The deadly blowout of BP plc's Macondo well in the Gulf of Mexico last April was due to "several individual missteps and oversights by BP, Halliburton and Transocean," and to a "systemwide problem" with industry practices and government policies, said the National Oil Spill Commission Thursday in an advance chapter of its final report.
"The well blew out because a number of separate risk factors, oversights and outright mistakes combined to overwhelm the safeguards meant to prevent just such an event from happening...most of the mistakes and oversights at Macondo can be traced back to a single overarching failure -- a failure of management. Better management by BP, Halliburton and Transocean would almost certainly have prevented the blowout," said the commission, which was established by President Obama to investigate the catastrophe.
"Whether purposeful or not, many of the decisions that BP, Halliburton and Transocean made that increased the risk of the Macondo blowout clearly saved those companies significant time (and money)," the panel said.
The panel further said "the root causes [of the blowout] are systemic and, absent significant reform in both industry practices and government policies, might recur."
A key question "posed from the outset by this tragedy is, 'Do we have a single company, BP, that blundered with fatal consequences, or a more pervasive problem of a complacent industry?' Given the documented failings of both Transocean and Halliburton, both of which serve the offshore industry in virtually every ocean, I reluctantly conclude we have a systemwide problem," Commission Co-Chair William K. Reilly said.
The commission also concluded that "government regulators lacked the authority, the necessary resources and technical expertise to prevent" the missteps and oversights of the three companies.
The Commission's broad brush approach to the problem brought an immediate response from ExxonMobil CEO Rex Tillerson. "I do not agree that this is an industrywide problem," Tillerson told reporters on the sidelines of a conference in Austin, TX, according to a Wall Street Journal report.
In earlier testimony before the commission Tillerson said individual companies create their own safety culture, including written rules, standards and procedures, as well as "the unwritten standards and norms that shape mindsets, attitudes and behaviors."
On Wednesday the commission released the advance chapter of its final report, which is due out Tuesday (Jan. 11). BP's per-share price rose on the conclusions reached in the 46-page chapter, which not only increase the odds that BP's partners will be forced to share the compensation bill, but make it less likely that the federal government will be able to make a case of gross negligence against BP.
BP was majority owner and the Macondo well operator when the blowout happened on April 20. Transocean Ltd. owned the Deepwater Horizon rig, which BP leased to drill the well; and Halliburton was the primary service operator. The explosion on April 20 killed 11 people and decimated a large portion of the Gulf Coast region commercially (see Daily GPI, April 22, 2010).
In addition, the presidential commission said the blowout of the Macondo well was avoidable. "This disaster likely would not have happened had the companies involved been guided by an unrelenting commitment to safety first. And it likely would not have happened if the responsible government regulators had the capacity and will to demand world class safety standards," said Commission Co-Chair Bob Graham.
Rep. Doc Hastings (R-WA), the new chairman of the House Natural Resources Committee, said he wanted to "view the report in its entirety before jumping to premature conclusions, so that Congress can properly address the preventable elements of this disaster and ensure U.S. offshore drilling is the safest in the world."
Sen. Mary Landrieu (D-LA) said the findings confirmed that the administration's imposition of an industrywide moratorium in the Gulf was unwarranted. "Nothing in these findings justifies the shutdown of an entire industry because of one mishap," she said.
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