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UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF LOUISIANA
IN RE: OIL SPILL BY THE OIL RIG * Docket 10-MD-2179DEEPWATER HORIZONIN THE *GULF OF MEXICO ON APRIL 20, 2010 * Section J
*Applies to: * New Orleans, Louisiana
*Docket 10-CV-02771, * March 19, 2013IN RE: THE COMPLAINT AND *PETITION OF TRITON ASSET *LEASING GmbH, et al *
*Docket 10-CV-4536, *UNITED STATES OF AMERICA v. *BP EXPLORATION & PRODUCTION, *INC., et al *
** * * * * * * * * * * * * * * * * *
DAY 14, AFTERNOON SESSIONTRANSCRIPT OF NONJURY TRIAL
BEFORE THE HONORABLE CARL J. BARBIER
UNITED STATES DISTRICT JUDGE
Appearances:
For the Plaintiffs: Domengeaux Wright Roy& Edwards, LLC
BY: JAMES P. ROY, ESQ.556 Jefferson Street, Suite 500Post Office Box 3668Lafayette, Louisiana 70502
For the Plaintiffs: Herman Herman & Katz, LLCBY: STEPHEN J. HERMAN, ESQ.820 O'Keefe AvenueNew Orleans, Louisiana 70113
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Appearances:
For the Plaintiffs: Cunningham Bounds, LLCBY: ROBERT T. CUNNINGHAM, ESQ.1601 Dauphin StreetMobile, Alabama 36604
For the Plaintiffs: Lewis Kullman Sterbcow & AbramsonBY: PAUL M. STERBCOW, ESQ.601 Poydras Street, Suite 2615New Orleans, Louisiana 70130
For the Plaintiffs: Breit Drescher Imprevento
& Walker, PCBY: JEFFREY A. BREIT, ESQ.600 22nd Street, Suite 402Virginia Beach, Virginia 23451
For the Plaintiffs: Leger & ShawBY: WALTER J. LEGER JR., ESQ.600 Carondelet Street, 9th FloorNew Orleans, Louisiana 70130
For the Plaintiffs: Williams Law Group, LLC
BY: CONRAD "DUKE" WILLIAMS, ESQ.435 Corporate Drive, Suite 101Houma, Louisiana 70360
For the Plaintiffs: Thornhill Law FirmBY: TOM THORNHILL, ESQ.1308 Ninth StreetSlidell, Louisiana 70458
For the Plaintiffs: deGravelles Palmintier Holthaus& Frug, LLP
BY: JOHN W. DEGRAVELLES, ESQ.618 Main StreetBaton Rouge, Louisiana 70801
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Appearances:
For the Plaintiffs: Williamson & RusnakBY: JIMMY WILLIAMSON, ESQ.4310 Yoakum BoulevardHouston, Texas 77006
For the Plaintiffs: Irpino Law FirmBY: ANTHONY IRPINO, ESQ.2216 Magazine StreetNew Orleans, Louisiana 70130
For the United States U.S. Department of Justice
of America: Torts Branch, Civil DivisionBY: R. MICHAEL UNDERHILL, ESQ.450 Golden Gate Avenue7-5395 Federal Bldg., Box 36028San Francisco, California 94102
For the United States U.S. Department of Justiceof America: Environment & Natural Resources
Environmental Enforcement SectionBY: STEVEN O'ROURKE, ESQ.
SCOTT CERNICH, ESQ.DEANNA CHANG, ESQ.
RACHEL HANKEY, ESQ.A. NATHANIEL CHAKERES, ESQ.Post Office Box 7611Washington, D.C. 20044
For the United States U.S. Department of Justiceof America: Torts Branch, Civil Division
BY: JESSICA McCLELLAN, ESQ.MICHELLE DELEMARRE, ESQ.JESSICA SULLIVAN, ESQ.SHARON SHUTLER, ESQ.MALINDA LAWRENCE, ESQ.
Post Office Box 14271Washington, D.C. 20004
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Appearances:
For the United States U.S. Department of Justiceof America: Fraud Section
Commercial Litigation BranchBY: DANIEL SPIRO, ESQ.
KELLEY HAUSER, ESQ.ELIZABETH YOUNG, ESQ.
Ben Franklin StationWashington, D.C. 20044
For the State of Attorney General of AlabamaAlabama: BY: LUTHER STRANGE, ESQ.
COREY L. MAZE, ESQ.
WINFIELD J. SINCLAIR, ESQ.500 Dexter AvenueMontgomery, Alabama 36130
For the State of Attorney General of LouisianaLouisiana: BY: JAMES D. CALDWELL, ESQ.
1885 North Third StreetPost Office Box 94005Baton Rouge, Louisiana 70804
For the State of Kanner & Whiteley, LLC
Louisiana: BY: ALLAN KANNER, ESQ.DOUGLAS R. KRAUS, ESQ.701 Camp StreetNew Orleans, Louisiana 70130
For BP Exploration & Liskow & Lewis, APLCProduction Inc., BY: DON K. HAYCRAFT, ESQ.BP America Production 701 Poydras Street, Suite 5000Company, BP PLC: New Orleans, Louisiana 70139
For BP Exploration & Kirkland & Ellis, LLP
Production Inc., BY: J. ANDREW LANGAN, ESQ.BP America Production HARIKLIA "CARRIE" KARIS, ESQ.Company, BP PLC: MATTHEW T. REGAN, ESQ.
300 N. LasalleChicago, Illinois 60654
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Appearances:
For BP Exploration & Covington & Burling, LLPProduction Inc., BY: ROBERT C. "MIKE" BROCK, ESQ.BP America Production 1201 Pennsylvania Avenue, NWCompany, BP PLC: Washington, D.C. 20004
For Transocean Holdings Frilot, LLCLLC, Transocean Offshore BY: KERRY J. MILLER, ESQ.Deepwater Drilling Inc., 1100 Poydras Street, Suite 3700Transocean Deepwater Inc.: New Orleans, Louisiana 70163
For Transocean Holdings Sutherland Asbill & Brennan, LLP
LLC, Transocean Offshore BY: STEVEN L. ROBERTS, ESQ.Deepwater Drilling Inc., RACHEL G. CLINGMAN, ESQ.Transocean Deepwater Inc.: 1001 Fannin Street, Suite 3700
Houston, Texas 77002
For Transocean Holdings Munger Tolles & Olson, LLPLLC, Transocean Offshore BY: MICHAEL R. DOYEN, ESQ.Deepwater Drilling Inc., BRAD D. BRIAN, ESQ.Transocean Deepwater Inc.: LUIS LI, ESQ.
355 S. Grand Avenue, 35th FloorLos Angeles, California 90071
For Transocean Holdings Mahtook & LafleurLLC, Transocean Offshore BY: RICHARD J. HYMEL, ESQ.Deepwater Drilling Inc., 600 Jefferson Street, Suite 1000Transocean Deepwater Inc.: Post Office Box 3089
Lafayette, Louisiana 70501
For Transocean Holdings Hughes Arrell Kinchen, LLPLLC, Transocean Offshore BY: JOHN KINCHEN, ESQ.Deepwater Drilling Inc., 2211 Norfolk, Suite 1110Transocean Deepwater Inc.: Houston, Texas 77098
For Cameron International Stone Pigman Walther Wittmann, LLCCorporation: BY: PHILLIP A. WITTMANN, ESQ.
546 Carondelet StreetNew Orleans, Louisiana 70130
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Appearances:
For Cameron International Beck Redden & Secrest, LLPCorporation: BY: DAVID J. BECK, ESQ.
DAVID W. JONES, ESQ.GEOFFREY GANNAWAY, ESQ.ALEX B. ROBERTS, ESQ.
1221 McKinney Street, Suite 4500Houston, Texas 77010
For Halliburton Energy Godwin Lewis, PCServices, Inc.: BY: DONALD E. GODWIN, ESQ.
BRUCE W. BOWMAN JR., ESQ.FLOYD R. HARTLEY JR., ESQ.
GAVIN HILL, ESQ.1201 Elm Street, Suite 1700Dallas, Texas 75270
For Halliburton Energy: Godwin Lewis, PCServices, Inc.: BY: JERRY C. VON STERNBERG, ESQ.
1331 Lamar, Suite 1665Houston, Texas 77010
For M-I, LLC: Morgan Lewis & BockiusBY: HUGH E. TANNER, ESQ.
DENISE SCOFIELD, ESQ.JOHN C. FUNDERBURK, ESQ.1000 Louisiana Street, Suite 4000Houston, Texas 77002
Official Court Reporter: Jodi Simcox, RMR, FCRR500 Poydras Street, Room HB-406New Orleans, Louisiana 70130(504) [email protected]
Proceedings recorded by mechanical stenography usingcomputer-aided transcription software.
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I N D E X
Page
Steven NewmanCross-Examination By Mr. Regan: 4677Redirect Examination By Mr. Brian: 4743
Timothy Leo Quirk
Direct Examination Mr. Breit 4753Cross-Examination By Ms. McClellan: 4808Cross-Examination By Mr. Maze: 4824Direct Examination By Mr. Hill: 4843
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* * *
AFTERNOON SESSION
(March 19, 2013)
* * * * *
THE DEPUTY CLERK: All rise.
THE COURT: Please be seated, everyone.
All right. Let's see. Halliburton?
MR. GODWIN: Yes, Your Honor. Halliburton has no
questions of this witness, Your Honor.THE COURT: Thank you.
MR. GODWIN: You're welcome.
THE COURT: BP?
MR. WILLIAMS: Your Honor, do you want to do -- just
to finish up the Webster exhibits?
THE COURT: We can do that.
MR. WILLIAMS: Okay. Thank you.
We would formally offer and introduce the
exhibits used with Mr. Webster's testimony, Your Honor. We've
circulated the requisite list, have had -- or heard no
objections and thus would like to move formally for their
introduction into evidence.
THE COURT: All right. Does anyone have any
objections to the plaintiffs' list of exhibits in conjunction
with Mr. Webster's testimony?
Hearing none, those are admitted.
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MR. HAYCRAFT: Your Honor, BP does the same. We have
a list of exhibits that we wish to move into evidence used
during Mr. Webster's deposition -- during Webster's
examination.
THE COURT: Any objections?
Without any objections, those are admitted.
MR. KINCHEN: Your Honor, John Kinchen, Transocean.
Transocean would also like to formally move to introduce the
exhibits that were referenced in cross-examination of GeoffWebster. We've distributed that list and have received no
objections.
THE COURT: Any objections to Transocean?
Hearing none, those are admitted. Okay.
MR. IRPINO: Judge, Anthony Irpino for the PSC. We
also have our list of exhibits used in connection with
Mr. Barnhill's testimony. We've sent those around and received
no --
THE COURT: We've not finished with his testimony
yet. Why don't you wait and we'll do those all together.
Okay.
MR. IRPINO: Sure.
THE COURT: Anything else before we resume?
All right. Mr. Regan.
MR. REGAN: Thank you, Your Honor.
(WHEREUPON, STEVEN NEWMAN, having been previously
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STEVEN NEWMAN - CROSS
duly sworn, testified as follows.)
CROSS-EXAMINATION
BY MR. REGAN:
Q. Good afternoon, Mr. Newman. Again, my name is Matt Regan.
I represent BP, and I have you on cross-examination.
Mr. Newman, I'm going to endeavor to try not to cover
anything that we've repeated earlier today. I'll do my best on
that, hopefully.
But with respect to Transocean's business, Transoceanis in the business -- you say you own rigs and you have a crew
to operate them. Is that fair?
A. Yes. That's the basis of our business.
Q. And you believe Transocean is the best in the world when
it comes to drilling of complex offshore wells; correct?
A. I do.
Q. And the capabilities of Transocean people, to you, they
are capable of drilling in some of the world's most difficult
and harsh environments; correct?
A. I believe that.
Q. And you have confidence in them to not only do those
things, but to do them well; correct?
A. I do, yes.
MR. REGAN: I'd like to pull up TREX-5642.
BY MR. REGAN:
Q. Which is a letter dated March 24th, 2010, to shareholders.
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STEVEN NEWMAN - CROSS
That must have been about a month into your time as CEO. This
is the cover page on the proxy statement, the annual report.
MR. REGAN: If we go to TREX-5642.5.1.
BY MR. REGAN:
Q. I'll just show you your signature on there.
Do you recall writing and signing this letter that
went to -- as the cover to Transocean's annual report in late
March 2010?
A. I do.Q. Okay. So this is about a month before April 20th;
correct?
A. Yes.
Q. All right.
MR. REGAN: If we could turn to page 2,
TREX-5642.2.1.
BY MR. REGAN:
Q. Just to see if this is fair, there's a description about
Transocean Limited. Do you see it there?
A. Yes.
Q. "Transocean Limited is the world's largest offshore
drilling contractor and leading provider of drilling management
services worldwide."
Correct?
A. That's what the document says.
Q. As of that time, Transocean had a fleet of 140 mobile
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STEVEN NEWMAN - CROSS
offshore drilling units, plus three newbuild units; correct?
A. That's what the document says.
Q. And Transocean believes that its fleet was one of the most
modern and versatile in the world due to its emphasis on
technically demanding sectors of the offshore drilling
business; correct?
A. That's what the document says.
Q. And it also highlights the fact that Transocean has
achieved a long history of firsts, in the words of thedocument; correct?
A. That's what the document says.
Q. Including the first dynamically positioned drillship, and
some other firsts; right?
A. Yes.
Q. And at the bottom, it says: "Transocean: Positioned to
Lead."
Was that one of the models of the company there in
March of 2010?
A. We used that as the theme for our 2009 annual report and
our 2010 proxy statement.
Q. And in this proxy statement, you specifically highlighted
the Deepwater Horizon's expertise amongst all of those
140 rigs; correct?
A. I think that was on the basis of the type of well that the
rig had drilled in 2009 with BP.
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STEVEN NEWMAN - CROSS
Q. Go to 5642.4.4. So again on March 24th, 2010, your letter
stated that "Transocean continues to be the industry leader in
technology, which gives us a strong competitive advantage. Our
expertise in helping customers drill complex and challenging
wells is well-documented in deepwater and harsh environments,
and the latest example in 2009 was our ultradeepwater
semisubmersible drilling rig, Deepwater Horizon, which drilled
the deepest oil and gas wells ever while working for BP in the
U.S. Gulf of Mexico. The well was drilled to a record depth of35,050 feet, including 4,130 feet of water."
Correct?
A. That's what the document says.
Q. That was a historic achievement, was it not?
A. It was.
Q. It was one that Transocean shared with BP; correct?
A. We did, yes.
Q. That was a well that was designed by BP engineers;
correct?
A. That's correct.
Q. That well was drilled by the Transocean Deepwater Horizon
crew; correct?
A. Yes.
Q. And there were BP well site leaders onboard when that well
was drilled; correct?
A. I believe so. That would be the normal circumstances,
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STEVEN NEWMAN - CROSS
yes.
Q. That was the team?
A. Yes.
Q. And I recall that in one of your investor speeches, you
said: "With respect to Transocean's people and their
achievements, we've been there and done that."
Do you recall using those words?
A. I have used those words in the past.
Q. And the Transocean Deepwater Horizon, it had been thereand it had done that.
A. The Deepwater Horizon had an exemplary track record and
had done some pretty amazing things.
Q. Now, you've also said in the past that "Transocean
provides the safest, most effective and efficient drilling at
all water depths."
Do you recall using those words?
A. I have probably used those words in the past, yes.
Q. And you would agree it would be fair for both the public
and for the operators, like BP, to rely on those type of
statements; that is, to rely on "Transocean will be providing
the safest, most effective and efficient drilling"?
A. If you're -- are you asking me whether the public can rely
on me making those statements?
Q. Just the statements themselves.
A. Yes. As CEO, you know, I'm taught not to make public
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STEVEN NEWMAN - CROSS
statements that I don't believe are true; and so, yeah, I
believe those statements.
Q. So we have Transocean being top of the market amongst
drilling contractors; is that right?
A. Yes.
Q. And the Deepwater Horizon was top of the market at
Transocean?
A. The Deepwater Horizon was one of our best-performing rigs.
MR. REGAN: If we could pull up TREX-41215,41215.1.2.
BY MR. REGAN:
Q. And what I have here, Mr. Newman, is your -- an excerpt
from your testimony in Congress on May 18th, 2010.
MR. REGAN: I think if we go to the -- try .1.2. Or
.1.1 then.
BY MR. REGAN:
Q. Now, this is a written statement that you gave with
respect to that testimony; is that right?
A. I believe so, yes.
MR. REGAN: Now, if we can go to .1.3.
Nope. All right.
BY MR. REGAN:
Q. Well, do you recall, Mr. Newman, as we're pulling it up,
in a statement saying that "The well construction process was a
collaborative effort involving various entities and many
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STEVEN NEWMAN - CROSS
personnel, the well operator, government officials, the
drilling contractor, the mud contractor, the casing contractor,
the cement contractor, and others"?
Do you recall using those words?
A. That's what the document says, yes.
Q. All right. I know that's what the document says, but you
believed these words when you said them; right?
A. Yes.
Q. And you believe them to be true today?A. Yes.
MR. REGAN: Now, if I could pull up D-4341.1.
4341.1.
BY MR. REGAN:
Q. This is a demonstrative that we have put together. I
think Transocean has a similar one, but really about the
history of the Deepwater Horizon's drilling from the time it
went into service through 2010.
And with the exception of one well in the life of
that rig, you're aware that the operator for all of the wells
that were drilled by the Deepwater Horizon was BP; correct?
A. As you said, with the exception of one well, BP was the
operator, yes.
Q. And what we have here are a few of the successes. We
talked about Tiber already, but we had Walker Ridge, the
deepest water depth that had been drilled back in 200 -- end of
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STEVEN NEWMAN - CROSS
'04 into '05; right?
A. Yes.
Q. And these wells -- these wells that we see on D-4341,
these wells had losses; right? Did these wells have losses
when they were being drilled?
A. I don't know. I haven't reviewed the well reports for all
those wells.
Q. So whether they had losses or kicks, you don't know?
A. I do not know.Q. But you do know they were successfully completed?
A. I --
Q. As far as you know?
A. As far as I know, but...
Q. The -- you said earlier you considered the Deepwater
Horizon's performance to be exemplary; correct?
A. Yes.
Q. And that performance is also a testament to the successful
collaboration that had taken place amongst all of the various
entities involved with the wells that were drilled here on this
page?
A. I think that's the only way you could deliver a track
record like that, is if you had a well-performing team.
Q. If you had to pick a rig in 2010 to drill a well, it would
be hard to choose a better rig than the Deepwater Horizon,
wouldn't it?
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STEVEN NEWMAN - CROSS
A. The Deepwater Horizon was one of our best-performing rigs,
yes.
Q. The equipment on the Deepwater Horizon, as of April --
well, as of January 2010, that met or exceeded industry
standard for a MODU drilling deepwater wells; correct?
A. I believe so, yes.
Q. And the crew, the people on that rig, they met or exceeded
industry standard for drilling deepwater wells; is that
correct?A. I believe so, yes.
MR. REGAN: I'd like to pull up an organizational
chart, D-4594.
BY MR. REGAN:
Q. Mr. Newman, this is not a complete organization chart of
every Transocean employee, but just to try to orient our
examination and for the Court, I just wanted to highlight a few
of the individuals that are either going to be testifying or
that have documents that have been shown already this morning
or on prior examinations.
Do you see yourself on this chart as CEO and
president, Mr. Newman?
A. Yes.
Q. And that was your position as of April 20th, 2010;
correct?
A. Yes.
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STEVEN NEWMAN - CROSS
Q. Again, this is D-4594, if I didn't say that for the
record.
And underneath you, you have Adrian Rose and Jimmy
Moore; is that right?
A. Yes.
Q. Is that the HSE side of the house for Transocean?
A. It is.
Q. And then you have underneath -- we have Mr. McMahan. Do
you see him, vice president of performance?A. I do.
Q. And you talked about Mr. McMahan at some length earlier
today; is that right?
A. Yes.
Q. Over on the far left underneath VP of engineering and
technology, we see Bill Ambrose. He's the director of
maintenance and technical support as of that time. Does that
sound about right? Do you know?
A. Yes.
Q. If we follow the line down from Mr. McMahan, we then have
Keelan Adamson, division manager. I think you mentioned his
name today. Is that right?
A. Yes.
Q. Is he now on the board of directors?
A. Keelan?
Q. Yes.
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A. No. Keelan -- today Keelan is our vice president of human
resources.
Q. Okay.
You have Steve Hand underneath Mr. McMahan; correct?
A. Yes.
Q. We know him.
We have Mr. Braniff?
A. Yes.
Q. Daun Winslow, Buddy Trahan, and Jerry Canducci. Do yousee them?
A. Yes.
Q. All right.
Now we get to the bottom of the left side with
Mr. Kent and Mr. Johnson. What were their roles, if you know?
A. Mr. Johnson was the performance rig manager, and Mr. Kent
was the asset rig manager.
If I could just point out --
Q. Please do.
A. On this chart you have depicted Keelan Adamson as working
for Larry McMahan.
Q. Yes.
A. That's not accurate.
Q. Is there a different person I have on the chart where he
works, or do I have it wrong?
A. The line would have gone straight up from Keelan Adamson
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STEVEN NEWMAN - CROSS
up through the business unit performance and directly up that
way.
Q. Okay. So if I just drew that line straight to there?
A. Yes. That's correct. Larry McMahan was a staff
individual, not a line management.
Q. And Mr. Johnson, he was the onshore rig manager for the
Deepwater Horizon; right?
A. He was the onshore rig manager/performance.
Q. The job you had -- similar to the job you had when youwere in Brazil and some other places?
A. Sort of. If you look at the way this -- this is drawn, we
really have two individuals filling the role of rig manager.
Back when I did it, the company was organized in a way that you
only had one individual filling the role of rig manager. So
here we have two.
Q. Okay. But it's the same concept. Those two gentlemen
were doing the job where they were the first contact onshore
for the rig; right?
A. Yes, that's correct.
Q. And as we go to the right side of the page, on the rig, we
have Jimmy Harrell. He was the OIM; correct?
A. Yes.
Q. Then we have a maintenance group underneath Mr. Bertone?
A. Yes.
Q. And you talked about them earlier today; correct?
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STEVEN NEWMAN - CROSS
A. Yes.
Q. Then we have the drilling group underneath Mr. Harrell
with Mr. Ezell, Mr. Wheeler, Mr. Anderson, and some others?
A. Yes.
Q. Again, it's not fully complete, but those are the key
players; correct?
A. Yes.
Q. And then we have a maritime group, where Curt --
Captain Kuchta; David Young, the chief mate; Andrea Fleytas,the DP operator; and Yancy Keplinger, the DP operator? Okay?
A. Yes.
Q. All right. I may refer back and forth to this little
chart just to make sure that we stay oriented as to who had
which jobs and where they might be situated.
A. Okay.
Q. You talked on your direct about Transocean having -- I
think you used the phrase "narrow slice." I just want to pull
up D-4275, which is a POB list, "persons onboard" of the
Deepwater Horizon. I'm going to ask you some questions in some
detail today about some of the roles and responsibilities,
generally, like the questions you've already been asked.
But with respect to the people on the rig, rough
justice, would it surprise you that the vast majority of the
people on the rig would be Transocean employees?
A. I think that's typically the case on our rigs around the
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world.
Q. So in term of the slice, however narrow or broad it might
be, of the actual people on the rig, generally speaking, the
drilling contractor's going to have the majority, if not
75 percent, of the people on the rig?
A. There are typically more drilling contractor personnel on
a drilling rig than there are operator personnel or operator
subcontractor personnel.
Q. And people are on the rig because they have jobs to do;correct?
A. That's the only reason for them to be out there,
Mr. Regan, yes.
Q. There are no tourists?
A. No, there are no tourists.
Q. I'd now like to change to -- there were some questions
about Transocean and BP's contractual relationship, and I just
want to ask you a few questions about that, if I might.
Now, you understand there is a contract between
Transocean and BP? You understand that?
A. Yes.
Q. And I'd like to pull up just a few provisions of it and
just confirm that they are consistent with your understanding.
If we could pull up TREX-1356A.20.4.
What I've pulled up, Mr. Newman, is Article 15 of
that contract, which is TREX-1356A under "Performance of
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STEVEN NEWMAN - CROSS
Drilling Operations," and the contract states -- 15.1,
"Operations of Drilling Unit: The contractor" -- which in this
case is Transocean -- "shall be solely responsible for the
operations of the drilling rig."
Do you see that?
A. I do.
Q. And it continues on and it says: "Including operations
onboard the drilling unit as may be necessary or desirable for
the safety of the drilling unit."Do you see that?
A. I do.
Q. And that's your understanding of one of the terms of the
agreement between BP and TO; correct?
A. I think that's -- I think that's an article from the
drilling contract, yes.
MR. REGAN: We'll pull up 1356A.20.4, also in
Section 15, which is "Performance of Drilling Operations."
BY MR. REGAN:
Q. Are you understanding -- is it consistent with your
understanding, I should say, Mr. Newman, that there is a
provision in the contract with respect to prevention of fire
and blowouts?
A. Yes, that would be consistent with my understanding.
Q. And it states: "Contractor" -- again, Transocean --
"shall maintain well control equipment in accordance with good
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STEVEN NEWMAN - CROSS
oilfield practices at all times and shall use all reasonable
means to control and prevent fire and blowouts and to protect
the hole and all of the property of the company" -- in this
case BP.
Is that consistent with your understanding of one of
the terms of the contract?
A. Generally consistent, yes.
Q. You're not aware of any amendment of that term, are you?
A. I'm not aware of, no.MR. REGAN: Let me pull up one more, 1356A.22.2.
BY MR. REGAN:
Q. Again, Mr. Newman, are you aware that, under Article 17,
which is entitled "Safety," that contractually Transocean
agreed in 17.1 that "Contractor" -- Transocean -- "shall have
the primary responsibility for the safety of all its
operations, shall take all measures necessary or proper to
protect the personnel and facilities, and in addition, shall
observe all safety rules and regulations of any governmental
agency having jurisdiction over operations conducted hereunder.
Contractor shall place the highest priority on safety while
performing the work. Contractor shall observe all of the
company's safety rules and guidelines as set forth in safety
and health manual of Vastar Resources and the requirements
contained in Exhibit D" -- and it continues: "Contractor may
also have its own safety manual" -- we can go to the next page,
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STEVEN NEWMAN - CROSS
at the very top -- "and when contractor's and company's safety
manuals conflict, contractor's safety manual shall control."
Are those terms consistent with your understanding of
the agreement between BP and Transocean?
A. These are provisions right out of that contract.
Q. And so you understand that under the contract, if there's
a conflict between Transocean and BP's safety manual,
Transocean's manual controls?
A. That's what the contract says.Q. We talked about a bridging document -- I'm done with that.
We talked about a bridging document, and I think you
said you have the same arrangement with every customer you
worked for; that is, Transocean has a safety system, the
operator or customer has a safety system, and you look at the
two of them and determine whether or not you need to bridge.
Is that fair?
A. That's a general approach, yes.
Q. All around the world?
A. Yes.
Q. Including the Gulf of Mexico?
A. Including the Gulf of Mexico, yes.
Q. Now, the concept of a bridging document, just to be clear
for the Court, that, in concept, is, if you identify a
difference between the policies, you need to bridge between
them. Is that fair?
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STEVEN NEWMAN - CROSS
A. That's the general purpose of the bridging document, yes.
Q. But if you both -- if the operator has a consistent policy
and you have a consistent policy, there's no need for a bridge;
correct?
A. That's correct.
Q. And again, that's how it happens every day of the week in
your business, regardless of who the operators are, all around
the world?
A. That is our general approach to business, yes.Q. You also understand that there are regulations that apply,
not just to the operators under United States law, not just to
the operator, but also to the contractor with respect to steps
needed to be taken to keep wells under control. You're
familiar with that?
A. Yes.
Q. Okay. All right. With respect to the equipment, you
talked a little bit already about it, but Transocean is
responsible for maintenance of any of the equipment that it
owns on the rig; correct?
A. Yes, that's true.
Q. And Transocean provides the maintenance crew, we've
already talked about; correct?
A. Yes.
Q. Transocean is responsible for the maintenance of the BOP
on the Deepwater Horizon; correct?
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STEVEN NEWMAN - CROSS
A. Yes.
Q. Transocean is responsible for training the drilling crew
on the Deepwater Horizon; correct?
A. Yes.
Q. Transocean is responsible for providing well control
training, specifically, to the members of the rig crew to whom
it pertains; correct?
A. For the members -- yeah, for Transocean's employees, yes.
Q. On the maritime side, Transocean is responsible forproviding the maritime crew; correct?
A. Yes.
Q. And Transocean is responsible for training the maritime
crew; correct?
A. Yes.
Q. And with respect to the BOP in specific, we've had some
testimony already about BOP pods and batteries in BOP pods.
Would you agree that the batteries in the BOP and
whether they were charged or not charged, that question and
that maintenance issue is a Transocean responsibility?
A. Yeah. I think earlier I said that, because the BOP is
ours and the pods are ours and the batteries within those pods
are ours, that's our responsibility to maintain and operate
that equipment.
Q. And more broadly, as the supplier and owner of the BOP,
Transocean was responsible for complying with MMS regulations
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STEVEN NEWMAN - CROSS
with respect to the BOP; correct?
A. We were certainly the owner. Cameron was the original
supplier of the BOP. We were the owner.
Q. But my question was a little more specific. As the
owner --
A. Yes.
Q. -- Transocean was responsible for complying with MMS
regulations as to the BOP; correct?
A. Yes.Q. Now, there were modifications that were made to the BP --
or Deepwater Horizon's BOP over the course of its ten-year
history?
A. Yes.
Q. You have general knowledge?
A. General knowledge, yes.
Q. With respect to drawings or other recordations of those
modifications, that would have been a Transocean responsibility
to keep that information; correct?
A. Yes, yes.
Q. I'd like to now turn to the safety management system. You
had a fair number of questions about that.
Now, you were asked about the idea of trust, whether
you have trust in BP's safety management system and the
relationship between Transocean and BP. Do you recall that
generally?
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STEVEN NEWMAN - CROSS
A. Yes.
Q. Okay. Now, I think you said you have -- you should have a
safety system for what you control. I think those were your
words. Does that sound fair?
A. Yes.
Q. And that's true for BP and for Transocean; correct?
A. Yes.
Q. And so there's mutual trust on those issues; correct?
A. I think so, yes.Q. It's a two-way street?
A. Yes.
Q. BP puts its trust it Transocean for its safety policies
for what Transocean controls; and Transocean may put trust in
BP for BP's policies for what BP controls? Fair?
A. Yes.
Q. And again, is that consistent with the way it works all
around the world?
A. Yes. Generally, yes.
Q. Now, you were -- I just want to do this right off the bat.
You were shown some deposition testimony from Mr. John Baxter.
Do you recall that?
A. I do.
MR. REGAN: If we could put up Mr. Baxter's
testimony, deposition, page 175.
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BY MR. REGAN:
Q. I think you were shown two lines from that deposition.
You were shown lines 14 and 15.
Do you recall being shown those two lines by counsel
for the State of Alabama?
A. Yes.
Q. I'd like to show you the question and answers that precede
this. So if we could start with page 174, line 13.
Now, the question starts on line 13:"QUESTION: Now, so BP is using this MODU that it has
leased continuously since its creation in the Gulf of
Mexico.
"Is it your testimony that the Deepwater Horizon
did not have the OMS system apply to it? First of all, is that
true?"
And do you see Mr. Baxter's answer starting at
line 19?
A. Yes.
Q. And he says:
"ANSWER: There was no requirement to apply -- sorry,
I take that back. OMS requires that where BP is
contracting any service which is -- and I can't recall the
words, but they're not on a BP entity -- then the business
which is contracting in that service reviews the safety
management system that the contractor is using. And the
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question then is, is that safety" -- go to the next
page -- "management system -- will it deliver the same --
let me remember the words. It's something like 'it will
deliver the same intent as OMS.'
"The BP business is then required to carry out some
kind of gap assessment. And the point is that the question is
then what, if anything, additional should be applied?
"And, of course, MAR is an element of OMS, taking an
isolation, one, may not be the right thing to do. The otherthing is that MAR is a very high-level risk assessment."
Do you see that question and do you see that answer?
A. Yes.
Q. And were you shown that by the counsel for the State of
Alabama?
A. No.
Q. And that conflict that's described by Mr. Baxter, that an
operator will look at the contractor's safety management
system, determine if there are any gaps, determine if there
needs to be a bridge, and then proceed forward with mutual
trust of each other, that's what you see every day in your
business; correct?
A. That is a -- that's not an uncommon occurrence across the
globe.
Q. That's industry standard, isn't it?
A. It is general industry standard for the operator to have a
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STEVEN NEWMAN - CROSS
safety management system and the contractor to have a safety
management system, and for there to be a pretty thorough
comparison of those two safety management systems. And if
there are gaps or differences, those need to be bridged.
Q. And if there are no gaps, then you proceed at peace?
A. Yes.
Q. Now, I want to talk about your safety management system.
MR. REGAN: If we could pull up 216.71.1 --
2016.7D-1.1.This is an excerpt from your testimony on May 11th,
2010.
Mr. Newman, do you recall, in response to a question
from Senator Murkowski, who asked you if you have any
additional safety measures or modification procedures as a
result of incident, you said: "Senator, we operate a
consistent standard of policies and procedures, maintenance
practices, and operating practices across the Transocean fleet
throughout the world."
I'm going to stop there.
Do you recall giving that answer?
A. It's helpful to read it. Yes.
Q. Okay. I just -- that's all I wanted, to just refresh you
as to that. The system you are referring to is the Transocean
company management system; is that right?
A. Yes.
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STEVEN NEWMAN - CROSS
Q. And that CMS system at Transocean serves as a governing
document. And then there's -- below it, or underneath it, are
various functional policies and procedures that are part of the
overall system?
A. Yes.
Q. And it's Transocean's general practice to have its CMS
govern on its rigs rather than an operator -- operating
management system; correct?
A. Yeah. That's our preference because, you know, we trainour people to our safety management system, and we expect them
to operate our safety management system. And consequently, on
rigs that are changing contracts frequently, they're not having
it change every time we change a contract. They're operating a
consistent set of policies and procedures.
Q. You find it less confusing for your employees, to make
sure that they know "We're working under Transocean's system"?
A. Yes. What I tell our people is that our approach to
safety management is independent of the customer we work for;
it's independent of the operator -- of the area we operate in;
it's independent of the type of rig we operate on.
We have a standard -- standard set of policies and
procedures that comprise our safety management system.
Q. Let's turn to that, and just be brief. But
Exhibit 5474.102.1. This is TREX-5474.
This is a work chart that comes out of the
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Deepwater Horizon operations integrity case. I think you might
be able to see those words at the top.
A. Yes.
Q. And you know what an operations integrity case is; right?
A. Yes.
Q. And that's one of the documents that's put together as
part of Transocean's assessments of conducting safe operations?
A. It is part of our safety management system.
Q. I just want to briefly describe. You see "Levels," this"hierarchy of risk management documents."
Do you see that on the right side?
A. Yes.
Q. And, in fact, I think I have a demonstrative that's easier
to read than this.
MR. REGAN: So, Diane, could we pull up D-4595. I
hope it's easier to read.
There, I can read that better.
BY MR. REGAN:
Q. This is the hierarchy within Transocean, correct, of the
company management system. Right?
A. Yeah. I think this is a graphical depiction of our
comprehensive company management system.
Q. And Level 1 and 1B, these ones here, kind of half the page
to the top, those are worldwide, companywide policies; right?
A. Between Level 1, Level 1A, and Level 1B, those are the
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worldwide documents.
Q. Level 2A and 2B, those are regional-type policies; right?
A. Yes.
Q. And then Level 3, down here at the bottom, those would be
location-specific or rig-specific policies; correct?
A. Yes.
Q. So this is the Transocean Deepwater Horizon operations
integrity case. So we see at Level 3 they all say
"Deepwater Horizon," and then the various manuals or policiesand procedures, they're in Level 3; right?
A. Yes.
Q. Okay. Now, this system is prepared or maintained by
Transocean to ensure that management expectations are
communicated, understood, and implemented effectively; right?
A. Yes.
Q. Okay. I want to just focus just briefly on the top left
corner. I think you talked about it.
But this health and safety policies and procedures,
Level 1A, do you see that box?
A. Yes.
Q. All right. That's TREX-1449.
And forgive me, before I get do that, let me do one
other thing.
With respect to the Macondo well, did you see the
drilling program where it expressly said which safety policy
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was going to apply for drilling this well? Did you see that?
A. No.
Q. Have you seen that?
A. No.
Q. Let me pull it up, 41222.31.1.
All right. This is the drilling program.
And then I'll bring up 7685.1.4, which is the
transmission of that drilling program to the OIM in February of
2010 to the Horizon.Do you see that there on the screen?
Let me now go to the first page of that program,
which I think is --
MR. REGAN: Diane, if we could just come back into
the exhibit and go to -- sorry -- 7685.4.1. Pardon me. I have
it right here. 7685.4.1.
BY MR. REGAN:
Q. All right. This is the first page of the drilling program
for the Macondo well. And do you see there on the first page,
under "Well information and well objectives, our H, S and E
objective is zero incidents, no harm to people, environment, or
equipment. We will accomplish this by:"
And the first bullet is: "Fully implementing
Transocean's health and safety management system on the
Horizon." Do you see that?
A. Yes.
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STEVEN NEWMAN - CROSS
Q. And that's consistent with what we've been talking about
in the last ten minutes. Fair?
A. Broadly speaking, I think so, yes.
Q. Let's go back now to that policy document I had up a
minute ago, which is 1449.5.3 -- 1449.
Now, you were asked a few questions about
stop-the-job authority, and the Court has heard about
stop-the-job authority. But just -- I think it would be
helpful to hear it from you.Stop-the-job authority is a key component in
Transocean's safety management system; correct?
A. Yes.
Q. It's something that you talk about with your employees
every time you're out there around them; right?
A. Yes.
Q. It's both they have the right to stop the job, but they
have the obligation to exercise that authority if they see
something that they don't understand or they think is unsafe or
they think shouldn't proceed; correct?
A. Yes.
Q. And that's a fundamental part of the safety management
system; right?
A. It is.
Q. So if a well site leader tried to direct a Transocean rig
hand to do something that the rig hand thought was unsafe or
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didn't understand, it doesn't matter who asked the rig hand to
do it, he's entitled and obligated to stop that job; is that
right?
A. Absolutely.
Q. And that's not just a Transocean policy; that's the way
the oil and gas business works. Right?
A. Yes.
Q. You've heard about that policy on your competitors' rigs;
right? Maybe not.A. I would agree with your prior statement, which is that's
the general approach taken across the industry.
Q. All right. And in 1449.5.4 there's health and safety
policy statement that you signed. And it expressly says in
there what we just said. "Each employee has the obligation to
interrupt an operation to prevent an incident from occurring";
correct?
A. That's what the document says.
Q. And there's been no change in that policy; right?
A. No.
Q. Similarly, if a Transocean employee feels like he doesn't
have enough information about the job he's about to do,
stop-the-job authority would kick in; correct?
A. Yes.
Q. All right. With respect to safety, you were asked, I
think by Mr. Brian, about what your role is for safety. And
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you described three things: Make sure that a system exists;
make sure that the people that you hire understand the system
and execute against it; and set expectations to make sure
people are meeting them. And I think sometimes you threw in a
Number 4, which is "intervene where necessary."
A. Yes.
Q. Do I have it right?
A. Yes.
Q. Good. But within the health and safety policy, itactually has some specific obligations for the chief executive
officer; correct?
A. I believe it probably does, yes.
Q. First, let me show you 1449.20.1. And I didn't get to see
Mr. Cunningham's drawing, but I did note in the document that
there was a drawing in there that actually had a description
of -- from the OIM to the CEO, how the line management for HSE,
or for safety, works at Transocean.
Do you see that depicted on the screen?
A. Yes.
Q. And is that a fair depiction of how you would get from the
OIM through the various levels of management up to the CEO with
respect to safety?
A. Yes.
Q. Let me now go to 1449.15.1.
Again, we're in that Level 1 document. Do you see
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it? There's a provision about the chief executive officer?
A. Yes.
Q. And it says: "The chief executive officer is ultimately
responsible for the health, safety, and welfare of all
personnel working at company installations, facilities, and
offices."
And then it details some specific responsibilities;
correct?
A. That's what the document says.Q. And you understand that to be the case. That you, in that
role, are ultimately responsible for the health, safety, and
welfare of all personnel working at Transocean installations,
facilities, and offices; correct?
A. As CEO, I'm ultimately responsible for a lot of things --
Q. And the way you --
A. -- including health, safety, and welfare.
Q. And the way you discharge that ultimate responsibility
that you own, as per the policy, is you clarify expectations,
you hire competent people to carry them out, you track their
performance, and you intervene where necessary. Is that fair?
A. Yeah, I think that's a good description of an approach to
management.
Q. You have ultimate responsibility, but you're not doing all
the work of the people below you, the 19,000 people at
Transocean; correct?
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A. No.
Q. You can't do everything --
A. Yes, that is correct.
Q. Right. So you try to discharge that ultimate
responsibility through expectations, through hiring competent
people, tracking their performance, and intervening where
necessary; right?
A. Yes.
Q. Let me show you 1449.123.1. This is another chart that Isaw in this document. You were asked about THINK procedures,
START programs, Task Risk Assessment, MAHRAs. I just asked you
about operations integrity case.
I was hoping that this chart might organize our
conversation here and for the Court. This is from the document
TREX-1449, page 123.
Do you see this as a representation, graphically, of
the levels of risk management within Transocean?
A. Yes.
Q. We see here the pencil on the side, "increasing complexity
and severity of risk," up the side; right?
A. Yes.
Q. The THINK procedures that are written here, both verbal,
individual, written, that's what we talked about earlier today;
correct?
A. You used the word "procedures." I think what that says is
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"process"; "THINK planning process, individual, verbal, and
written."
Q. All right.
A. And then you get to task-specific THINK procedures.
Q. Okay. Yes. I skipped that one. You're right.
Then we have a line here, "shore-based resources,"
and then some things above the line; correct?
A. Yes.
Q. And the things above the line include the operationsintegrity case -- that's at the very top; right?
A. Yes.
Q. There was an operations integrity case done for the
Deepwater Horizon; correct?
A. Yes.
Q. There's an issue of a safety case. Do you know what that
refers to?
A. Yes. In some highly regulated regimes around the world
there is a requirement for an analysis of safety on the rig,
and that document is referred to as a safety case.
Q. Okay. There's the MAHRA, or major accident hazard risk
assessment; correct?
A. Yes.
Q. And then there's HAZOP or HAZID. Those are other types of
studies you've done; correct?
A. Yeah, hazard identification and hazard operability
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analysis.
Q. So for the DeepwaterHorizon, though, we know it had not
only just an OIC, but it also had a MAHRA done; correct?
A. Yes.
Q. Just a couple questions about the THINK procedures, then I
want to turn to that MAHRA.
You gave an example, I think to Mr. Brian, about how
a THINK procedure might work. And I think you were talking
about sling lockers. I think that was what you werediscussing?
A. Yeah. I mean, that was a simplified task to describe how
you might apply the THINK planning process at the individual
level.
Q. Understood. There also would be a THINK procedure for
conducting a negative test; correct?
A. There would be a THINK plan.
Q. There would be a THINK plan. Maybe it would be verbal,
maybe it would be written, but there would be a THINK plan for
conducting a negative test; correct?
A. I would expect there to be, yes.
Q. You would expect there to be a THINK plan for displacing
the riser; correct?
A. I would expect there to be a THINK plan for every task
that's undertaken on our drilling rigs.
Q. So you would expect for the positive test, the negative
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test, displacing the riser, and on down the line?
A. I would expect a THINK plan to be undertaken for every
task.
Q. And have you seen written THINK plans that were prepared
for the Deepwater Horizon with respect to negative tests? Have
you seen those?
A. As a result of the litigation, I believe I have, yes.
Q. And have you seen THINK plans that were prepared for
displacement of the riser?A. I don't recall.
Q. But fundamentally, that procedure, the THINK procedure, is
designed to have people stop before they take action, think
about what they're going to do, talk to the people they're
going to do it with, make sure they're clear on what's going to
happen, consider the risks, and only then proceed?
A. That is the -- that's the fundamental expectation of the
THINK planning process, is that before the crew or any
individual in the crew undertake a task, they conduct a THINK
plan to make sure that they can carry out that task safely and
efficiently.
Q. Okay. I'd like to now turn to the Transocean major
accident hazard risk assessment.
Now, still on this same document, 1449, let me pull
1449.132.1.
Now, a few preliminary questions, Mr. Newman. You
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were shown some testimony from Dr. Bea. Do you remember seeing
that on your direct examination?
A. I do.
Q. And I think you were asked about whether Transocean could
do a risk assessment about all risks inherent in the well. Do
you remember that?
A. I do.
Q. And I think you said you couldn't. You could only do a
risk assessment for the things that Transocean controls and thethings Transocean does; correct?
A. Yes.
Q. All right. So it applies -- you can do a risk assessment
that's applicable to your own activities; right?
A. Yes.
Q. Okay. And this is what a risk assessment -- the purpose
of a -- under the policy is -- let me just read it.
It says: "Transocean has three processes to provide
assurance that major hazards are effectively managed.
One, "the Major Hazard Risk Assessment, MHRA."
Two, "the HSE (or safety) Case."
And three, "the Operations Integrity Case (OIC).
"Every vessel on the Transocean fleet must have a
current version of a MHRA, Safety Case, or OIC."
Do you see that?
A. Yes.
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Q. And the Deepwater Horizon had two of them. It had a MHRA
and an OIC; correct?
A. I believe that's true, yes.
Q. And then for definitions, to make sure we're all on the
same page, it's defined. "A Major Hazard Risk Assessment
(MHRA) shows that major hazards have been identified, the risk
associated with those hazards has been qualitatively assessed,
and the preventive and mitigating controls necessary to reduce
the risk to ALARP have been identified."ALARP stands for?
A. As low as reasonably practical.
Q. And that's a term that comes out of both the safety case
concept and also some of the process safety discussions; right?
A. Yes.
MR. REGAN: Let me pull up 2187.1.2. This is the
major accident hazard risk assessment for the Horizon. I'd
like to go to .2.1 in the same exhibit, TREX-2187.
BY MR. REGAN:
Q. Do you see there's a statement of approval of the document
for 2004 signed by John Keeton?
A. I do.
Q. And he is confirming that this major accident hazard risk
assessment has been performed and that it identified the
reasonably foreseeable hazards that might lead to a major
accident; correct?
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A. That's what the document says, yes.
Q. And Mr. Keeton is confirming, by virtue of his signature,
that it has been demonstrated that adequate controls are in
place so that HSE risks on the Horizon can be considered both
tolerable and ALARP, as low as reasonably practicable; correct?
A. That's what the document says.
Q. And then he goes on to approve it; correct?
A. He has signed the document, yes.
MR. REGAN: Now let's go to 2187.5.BY MR. REGAN:
Q. There's a list of scenarios, and it says: "The study
concentrated on identifying major accident hazards. The
following is a list of the possible hazards for
semisubmersibles engaged in exploration or development
drilling."
Do you see that?
A. Yes.
Q. And that list of hazards applies to any MODU operated by
Transocean in the oceans of the world. Is that fair?
A. Yes.
Q. I want to focus on just a couple of them because a couple
have already been covered. I want to focus on "reservoir
blowout at drill floor."
Do you see that?
A. Yes.
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Q. Let's turn to 2817.178.1. This is the chart similar to
what you went through, I think, with Mr. Cunningham,
identifying the hazards. "Reservoir blowout (at drill floor),"
do you see that?
A. Yes.
Q. It also identifies the consequences of that event: "Major
environmental impact. Multiple personnel injuries and/or
fatalities. Major structural damage and possible loss of
vessel."Do you see that?
A. I do.
Q. And then it lists the preventions; correct?
A. Yes.
Q. And the first prevention listed to avoid the hazard of a
reservoir blowout at the drill floor is "well control
procedures and training of drill crew in well control";
correct?
A. That's what the document says.
Q. The well control procedures and the training of the drill
crew in well control is a Transocean responsibility; correct?
A. Yes.
Q. The second prevention of a reservoir blowout is
"maintenance and testing of BOPs and other subsea and well
control equipment"; correct?
A. That's what the document say also.
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Q. Maintenance and testing of BOPs and other subsea and well
control equipment, that's a Transocean responsibility; correct?
A. Yes.
Q. The third prevention of a reservoir blowout at the drill
floor is "instrumentation and indication of well status";
correct?
A. That's what the document says.
Q. And that's referring to the HITEC system, or it could be,
in the olden days, just more rotary-type gauges --A. The geolograph.
Q. Literally the gauges, the computer screens, the data, the
things that are used by people to understand what's going on in
the well; correct?
A. I think that's what that would refer to, yes.
Q. And instrumentation and indication of well status, that's
a Transocean responsibility; correct?
A. We do have instrumentation and indication of the well
status, in addition to other companies out there doing that as
well.
Q. But the person with the primary responsibility to watch
the well are the drillers; correct?
A. Correct.
Q. And the driller works in the driller's cabin or driller's
shack or doghouse; correct?
A. Yeah, that what we call it.
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Q. The epicenter of instrumentation and the indication of
well status is that doghouse or driller's shack or driller's
cabin; correct? That's where the bulk of that information
is --
A. Yes. The driller has access to the instrumentation and
indication of well status.
Q. The fourth prevention for a reservoir blowout at the drill
floor is "hydrocarbon combustible gas detection system";
correct?A. That's what the document says.
Q. And that detection system on the Horizon, that's a
Transocean responsibility; correct?
A. The system that was installed permanently on the Horizon
is Transocean's system, yes.
Q. And the fifth prevention of a reservoir blowout at the
drill floor is "redundant BOP controls"; correct?
A. That's what the document says.
Q. And we've already agreed that the BOP controls are a
Transocean responsibility?
A. Yes.
Q. Those preventions that we've just listed, the five
preventions of a reservoir blowout at the drill floor, those
are the same types of preventions you would expect to see,
frankly, on any of your rigs with respect to this risk;
correct?
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A. Yes.
Q. Those are industry standard preventions for reservoir
blowouts; correct?
A. Yes.
Q. Then with respect to mitigations, do you see, as listed
there in the column Emergency Response Procedures, "ability to
move off station; firefighting capabilities; ability to
evacuate the rig; availability of medical treatment, including
medivac; redundant BOP controls; passive fire protection inhighly populated areas of vessel; and EX-rated equipment to
prevent ignition of blowout"?
All of those mitigations are Transocean -- are
primarily Transocean responsibilities; correct?
A. No.
Q. Which are not?
A. Availability of medical treatment, including medivac.
Typically, the medivac element of it would be provided by the
customer.
Q. Excluding the medivac, are the rest of the mitigations
Transocean responsibilities?
A. Yes.
Q. Again, are those standard mitigations in the industry for
this risk?
A. Yes. Generally standard, yes.
Q. Okay. Mr. Cunningham showed you a similar page for gas in
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the riser.
MR. REGAN: I'd like to turn to 2187.212.1.
BY MR. REGAN:
Q. There's also identified -- hazards of BOP component
failure. Do you see that?
A. I do.
Q. And the prevention -- it indicates consequences. And the
prevention is testing, inspection, and maintenance; correct?
A. That's what the document says.Q. Also, failure of hydraulic supply. Do you see that?
A. I do.
Q. The same preventions; correct?
A. That's what the document says.
Q. And those testing, inspections, and maintenance, again,
would be led by Transocean; correct?
A. Yes.
Q. All right. With respect to -- I'll ask you about the
chain of command on the Deepwater Horizon. I'm going to change
topics. Okay?
We heard some testimony about the transition of
control or authority between the OIM and the master. Do you --
are you able to tell us, Mr. Newman, with respect to that chain
of command, when authority was transitioned from the OIM to the
master?
A. Well, under the statutory framework, the master always,
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always has overriding authority, particularly in the event of
an emergency, such as what occurred.
Q. Okay. And what constitutes an emergency for purposes of
that -- of the handover?
A. When the emergency response team musters on the bridge.
Q. So visually seeing the muster would then be the evidence
that there had been a transition from a drilling issue of the
OIM to the master -- from a maritime issue to the master?
A. Well, as individuals gathered in the emergency responsecenter, the captain would understand that he has overriding
authority.
Q. Let me put up TREX-5643. This is a November 20th, 2007 --
sorry -- 5643. This is a November 20th, 2007 memorandum. Do
you recognize this?
A. Yes.
Q. And it was something that you authorized; correct?
A. Yes.
Q. It was in connection with a merger that had taken place
in -- earlier in 2007; correct?
A. The merger took place at the end of November 2007.
Q. Okay. So it was preparations for how the new combined
entity would operate on day one going forward; correct?
A. Yes.
Q. Okay. Again, you were one of the approvers of this
document; is that right?
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A. I recall seeing it, yes.
MR. REGAN: If you just go down to the bottom of the
page, Diane, I think we might have Mr. Newman's name.
BY MR. REGAN:
Q. Do you see your name there as an approver?
A. Yes.
MR. REGAN: If we can go to 5643.4.1.
BY MR. REGAN:
Q. Now, in this memorandum, did you write, for rig chain ofcommand, "There will be no changes to the current chain of
command and rig organization on Transocean or GlobalSantaFe
rigs on Day 1"?
And as we've highlighted: "The offshore installation
manager will remain overall responsible for the health, safety,
and welfare of all persons and all activities conducted
on board their respective rig. The OIM is authorized and
obligated to take whatever actions he considers necessary to
prevent injury, loss of life, damage to equipment/structure,
and/or loss of rig and well operation integrity."
Do I read that correctly?
A. Yes, you did.
Q. And was that statement true when you approved the
document?
A. Yes.
Q. Well control. To you, well control, in terms of
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maintaining well control, requires awareness and vigilance,
identification and recognition of an indication of a loss of
well control, and the requirement to then take prompt and
appropriate action; is that right?
A. Yes.
Q. Now, kicks -- I think you might have been asked this, but
kicks themselves in an exploration well are not a surprising
event, are they?
A. They're not uncommon.Q. Right. They're unanticipated, meaning you don't know when
they're going to happen, but you prepare for them because you
know it's a possibility; correct?
A. Under this framework of awareness, recognition, and
prompt, appropriate action, the awareness part is to remain
vigilant.
Q. Right. And in this business in drilling deepwater oil and
gas wells, regardless of what the plan is, regardless of what
the prognosis is, regardless of what the engineering is,
there's always one -- or in this case two people whose job it
is to, in essence, assume everything's going to go wrong, we're
going to have a situation that we're going to need to respond
to quickly. Is that right?
A. I don't think that's unique to deepwater. I think there's
a need for that high level of awareness, understanding, and
recognition and the prompt, appropriate action.
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STEVEN NEWMAN - CROSS
Q. That's because drilling wells is a dynamic process. It's
you have to be ready for something that's unanticipated.
That's why drillers constantly monitor the well; right?
A. Yes.
Q. Loss returns, loss return events, in your experience,
Mr. Newman, are those rare things in drilling deepwater wells?
A. No, they're not uncommon.
Q. Use of loss circulation material, is that a rare thing to
happen?A. That's the general approach to curing loss returns.
Q. With respect to the well control manual itself --
MR. REGAN: If we could pull up D-4595.1. D-4595.1.
BY MR. REGAN:
Q. In this hierarchy of documents that we talked about
10 minutes ago, we see the well control handbook is Level 1B;
correct?
A. Yes.
Q. It applies wordwide; correct?
A. Yes, it does.
Q. The Horizon didn't have its own well control manual, and
the Nautilus has its own, and the DD3has its own. The well
control handbook for Transocean is a global policy; correct?
A. It is.
Q. Irrespective of the operator, irrespective of the
location; correct?
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STEVEN NEWMAN - CROSS
A. That's correct.
Q. Now, with respect to -- the judge has heard a fair amount
about this. But with respect to monitoring the well, the
person with responsibility on Transocean rigs to constantly
monitor the well and shut it in if they believe it's flowing is
the driller; correct?
A. Our driller has that responsibility, yes.
Q. And the driller has the responsibility to shut it in if he
has any indication that something's happening that may not beright?
A. I think that's part of the prompt, appropriate action.
Q. And it's the policy of Transocean that the driller or the
person doing the driller's function has to shut the well in as
quickly as possible if a kick is detected or sus
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