Wall Street Journal: Workers Missing after Oil Rig Explosion

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By GUY CHAZAN , RUSSELL GOLD And BEN CASSELMAN

Twelve people were missing and seven critically injured after an explosion and fire at an oil-drilling rig in the Gulf of Mexico.

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AFP/Getty ImagesA Coast Guard rescue helicopter and crew document the fire aboard the mobile offshore drilling unit Deepwater Horizon, while searching for survivors.

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The rig, about 41 miles off the Louisiana coast, is owned and operated by Transocean Ltd. and contracted to British oil major BP PLC. A spokesman for Transocean said most of the 126 people on board were safe. A Coast Guard spokeswoman said 12 were still missing but said reports indicated that all 126 people got off the rig. The rig was still burning and listing.

Four Coast Guard helicopters and an airplane are being used in rescue operations and five Coast Guard cutters are also responding, the Coast Guard said. “We are still in a search and rescue operation,” Transocean spokesman Greg Panagos said.

Billy Nungesser, president of Plaquemines Parish, has said that the missing people were in a lifeboat that drifted away from the rig while rescue workers were helping others.

It was unclear what caused the blast, which happened at around 10 p.m. Tuesday. Mr. Panagos said Transocean wouldn’t focus on determining the cause until the search and rescue concludes.

Fifteen workers were airlifted to local hospitals, according to Petty Officer 3rd Class Elizabeth Bordelon of the Coast Guard.

Ninety-nine people from the rig are on a vessel expected to arrive at Port Fourchon, La., at 8 p.m. CDT, the Coast Guard said. Transocean is bringing family members of the rig’s crew to Louisiana and is providing counseling, Mr. Panagos said.

“Anytime an incident like this happens, it’s a huge deal to us. We don’t want to see anybody hurt and we’ll do everything we can to take care of the crew,” Mr. Panagos said.

A spokesman for BP said the company had six personnel on board the rig at the time of the incident, and all were safe. The rig, the Deepwater Horizon, is located in an area known as the Mississippi Canyon.

Deepwater Horizon is a semisubmersible, effectively a floating platform that has small thrusters to hold it in place above a well. It was carrying out exploration drilling on BP’s Macondo prospect in the deepwater Gulf of Mexico. BP said Transocean was carrying out the work on BP’s behalf and was responsible for safety on the rig. Its staff on the facility work with Transocean’s drilling team to make sure the work is done to BP’s specifications.

BP, which owns the rights to produce oil and gas from the area, filed for a permit April 16 to temporarily abandon the well it was drilling at the site of the explosion, according to the Minerals Management Service, an arm of the Interior Department that oversees offshore drilling. It wasn’t clear from the service’s data if the government had approved the permit.

A BP spokesman says it had recently wrapped up exploration drilling. It is standard practice, the spokesman said, to file such a permit. The rig would then be moved to another location while BP spends time analyzing and interpreting data.

BP had begun to drill the well in June 2009, using a different Transocean rig. The Deepwater Horizon appears to have begun work in January, according to Minerals Management Service well data. The well had reached a depth of at least 11,500 feet.

Temporarily abandoning the well would typically require setting cement plugs in the wells to make sure that water, oil and natural gas don’t move around.

The deepwater Gulf of Mexico is a key focus of the western oil majors and a significant exploration hotspot. Last year, BP announced a “giant” discovery in the Gulf, saying its Tiber prospect, south of Louisiana, contained some three billion barrels of oil.

[bpblast0421] Associated PressThe ultra-deepwater semisubmersible rig Deepwater Horizon is shown operating in the Gulf of Mexico.

Finds like Tiber have resurrected a region that was dismissed as the “Dead Sea” in the early 1990s after the majors drilled a string of dry holes.

With a fleet of 146 rigs, Transocean is the world’s largest offshore drilling contractor. It has built up a big position in state-of-the-art rigs capable of operating in deep water and other technically challenging environments and has more than 21,000 employees world-wide. The company moved its domicile to Switzerland from the Cayman Islands in December 2008 for tax purposes and debuted on the Swiss stock exchange earlier this month.

Tuesday’s explosion isn’t the first major accident in the modern era of offshore drilling.

In 2001, a platform working off the coast of Brazil caught fire, killing 11 workers and sank five days later. The platform was a converting semisubmersible drilling rig.

According to an investigation by Petroleo Brasileiro SA, oil and natural gas was accidentally pumped into a storage tank, which led to excessive pressure in the tank and a rupture. Gas was dispersed inside the vessel and 17 minutes later, was ignited and exploded. The crew began to evacuate the facility about 1½ hours after the tank rupture.

About eight hours later, the facility was badly listing. Crews tried to inject nitrogen gas into its pontoons, but it sank five days later.

—Angel Gonzalez and James Herron contributed to this article.

Write to Guy Chazan at guy.chazan@wsj.com

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