U.S. lawmakers to urge BP to idle its Atlantis rig

Wed May 19, 2010 8:00pm EDT

* Lawmakers to tell MMS that Atlantis rig may be unsafe

* Any order to idle Atlantis could cut BP's oil output

* BP: Atlantis operates safely, all documents up to date

* U.S. lawmaker says expects BP criminal probe (Adds signatories and letter details in paragraph 2, separate letter from Senate Democrats urging rig inspections in paragraph 1.)

By Joshua Schneyer

NEW YORK, May 19 (Reuters) - A group of U.S. lawmakers will recommend BP (BP.L) be ordered to idle its Atlantis oil and gas platform in the U.S. Gulf of Mexico until federal regulators can prove the region's second biggest rig is operating safely.

More than 20 Democratic lawmakers signed a letter on Wednesday with language that urges the Minerals Management Service to shut down Atlantis, which pumps up to 200,000 barrels per day of crude, pending a safety probe. The letter, given to Reuters, will be delivered to Interior Secretary Ken Salazar early Thursday, congressional staff said.

"We urge MMS to listen to the expert engineer who reviewed the Atlantis situation and called for an immediate shutdown until it can be shown that this platform is operating safely," the letter said.

An earlier, Feb. 24 letter from 19 lawmakers to the MMS urged an investigation into Atlantis's safety, months ahead of the rig explosion at BP's Macondo field in April and resulting oil spill and environmental disaster. [ID:nN19188461]

Arizona Representative Raul Grijalva, who sits on the Committee on Natural Resources, led the February effort and is the first signatory on the new letter.

"Given the backdrop of what has happened, the idling of the (Atlantis) platform I think is justified," Grijalva said in a phone interview on Wednesday. "We need to make sure another catastrophe doesn't happen."

In the letter, House Democratic lawmakers voice renewed concern that the Atlantis oil and gas project, which began production in 2007, has operated without up-to-date "as built" engineering documents and diagrams showing how all of its components work, raising the specter of a disaster that could be even bigger than BP's Macondo spill.

"We are very concerned that the tragedy at Deepwater Horizon could foreshadow an accident at BP Atlantis, which is operating in deeper water than Horizon," according to the letter. The "worst-case scenario spill" could be many times worse than the Horizon disaster, exceeding the volume of the Exxon Valdez spill of 1989 in just two days time, it says.

So far, the U.S. Gulf oil spill has yet to significantly affect U.S. oil production. Any order to halt Atlantis could change that. One of the most complex deepwater platforms in the world, Atlantis pumps crude and natural gas from the Green Canyon blocks in the U.S. Gulf, in waters more than 7,000 feet (2,130 metres) deep, around 150 miles (240 km) south of New Orleans.

A separate letter from leading Democratic Senators to U.S. President Barack Obama on Wednesday urged his administration to order "immediate and enhanced" inspections of all U.S. offshore rigs and platforms, including outside the Gulf of Mexico, and said U.S. taxpayers shouldn't have to pay for the inspections.

BP operates Atlantis and holds a 56 percent stake, while BHP Billiton (BHP.AX) holds a 44 percent stake.

Salazar said in Senate testimony on Tuesday the U.S. government was investigating Atlantis, and admitted his agency came up short in preventing the recent Gulf of Mexico oil spill. [ID:nN18168199]

Atlantis accounts for a major chunk of BP's U.S. crude and natural gas production. The platform can produce up to 200,000 barrels a day of crude, around 13 percent of total U.S. Gulf output, and up to 180 million cubic feet of natural gas.

BP, the top Gulf producer, pumps more than 400,000 bpd of oil equivalent in the region, and operates the two largest platforms, Thunder Horse and Atlantis.

Lawmakers expect MMS to complete an initial investigation into Atlantis by May 27, Grijalva said. The MMS did not immediately return phone calls seeking comment.

BP wouldn't comment on the letter as it hasn't seen it, but has said Atlantis adheres to rigorous safety standards and has safely produced millions of barrels of oil since its start-up.

On Monday, the company rebuffed claims from a former BP contractor, Kenneth Abbott, who has said BP operated the rig without complete or accurate engineering documents.

Abbott, along with advocacy group Food and Water Watch, filed a federal lawsuit this week against Salazar and the MMS, seeking Atlantis's shut down.

BP's earlier investigation into the matter found that Abbott's claims were "without substance," the company said.

Grijalva is urging the MMS to interview Abbott and other experts. According to a database Abbott compiled while on contract with BP, more than 90 percent of the engineering documents and drawings for Atlantis' subsea components had not been approved by an engineer as required by regulations, Grijalva said.

The letter also cites an internal BP email from 2008, indicating that the company recognized incomplete or inaccurate engineering documents on Atlantis "could lead to catastrophic Operator errors."

CRIMINAL PROBE?

Grijalva said lawmakers on Capitol Hill, including Republicans, have increasingly been talking about the likelihood of criminal probes into BP's operations.

Department of Justice spokesman Andrew Ames said he could neither confirm or deny the existence of any investigation.

Grijalva said a criminal investigation into BP's activities "has become part of the conversation on the Hill," adding that he expected BP to face a probationary period as well as potential indictments. (Reporting by Joshua Schneyer; Editing by Marguerita Choy)








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