Macondo disaster could repeat if reforms not adopted: US commission

Washington (Platts)--5Jan2011/519 pm EST/2219 GMT

The blowout of BP's Macondo well in the Gulf of Mexico last April was due to a "failure of management" on the part of BP, Transocean and Halliburton, as well as a failure by government regulators, and could occur again if significant reforms are not adopted, the National Oil Spill Commission has concluded.

"The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again," the Commission's final report, part of which was released late Wednesday, states. "Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur."

The Commission, appointed by President Barack Obama to determine the cause of the April 20 blowout that killed 11 workers and caused the worst marine oil spill in US history, will release its full report on January 11. But the group decided to release the chapter centering on the blowout itself early.

BP owned a majority stake in Macondo and operated the well. Transocean owned the Deepwater Horizon drilling rig destroyed by the blowout; Halliburton performed well services at Macondo.

One of the Commission's key conclusions was that the blowout of the well and the explosion aboard the Deepwater Horizon was not a "statistical inevitability."

"This disaster likely would not have happened had the companies involved been guided by an unrelenting commitment to safety first," Commission Co-Chairman Bob Graham said in a statement. "And it likely would not have happened if the responsible governmental regulators had the capacity and will to demand world class safety standards."

The report stops short of accusing BP of putting cost savings ahead of safety. But it does conclude that BP made a number of decisions in designing and digging the Macondo well that resulted in savings of time and money, but did not have procedures in place to determine if cutting costs also increased risks.

"Whether purposeful or not, many of the decisions that BP, Halliburton, and Transocean made that increased the risk of the Macondo blowout clearly saved those companies significant time (and money)," the report concludes.

The report states that companies must have strict policies in place that force managers to analyze and show proof that less costly alternatives are at least equally as safe as the ones they replace.

"If BP had any such policies in place, it does not appear that its Macondo team adhered to them," the report states.

Many of the report's conclusions have already been publicly discussed.

The report found that the cement that was supposed to prevent gas and oil from leaking into the well failed; that managers on the well misinterpreted the results of a key negative pressure test that showed that hydrocarbons had begun to leak into the wellbore; and that managers from BP, Transocean and Halliburton failed to communicate.

The report also had harsh words for regulators who were understaffed, underfunded and failed to do their job.

"Many critical aspects of drilling operations were left to industry to decide without agency review," the report concludes. "As a result, neither the regulations nor the regulators were asking the tough questions or requiring the demonstration of preparedness that could have avoided the Macondo disaster."

--Gary Gentile, gary_gentile@platts.com

To subscribe or visit go to:  http://www.platts.com