ExxonMobil Corp.'s top gun on Wednesday took a shot at BP plc CEO Bob Dudley's assertion that the Macondo well blowout in the Gulf of Mexico last April resulted from industry-wide safety lapses.
CEO Rex Tillerson's rare public criticism of a peer producer came during the company's annual analyst meeting in New York. His critique followed a speech Tuesday by Dudley at CERAWeek 2011 in Houston.
Dudley, in his first address to the energy industry since taking over the London oil major, said, "I think it would be a mistake to dismiss our experience of the last year simply as a 'Black Swan,' a one-in-a-million occurrence that carries no wider application for our industry as a whole. As we have learned in the past 11 months, one company's calamity quickly becomes every company's concern" (see Daily GPI, March 9).
The well blowout killed 11 men and sank the Deepwater Horizon rig platform.
"I think those comments are a great disservice to this industry," Tillerson said in reaction to the speech on Wednesday. "This conclusion that this is a bigger problem for the industry is just wrong.
"It was a breakdown of management oversight and that management oversight rests in the lap of one company. To extrapolate that to the entire industry, I think that is a real overreach...When you do things the proper way these kind of things do not happen."
ExxonMobil's current system of managing risks, which was implemented after the oil tanker Exxon Valdez ran aground in Alaska, today helps it to avoid accidents, the CEO said. Tillerson reiterated what he said last year, that more than 14,000 deepwater wells have been drilled safely worldwide (see Daily GPI, May 27, 2010).
"I think the industry manages this risk well," Tillerson said. Dudley's "conclusion that this is a bigger problem for the industry is just wrong. It flies in the face of the facts...When you do things the proper way, these types of tragedy do not happen. So this might very well have been a 'black swan' event."
In comments before a House subcommittee last June Tillerson and executives of ConocoPhillips, Shell Oil Co. and Chevron Corp. said they would have drilled the Macondo well differently (see Daily GPI, June 16, 2010).
The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, which was appointed by President Obama after the accident, concluded that BP and its contractors made "identifiable mistakes," which led to the Macondo blowout.
However, William Reilly, who co-chaired the commission, said the blame cannot be solely put at the feet of BP. Reilly, who also spoke at CERAWeek, on Tuesday said safety issues were not only an issue for BP and its contractors but rather a "systemic problem" across the industry.
Oil company executives are scheduled to meet next Friday (March 18) in Washington, DC, to consider proposals to police offshore safety, Reilly noted.
At its annual analyst meeting, ExxonMobil also laid out its strategy for the next few years. The company now is the largest gas producer in the United States, but for the short-term at least, oil output will be the main driver in North America. Several large new project start-ups are expected to add about 1.4 million boe/d of output, weighted 80% to oil. In the last three months of 2010 about 51% of ExxonMobil's output was oil-weighted.
The company, Tillerson told analysts, doesn't have a preference for oil or gas. "There is no bias for us one way or the other," he said. "Our bias is to make money."
U.S. oil and gas production is forecast to double by 2020. Projects expected to add to the reserves mix include oil-weighted output from the Eagle Ford Shale of South Texas, the Bakken Shale of North Dakota and in California.
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