BP promises safer drilling, without admitting flaws

LONDON/WASHINGTON Fri Jul 15, 2011 12:42pm EDT

A logo is seen at a BP fuel station in London July 27, 2010. REUTERS/Toby Melville

A logo is seen at a BP fuel station in London July 27, 2010.

Credit: Reuters/Toby Melville

LONDON/WASHINGTON (Reuters) - BP Plc promised improved drilling practices on Friday as the company balances twin aims of rebuilding investor and public confidence after the Gulf of Mexico oil spill while not admitting flaws in its own procedures.

BP said it would more closely oversee the work of its contractors, echoing its position that the rig blast, which killed 11 men and led to the spill, was the fault of its contractors, including driller Transocean and Halliburton.

The companies have filed lawsuits worth tens of billions of dollars blaming each other for the blast, and any admission by BP that its existing drilling procedures needed improvements could weaken its legal position.

BP said it would also establish centers for monitoring its drilling wells in real time -- something some rivals already do and which might have prevented the well blow-out that caused the disaster.

The London-based company declined to comment on whether it was addressing shortcomings in its internal procedures that were highlighted in government investigations, such as its reliance on a single barrier to keep oil and gas in the well.

BP's rivals including Exxon Mobil, Royal Dutch Shell and BG Group have criticized its design for the Macondo well, saying it contributed to the disaster.

GOING BEYOND WHAT'S REQUIRED

BP said its plans go beyond regulatory requirements.

"BP clearly understands that they have to win back not only the regulators' confidence, but the confidence of the public as well," the head of the U.S. offshore drilling regulator, Michael Bromwich, said at a congressional hearing in Washington.

The regulator has already established strong, new safety and environmental standards that all operators are required to meet, said Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement.

Appointed after the BP spill to overhaul the drilling regulator, Bromwich said he has been pleased by BP's cooperation with the agency since the disaster. He welcomed BP's plans to strengthen safety.

"We'll always look favorably on companies that will impose on themselves higher safety standards than what our current regulations require," Bromwich said.

The agency will consider whether to encompass any of the voluntary standards BP has adopted as it moves ahead with plans to develop additional drilling regulations, Bromwich said.

A BP source told Reuters in April that the company had filed one drilling application. The agency would not offer specific details on Friday about any pending BP applications to drill exploratory wells.

BP said on Friday that it would only use blow-out preventers (BOPs) -- devices designed to prevent uncontrolled releases of oil and gas from wells -- with twin sets of shears which could slice through drill pipes, and that it would have third parties verify the testing of BOPs.

The failure of the BOP on the rig that was drilling BP's Macondo well contributed to the oil spill, although the panel convened by President Barack Obama to investigate the disaster said even if it worked properly the fatal blast would still have occurred.

BP will also require lab testing of the cement mixtures its outside cementing contractors recommend for lining and sealing oil wells, and provide the results to the offshore safety regulator.

BP's Chief Executive Bob Dudley, who took over from Tony Hayward after the leaking Macondo well was capped, had previously outlined some of the measures at public events in the past month.

Representative Edward Markey, the top Democrat on the U.S. House Natural Resources committee, said BP's plans show that offshore drillers can comply with tougher safety rules.

"It is time for the oil industry and their Republican allies in Congress to drop their opposition to stronger requirements," said Markey, an outspoken critic of the oil industry.

"If BP can do this, so can everyone else," he said.

(Additional reporting by Malathi Nayak in Washington; Editing by David Hulmes, Jane Merriman and Dale Hudson)