BP is carrying the can for the Gulf of Mexico tragedy which claimed 11 lives. Unsurprisingly, its initial report findings suggest the blame may need to be spread more widely.
No single factor caused the Macondo well tragedy. Rather, a sequence of failures involving a number of different parties led to the explosion and fire which killed 11 people and caused widespread pollution in the Gulf of Mexico earlier this year.
A report released by BP last month concluded that decisions made by “multiple companies and work teams” contributed to the accident which it says arose from “a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces.”
The report – based on a four-month investigation led by Mark Bly, BP’s head of safety and operations and conducted independently by a team of over 50 technical and other specialists drawn from inside BP and externally – found six key failings which formed the anatomy of a disaster.
- The cement and shoe track barriers – and in particular the cement slurry that was used – at the bottom of the Macondo well failed to contain hydrocarbons within the reservoir, as they were designed to do, and allowed gas and liquids to flow up the production casing;
- The results of the negative pressure test were incorrectly accepted by BP and Transocean, although well integrity had not been established;
- Over a 40-minute period, the Transocean rig crew failed to recognise and act on the influx of hydrocarbons into the well until the hydrocarbons were in the riser and rapidly flowing to the surface;
- After the well-flow reached the rig it was routed to a mud-gas separator, causing gas to be vented directly on to the rig rather than being diverted overboard;
- The flow of gas into the engine rooms through the ventilation system created a potential for ignition which the rig’s fire and gas system did not prevent;
- Even after explosion and fire had disabled its crew-operated controls, the rig’s blow-out preventer on the sea-bed should have activated automatically to seal the well.
But it failed to operate, probably because critical components were not working.
Commenting on the report, which he commissioned immediately after the Macondo explosion, BP’s outgoing chief executive Tony Hayward said: “The investigation report provides critical new information on the causes of this terrible accident. It is evident that a series of complex events, rather than a single mistake or failure, led to the tragedy. Multiple parties, including BP, Halliburton and Transocean, were involved.
“To put it simply, there was a bad cement job and a failure of the shoe track barrier at the bottom of the well, which let hydrocarbons from the reservoir into the production casing. The negative pressure test was accepted when it should not have been, there were failures in well control procedures and in the blow-out preventer; and the rig’s fire and gas system did not prevent ignition.
“Based on the report, it would appear unlikely that the well design contributed to the incident, as the investigation found that the hydrocarbons flowed up the production casing through the bottom of the well,” Hayward said.
BP’s incoming chief executive Bob Dudley said: “We have said from the beginning that the explosion on the Deepwater Horizon was a shared responsibility among many entities. This report makes that conclusion even clearer, presenting a detailed analysis of the facts and recommendations for improvement both for BP and the other parties involved. We have accepted all the recommendations and are examining how best to implement them across our drilling operations worldwide.
“This was a tragic accident that resulted in the loss of 11 lives and impacted the communities and the environment along the Gulf Coast region. We deeply regret this event. We have sought throughout to step up to our responsibilities. We are determined to learn the lessons for the future and we will be undertaking a broad-scale review to further improve the safety of our operations. We will invest whatever it takes to achieve that. It will be incumbent on everyone at BP to embrace and implement the changes necessary to ensure that a tragedy like this can never happen again.”
Chairman of the Board Carl-Henric Svanberg commented: “I believe this report will be of significant value in helping the overall understanding of how this tragedy occurred. It is of the utmost importance to the Board to ensure that BP learns from this and further enhances the safety of its operations for the future.”
Based on its key findings, the investigation team has proposed a total of 25 recommendations designed to prevent a recurrence of such an accident. The recommendations are directed at strengthening assurance on blow-out preventers, well control, pressure-testing for well integrity, emergency systems, cement testing, rig audit and verification, and personnel competence.
The company said it expected a number of the investigation report’s findings to be considered relevant to the oil industry more generally and for some of the recommendations to be widely adopted.
BP said the report was based on information available to the investigating team. It noted that additional relevant information may be forthcoming, for example, when Halliburton’s samples of the cement used in the well are released for testing and when the rig’s blow-out preventer is fully examined now that it has been recovered from the sea-bed. There will also be additional information from the multiple ongoing US government investigations.
UPDATE:
The MC252 well has been shut-in since July 15; and there is currently no oil flowing into the Gulf. The Development Driller II has pulled its diagnostic tools out of the well and is standing by for the relief well intercept by the Development Driller III. The Development Driller III is currently conducting a ranging run. Upon completion of the ranging run, decision on the next steps will be made.
Change at the top
Tony Hayward is to step down as group chief executive with effect from October 1, 2010. He will be succeeded as of that date by fellow executive director Robert Dudley.
BP chairman Carl-Henric Svanberg said: “The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired.
“The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed incident. BP remains a strong business with fine assets, excellent people and a vital role to play in meeting the world’s energy needs. But it will be a different company going forward, requiring fresh leadership supported by robust governance and a very engaged board.
“We are highly fortunate to have a successor of the calibre of Bob Dudley who has spent his working life in the oil industry both in the US and overseas and has proved himself a robust operator in the toughest circumstances,” Svanberg said.
Bob Dudley (54) is a main board director of BP and currently runs the recently-established unit responsible for clean-up operations and compensation programmes in the Gulf of Mexico. He joined BP from Amoco after the merger of the two companies in 1998. He was president and CEO of BP’s Russian joint venture, TNK-BP, until 2008.
“I am honoured to be given the job of rebuilding BP’s strengths and reputation but sad at the circumstances. I have the greatest admiration for Tony, both for the job he has done since he became CEO in 2007 and for his unremitting dedication to dealing with the Gulf of Mexico disaster,” Dudley said.
“I do not underestimate the nature of the task ahead, but the company is financially robust with an enviable portfolio of assets and professional teams that are among the best in the industry. I believe this combination – allied to clear, strategic direction – will put BP on the road to recovery.”
On his appointment, Dudley will be based in London and will hand over his present duties in the US to Lamar McKay, chairman and president of BP America. “In this change of roles, I particularly want the people of the Gulf Coast to know that my commitment to remediation and restitution in the region is not lessened. I gave a promise to make it right and I will keep that promise,” he said.
Hayward will remain on the BP board until November 30, 2010. BP also plans to nominate him as a non-executive director of TNK-BP.
Commenting on the decision to step down, Hayward said: “The Gulf of Mexico explosion was a terrible tragedy for which – as the man in charge of BP when it happened – I will always feel a deep responsibility, regardless of where blame is ultimately found to lie.
“From day one I decided that I would personally lead BP’s efforts to stem the leak and contain the damage, a logistical operation unprecedented in scale and cost. We have now capped the oil flow and we are doing everything within our power to clean up the spill and to make restitution to everyone with legitimate claims.
“I believe the decision I have reached with the board to step down is consistent with the responsibility BP has shown throughout these terrible events. BP will be a changed company as a result of Macondo and it is right that it should embark on its next phase under new leadership,”
Hayward said. “I will be working closely with Bob Dudley over the coming months to ensure a smooth transition. It has been a privilege to serve BP for nearly 30 years and to lead it for the last three. I am sad to leave so many fine colleagues and friends who have helped this great company to achieve so much over the years. I am sorry that achievement has been overshadowed by the tragedy in the Gulf of Mexico.”
BP said that under the terms of his contract Hayward would receive a year’s salary in lieu of notice, amounting to US$1.65
million.
