By Dow Jones Business News, February 27, 2013, 03:05:00 PM EDT
NEW ORLEANS--BP PLC's (BP.LN, BP) managers were under pressure to cut costs significantly in the years leading up to
the Deepwater Horizon accident, according to testimony at the federal trial here over liability for the 2010 explosion
and oil spill.
Kevin Lacy, BP's former head of drilling in the Gulf of Mexico, said in a videotaped deposition that he was told to
cut hundreds of millions of dollars in costs in 2008 and 2009.
"I was never given a directive to cut corners or deliver something unsafe," Mr. Lacy said. "But there was tremendous
pressure on costs."
The testimony came on the third day of the civil trial that will determine the degree of culpability that BP and other
companies have for the accident, which killed 11 workers. They are being sued by the federal government, state, and
local businesses that say they were hurt financially by the oil spill, which lasted for three months.
Mr. Lacy's testimony was preceded by excerpts from interviews lawyers for plaintiffs suing BP did with its former
chief executive, Tony Hayward, who was asked repeatedly about speeches he had given on cost-cutting at the company. In
many cases Mr. Hayward tried to point out a broader context for the statements and speeches.
On Monday, lawyers for the parties traded barbs over who was to blame for the explosion that unleashed the worst
offshore oil spill in U.S. history. Tuesday was dominated by testimony from Robert Bea, a University of California
Berkeley engineering professor who called the accident "a classic failure of management and leadership in BP" that came
after many warnings to the company.
Lamar McKay, the head of BP's exploration and production business, repeatedly rebuffed attempts by a lawyer for the
plaintiffs to place the entire blame for the accident on BP. Mr. McKay stressed that decision making and safety were
shared responsibilities among all the companies working on the doomed rig.
The trial is scheduled to take up to three months, but could be cut short or temporarily stopped if the parties reach
a settlement.
A second trial, scheduled for the fall, will determine how much oil leaked into the Gulf of Mexico.
Together, they will determine the size of fines firms face under the Clean Water Act, which could total as much as $
17.6 billion.
BP, which hired Transocean Ltd. (RIG.VX, RIG) and Halliburton Co. ( HAL ) to work on drilling its well, has said the
fines would likely be under $5 billion.
Write to Tom Fowler at Tom.Fowler@wsj.com
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(END) Dow Jones Newswires
02-27-131505ET
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