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WASHINGTON—A federal investigation into the U.S. Gulf oil spill hasn’t found evidence that BP PLC sacrificed safety to save money, backing a key argument made by the oil company.
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Fred Bartlit, chief counsel of the National Oil Spill Commission
.“To date, we have not seen a single instance where a human being made a conscious decision to favor dollars over safety,” said Fred Bartlit, the chief counsel for the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, during his first public presentation on the causes of the spill.
However, he later complained after the panel’s hearing Monday that the media had reached “overarching conclusions” about his comments. BP, he said, was paying more than $1 million a day to drill the Macondo well, and “any time you’re talking about $1.5 million a day, money enters in.”
Nevertheless, the panel’s findings seemed to be a blow to Anadarko Petroleum Corp., which owns a 25% stake in the blown-out Macondo well and has said that its liability is limited because the spill was a result of BP’s actions. Anadarko shares were recently down 4.5%.
Halliburton Co. shares rose 4.9% and Transocean Ltd. shares rose 5%, as the spill commission said that challenges in drilling the well, which led to the worst offshore oil spill ever, are common in the oil industry. That makes it harder to break contractual provisions protecting the companies against liability.
The panel’s staff concluded that gas and oil blew up through the casing, in the middle of the well. That is in line with what BP has concluded. BP has said that the pathway is evidence that the disaster was unlikely to have started with its own well design.
The panel’s staff did say that BP introduced more risk into the system by removing heavy drilling “mud” that provides pressure to keep down gas before setting a 300-pound cement plug that provides another safeguard against a surge of combustible gas to the surface.
But investigators also said that while the problems encountered in drilling the Macondo well were common throughout the industry, the combination of problems meant that the design team should have paid special attention to testing the job.
“These things individually are common in the industry,” said Sambhav Sankar, the deputy chief counsel. “Taken together they’re something that should have been in the head of the design team, cementing team, and if nothing else should have led them to be very careful, very concerned about what they were going to do next to test the job.”
BP, Halliburton and Transocean argued some points in the panel’s findings, jockeying to avoid taking blame.
Halliburton’s Richard Vargo Jr., a cementing manager for the Gulf of Mexico region, disagreed with the conclusion about the flow of the oil and gas. BP’s executive vice president of safety and operational risk, Mark Bly, challenged a conclusion that BP had added risk with its handling of a cement plug. Transocean’s director of special projects, Bill Ambrose, said BP was responsible for interpreting a key test, not Transocean, the owner of the rig.
The degree to which the staff’s initial findings track with BP’s findings may renew questions about the limitations faced by the panel due to a failure of Congress to grant the commission the power to issue subpoenas. Senate Republicans blocked the panel from obtaining subpoena power out of a concern that the commissioners, appointed by President Barack Obama, would be biased against the oil and gas industry.
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.As for specific problems in developing the Macondo well along the way, Mr. Sankar said that a decision to use six parts known as centralizers instead of the 21 recommended by Halliburton might not necessarily have been wrong. “There’s no clarity even now on whether the additional centralizers should have been used on the rig,” he said in a presentation.
The findings are just some of the details to emerge at the spill commission’s first hearings in its investigation. The findings follow scathing criticism from Capitol Hill in which lawmakers had said that BP put profits ahead of safety and ignored warnings, such as the warning to use more centralizers.
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Rig of the Future: Satellites Aid Operations. Access thousands of business sources not available on the free web. Learn More .A BP employee had seemed to be indifferent, in an email disclosed by the U.S. House Energy and Commerce Committee earlier this year, about a shortage of parts known as centralizers.
But on Monday, the spill investigators provided fuller details about that email, revealing that the BP employee had also indicated that using fewer centralizers—key to keeping the casing centered in the well and thereby ensuring that cement flows evenly instead of leaving gaps through which oil or gas can channel—would simply mean using another tactic. That tactic involves squeezing cement into any empty spaces in the narrow area between the casing and the hydrocarbon formation.
“The team recognized that squeezing is a possibility and that they’ve increased the possibility of having to squeeze by using less centralizers,” Mr. Sankar said.
As for choosing to design the well with a long string instead of a tie-back, Mr. Sankar said that the long string “has some value over the long-term life of the well.” That is the same thing that former BP Chief Executive Tony Hayward had told a House panel, and compares with allegations by U.S. House Energy and Commerce Committee Chairman Henry Waxman (D., Calif.) that BP chose the long string method—which provides half as much protection against a possible pressure surge—to save $7 million.
Using a long string in and of itself “is not a problem,” Mr. Sankar said, but “just requires more attention.”
The presentation is continuing. But last month, the staff found that Halliburton knew about problems with the cement it designed and pumped into the well. The staff also said that because cement jobs may be faulty, the oil industry has tests to identify cementing failures, and that BP and or Transocean personnel misinterpreted or chose not to conduct such tests.
A big issue, highlighted previously, was the failure of rig workers to recognize that a key test, known as a negative pressure test, had failed. In that instance, the staff appeared to put the blame on a loophole in U.S. regulations, noting that there were at the time no specific regulations.
L SPILL PANEL SAYS < MONEY DID NOT TRUMP SAFETY
