Bp Bears Brunt of Blame for Deepwater Horizon Catastrophe

March 5, 2017 Management

BP bears brunt of blame for Deepwater Horizon catastrophe
Report says oil company is ultimately responsible for oil spill but rig contractors also implicated in some areas
BP??™s share prices rose almost 5% but fell back after report was published Photograph: Molly Riley/REUTERS
A key US federal report has focused the blame for the worst offshore oil spill in US history on BP, but criticised its contractors sufficiently for the markets to push BPs share price up. Amid a string of failures, BPs “cost or time-saving decisions??¦ were contributing causes of the blowout,” the report concluded.
Assigning ultimate responsibility for the disaster ??“ and the billions of dollars of clean-up and compensation costs ??“ will take years of legal action, but Wednesdays investigation report was seen as a significant indicator as it was conducted by the regulator responsible for offshore activities. The blowout at the Deepwater Horizon rig in the Gulf of Mexico in April 2010 killed 11 people and led to almost 5 million barrels of oil being spilt into the ocean.
BPs share price rose almost 5% in London on rumours the report would help avert the company being found grossly negligent in future, which would increase its financial liabilities hugely. But it fell back after the report was published, finishing the day up 3.5% at 395.1p.
The investigation, jointly conducted by the Bureau of Ocean Energy Management, Regulation and Enforcement (Boemre) and the US Coast Guard, stated that a “central cause” of the blowout was the failure of a cement barrier in the drilling apparatus. The cement job was done by a contractor, Halliburton, but the report states that BP was, as designated operator, “ultimately responsible” for safety on the rig. It also stated that, in the days before the blowout, BP had “made a series of decisions that complicated cementing operations, added incremental risk, and may have contributed to the ultimate failure of the cement job”.? 
BP and Halliburton are already engaged in a bitter legal fight, with the most recent development being the filing of claims against BP in the Texas state court on 1 September, accusing BP of defamation and amending its existing action in Louisiana to include fraud.
The Boemre/Coast Guard investigation also found that staff from BP and Transocean, which owned the Deepwater Horizon rig and was responsible for safe operations aboard, had failed to react until it was too late to heed warning signs that arose during well tests. The report noted that Transocean staff had admitted to BP they had “screwed up by not catching” a similar warning sign six weeks before the blowout and that BP had failed to “take steps to ensure the rig crew was better equipped to detect kicks”.
BP had experienced “personnel changes and conflicts” and BPs operations at the well were $58m (?37m) over budget at the time of the blowout, the report found.
The investigation found evidence for violation of seven federal regulations. BP are named alone in three, BP and Halliburton in one, BP and Transocean in another, and all three companies in the final two.
BP said the report concluded that the accident was the result of multiple causes involving multiple parties. “From the outset, BP acknowledged its role in the accident and has taken concrete steps to further enhance safety and risk management throughout its global operations,” BPs statement said. “We continue to encourage other parties to acknowledge their roles in the accident.” A presidential commission on the BP-Deepwater disaster concluded in January that there had been a “system-wide problem”.
A spokesman for Transocean said: “The report confirms the primary cause of the incident was the catastrophic failure of the cement in the Macondo well, and finally puts to rest all previous allegations that improper maintenance of the blowout preventer contributed to the tragedy.
“We take strong exception to criticisms of the Horizon drill crew, nine of whom perished fighting to save their fellow crewmembers and the rig, for the actions they took in the face of such an unprecedented emergency,” he added.
The report stated there was no evidence that the regulations themselves were a cause of the disaster, but did find that stronger regulations might have reduced its chances. The Obama administration created Boemre to replace the Minerals Management Service, the regulator at the time of the blowout. The service was disbanded following accusations that it had been “captured” by the oil industry. But Congress has yet to pass any legislation to address safety gaps highlighted by the disaster.
Only one person, BP engineer Mark Hafle, is mentioned by name in the report. Hafles failure to investigate or resolve anomalies detected during a critical test possibly contributed to the failure of the crew to detect the initial influx of gas and oil. Hafle also chose not to run a cement log, a test that evaluates the quality of the cement job, in violation of BP procedures, the report found. Hafle refused to testify before the federal panel in August 2010, citing his constitutional right against self-incrimination.


I'm Amanda

Would you like to get a custom essay? How about receiving a customized one?

Check it out