and was closed on weekends. MR. WEBB: Q. Object to the form.
(By Mr. Cunningham) You didn't know that? MR. WEBB: Object to the form.
A. Q.
I wasn't aware of the Drilling Operations. (By Mr. Cunningham) We've talked a good deal
about BP, and I want to be sure that there's no question about what exactly we're referring to when we use the term "BP." This is Tab 7 from the previous CD.
(Exhibit No. 6079 marked.) MR. GODFREY: marked 6079? MR. CUNNINGHAM: it. MR. GODFREY: Q. 6079. Okay. Fine. No. I'm just marking Has it -- has this been
(By Mr. Cunningham) I will hand you Exhibit Just for purposes of clarity, if you'll turn to Do you have
the page marked 2 at the bottom left. that? A. I do.
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Q.
These are "Miscellaneous terms," and below
that it says, "In this document, unless the context otherwise requires, the following terms shall have the meaning set out below." Do you see that? A. Q. I do. And does it define "BP, BP Group or the
group," any of those three terms, as "BP p.l.c. and its subsidiaries"? A. Q. That's what it says. All right. And then on the right, does it An entity that is
define "Subsidiary" as follows: controlled by the BP group.
Control is the power to
govern the financial and operating policies of an entity so as to obtain the benefits from its activities." Is that how a subsidiary is defined? A. Q. That's what it says. All right. And is that an accurate
definition? A. Q. A. Q. A. I'm sure it is an accurate -So it's a --- definition. -- BP document, isn't it? I -- I wasn't the author of it, but it -- I'm
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sure it's an accurate definition. Q. Now, you mentioned in your earlier testimony
that the Bly Investigation had concluded that there were eight causes of the -- of the blowout, correct? A. Q. That's correct. And you said, "We" -- and I think I will --
I -- I'm quoting you correctly, you can correct me if I'm not -- "We had responsibility for part of one of them." A. correct. Q. All right. What part of that "one" did BP Half? A third? Two-thirds? Is that what you said? In terms of the direct cause, I think that's
have responsibility for? MR. GODFREY: Q. A.
(By Mr. Cunningham) How much? The cause that I was referring to, as I'm
certain you're aware, was the interpretation of the negative pressure test. And my understanding is that
there were three people involved in that decision, two from Transocean and one from BP. Q. Okay. So you were referring to a one-third
responsibility for one of the eight causes of the blowout? A. I didn't -MR. GODFREY: Objection --
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MR. WEBB: Q.
Objection, form.
(By Mr. Cunningham) Correct? MR. GODFREY: Objection --
A.
-- I wasn't referring -MR. GODFREY: -- as to form. I said it was BP was
A.
-- to that at all.
involved in that decision with two other people. Q. A. (By Mr. Cunningham) What -That doesn't imply a third -- the world
generally doesn't work like that -Q. A. Q. A. Q. All right. -- it is --- what --- it is not divided by fractions. -- what part of the one of the eight that you Well, what --
said BP had responsibility for, what part of it? A. decision. Q. A. Q. A. Q. Half of it? A part of it. We were involved -Part of it. We were involved in that
Just a part of it. We -You can't -- you can't say whether it was a
half, a third, two-thirds or -A. I can --
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Q. A. Q.
-- what it was? -- say we were clearly party to that decision. All right. Well, however you break it up,
that means that you believe and BP believes that 96, 97 percent of the causes of the blowout somebody else is responsible for; is that right? MR. WEBB: question. A. Based on the Report, the people taking Objection to the form of the
decisions around the individual causes of the Reports, there was direct BP involvement in the negative pressure test. There was not direct -- direct BP
involvement in the design of the cement or the pumping of the cement. There -- there wasn't direct BP There
involvement in the well control procedures.
wasn't direct BP involvement in monitoring the mud system. MR. GODWIN: A. Q. Object -- object to form.
That -- that is the point I was making. (By Mr. Cunningham) So out of the eight causes
of the blowout, if you had responsibility for part of one of them, you had responsibility for 5 percent or less of what caused the blowout, correct? A. That's not -MR. WEBB: Object to the form of the
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question. Q. A. Q. A. Q. A. Q. (By Mr. Cunningham) Is my math wrong? Yeah, I think so. All right. It's not --- do it --- I -- I -- I'm afraid --- you do the math. You've got a Ph.D. You Well, do --
probably -A. Q. Well, I --- could a lot quicker than -MR. WEBB: question. A. I -- I don't do maths on that sort of It's not what maths is designed Object to the form of the
analysis, I'm afraid. to do. Q.
(By Mr. Cunningham) Well, you're the one that
said -- not me, you're the one that said "We had responsibility for part of one of the eight causes." And I'm trying to determine what part of the total causes you accept responsibility for at BP. percent, 10 percent, 2 percent, 1 percent? MR. WEBB: A. Well, I -MR. WEBB: -- answered. Objection. Is it 5 What is it?
Asked and --
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q.
-- don't have an answer to that question. (By Mr. Cunningham) You -- you mean, you don't
want to answer -A. Q. A. No --- the question? -- I don't have -MR. WEBB: A. -- an answer. MR. WEBB: Q. -- asked and answered -Objection --
(By Mr. Cunningham) You don't have an answer? MR. WEBB: -- four times.
Q. answer? A. metric.
(By Mr. Cunningham) Why do you not have an
Because I don't know how to calculate that I don't know what -- on what basis you would
calculate that metric. Q. You also testified earlier that you and the
top leadership at BP did not monitor Drilling Operations because BP drills hundreds of wells every year. A. Did I hear that correctly? What -MR. GODFREY: A. Objection as to form.
-- what I said was that I did not receive
daily or weekly reports of drilling operations, because it's not what a Chief Executive does.
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Q.
So you -- you
did say that you and the top leadership did not monitor Drilling Operations, because BP drills hundreds of wells every year? A. Q. That's not what I said. I said --
So you do monitor drilling operations? MR. GODFREY: Objection as to form.
A.
What I said was that we -- I nor my immediate
Team monitored Drilling Operations on a week-to-week basis, in terms of individual wells being drilled. Q. (By Mr. Cunningham) Well, do you monitor --
monitor it on a month-to-month basis, in terms of individual wells being drilled? A. Q. Not in terms of individual wells, no. And is that because there are hundreds of
wells being drilled every year, as you testified to earlier? A. Q. A. Q. That's correct. Sir, excuse me? That is correct. All right. Now, there are wells and there are
deepwater wells, correct? A. Q. That's correct. And the -- they're two different things,
aren't they?
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A.
Well, I think there's a transition between
wells and deepwater wells, because there are deepwater wells and deepwater wells. Q. Well, you described deepwater drilling as
being comparable to outer space exploration, we've -you've agreed that you have in the past described that, haven't you? A. I've described deepwater exploration as akin
to outer -Q. A. Q. A. Q. All right. -- space exploration. And -And it involves more than just drilling. Is there or is there not a big difference
between shallow wells and deepwater wells -A. Q. A. Q. There is. -- in terms of drilling? (Nodding.) All right. What number of deepwater wells
were being drilled on April the 20th of 2010? A. Q. A. don't -Q. Tens? I don't know. Give me your best judgment. I don't know. Tens, I would imagine, but I
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A. Q. or -A. Q. A. Q. A. Q. A. Q. A. prospect. Q. A. Q.
I would imagine tens globally. And -- and would that be like 30 or 20 or 50
Well, of --- 60 or 80? Probably 20, I would -All right. -- I would think. Well, what -- what is Hodoa? I don't know. Fragata? I don't know. I think that's an exploration
Moccasin? I think Hodoa is what -- is that right? Is that the way you pronounce, Hodoa,
H-o-d-o-a? A. Q. A. Q. A. prospect. Q. A. Moccasin? Don't know. That's right. For -- is -- is that a well? That's a -Fragata? Yeah, it's either a well or an exploration
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Q. A.
Tucker? Tucker is a -- was a well and is now a
discovery. Q. All right. Can -- can you testify under oath
today that there were more than five deepwater wells being drilled on April 20th of 2010? A. Q. A. Q. Globally or -Globally. I honestly don't know. And even within the context of drilling
deepwater wells, there are wells that are higher risk and wells that are lower risk, aren't there? A. Q. That's correct. And what determines whether they may be higher
or lower risk? A. Q. An assessment of pressure and temperature. Is that in the layman's language whether
they're in a state being drilled in a stable formation or an unstable formation? A. No. It's about the pressure and
temperature -Q. A. Q. A. All right. -- that you expect to encounter. And what determines pressure and temperature? Depth and geological formation.
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Q.
All right.
In terms of geological formation,
where does the Gulf of Mexico geological formation fit in the scale of high risk versus low risk? A. Q. It's higher risk. It's higher risk. How many deepwater wells
were being drilled on April 20th in high risk areas? A. Q. Probably only two or three. Two or three. What would be the two or three
other than Macondo? A. Angola. Egypt. Q. A. All right. You may and you may not have? At the time we -- we may have been drilling in I'm not certain. We may have been drilling in
I can't recall exactly, but I'm -- I'm
referring to areas where the deepwater drilling was high pressure and high temperature. Q. All right. In any event, the number would be
somewhere between one and three? A. Q. One and five, probably. And do I understand that BP has the same level
of Executive Management oversight for low risk wells as it did on April 20th, 2010 for the higher risk deepwater wells that were being drilled? A. I think what's -- what is the case is that the
executive oversight at my level did not distinguish
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between different sets of wells. Q. A. Q. A. Q. Right. That wasn't what I was doing. Right. The exec --
Someone in the company was, but it wasn't me. The executive oversight was no different for a
shallow well being drilled on land than it was for a higher risk deepwater drill -- well being drilled in the Gulf of Mexico, was it? A. That is -MR. WEBB: Objection -Sorry.
THE WITNESS: MR. WEBB: question. A. Q. A. That is --
-- to the form of the
(By Mr. Cunningham) Was it? That is not what I said. I said that I didn't
have a role in executive oversight of drilling. Q. Well, that's what I'm talking about. Did you
have a different role in executive oversight of drilling in a high risk well in the Gulf of Mexico than whatever you had for a shallow low risk well on land? A. Q. I had no oversight in either. And that's the reason you knew nothing about
the day-to-day risk level at the DEEPWATER HORIZON on
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April the 20th, correct? A. Q. That's correct. Because that's what the policy was. That --
that's the way BP -A. Q. A. not. Q. Well, one thing you did do as a CEO was you That's --- operated, correct? That's not what CEOs do. I'm sorry, but it's
made sure you knew when the Macondo hit pay dirt, didn't you? A. I didn't make -- sir, I was made aware when
the well was a discovery. Q. So were you accidentally made aware, or were
you made aware because it was the policy at BP that when you hit gold, when you hit pay dirt, you tell the CEO? A. No. I was made aware during a normal course Some -- some time after it was evident
of business.
that they had made a discovery. Q. A. Q. So -So it would be a couple of weeks. -- within the normal course of business, the
CEO did know when the well struck pay sands, true? A. The CEO was made aware of a discovery, if
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there had been one, in the normal course of business. Q. But there was no policy for the CEO or top
level Executive Management to be aware if a well was experiencing hazard drilling conditions, correct? A. There was no basis for me to be involved in
day-to-day drilling operations on a well in the deepwater Gulf of Mexico. I have neither the skills
nor capabilities to do that. Q. Mr. Godwin was questioning you, and I think I
understood you to say that Mark Bly was chosen to lead the investigation because he could be objective by virtue of the fact that he did not have accountability for the DEEPWATER HORIZON. or not? A. I -- I -- I chose Mark because I believed he Did I hear that correctly
was the best qualified person in BP to lead the investigation, and he was outside of the line with respect to that operation. with no line accountability. He -- he sat in a function His role was to develop
standards and systems and processes and to help in their implementation. Q. Okay. He was chosen because he was the most
qualified person and because he was outside of the line of accountability with respect to the DEEPWATER HORIZON, correct?
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A. Q.
That's correct. Who was the highest level Executive
responsible to you for Process Safety? A. Q. Mark Bly. Mark Bly. And he reported directly to you in
his capacity as having responsibility for the implementation of OMS and for being responsible for Process Safety, didn't he? A. Q. That's correct. And as we discussed earlier, Process Safety
deals with major accidents, preventing major accidents, correct? A. Q. Correct. Major accidents just like the one that
occurred on the DEEPWATER HORIZON, correct? A. The DEEPWATER HORIZON was a major accident by
anyone's definition. Q. And it's the type of accident that Process
Safety Principles are implemented to try to prevent; isn't that true? A. Q. That's correct. So what -- what you did, then, is you
appointed the highest level Executive next in line to you who was responsible for preventing exactly what happened, a major disaster. You -- you appointed that
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person to investigate this major disaster, didn't you? MR. WEBB: question. Q. (By Mr. Cunningham) Didn't you? MR. GODFREY: A. Q. A. Same objection. Objection to the form of the
That's not correct, because -(By Mr. Cunningham) You didn't? No, because he's not accountable for the The line is accountable for the
implementation. implementation. Q. A. You --
He sets the standards.
Mark is not
accountable for the im -- implementation at the operating level. Q. Didn't you testify earlier that he was
accountable for OMS and the implementation of OMS throughout BP? A. He was accountable for overseeing, but he was
not accountable for the implementation at the operating level on a day-to-day basis. Q. He was accountable for overseeing the You've testified to that,
implementation of OMS. haven't you? A. Q. Correct. That's correct.
So you appoint him to conduct
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the investigation, and then the two of you exclude from the investigation one of the three standard elements of a BP investigation, and that is systemic causes, or root causes, which are Management-related causes; isn't that true? MR. WEBB: Objection -Object to the form.
MR. GODFREY: MR. WEBB: answered -A. We've discussed -MR. WEBB: A.
Objection, asked and
-- three times.
We've discussed previously the terms in They're the terms --
reference of the investigation. Q. A.
(By Mr. Cunningham) All right. -- we reference in investigation. They are --
it is what it is. Q. And they excluded investigation of systemic
causes, didn't it? A. In terms of the reference -MR. WEBB: A. Objection to form.
-- to determine the cause of the accident,
that's what the Report did. Q. (By Mr. Cunningham) So the investigation by
definition would not investigate you or Mark Bly, true? MR. WEBB: Objection to the form of
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question. A. The investigation was designed to determine
the cause of the accident. Q. (By Mr. Cunningham) The investigation by the
exclusion of systemic causes which are Management-related causes excluded investigation of you and Mark Bly, didn't it? MR. GODFREY: A. Objection to the form.
It was designed to investigate the cause of That's what it did.
the accident.
(Discussion off the record.) Q. (By Mr. Cunningham) And since -- since the
investigation Mr. Bly conducted, he's been promoted, hasn't he? A. Q. A. I believe he's still doing the same job. So you don't believe he's been promoted? I believe he's doing the same job. He may
have a different title.
He's still doing the same job.
I think he's -- remains the Head of Safety and Operations. Q. Well, when you -- when you look at the
Executive Management structure -- and this is Tab 53 in the earlier CD that was handed out. (Exhibit No. 6080 marked.) MR. CUNNINGHAM: Here, give me that one,
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and I'll give you this one. Exhibit 6080. MR. GODFREY: what you're talking about? MR. CUNNINGHAM: MR. GODFREY:
It's been marked.
It's
Can I take the time to see
I'm sorry. I'll
No, that's all right.
just take -- I've probably seen it, and I just want to see what it looked like. All right. Thank you. Q. (By Mr. Cunningham) This shows the Executive I know what this is. Got it.
Management at BP, correct? A. Q. A. Q. Yes. And at the top we see Mr. Dudley -Correct. -- right? And then the second face on the page is Mark Bly, isn't it? A. Q. That's right. And if you had disclosed to Congress that you,
in fact, did not do a complete full investigation that covered everything and instead had told them that you excluded systemic causes and that the man you had appointed to head the investigation was responsible for Process Safety, which includes systemic causes, you --
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you know what the reaction would have been, don't you? MR. GODFREY: MR. WEBB: A. Objection, form.
Form.
The Congress was fully aware of the We had shared the extent of our
investigation.
investigation with the Oil and Gas Oversight Committee ahead of my testimony. investigation -Q. A. Q. (By Mr. Cunningham) Did you --- and the extent of it. Did you tell the Congress that Mark Bly was They were fully aware of our
responsible for the implementation of Process Safety within OMS, as well as OMS itself, and that you were appointing him to investigate the accident and you were excluding any investigation of you and him as part of that? MR. GODFREY: Q. A. Q. A. right? Q. Well, the rules are you tell the truth, the You understood Objection as to form.
(By Mr. Cunningham) Did you tell them that? I was never asked that question. You were never asked. Okay.
Well, the rules are you answer the questions,
whole truth, and nothing but the truth. that, didn't you?
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MR. WEBB: question. A. Well --
MR. GODFREY: MR. WEBB: A. Q. right? A. Q. I certainly do. All right.
Object to form.
Move on.
In answer to questions. (By Mr. Cunningham) You understood that,
Now, you testified also earlier
that you were not fired; is that correct? A. I testified that I -- in discussion with the
Board, we came to a mutual agreement that it would -it was in the best interests of BP that I leave the company. Q. All right. You decided -- you -- you decided
it was best for BP to have a new face in the Gulf, I think you said, or in the U.S.? A. Q. A. Q. A. A new face -Is that right? -- in America. That's correct.
So you resigned of your own accord, then? It was a mutual agreement between myself and I think the Board probably felt the same,
the Board. so --
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Q.
Well, did you resign of your own accord, or
were you told, "Resign, or you're going to be fired"? MR. WEBB: Objection, form. Objection, form.
MR. GODFREY: A. Q.
It was a mutual agreement. (By Mr. Cunningham) That isn't -- that -- that
isn't what I'm asking you. A. Q. I'm telling you what the -Were you told that if you did not resign, you
would be fired? MR. GODFREY: A. Objection to form. It was a
I'm telling you what happened.
mutual agreement, so the issue of firing or resigning never came up. Q. We agreed -So then, you were
(By Mr. Cunningham) Okay.
not told that, is the answer, correct? A. Correct. MR. WEBB: Q. Object to the form.
(By Mr. Cunningham) Correct. And with respect to any accountability for
what happened on April the 20th of 2010, the Board did not hold you accountable and discharge you; is that correct? MR. WEBB: Objection to the form. Objection as to form.
MR. GODFREY:
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
You'll have to ask the Board what they
concluded, but as I said, we agreed that I should -- it was in the best interests of BP that I should leave, and there was no other discussion. Q. (By Mr. Cunningham) Did the Board hold you
accountable for what happened on April the 20th of 2010? MR. WEBB: A. Q. Objection, form.
I was never told that was the case. (By Mr. Cunningham) All right. Did the Board
ever sanction you in any way for what happened on April 20th? A. I -- I left my post in the middle of Jul -- at
the end of July. Q. Did the Board ever sanction you between April
the 20th and the time you left your post? A. Q. A. Q. A. Q. They didn't. Did they ever reprimand you? They did not. Did they ever penalize you? They did not. Did they ever privately, to you, criticize you
for what happened on April 20th? MR. WEBB: A. They did not. Objection, form.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q.
(By Mr. Cunningham) Did they ever publicly
criticize you for what happened on April 20th? A. Q. I don't believe so. Was there any top-level Executive Management
person at BP who was sanctioned for what happened on April 20th? A. Q. A. Q. What is top-level Management? The top five. I don't believe so. Was any top-level Executive Management person
reprimanded for what happened on April 20th? A. Q. Not to my knowledge. Fired. Anybody fired for what happened on
April 20, in the top Management? A. Q. A. Q. Not to my knowledge. Anybody penalized? Not to my knowledge. Anybody privately criticized in the top
Management? A. Q. A. Q. A. Q. I don't know, if it was private, do I? Publicly. Not to my knowledge. Do you use a computer? I do. A laptop or a desktop, or both?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Q. A. Q.
Laptop. You use a BlackBerry? I do. Have you for the last few years used both a
laptop and a BlackBerry? A. Q. I have. How about a -- an iPhone or an iPad or some
other kind of -A. I used -- in -- in my time at BP, I used a
BlackBerry and a laptop. Q. And did you use these devices like most
everybody does, fairly frequently? A. Q. Fairly frequently. We've been provided with your custodial file,
Dr. Hayward, and it consisted of 71 E-mails, seven before April the 20th and 64 after April the 20th. A. Q. M-h'm. I suspect that a lot of people in this room in
the last day or two have gotten far more E-mails than that while they've been sitting in this deposition. You had dozens and dozens and dozens and dozens of other E-mails beyond that number of 71, didn't you? MR. WEBB: A. Objection, form.
Are those E-mails received or sent?
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Q. A. Q.
(By Mr. Cunningham) Either one. I'm certain I had more received, for sure. You communicated with other Executives within
BP, didn't you? A. Q. A. Very rarely using E-mail. Why not? I don't like using it as -- as -- as a form of I prefer to talk to them, so I can -Very rarely.
communication. Q. A. Q.
You don't --- phone them. So you -- you use the telephone when you
communicate with other Executives? A. Q. A. Q. E-mail? A. Q. A. Q. E-mail? A. out. Person -- I don't use E-mail very much going I receive a lot of E-mail. I don't use it -- I Only in formal communications. Well, then -Formal updates. Well, then, who did you communicate with by I do. Even the ones in the U.S.? I do. Did you communicate with Board Members by
used it very little, in my time as the CEO, to send
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E-mails. Q. them. A. Q. A. Q. use? A. Q. A. Q. you use? A. Q. A. Q. It's my only phone. It's your what? It's my only phone. And so for communication purposes, most of I do. Is that -It's a BlackBerry. Your BlackBerry is your principal phone that So you'd get E-mails, but you sent very few of Is that what your -That's correct. -- testimony is? That's true. You have a cell phone, I take it, that you
your communication took place on a BlackBerry; is that right? A. Q. A. Q. That's correct. What was the number of that BlackBerry? The number. Yeah.
Q.
And who is your account with, what server?
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A. Vodafone. Vodafone. Q.
My account is with -- I believe it was with It was a BP account, and I think it was with
Did you also have a different phone that you
used for personal business? A. Q. No. You said, I -- I believe earlier, that you had
one E-mail account and that was at BP, correct? A. Q. A. Q. A. Q. A. Q. That's correct. And that -- is that "HaywardT@BP.com"? That's correct. You had no personal E-mail account? No. And you testified to that earlier, right? I did. Well, then, whose E-mail address is
"Haywar" -- "H-a-y-w-a-r-a-b-1@yahoo.com"? A. It was a -- it was an account I never used. You can go and look.
Nothing in it.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Q. A. Q.
Is that your testimony? I set it up, and I've never used it. Set it up and never used it. Well, why did
you set it up? A. I thought I might, but I just never did. I
could never -- I could remember -- never remember the E-mail. Q. A. Q. A. You could never what? I could never remember the E-mail address. You couldn't remember the E-mail address? That's right. You can look -- you can go and I don't -- it may
look at it.
There's nothing in it.
not even be extant anymore. Q.
I don't know.
Well, why did you testify that you never had
an -- an -- an E-mail address -A. Q. A. Q. A. Q. A. Because it was never act -- sorry. -- when you had one? It was never activated. Nobody asked you whether it was activated. Well, I'm -Why did you testify under oath twice? I'm sorry, but I never used it, so it -- as
far as I was concerned, it was not relevant because it was never used. Q. So you think you can answer a question saying
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
you don't have an account because you didn't think it was relevant? A. You -- you think that's okay? So it was -- it was, in
It was never used.
essence, not an account. sent from it. Q.
There wasn't an E-mail ever
There was an exhibit offered earlier, a I don't know the number of the Do
"Forbes" article.
exhibit, but you may have it over there somewhere. you remember that? A. Q. A. Q. I remember you showing it to me, yeah. I didn't show it to you. I think the --
Or someone else showing me --- gentleman from Transocean showed it to you. MR. CUNNINGHAM: Do y'all -- do you have
it? MR. GODFREY: Q. Oh, this is one -Well, I can't
give you the number, but -MR. GODFREY: What is it -I don't know the number,
MR. CUNNINGHAM: but it's a "Forbes" article. MR. GODFREY: if we can find it. MR. CUNNINGHAM: number?
Okay.
Hold on.
Let me see
Steve, you got the
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
MR. ROBERTS: is 6061. MR. GODFREY:
Yeah.
The "Forbes" article
6061? Yes.
Is this it?
MR. CUNNINGHAM: Q.
(By Mr. Cunningham) I'd ask you to take a look And this is a document that's in
at Page 2 of that. your own words.
It's a Q&A with you, correct? Objection as to form.
MR. GODFREY: A. Q. I believe so, yeah.
On Page 2, "Do I feel
second paragraph, first sentence says this: that anything I've done, I would have done differently," question mark.
"Not at all," period.
And I think you were referring -- or responding to a question about the response effort there; is that correct? A. I -- I think it was actually a -- a question
about what I'd done in the prior three years, actually. Q. A. Q. A. Q. A. Q. Oh, was it? I think so. Okay. I think so. Well, then -That's what I interpreted --- that was going to be my next question.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
With respect to what you did in the three years leading up to the blowout on April the 20th of 2010, would this question and this answer still be yours today? A. I've thought a lot about that, and -- and I --
I had done everything that I could do as a human being, as a person, to implement changes to Process Safety, to introduce new people, new systems, new processes. don't know what else I could have done. Q. So the question today, "Do I feel that I
anything I've done, I would have done differently," the answer today would still be, "Not at all," correct? MR. WEBB: Q. Objection, asked and answered.
(By Mr. Cunningham) Correct? MR. GODFREY: Same objection.
A. Q. A. Q.
I feel that I did everything that I could -(By Mr. Cunningham) Would the answer --- as a person. Would the answer to the question, "Do I feel
that anything I've done, I would have done differently" -- would the answer to that question today still be, quote, "Not at all" -MR. WEBB: Q. Objection --
(By Mr. Cunningham) -- period, end quote? MR. WEBB: -- asked and answered three
times.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
A.
I can't put my finger on what I would have
done differently. MR. CUNNINGHAM: I have. THE VIDEOGRAPHER: p.m., ending Tape 22. (Recess from 5:19 p.m. to 5:23 p.m.) (Proceedings on the stenographic record only:) MR. GODFREY: Okay. Thank you. Off the record at 5:19 That's all the questions
Well, first, I appreciate everyone's patience for the last two days, during the depositions, and I think it went about as well as could be expected, so I appreciate that very much. There is a continuing issue, and I think this deposition illustrates that I think Mr. Langan has made clear that with a number of BP witnesses, we feel that the time allocations are not fair. But what happened today was -- you know, I've previously, when I've talked to Mr. Lemoine of Weatherford, and he agreed to graciously cede his time with the condition that they could yank it if they saw something they didn't like, and I just wanted to do that. And as you saw, I felt I could use more time. But with respect to Anadarko and MOEX, my understanding had not been that MOEX had ceded its
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time.
And so the reason I asked counsel about that,
was I wanted to run down who, given that resolution has been reached, at least in part, between BP and MOEX. So there is a time difference between the West Coast in the United States and London, so Mr. Brock and Mr. Neath sent an inquiry, after what was said on the record. And I thought we should put on the record now
what our understanding is and the basis for it. Mr. Brock will do that, since he had the communications, I didn't. But I do think this is subject to further communication that, Your Honor, when you return to the United States, although we welcome you here in London as much as you'd like to come, when you return to the United States, I think that we need to have a little further clarity about this issue, particularly where, you know, I went and I was prepared to show the documents, i.e., E-mails between Mr. Lemoine and myself that I had at the time, although his partner was here, so he was able to confirm it, anyway. But it leaves us in a bit of an awkward position, particularly when we're away from the quick call. And just as a matter of personal approach, I
don't like controversies like this, so I like to try to work them out in advance, and if the Court rules for
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me, great.
If it rules against me, well, then I move
forward and I don't think about it. But if Mr. Brock could put on the record what our understanding is, and the basis for it, I think that's important, because I do think that this is a matter for further discussion with respect to time allocations, particularly the Senior BP witnesses, where the likelihood that there will ever be a former CEO is unlikely that he'll ever be in the United States to testify, and short time allocations, I think, really are prejudicial, and I think that particularly when it's sixteen hours one way and one hour the other way. So, Mr. Brock, if you could be kind enough to put on the record what we've learned since. MR. BROCK: BP. I think, Your Honor, what we would ask for, in depositions going forward, is that if a Party claims to have been ceded time from a Party who is not present at the deposition, that they should have some verification that that time has been ceded by the Party that is not present. We asked for that verification today. not forthcoming. counsel. It was All right. So Mike Brock for
We proceeded on the representation of
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Members of our Team have inquired of MOEX's present counsel as to whether they ceded time to Anadarko for this deposition. Tom Campbell of Pillsbury has responded that he did not cede that time for this deposition. There
was reference to Kathy McCollum having possibly been the person that did that. Tom checked with Kathy to
see if she'd ceded time to Anadarko for the Tony Hayward deposition. And our information, at this
point, is that she says she did not. So I think what we would like to say to the Court, at this point, is that there could be further clarification of this, and we understand that, but the information that we have at this point is that time was not given to Anadarko from MOEX, and if that holds to be the case, as we believe from what we know now, we'll file an appropriate Motion to Strike portions of their exam. MAGISTRATE SHUSHAN: MS. HERTZ: Okay.
Your Honor, may I just say -Yes, please.
MAGISTRATE SHUSHAN: MS. HERTZ:
I just want to make a
representation on the record that I simply conveyed what I was told, and I didn't have a writing. wasn't that it wasn't forthcoming. It
It's I didn't have
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
one, and I was proceeding with the information I have. And that's all I can tell you right now. MAGISTRATE SHUSHAN: MS. HERTZ: representations. certainly not -MAGISTRATE SHUSHAN: And I'm not Okay.
There was no false
I just wanted you to know that, and
suggesting, and nor do I have the impression that counsel for BP are suggesting that, so -MR. GODFREY: Honor. Let me confirm that, Your
I think this is where -- the importance of the I took the time to have an
communications here.
E-mail, but then Mike's partner was here, anyway, so I knew it, and I spoke with him privately. I just think, that given the potential importance of depositions, and our concerns about the time allocation, anyway, I was surprised. surprised. We were
That had not been our understanding, and
when you're an eight hours time difference from the West Coast, learning that at 11:00 a.m. London time does not allow us to do any check. And that goes all
the way around, so I'm not suggesting that, but what I am suggesting is a need for clarity. MAGISTRATE SHUSHAN: I agreed with that,
and in addition, it has occurred to me that the
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informal agreement that the Defendants had been working under might require some tweaking because of the settlement with MOEX. occurred to me. So that is something that had
And I think maybe tomorrow morning,
off the record, we might be able to sit down and talk about what my thinking is, because I would like to work it out on a longer term basis, so that you don't have the problem. I do think that the amount of time you had today was tight. You did a really good job with it,
but I will agree it was tight, and so it's something that I do think we should talk about. MR. GODFREY: fast, but I'm not that fast. MAGISTRATE SHUSHAN: MR. GODFREY: Okay. I do think that if, I'm with you. But at 16 to 1, I may be
MAGISTRATE SHUSHAN:
indeed, somebody has the idea that time has been ceded, but the person that is the person ceding has not attended the deposition and can't confirm it, I do think it would be a good idea if we get it in writing. MR. GODFREY: you. All right. Well, thank
And that's all we had, and now we're off the
record. (Deposition concluded at 5:30 p.m.)
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CHANGES AND SIGNATURE WITNESS NAME: ANTHONY HAYWARD JUNE 8, 2011 REASON
DATE OF DEPOSITION: PAGE LINE
CHANGE
_______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________ _______________________________________________________
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I, ANTHONY HAYWARD, have read the foregoing deposition and hereby affix my signature that same is true and correct, except as noted on the attached Amendment Sheet.
ANTHONY HAYWARD
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THE STATE OF
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COUNTY OF
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Before me, , on this day personally appeared ANTHONY HAYWARD, known to me (or proved to me on the oath of or through to be the person whose name is subscribed to the foregoing instrument and executed the same for the purposes and consideration therein expressed. GIVEN UNDER my hand and seal of office this day of , 2011. )
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Notary Public in and for The State of
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UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA IN RE: OIL SPILL BY THE OIL RIG "DEEPWATER HORIZON" IN THE GULF OF MEXICO, ON APRIL 20, 2010 ) ) ) ) ) ) MDL NO. 2179 SECTION "J" JUDGE BARBIER MAG. JUDGE SHUSHAN
REPORTER'S CERTIFICATION TO THE ORAL AND VIDEOTAPED DEPOSITION OF ANTHONY HAYWARD JUNE 8, 2011 VOLUME 2
I, Emanuel A. Fontana, Jr., Certified Shorthand Reporter in and for the State of Texas, hereby certify to the following: That the witness, ANTHONY HAYWARD, was duly sworn by the officer and that the transcript of the oral deposition is a true record of the testimony given by the witness; That the deposition transcript was submitted on , 2011, to the witness or to Attorney , for the witness to examine, sign, and return to Worldwide Court Reporters, Inc., by , 2011. That the amount of time used by each party at the deposition is as follows: Mr. Mr. Mr. Mr. Ms. Mr. Mr. Mr. Strange - 18 Minutes Kanner - 1 Hour, 6 Minutes Roberts - 59 Minutes Godwin - 59 Minutes Hertz - 1 Hour, 15 Minutes Beck - 1 Hour, 13 Minutes Godfrey - 1 Hour, 11 Minutes Cunningham - 37 Minutes
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I further certify that I am neither counsel for, related to, nor employed by any of the parties in the action in which this proceeding was taken, and further that I am not financially or otherwise interested in the outcome of the action. SUBSCRIBED AND SWORN to by me on this 8th day of June, 2011.
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____________________________ Emanuel A. Fontana, Jr., RPR Texas CSR No. 1232 Expiration Date: 12/31/12 Worldwide Court Reporters Firm Registration No. 223 3000 Weslayan, Suite 235 Houston, Texas 77027 (713) 572-2000
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Hayward Deposition - June 2011

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Hayward Deposition - June 2011

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1

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA

BY THE OIL RIG

"DEEPWATER HORIZON" IN THE GULF OF MEXICO, ON APRIL 20, 2010

***************** VOLUME 1 *****************

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

PURSUANT TO CONFIDENTIALITY ORDER

MR. CUNNINGHAM: THE VIDEOGRAPHER:

We're ready. On the record at

Production. Q. All right.

PURSUANT TO CONFIDENTIALITY ORDER

The CEO of the company was a gentleman called

largest oil companies at the time.

PURSUANT TO CONFIDENTIALITY ORDER

oil companies. Q. A. Well --

It had operations pretty well globally, had

it is today, that's for sure. Q. Well, if -- if -- if that statement is not

As I said, the -- it's all about the context So

in which you're describing "small" and "regional."

PURSUANT TO CONFIDENTIALITY ORDER

that period? A. Q. Yes. A promotion to a position that John Browne had

previously held, true? A. That is correct.

PURSUANT TO CONFIDENTIALITY ORDER

By 2003, you and Browne, John Browne, had

I think defining that as the No. 2 job would

the Deputy Chief Executive of BP at the time.

Would -- would you pull his microphone up?

We can hear Bobo, but we can't hear the --

PURSUANT TO CONFIDENTIALITY ORDER

Or turn up the volume.

It's not really the

We're not -- we can't hear

Yeah. We're not hearing anything

It's not my microphone. If you'll keep your

Okay. Just speak up.

This -- I think we have -Can I -The witness is going to

-- ask a --- Examiner and, I think,

PURSUANT TO CONFIDENTIALITY ORDER

I just asked for the microphone to be placed so

we didn't have this problem. MR. WEBB: I think the microphone is So

PURSUANT TO CONFIDENTIALITY ORDER

going to tell me I did. Q. Okay.

But it was not good.

Well, if you used that word in your

was describing BP's financial performance, wasn't it?

PURSUANT TO CONFIDENTIALITY ORDER

It was. All right. Okay. You -- you underperformed

No, I thi -- I -- well, I -- it was -- I mean,

talk -- talking to.

PURSUANT TO CONFIDENTIALITY ORDER

Browne, by the way? A. My recollection is sometime around 2004,

something like that. Q. A. Q. A. Okay. So that brings us--

PURSUANT TO CONFIDENTIALITY ORDER

was before he was fired or not. resigned. Q.

(By Mr. Cunningham) And -- and you were on the

I don't know that I can pass a comment on the

* VOLUME 1 *