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Oil and Gas

UPDATE 3-U.S. lawmakers to urge BP to idle its Atlantis rig

 * 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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