United States Department of the Interior

BUREAU OF SAFETY AND ENVIRONMENTAL ENFORCEMENT

Gulf of Mexico OCS Region New Orleans District 990 N . Corporate Drive , Suite 100 New Orleans, LA 70123-3392

In Reply Refer To: MS 5250

December 7, 2011

CERTIFIED MAIL RETURN RECEIPT REQUESTED

Mr. James Dupree BP Exploration and Production Inc. 200 Westlake Park Blvd., WL 4-2017 Houston, Texas 77079

Dear Mr. Dupree:

On October 12, 2011 , the Bureau of Safety and Environmental Enforcement (BSEE) New Orleans District issued BP a Notification of Incidents ofNoncompliance that occurred while BP and its contractors conducted drilling and temporary abandonment operations at Lease OCSG 32306, Well No. 1, Mississippi Canyon Block 252 (the Macondo well). In that Notification, we stated that the list of regulatory violations may be supplemented as additional evidence is reviewed. We have reviewed additional evidence, in addition to the Investigation Report of the Joint Investigation Team (JIT) of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE, now BSEE) and the United States Coast Guard, and concluded that additional violations occurred that warrant an enforcement code S (facility shut in). We accordingly hereby issue this Notification ofincidents ofNoncompliance to BP for violating the following regulations:

30 CFR 250.427 - BP failed to conduct an accurate pressure integrity test (PIT) at the 13-5/8" liner shoe. BP lacked confidence in the test' s validity but did not retest. 30 CFR 250.427(b) - BP failed to suspend drilling operations at the Macondo well when the safe drilling margin identified in the approved application for permit to drill was not maintained. Specifically,
In the hole sections below the 22" casing and 16" liner, BP drilled ahead with less than the approved 0.3 ppg margin between the operative fracture gradient (based on the shoe test at the top of the interval) and the mud weight. In the hole sections below the 13 5/8" and 9 7/8" liners, BP drilled ahead with less than the approved 0.5 ppg margin between the operative fracture gradient (based on BP' s internal analysis) and the mud weight.

2 This list of violations may be supplemented as additional evidence is reviewed. You are hereby ordered to submit a letter acknowledging receipt of this Notification within 14 days. Because no corrective action is now possible to remedy these violations, no additional action on your part is presently required. You have the right to appeal this Notification in accordance with 30 CFR Part 290. You must file your appeal with the New Orleans District Office, the office issuing this notification. If you have any questions about this letter, please contact me at (504) 734-6742.

David J. Trocquet New Orleans District Manager

12/07/2011 08:18 FAX

504 734 8741

N. 0. DISTRICT

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TRANSMISSION OK TX /RX NO DESTINATION TEL # DESTINATION ID ST . TIME TIME USE PAGES SENT RESULT 3884 812813884300 12/07 08: 17 0 1 ' 18 2 OK

United States Department ofthe Interior

BUREAU OF SAPETY AND ENVIRONMENTAL ENFORCEMENT
Gulf of Mexico OCS Region New Orleans District 990 N, Corporate Drive, Suite I 00 New Orleans, LA 70123-3392

In Reply Refer To: MS 5250

December 7,2011

CERTIFIED MAIL RETURN RECEIPT REQUESTED

Mr. James Dupree
BP Exploration and Production Inc. 200 Westlake Park Blvd., WL 4-2017 Houston, Texas 77079 Dear Mr. Dupree:

On October 12, 2011, the Bureau of Safety and Environmental Enforcement (BSEE) New Orleans District issued BP a Notification oflncidents of Noncompliance that occurred while BP and its contractors conducted drilling and temporary abandorunent operations at Lease OCSG 32306, Well No. 1, Mississippi Canyon Block 252 (the Macondo well). In that Notification, we stated that the list of regulatory violations may be supplemented as additional evidence is reviewed. We have reviewed additional evidence, in addition to the Investigation Report of the Joint Investigation Team (JIT) of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE, now BSEE) and the United States Coast Guard, and concluded that additional violations occurred that warrant an enforcement codeS (facility shut in). We accordingly hereby issue this Notification of Incidents ofNoncompliance to BP for violating the following regulations: 30 CFR 250.427 - BP failed to conduct an accurate pressure integrity test (PIT) at the 13-5/8" liner shoe. BP lacked confidence in the test's validity but did not retest.