Panel: Management failures largely to blame for Macondo blowout

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, Jan. 6 -- A failure of management by the three main companies involved in drilling the Macondo deepwater oil well was the single biggest reason it blew out and exploded on Apr. 20, killing 11 workers and creating a massive spill, US President Barack Obama’s independent oil spill commission concluded.

The well blew out because of a number of separate risk factors, oversights, and outright mistakes, the commission said on Jan. 5 as it released a chapter from its full report, which is scheduled for release on Jan. 11.

But it added that better management by BP PLC, the well’s operator; Halliburton Co., which provided cementing services; and Transocean Ltd., the well’s drilling contractor and owner of the Deepwater Horizon semisubmersible rig, which the blast and fire destroyed, “would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate, and address them.”

It said the accident was the result of “several individual missteps and oversights” by the three companies, “which government regulators lacked the authority, the necessary resources, and the technical expertise to prevent.”

It said, “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. Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.”

‘Large and avoidable’
The report said each mistake made on the rig and onshore contributed to the blowout, that the cumulative risk from these mistakes “was both unreasonably large and avoidable,” and that the risk of a catastrophic blowout was realized on Apr. 20 when several of those risks contributed to the accident.

The chapter cited inadequate risk evaluation and management of late-stage well design decisions, a flawed cement slurry design developed without adequate engineering review or operator supervision, flawed procedures to secure the well that unnecessarily removed drilling mud from the wellbore, apparent inattention to key signals of an impending blowout, and an ineffective response once the blowout began, including but not limited to a failure of the rig’s blowout preventer.

“The commission’s findings only compound our sense of tragedy because we know now that the blowout of the Macondo well was avoidable,” said co-chairman Bob Graham, a former Florida governor and US senator. “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.”

William K. Reilly, commission co-chairman and former US Environmental Protection Agency administrator noted, “My observation of the oil industry indicates that there are several companies with exemplary safety and environment records. So a key question posed from the outset by this tragedy is, do we have a single company, BP, that blundered with fatal consequences, or a more pervasive problem of a complacent industry? 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.”

The three companies’ responses to the chapter’s main conclusion varied. BP said in a statement that the release largely adopted the preliminary findings by the commission’s chief counsel that the accident was the result of multiple causes by multiple companies. The multinational oil company said it has instituted significant safety and risk management improvements already, and that it is working with contractors and regulators to improve deepwater drilling operations and contractor services.

Selective omissions
Halliburton said in its statement that the chapter acknowledged that cementing an oil well is an inherently uncertain process where things can go wrong even under optimal conditions. But it added that the commission “selectively omitted information we provided them in response to their numerous inquiries.” The oil field services company disagreed with the report’s characterization of February and April foam stability tests, and noted that the report acknowledged that Halliburton operated under BP’s direction and that the well operator put constraints on the well’s cement design.

Transocean, meanwhile, said in its statement: “Consistent with industry standards, the procedures being conducted in the final hours were crafted and directed by BP engineers and approved in advance by federal regulators. Based on the limited information made available to them, the Transocean crew took appropriate actions to gain control of the well. They were well trained and considered to be among the best in the business.”

The commission’s partial report cited a series of management decisions that eventually led to the well’s failure, National Ocean Industries Association Pres. Randall B. Luthi observed on Jan. 6. “While these are serious and had dire consequences, what is more important to the future of the nation’s offshore energy is the conclusion that this blowout was not a statistical inevitability,” he continued. “That means the human failures that led to Macondo can and will be corrected. In fact, the offshore industry has already made changes in procedures and practices based on the lessons learned thus far and in response to new regulations. We look forward to seeing the full findings of the commission.”

The American Petroleum Institute is studying the chapter from the commission’s report before it formally comments, a spokesman told OGJ on Jan. 6. API Pres. Jack N. Gerard said during a Jan. 4 briefing on the state of American energy that the Macondo well accident and spill were a wakeup call for the oil and gas industry, but added that the public generally believes that it was an isolated incident in an area where 42,000 other wells have been safely drilled over 60 years.

Contact Nick Snow at nicks@pennwell.com.

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