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Former BP CEO says cost cuts didn't affect drilling

Lamar McKay, former president of BP America and current chief executive of BP’s Upstream unit, leaves court after testifying in New Orleans on Monday. McKay testified Tuesday that BP and its contractors share responsibility for preventing blowouts. 

Associated Press

Lamar McKay, former president of BP America and current chief executive of BP’s Upstream unit, leaves court after testifying in New Orleans on Monday. McKay testified Tuesday that BP and its contractors share responsibility for preventing blowouts. 

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

Hayward's videotaped appearance may be his only one in the courtroom.

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

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

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

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

Lacy said the London company slashed $250 million to $300 million from its gulf drilling budget from 2008 to 2009, while at the same time its production rose by more than 50 percent.

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

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

Rig owner Transocean Ltd. and cement contractor Halliburton also are defendants.

The rig explosion killed 11 oil rig workers, and the busted well dumped an estimated 172 million gallons of oil into the gulf.

Shell suspends Arctic drilling: Shell is dropping plans to drill in the Arctic waters off Alaska this year after a 2012 drilling season marred by equipment failures and ongoing investigations by the Coast Guard, the Interior Department and the Department of Justice.

Former BP CEO says cost cuts didn't affect drilling 02/27/13 [Last modified: Wednesday, February 27, 2013 11:09pm]
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