BP, Transocean faulted for lax guidelines in Gulf spill report

HOUSTON Tue Jul 24, 2012 6:00am EDT

1 of 2. A gasoline station board displaying fuel prices stands beside a sign owned by a BP petrol station (L) in Moscow July 24, 2012.

Credit: Reuters/Maxim Shemetov

HOUSTON (Reuters) - BP Plc (BP.L) and Transocean Ltd (RIG.N) lacked clear guidelines for key tests to ensure that the ill-fated Macondo well was safely sealed before it ruptured and triggered the 2010 Deepwater Horizon disaster, U.S. safety investigators said.

The preliminary report from the U.S. Chemical Safety Board, to be delivered at a public hearing in Houston on Tuesday, puts the spotlight back on missteps highlighted in prior investigations as BP faces potential civil and even criminal penalties over the incident.

More than two years have passed since the disaster struck at 9:53 p.m. CDT on April 20, 2010, (0253 GMT on April 21), when a surge of methane gas known to rig hands as a "kick" sparked an explosion aboard the Deepwater Horizon rig that killed 11 men. The vessel sank two days later.

London-based BP was the majority owner and operator of the Macondo well and Swiss-based Transocean Ltd owned the rig, which was drilling the mile-deep well in the Gulf of Mexico off Louisiana's coast.

"(BP and Transocean had) multiple safety management system deficiencies that contributed to the Macondo incident," and neither had safety rules that adequately focused on major accident hazards, according the federal agency's report.

The well spewed 4.9 million barrels of oil into the Gulf of Mexico for 87 days straight, fouling the shorelines of four Gulf Coast states in America's biggest offshore oil spill, eclipsing the 1989 Exxon Valdez spill in Alaska.

Investigators at the Chemical Safety Board, which has powers to subpoena witnesses but not to issue fines or citations, focused on crucial tests run by drill workers in the days ahead of the blowout to determine if the Macondo well was safely sealed with cement.

"Transocean is committed to continuous improvement in both personal and process safety performance," Transocean spokesman Brian Kennedy said.

"We look forward to reviewing the CSB report in its entirety toward that end, just as we have with the many investigative reports that have preceded it."

A BP spokesman said the accident "was the result of multiple causes, involving multiple parties," and that the company "has taken concrete steps to further enhance safety and risk management," including new drilling standards for the Gulf of Mexico that exceed current regulatory requirements.

PIVOTAL TEST

BP has already taken a $37.2 billion charge against its earnings for the spill, while total costs, based on estimates from analysts and previously paid items, could exceed $69 billion if a judge finds BP to be grossly negligent, which BP strongly disputes.

Previously released reports from a White House panel, the National Academy of Engineering and others also have focused on the pivotal negative pressure test, which could have alerted workers to the well's instability and potential danger.

Despite the critical nature of the test, there were no written procedures on how to conduct it, the CSB said. Also, there were "no written criteria or safe limits defined for determining if the test was a success or warnings on the consequences of deviation from the procedural requirements," the agency said.

Rig workers conducted the negative pressure test "multiple times in multiple ways," and inaccurately declared it a success after one unnamed crew member "proposed a novel, unsubstantiated theory about why the test results appeared the way they did," the CSB said.

The companies involved with drilling the Macondo well have all traded blame for the accident. The CSB findings make no criticism of Halliburton Co (HAL.N), the contractor that did the cementing work for the well.

Transocean and Halliburton have both charged that BP had a faulty well design for Macondo that was a major factor in the explosion.

BP has denied these claims, instead faulting Halliburton for a flawed cementing job on the well. BP and Transocean also disagree on who was in charge of interpreting the pivotal negative pressure test. Other reports have faulted BP for not using a "cement bond log" test that could have shown that the cement was unstable.

According to testimony by the rig's chief mechanic before a federal investigative board in 2010, there was a "skirmish" between BP and Transocean rig workers over whether to displace drilling mud with water in an attempt to wrap up drilling operations and plug the well with cement.

Ironically, BP and Transocean executives were visiting the rig at the time of the explosion to celebrate seven years of "zero lost time incidents," the CSB said, an industry marker of prolonged safe operation.

The crew was 43 days behind schedule in drilling the Macondo well -- called the "well from hell" by rig workers.

(Reporting By Chris Baltimore; Editing by Edmund Klamann)

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