A lawsuit against Anadarko Petroleum Corp. over a 2017 explosion accuses the company of keeping deteriorating Colorado oil and gas wells running while cutting maintenance budgets in the wake of the 2014 price collapse.
The suit, filed in U.S. District Court in Houston by shareholders after a gas line blast killed two people in Firestone, Colo., in April 2017, said the company ordered a massive reduction in safety-related budgets that left a "skeleton staff" for well remediation. A relentless drive for profits at the expensive safety, the lawsuit alleges, made the Colorado wells "a ticking time bomb."
The suit claims that Anadarko had started work on well remediation in Colorado, then gutted safety and remediation budgets after prices dropped starting in mid-2014. The suit quotes an unnamed former Anadarko official as saying that when the price of oil fell, "Anadarko's attitude to safety completely changed." The plaintiffs claim that Anadarko had a single employee checking gas lines in Weld County, Colo., one of the busiest producing counties in the nation.
"There should have been twelve to twenty employees," the suit alleges, adding that money that had been budgeted to well remediation was diverted to production when oil and gas prices went back up in 2016 and 2017.
"Anadarko did not consider safety threats in determining which few wells to remediate, even though many of these wells were located near houses or schools," the suit reads. An investigation into the Firestone explosion pointed to a severed gas pipeline believed to be abandoned but that was still connected to an operating Anadarko well as the cause. The company shut in more than that 3,000 similar one-inch gas lines similar to the line in question in 10 days after the blast.
Anadarko told S&P Global Market Intelligence that it welcomes the chance to try the case in court.
"Although we do not comment on specific allegations in pending litigation, the company looks forward to the opportunity to substantively respond through the judicial process when appropriate," said Jennifer Brice, the company's manager of corporate communications for the Rockies.