BP well disaster stuns hardened oil men

HOUSTON Thu May 27, 2010 1:03pm EDT

Steve Farris, Chairman and Chief Executive Officer of Apache Corporation, addresses the Reuters Energy Summit in Houston June 4, 2009. REUTERS/Richard Carson

Steve Farris, Chairman and Chief Executive Officer of Apache Corporation, addresses the Reuters Energy Summit in Houston June 4, 2009.

Credit: Reuters/Richard Carson

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HOUSTON (Reuters) - Hardened U.S. oil men might be able to do deals in dangerous parts of the world and stay cool under perennial political fire, but the gravity of the Gulf of Mexico disaster has left some of them feeling shell-shocked.

Apache Corp (APA.N) CEO Steve Farris, a senior executive at the company for two decades, said he does his best to remain calm and keep the gushing well in perspective. But the first thing he does when he wakes at 5 a.m. is seek out the latest news developments.

"It has a psychological effect not only on America, but our industry, and you try to overcome that," Farris told the Reuters Global Energy Summit in Houston this week.

On top of the environmental catastrophe, the loss of 11 lives in last month's Deepwater Horizon explosion has left a deep emotional impact on the close-knit drilling community.

Apart from the possibility that it could happen to one of their own rigs, executives worry about the pall BP Plc's (BP.L) blown-out well has cast over a deepwater drilling sector that once had a persistently sunny outlook.

Black & Veatch Chief Executive Len Rodman, whose company does engineering for energy projects, said huge tragedies have changed the trajectory of the energy business before, such as the partial core meltdown in a unit at Pennsylvania's Three Mile Island nuclear power plant in 1979.

"That disaster literally put a stop to nuclear power in the U.S.," Rodman said at the summit. "I'm not sure Three Mile Island was as big as what has happened (in the Gulf)."

"What I worry about as an energy CEO is what effect this will have on energy policy," he said, noting it may lead people to look more seriously at electric cars, or complicate plans to pump carbon underground. "This BP thing has tentacles."

Along with the public at large, industry players were crossing their fingers on Thursday in hopes the latest attempt to plug the well would be successful.

Dave Roberts, head of worldwide upstream operations at Marathon Oil Corp (MRO.N), spoke frankly about everything that went wrong and the looming political fallout.

"These things just shouldn't happen," Roberts said, citing the industry's obligation to keep equipment working and its people safe. "On this particular incident, the industry has failed that obligation, and we're obviously very concerned about it."

Even energy lobbyists are changing their tack. Catherine Reheis-Boyd, president of the Western States Petroleum Association, readily conceded at a debate in San Francisco last week that what happened with the Horizon was a "game-changer."

(Reporting by Braden Reddall; editing by Gunna Dickson)

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