Transocean Ltd., which owned the Deepwater Horizon rig that was destroyed when the Macondo well exploded last year in the Gulf of Mexico (GOM), last week directed most of the blame for the tragedy to BP plc, which operated the well and was leasing the rig.
The Swiss-based driller, which was employed by BP to manage the rig, commissioned an “internal investigation team,” including “experts from relevant technical fields and specialists” to analyze the information and determine the causes of the fatal accident, which killed 11 men who were working on the rig platform.
The internal report attributes some errors to Transocean, but it said the “incident” was the result of a “succession of interrelated well design, construction and temporary abandonment decisions that compromised the integrity of the well and compounded the risk of failure.” Temporary abandonment is the process to plug a well after it has been initially drilled so that additional equipment can be used to complete it to begin production. Transocean’s report noted that BP engineers completed at least five temporary abandonment plans for Macondo from April 12-April 20, 2010, the day of the blast.
“The decisions, many made by the operator, BP, in the two weeks leading up to the incident were driven by BP’s knowledge that the geological window for safe drilling was becoming increasingly narrow,” the report stated. Halliburton, which was in charge of sealing the well, did not properly test the cement used in that process, and BP did not verify the results, according to the report.
Transocean’s investigation team traced the tragedy to four “overarching” issues:
In response, a BP spokesman called the report “an advocacy piece” that “cherry-picked the facts in support of its litigation strategy…Unlike BP, which has stepped up to its responsibilities and cooperated with all official investigations regarding the accident, Transocean continues to take every opportunity to avoid its responsibilities.”
Halliburton also responded and said it remained “confident that all the work we performed with respect to the Macondo well was completed in accordance with BP’s specifications for its well construction plan and instructions.” The contract with BP, it added, protected it from liability. “Deepwater operations are inherently complex and a number of contractors are involved, which routinely make recommendations to a single point of contact, the well owner.”
Other reports, including an internal investigation issued by BP last September, found that “multiple companies and work teams,” including Transocean’s, had played a bigger role in the explosion (see NGI, Sept. 13, 2010). A preliminary report issued in April by the U.S. Coast Guard and Department of Interior broadly spread the blame and cited problems at Transocean that included inadequate maintenance and training, as well as a “poor safety culture” (see NGI, May 2).
Transocean’s findings that faulted BP for most of the deepwater tragedy came as “no surprise” to analysts with Tudor, Pickering, Holt & Co. (TPH). The report, they said, acknowledged that all the parties involved in the Macondo well drilling — including Transocean personnel — had misinterpreted the results of a negative pressure test, which ultimately led to the explosion. In any case, however, “liability is ultimately going to be decided by courts.”
Elsewhere, industry critic Rep. Ed Markey (D-Mass.) said the “circular finger-pointing contest” between the companies involved is proof that there needs to be tougher safety drilling regulations.
Transocean’s report “says little to shed new light on the details of the disaster, but the problems identified by the spill commission continue to cry out for congressional action to pass comprehensive safety standards for deepwater offshore drilling,” said Markey. “The oil industry should share responsibility for keeping their workers and American waters safe, instead of relying on their lawyers to stake out the best position for their company following a disaster.”
Transocean’s investigation began in the days immediately following the incident, but investigators didn’t have all of the evidence, the company acknowledged.
“The loss of evidence with the rig and the unavailability of certain witnesses limited the investigation and analysis in some areas. The team used its cumulative years of experience but did not speculate in the absence of evidence. The report of the team does not represent the legal position of Transocean, nor does it attempt to assign legal responsibility or fault.”
Transocean’s report and supporting documents are available at www.deepwater.com.
In related news Weatherford International, which provided casing components for the Deepwater Horizon rig, agreed to pay BP $75 million in exchange for indemnity against compensatory claims in the multidistrict litigation (MDL). The $75 million is to be part of BP’s $20 billion Gulf Coast Claims Facility, which was set up to compensate Gulf Coast residents and businesses that suffered economic loss as a result of the spill.
The Weatherford settlement is the second BP has reached with a partner in the oil spill litigation. In May Japan’s Mitsui Ltd. agreed to a $1.1 billion settlement (see NGI, May 23). Mitsui affiliate MOEX USA owned a 10% stake in the Macondo well. BP has MDL pending in U.S. District Court for the Eastern District of Louisiana against other related partners, which include Anadarko Petroleum Corp., a 25% stakeholder in the Macondo well, as well as Halliburton and Cameron International.
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