BP, Transocean and Halliburton: The Three Stooges
Last week the Oil Spill Commission released its preliminary findings in a two day meeting held in Washington D.C.
Findings confirmed that the Macondo well blowout was an avoidable accident. And that escalating series of issues leading up to the blowout were the result of BP’s prioritization of cost cutting over safety.
Specifically, the Commission’s investigation team found that most of the mistakes and oversights that led to the blowout were the result of management failures by BP, Halliburton, and Transocean.
Key findings include:
- BP, Transocean, and Halliburton failed to communicate adequately. BP did not share important information with its contractors, or sometimes even within its own team. And contractors did not share important information with BP or each other;
- Halliburton and BP management processes did not ensure that cement was adequately tested before pumping. Halliburton didn’t have sufficient controls in place to ensure that its personnel tested cement in a timely manner or rigorously vetted test results. BP personnel did not ensure that Halliburton completed testing before pumping cement, despite recognizing problems with timeliness of Halliburton’s cement testing;
- BP and Halliburton employees knew that the cement job would be difficult but did not adequately communicate these issues to the rig crew;
- Neither the BP well-site leaders nor the Transocean crew consulted anyone on shore about anomalies in the negative pressure test;
- If these challenges and anomalies had been better communicated, the Macondo blowout could have been prevented.
The findings made clear that there is plenty of blame to go around for the worst oil spill in U.S. history, but the analysis provided on the key actors’ deplorable safety culture and history of violations and accidents begs the questions: Why were they permitted to drill at all?
BP’s history of cost-cutting and resulting problems across all business segments and over many years suggests systemic corporate culture issues.
- Grangemouth Refinery complex –2000
- Forties Alpha Production Platform –2003
- Texas City Refinery –2005
- Thunder Horse Platform -2005
- Prudhoe Bay Pipeline -2006
- Deepwater Horizon -2010
- Texas City Refinery (again) -2010
- BP pipelines across Alaska –2010
BP safety lapses appear to be chronic; its systems safety engineering and safety culture still need improvement.
Halliburton is the largest company in the global oil field cementing business, which accounted for 11% of the company’s business, or $1.7 billion in 2009.
For all of its experience, Halliburton prepared cement for BP, one of its major clients, that had repeatedly failed laboratory tests. And Halliburton managers on shore let its team, Transocean, and BP continue with a cement job without timely and positive stability results.
Halliburton was also the cementer on the Montara well that suffered a blowout in August 2009, off the coast of Australia.
The accident inquiry confirmed that cementing problems led to the blowout.
While specific cementing problems at Montara were different from mistakes at Macondo, in both cases management processes by the operator and Halliburton failed to ensure the crew achieved a good cement job.
In February, the UK Health & Safety Executive accused some of the company’s offshore managers “of bullying, aggression, harassment, humiliation, and intimidation” [towards their staff] according to Upstream, an industry trade journal that had seen a copy of the report.
Early in 2010, Transocean contracted Lloyds Register to review its safety management and safety culture after “a series of serious accidents and near hits within the global organization.”
Of the four North American rigs that Lloyd’s visited, the Deepwater Horizon was the highest performing with scores solidly in the twos and threes on a five point scale.
“[A] fundamental lack of hazard awareness underpins many of the issues in the North America Division.”
Transocean Supervisors and rig leaders themselves believed: “The workforce was not always aware of the hazards they were exposed to . . . ”
“[F]rontline crews are potentially working with a mindset that they believe they are fully aware of all the hazards when it is highly likely that they are not.”
Information courtesy of Oil Spill Commission Staff
Allison Fisher is the Outreach Director for Public Citizen’s Energy Program