OilVoice - The St. Joe Company Files Lawsuit against M-I SWACO for Role in Deepwater Horizon Oil Spill

The St. Joe Company Files Lawsuit against M-I SWACO for Role in Deepwater Horizon Oil Spill

Thursday, August 26, 2010

The St. Joe Company has announced it filed a lawsuit against M-I SWACO for its role in the Deepwater Horizon Oil Spill'). M-I SWACO was the drilling fluid contractor for the Deepwater Horizon drilling rig that exploded on April 20, 2010, resulting in the largest oil spill in U.S. history.

Filed today in Superior Court for the State of Delaware, New Castle County, the lawsuit charges M-I SWACO with having been grossly negligent in the performance of its duties.

'We believe that M-I SWACO's reckless behavior in connection with its management of the drilling fluid program at the Deepwater Horizon played a significant role in this epic disaster,' says William A. Brewer III, partner at Bickel & Brewer and lead counsel for St. Joe.

According to the lawsuit, M-I SWACO was hired by BP Exploration & Production, Inc. ('BP') to ensure the proper composition, use and monitoring of drilling fluid, also called drilling 'mud.' Drilling fluids are used to control well pressure and are recognized as the first line of defense against a blowout. The lawsuit claims M-I SWACO failed to report a series of regulatory violations which should have led to a suspension of operations on the Deepwater Horizon.

M-I SWACO allegedly displaced the heavy drilling mud from the well with lighter seawater without confirming that doing so would not result in a blowout. In addition, the displacement itself was allegedly performed in a grossly negligent manner because it was done without the benefit of key tests. The lawsuit claims M-I SWACO used unproven formulations of specialized fluids, and the mud was displaced at depths that were nearly a mile-and-a-half deeper than usual.

The complaint alleges, 'M-I SWACO is liable for the grossly negligent and reckless way in which it managed and conducted the use of drilling fluids to maintain well control, and its intentional disregard for its obligation to take appropriate action in the face of multiple violations of law on the Deepwater Horizon.' The lawsuit claims as a result of the actions of M-I SWACO, there was insufficient drilling mud to hold back the harmful escape of methane gas at the well. The methane gas shot up through the drilling column and out on the platform of the Deepwater Horizon - before igniting, exploding and engulfing the rig in flames.

The lawsuit represents the second legal action taken by St. Joe in the aftermath of the Deepwater Horizon incident. St. Joe filed a lawsuit against Halliburton Energy Services, Inc. on August 4, 2010. St. Joe owns approximately 577,000 acres in Florida, 70 percent of which are within 15 miles of the coast of the Gulf of Mexico. Since the incident, St. Joe has suffered a substantial decline in its enterprise value - faced with direct costs, an interruption to its business, and the diminution in the value of its assets. The Company's stock price declined by over 40 percent in the days following the explosion.

St. Joe's President and CEO Britt Greene commented on today's lawsuit and the Company's efforts to pursue a full and appropriate remedy for the damages it has suffered since the incident occurred. 'We believe the facts demonstrate that M-I SWACO is among the parties responsible for the Deepwater Horizon incident,' said Greene. 'Even as our company focuses on its long-range strategic plan, we remain committed to pursuing remedies against those responsible for this catastrophe and the damages suffered by St. Joe.'

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