Houston Chronicle: BP spreads blame for deadly blowout, & BP report sets inquiry agenda for now, & Oil Giant’s critics not impressed.

September 9, 2010

http://www.chron.com/disp/story.mpl/business/energy/7192813.html

By BRETT CLANTON and JENNIFER DLOUHY
Copyright 2010 Houston Chronicle
Sept. 9, 2010, 7:03AM

BP on Wednesday laid out its most detailed analysis yet on possible causes of the Deepwater Horizon accident in April, taking particular aim at mistakes by contractors on the doomed rig while claiming only a limited role in the disaster.

In a much-anticipated report on its internal investigation, BP reiterated that a “complex and interlinked series” of equipment failures and human error led to the deadly incident and subsequent oil spill but also offered new explanations about what went wrong.

Key contractors quickly dismissed BP’s report as inaccurate and one-sided.

One key finding seemed to debunk the prevailing theory on where the original leak occurred deep within the Macondo well that set the disaster in motion. Rather than traveling up a narrow channel outside the well’s interior pipe casing, volatile gas likely entered the casing itself through a series of barriers at the bottom of the well called a shoe track, the company said.

That is one of eight problems BP cited as possible causes of the April 20 accident, which killed 11 workers and spilled 4.9 million barrels of oil into the Gulf of Mexico.

The BP team also said crew members missed clear warning signs that gas had seeped into the well, that worker errors and defects in the rig’s design let gas ignite at the rig’s surface, and that problems with a massive blowout preventer on the seafloor may have kept it from sealing the well after the blast.

Though BP personnel are directly implicated in just one of the eight factors, company investigators stressed the report was not intended to be the final word on the subject, nor an accounting of legal responsibility.

First of several reports

“Our purpose was not to apportion blame or liability but rather to learn, recommend areas for improvement and share lessons with others,” said Mark Bly, the BP safety chief who led the investigation.

Compiled over a four-month period, the 234-page report drew upon interviews with BP and non-BP employees on the Deepwater Horizon and BP well engineers in Houston, company documents, real-time well data transmitted from the rig to shore and testimony in public hearings about the accident.

While about 10 other independent and government investigations continue, BP’s is the first report on a start-to-finish examination of the tragedy.

In it, investigators repeatedly homed in on the failure of cement barriers in the well, a focus that shifts attention to the work done by the cement contractor Halliburton Co. In particular, the team alleged that the oil field services giant failed to conduct adequate testing of the specific cement slurry used at the well.

The nitrogen-injected foam cement that was used at the site is susceptible to breaking down over time, especially if it is contaminated, BP’s Kent Corser said at a briefing with reporters in Washington. This is what the team believes happened to cement in the thin area called the annulus between the pipelike casing at the well’s center and the surrounding rock.

Once in the annulus, hydrocarbons likely entered the casing through the shoe track, a final section of casing at the bottom of the well where two mechanical valves and cement are installed to seal off the reservoir. BP speculates that both the valves and cement failed, allowing hydrocarbons to pass through the valves and up the casing.

Could deflect blame

The theory, if true, could deflect blame from BP’s Macondo well design criticized by some experts as risky and shift it to contractors including Halliburton and Transocean, which owned and operated the rig under contract with BP.

It also could take heat off BP engineers for a much-scrutinized decision to install fewer devices called centralizers than Halliburton had recommended for a section of well casing, despite risks that the smaller number could cause an uneven cement job and gas flow in the well.

“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,” BP’s outgoing CEO, Tony Hayward, said in a statement.

Contractors don’t agree

Halliburton said Wednesday it remains confident in the work it did on the Macondo well, noting it was done according to BP specifications, and criticized the report for “substantial omissions and inaccuracies.”

Transocean called the document a “self-serving report that attempts to conceal the critical factor that set the stage for the Macondo incident: BP’s fatally flawed well design.”

While the shoe track explanation is plausible, BP still had responsibility for verifying the cement job was sound, said Darryl Bourgoyne, director of the Petroleum Engineering Research Lab at Louisiana State University.

“From my view, they were the operators of the well,” he said. “If somebody working on their behalf wasn’t doing something right, then it’s the same as them not.”

BP investigators said a bad cement job, in and of itself, shouldn’t have caused the lethal escape of gas from the well. They also faulted workers on the rig for not going through a formal risk assessment after the cementing.

That kind of on-the-spot analysis might have prompted workers to run a cement bond log, considered the gold standard for well-cement testing, which might have detected problems sooner. BP had planned to run the test and even had a crew from Schlumberger on board to perform it, but sent them home the day of the blast after deciding the test was unnecessary.

Pressure test ignored

The Bly Report is also critical of two BP well site leaders and Transocean crew on the rig who “incorrectly accepted” the results of a crucial test of the well’s integrity on the day of the accident. Though the negative pressure test showed pressure on a drill pipe when it should have been zero, the crew went forward with a procedure to replace heavy drilling mud in the well with much lighter seawater.

Investigators said rig data shows a 40-minute gap from the first indication of a gas influx to the first attempt by the crew to bring the well back under control. But by then, it was too late. Minutes later, the first of two explosions occurred.

The BP team insisted that had the flow of hydrocarbons been caught before it got into the riser pipe and gas started flowing onto the Deepwater Horizon, rig workers might may have been able to avert disaster.

But, at the end of the day, BP can only blame others so much for the accident, said Nansen G. Saleri, CEO of Houston-based Quantum Reservoir Impact, an oil and gas industry consultant.

“The elephant in the room,” he said, “is that collectively and ultimately the responsibility lies with BP.”

brett.clanton@chron.com

jennifer.dlouhy@chron.com

xxxxxxxxxxxxxxxxx

http://www.chron.com/disp/story.mpl/business/7192390.html

DISASTER IN THE GULF
BP report sets inquiry agenda – for now
Company gets out in front on the debate over causes of rig blowout
By MONICA HATCHER
Copyright 2010 Houston Chronicle
Sept. 8, 2010, 10:32PM

In releasing the first detailed report on the causes of the massive Gulf of Mexico oil spill, BP laid down a battleground for years of legal and political skirmishes, and may have provided itself some cover against the most severe civil and criminal penalties.

In the highly anticipated report released Wednesday, the British oil giant acknowledged limited responsibility for the myriad missteps that led to the April 20 blowout at its Macondo well, shifting most of the blame to contractors who analysts say will now be forced to respond on BP’s terms.

The report outlines in 234 pages the results of a four-month investigation that identified and analyzed eight key factors in the disaster and includes recommendations for preventing future accidents.

“BP has set the battleground, now Transocean, Halliburton and Cameron are going to have to respond initially on the turf that BP has selected,” said Kent Moors, a professor at the Graduate Center for Social and Public Policy at Duquesne University and president of ASIDA, an international oil and gas consulting firm.

Three more companies

Transocean owned and operated the Deepwater Horizon under contract with BP. Halliburton performed well cementing that BP identifies as a trigger to the chain of events that destroyed the rig, killed 11 men and set off a 4.9-million-barrel oil spill in the Gulf. Cameron built the blowout preventer that failed as the last line of defense against disaster.

By getting out in front of the debate, Moors said, BP framed the discussion going forward, at least until others reply with findings from their own investigations.

Role of others

Rep. Henry Waxman, D-Calif., chairman of the influential House Committee on Energy and Commerce, acknowledged as much in saying the report “raises many questions” about the role of others in the accident.

But he also accused BP of glossing over its own role.

Yet BP also may benefit from demonstrating to the federal government that the company is acting in good faith by investigating the accident and helping regulators and industry find ways to prevent recurrences, said Tracy Hester, assistant professor and the director of the Environment, Energy & Natural Resource Center at the University of Houston Law Center.

“That is important in dealing with government agencies, because responding in good faith could play an important role in assessing civil penalties and in the government’s decision to ultimately charge anyone,” Hester said. A similar internal investigation into BP’s 2005 Texas City refinery explosion was important in shaping enforcement decisions after that event as well, he said.

While the findings brought few surprises to analysts, academics and attorneys closely following the case, BP was nonetheless clobbered by critics for failing to take more responsibility.

Nancy Leveson, a specialists in systems safety at Massachusetts Institute of Technology who has investigated hundreds of major accidents, including ones on spacecraft and oil refineries, said expecting anything else from BP would have been naive. She likened the findings to an incident report written by someone in a car crash who was told he, not his insurance company, would be on the hook for damages.

‘Astounding liability’

“BP faces astounding liability. Everyone in the world is suing them, including other oil companies. It’s just impossible for a company to investigate itself under these circumstances,” Leveson said.

The report doesn’t address accusations leveled against the company and doesn’t discuss any role BP management may have played in the decision-making. Rather than a defense, the report should be seen an explanation of the mechanical and physical failures that caused the accident, Leveson said.

“The lawsuits are going to be about the things that are left out of this report, who did what,” Leveson said.

Halliburton said BP’s findings had a number of “substantial omissions and inaccuracies.” And a spokesman for Transocean called the report “self-serving” and an attempt “to conceal the critical factor that set the stage for the Macondo incident: BP’s fatally flawed well design.”

During a three-hour technical briefing Wednesday in Washington, BP safety and operations chief Mark Bly, who headed the investigation, denied the report was written to diffuse blame. “We wanted to understand what happened and why,” he said.

Fall on their own sword?

But Steve Gordon, a veteran maritime lawyer in Houston who represents the family of rig worker Karl Kleppinger Jr., who died on the Deepwater Horizon, and eight survivors, said BP missed an opportunity to speed litigation for those it said it would make whole.

“Is it naive to think BP would have accepted some blame when you’ve been told for more than 140 days, ‘Do not worry, America, we will get to the bottom of what happened and admit fault where we were at fault and make recompense?’? ” Gordon said. “I don’t expect them to fall on their own sword, but truly analyze how BP messed up.”

No special weight

A joint Coast Guard- Interior Department board investigating the accident will take into consideration the Bly Report as it looks for root causes but won’t give it special weight, Coast Guard Lt. Sue Kerver said.

“They would use that as they would any other piece of evidence and see if there’s any information they needed to glean or any other folks they need to bring in and talk to as a result of that,” she said.

Eban Burnham-Snyder, a spokesman for Rep. Ed Markey, D-Mass., who chairs a congressional panel investigating the oil spill, said the congressman is reviewing the report and checking it against information the committee has already received from BP and elsewhere.

“If we find cause to ask additional questions relevant to the investigation, we will do so,” he said.

Brett Clanton and Tom Fowler contributed from Houston and Jennifer A. Dlouhy from Washington.

monica.hatcher@chron.com

xxxxxxxxxxxxxxxxxxx

http://www.chron.com/disp/story.mpl/business/energy/7192389.html

Oil giant’s critics are not impressed
They wanted it to accept more blame for blast
By PURVA PATEL
Sept. 8, 2010, 10:33PM

Lawmakers and environmental groups blasted BP’s report on its disastrous well blowout as self-serving, saying the British company pointed fingers at others rather than accept responsibility.

Particularly critical was Rep. Edward Markey, D-Mass., chairman of the Energy and Commerce subcommittee on energy and environment.

“This report is not BP’s mea culpa,” Markey said. “Of their own eight key findings, they only explicitly take responsibility for half of one. BP is happy to slice up blame, as long as they get the smallest piece.”

In a briefing with reporters in Washington Wednesday, BP’s Mark Bly, who headed the investigation, dismissed allegations that the report was intended to diffuse blame.

“We were not about proportioning or apportioning fault or blame,” Bly said. “I know there may be people who may want to understand that from us. We understand our work may be used for those reasons, but that’s not what we’ve done. We wanted to understand what happened and why.”

More objective?

Markey and others said they expect that investigations by Congress and federal agencies will be more objective and carry more weight.

P&J Oyster Co. owner Sal Sunseri, whose New Orleans-based business suffered after he was forced to stop shucking oysters in June, said he wasn’t sure how objective BP’s self-reporting could be but added that there’s enough blame to go around.

“Everyone involved in the production and operation of that rig is responsible,” he said. “Is BP’s report accurate? I don’t know. All I know is my business is directly affected, and I’m not able to do what I regularly do.”

Environmental groups also gave little quarter.

“This report is more concerned with calming BP’s shareholders than taking responsibility for its actions,” said Kieran Suckling, executive director of the Center for Biological Diversity.

One group cared less about the finger-pointing and more about future incidents.

“We need to make sure BP, the federal government and the entire oil and gas industry have far better plans and practices in place to respond to their mistakes,” said Aaron Viles, campaign director for the Gulf Restoration Network, a New Orleans-based environmental group.

No comment by API

Spokesmen for two major trade groups, the American Petroleum Institute in Washington and the International Association of Drilling Contractors in Houston, declined to comment on BP’s report.

Mihael Ivic, owner of Misho’s Oyster Co. in San Leon, saw his oyster inventory drop to the lowest level in 10 years after the spill. But he doesn’t think BP deserves all the blame.

“There is probably guilt on each side,” said Ivic, who says compensation payments from BP have helped keep his business afloat. “I really don’t think we should bad-mouth BP because the same thing could happen to any other company. Now that everything is over, they are willing to cover all consequences.”

Reporters Matthew Tresaugue and Jennifer A. Dlouhy contributed to this report.

purva.patel@chron.com

Special thanks to Richard Charter

Leave a Reply

Your email address will not be published. Required fields are marked *