BP

arjay wrote:Was Tony Hayward right that BP's Gulf of Mexico oil disaster was 'modest'?

Disasters
Transocean: Coast Guard report on oil spill flawed

Published June 08, 2011

| Associated Press



The owner of the oil rig that exploded in the Gulf of Mexico last year said Wednesday that a Coast Guard report that faults the company for a poor safety culture and other shortcomings that preceded the disaster is full of errors.

Transocean said in a 112-page response submitted to the U.S. government that the April 22 draft report should be corrected. The Bureau of Ocean Energy Management Regulation and Enforcement is expected to release a joint final report with the Coast Guard by late next month.

Switzerland-based Transocean insists the blast did not result from poor upkeep, that the blowout preventer was properly maintained and that the general alarm on the rig did not fail to operate automatically. It also said the engines on the rig did not fail to shut down upon detection of gas.

"When a report of this importance purports to reach conclusions and makes findings so at odds with the evidence, questions must be raised about the fact-finding process and whether an agenda, rather than evidence, served as the report's foundation," Transocean said in its response.

A spokeswoman for the joint federal investigation team declined to comment.

Multiple government and independent investigations have blamed a cascade of failures by several companies, including Transocean.

The Coast Guard said in its report that decisions made by workers aboard the rig "may have affected the explosions or their impact," such as failing to follow procedures for notifying other crew members about the emergency after the blast. It also said electrical equipment that may have ignited the explosion was poorly maintained, while gas alarms and automatic shutdown systems were bypassed so that they did not alert the crew. And, the report said, rig workers didn't receive adequate training on how and when to disconnect the rig from the well to avoid an explosion.

The April 2010 explosion aboard the Deepwater Horizon rig killed 11 workers and sparked the worst offshore oil spill in U.S. history. BP PLC was leasing the rig from Transocean and owned a majority stake in the well a mile beneath the sea. According to government estimates, some 206 million gallons of oil were released by the well before it was capped three months after the explosion.

Hundreds of miles of Gulf shoreline were stained with oil, fishermen and business owners lost their livelihoods, and new regulations were imposed as the offshore drilling industry was put under a microscope. BP has spent tens of billions of dollars cleaning up the mess and compensating victims, and it is seeking to recoup some of its losses from its partners on the rig.

Transocean report: BP didn’t assess risks properly before blowout *update*
Posted on June 22, 2011 at 7:11 am by Tom Fowler in Accidents, Gulf Oil Disaster



BP failed to properly assess, manage and communicate risks, didn’t adequately test cement and misinterpreted a key pressure test prior to the deadly blowout on the Deepwater Horizon rig, according to a report released by drilling contractor Transocean this morning.

BP failed to properly assess, manage and communicate risks, didn’t adequately test cement and misinterpreted a key pressure test prior to the deadly blowout on the Deepwater Horizon rig, according to a report released by drilling contractor Transocean this morning.

The accident was a “result of a succession of interrelated well design, construction, and temporary abandonment decisions,” mostly made by BP in the weeks before the spill, the report concludes, but the immediate cause of the accident was the failure of the final cement seal in the well.

BP’s well design led to a cement job design that was risky, but those risks and the failure to adequately test the integrity of the cement was not communicated properly to the rig crew or others by BP, Transocean said.

The final well completion and abandonment plan also wasn’t approved by regulators, the report notes, because of the constant stream of last-minute changes.

The report also faults cement contractor Halliburton for not adequately testing the cement or communicating the risks of the mix.

The blowout preventer on the rig was properly maintained, according to Transocean, but was overcome by the force of the blast and was unable to seal the well completely. A video animation showing how the blowout preventer failed can be seen here.

The two-volume report and accompanying documents can be found here.

BP said in a statement the report “cherry picked” facts to fit Transocean’s legal strategy. You can read the full text of BP’s statement and other reactions here.

A key driver behind many of BP’s risky decisions was the concern over whether the pressure of heavy drilling mud from the rig would be more than the pressure from the formation and lead to fractures that would lead the company to have to permanently abandon the well, Transocean says.

The well design BP used increased the risk, but rather than changing the well design, BP chose a technically complex nitrogen foam cement mix for the final cement job.

That cement mix left relatively little room for error and a just a small quantity of the cement was used. BP and Halliburton did not test it adequately before or after the cementing, the report says, and didn’t report the risks of those decisions to others properly.

The final test on the cement job, the negative pressure test, “was inadequately set up because of displacement calculation errors, a lack of adequate fluid volume monitoring, and a lack of management of change discipline when the well monitoring arrangement was switched during the test,” the report says.

The results were misinterpreted, the report says, but the results were accepted by BP officials who then decided to move forward with temporary abandonment of the well.

Both the final cement barrier failed and the float collar – a Weatherford built device that was supposed to prevent backflow up the well casing – “likely failed” the report says.

“None of the individuals monitoring the well, including the Transocean drill crew, initially detected the influx,” the report says.

In a conference call with reporters Transocean officials said they do not believe complacency on the part of their workers was a reason for the accident.

“After looking at the evidence we disagree with the idea that there was a sense of complacency on the rig,” said Bill Ambrose, Transocean’s director of North American operations.

Data from the rig’s instrumentation indicates the drilling crew was “very closely monitoring the well in the last hour” although the question remains if they were reading the data correctly, Ambrose said.

There have been reports from some BP workers that Transocean workers tried to explain away the odd negative pressure test readings as a phenomenon called “the bladder effect.” But Ambrose said no one on the rig that was interviewed by Transocean had ever heard of the term.

New Orleans court dismisses BP raketeering allegations
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Harry Wilson, 0:47, Saturday 16 July 2011

BP has scored a duo of legal successes as a US court yesterday rejected claims the energy company had defrauded regulators and put on hold another lawsuit.

The New Orleans court dismissed allegations that BP had broken anti-raketeering law by defrauding US regulators in relation to the safety standards of its drilling operations.

Judge Carl Barbier told the court that the case brought by a group of Gulf residents and businesses had failed to prove a "causal" link between the alleged fraud and last year's explosion and subsequent oil spill.

"In order for plaintiffs to prevail on their theory of causation, they must rely on this particular domino effect steeping from BP's alleged fraud," said Judge Barbier, adding that the link was "too remote".

In a separate action, Judge Barbier also put on hold a lawsuit brought against BP by Anadarko Petroleum Corp, one of the company's partners in its Gulf of Mexico drilling operations.

Anadarko owned a 25pc stake in the Macondo well that exploded last year killing 11 men working on the Deepwater Horizon oil rig.

In its lawsuit, Anadarko asked the court to rule that it was not responsible for any of the damages and clean-up cost resulting from the disaster.

Judge Barbier said Anadarko would have to take its claim to arbitration so that it and BP can argue over the separation of costs.

"Anadarko has not met its burden to overcome the presumption in favor of arbitration. Accordingly, Anadarko's claim against BP must be stayed pursuant to the arbitration clause" in the joint operating agreement between the parties," said Judge Barbier in his ruling.

The rulings came as BP said it planned to adopt "enhanced" drilling standards in the US, as it attempts to repair damaged relations in the country in the wake of the Gulf oil spill.

The oil giant will more closely oversee the work of outside contractors and only use blow-out preventers (BOP) with twin sets of shears which could slice through drill pipes. The Macondo spill was caused by a BOP failure. BP also said it would produce an enhanced oil spill response plan.

"BP's commitment in the wake of the Deepwater Horizon incident is not only to restore the economic and environmental conditions among the affected areas of the Gulf Coast, but also to apply what we have learned to improve the way we operate," said Bob Dudley, chief executive of BP.

BP shares closed up 0.2pc yesterday at 459p.

BP reports Alaskan leak

By Tom Bergin and Yereth Rosen, Reuters

Tuesday, 19 July 2011


BP has reported another pipe- line leak at its Alaskan oilfields, frustrating the oil giant's attempts to rebuild its reputation after the Gulf of Mexico oil spill.

A pipeline at BP's 30,000 barrel per day Lisburne field, which is closed for maintenance, ruptured during testing and spilled methanol and oily water on to the tundra, bringing risks to slow-growing vegetation. The stretch of pipeline will have to be dug up to investigate why it failed.

The Alaska Department of Environmental Conservation said the spill amounted to 2,100 to 4,200 gallons and the field would remain closed.

A BP spokesman said the clean-up was under way and the company would determine the cause "in due course".

BP’s $7.2 billion Reliance oil, gas deal gets India approval
Posted on July 22, 2011 at 11:20 am by Bloomberg in Drilling, Economics, Oil




BP Plc, Europe’s second-largest oil company, won approval from India’s Cabinet for a $7.2 billion deal to buy stakes in Reliance Industries Ltd.’s oil and natural gas blocks, five months after announcing the accord.

BP will acquire a 30 percent interest in 21 of 23 blocks proposed by Reliance, Oil Minister S. Jaipal Reddy said after a Cabinet meeting in New Delhi today. “Our ministry recommended only 21 blocks. For technical reasons, we didn’t recommend two other blocks,” Reddy said.

The deal puts BP closer to regions that it predicts will generate the majority of energy demand growth for the next 20 years. Reliance will get access to technology and expertise to develop deepwater fields and help reverse declining gas output from India’s biggest deposit, called KG-D6, where production has dropped about 22 percent in the past year because of technical difficulties.

India’s oil ministry recommended approval for the deal and referred it to the Cabinet because of the large investment involved, Reddy said.

The two additional blocks will be approved after the oil ministry and Reliance agree on exploration work in the areas, he said. The blocks aren’t producing oil or gas.

Energy Security

“BP is keen to be a long-term partner with India in its quest for energy security,” the London-based company said in an e-mail statement today. “We will now work to complete the commercial agreements with Reliance and move forward with this exciting venture.”

Reliance has declined 18 percent this year compared with a 8.7 percent fall in the benchmark Sensitive Index of the Bombay Stock Exchange. The stock gained 1.5 percent to 873.35 rupees at close in Mumbai.

Reliance’s net income grew at the slowest pace in six quarters in the three months ended March 31 after gas output fell.

The company is scheduled to report first-quarter earnings on July 25. Profit in the three months ended June 30 may rise to 56.6 billion rupees, according to the median estimate of 19 analysts surveyed by Bloomberg. That compares with net income of 48.5 billion rupees a year earlier.

‘Technical Issues’

“After the government approvals for the Reliance-BP partnership, the KG-D6 reservoirs will be jointly assessed to address the technical issues in ramping up production,” Reliance’s billionaire Chairman Mukesh Ambani told shareholders on June 3. The deal will be completed before March 31.

Reliance and BP will also form a venture to market gas, according to their Feb. 21 statement. Future performance payments and investments could increase the size of the deal to $20 billion, BP said that day.

Last year, BP signed a deal to explore off Brazil and sealed a partnership with Cnooc Ltd., China’s biggest offshore oil producer, for licenses in the South China Sea.

BP bears ultimate responsibility for the worst offshore oil spill in U.S. history, a key government panel said Wednesday in a report that assigns more blame to the company than other investigations and could hurt its effort to fend off criminal charges and billions of dollars in penalties.

The report concluded that BP violated federal regulations, ignored crucial warnings, was inattentive to safety and made bad decisions during the cementing of the well a mile beneath the Gulf of Mexico.

In the report, other companies shared some of the blame. Rig owner Transocean was accused of being deficient in preventing or limiting the disaster, in part by bypassing alarms and automatic shutdown systems. Halliburton, the contractor responsible for mixing and testing the cement, was faulted as well.

But BP, as the designated operator of the Macondo well, "was ultimately responsible for conducting operations at Macondo in a way that ensured the safety and protection of personnel, equipment, natural resources and the environment," the panel concluded.

"It is only a question of time before BP – along with Transocean and Halliburton – will face criminal charges for their roles in the Gulf oil spill,"

Federal officials arrested a former BP engineer on charges of obstruction of justice on Tuesday, in the first criminal charges filed in connection with the 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

Kurt Mix, 50, a senior BP drilling engineer, allegedly destroyed hundreds of text messages sent to a supervisor that described high volumes of oil flowing from the ruptured well, located 5,000 feet underwater, according to a federal affidavit.

BP added that it had "clear policies requiring preservation of evidence in this case" and said that it has undertaken "substantial and ongoing efforts to preserve evidence" in the criminal investigation into the spill.

"The courts will determine whether these actions were an obstruction of justice, but we already know that BP had a policy of obfuscation during the spill when it came to the amount of oil flowing out of the Macondo well," Markey said.

More criminal charges related to the spill could also be forthcoming. Investigations by the Coast Guard and an independent commission created by President Obama found that BP shared responsibility for the rig explosion with other contractors on the well, including Transocean, which owned the rig, and Halliburton, which poured the concrete designed to seal the well.

"The Deepwater Horizon Task Force is continuing its investigation into the explosion and will hold accountable those who violated the law in connection with the largest environmental disaster in U.S. history," said U.S. Attorney General Eric Holder in a statement Tuesday.