Blame for Deepwater Horizon disaster must be shared says report

BP’s shares rose today after a US panel split the blame for the Gulf of Mexico spill between the oil company, its contractors and regulators.

In a preview chapter of a report due out next week, the presidential National Oil Spill Commission said the main cause of last year’s spill was a systemic failure of management at BP, Halliburton, and Transocean.

Meanwhile, a House of Commons committee has warned against stopping deepwater drilling in UK waters but said extra precautions should be taken to avoid a similar disaster.

The US report chapter concluded that a number of mistakes and oversights led to the Deepwater Horizon explosion, which killed 11 people and led to the largest ever oil spill in American waters, but they could all be traced back to management failure.

‘Given the documented failings of both Transocean and Halliburton, both of which serve the offshore industry in virtually every ocean, I reluctantly conclude we have a system-wide problem,’ said the commission’s co-chair, William K Reilly.

Co-chair Bob Graham said: ‘This disaster likely would not have happened had the companies involved been guided by an unrelenting commitment to safety first.

‘And it likely would not have happened if the responsible governmental regulators had the capacity and will to demand world class safety standards.’

A statement from BP said the company was working with regulators and industry to improve operations and contractor services in deepwater drilling following the disaster.

‘Even prior to the conclusion of the Commission’s investigation, BP instituted significant changes designed to further strengthen safety and risk management.

‘These changes include the creation of a new Safety & Operational Risk division, reporting directly to Group CEO Bob Dudley, that will provide independent oversight of operational decisions involving safety.’

The report said the immediate cause of the blowout was a failure to contain hydrocarbon pressures in the well, which followed a series of mistakes and failures on the part of BP and its contractors.

BP’s fundamental mistake was not taking special caution with the primary cement job, which was supposed to act as a barrier to the hydrocarbon flow but was made less reliable by the well design used, the report said.

Further criticisms were made of BP and Halliburton’s communication, management and design procedures and response to tests of the cement and pressure. The report also said the rig crew were not adequately trained to respond to such an emergency.

In the UK, the Commons Energy and Climate Change Committee said a moratorium on deepwater drilling was unnecessary and would undermine energy security.

But it had serious doubts about the ability of oil spill response equipment to function in the harsh conditions off the west coast of Shetland, where wells are being drilled over a thousand metres deep.

And if liability rules weren’t clarified, taxpayers could be forced to pay the bill for any major oil spill that occurred.

Committee chair and MP Tim Yeo said: ‘Safety regulations on drilling in the UK are already tougher than they were in the Gulf of Mexico, but oil companies mustn’t use that as an excuse for complacency.

‘Companies cannot continue producing cut and paste oil spill response plans and rig operators must make it easier for staff to raise concerns without fear of intimidation.’

Energy Minister Charles Hendry said the government welcomed the Committee’s conclusions and would conduct a further review once full US reports and detailed analysis of the Gulf of Mexico incident were available.