BP Lacked ‘Discipline’ Before Rig Blast, Panel Says

Decisions made by BP Plc and its contractors before the explosion on the Deepwater Horizon drilling rig suggest that risks were ignored and a “lack of operating discipline” contributed to the disaster, according to an interim report from a technical panel.

The findings question the competency of key personnel on the doomed rig in the Gulf of Mexico, according to the report from a committee of the National Academy of Engineering and National Research Council. The blast on April 20 sank the rig, killed 11 workers and set off the worst U.S. oil spill.

The report highlights the decision to proceed with sealing the well after tests showed that cement put in place to prevent natural gas from seeping in wasn’t effective, a conclusion also reached by a panel formed by President Barack Obama. U.S. regulators responsible for offshore drilling provided “insufficient” checks and balances, the report found.

“The pivotal event when the game changed, not totally out of control but headed that way, was the pivotal negative test,” Paul Bommer, committee member and senior lecturer in the Department of Petroleum and Geosystems Engineering at the University of Texas, said today on a conference call. “When that was accepted as being OK and they went on to displace mud in preparation for temporary abandonment, their options greatly narrowed.”

Photographer: Jay Mallin / Bloomberg News

Former secretary of the Navy and chair of the study committee Donald Winter. Close

Former secretary of the Navy and chair of the study committee Donald Winter.

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Photographer: Jay Mallin / Bloomberg News

Former secretary of the Navy and chair of the study committee Donald Winter.

Flawed decisions, which ultimately lowered costs, weren’t identified or corrected by BP, its contractors or by regulators in the U.S. Minerals Management Service, said Donald Winter, former secretary of the Navy and chair of the study committee.

Reduced Schedule, Costs

The choices used to seal the well “appear to be made in a direction which provides a reduced schedule and therefore a reduced cost of completing the well,” Winter said.

The report triggered a fresh request for BP Chief Executive Officer Robert Dudley to testify on the spill before Congress. Dudley declined to appear before the House Energy and Commerce Committee in October, citing the “enormous amount of work to do” after taking over as CEO on Oct. 1.

BP shares the authorities’ “goal to prevent future accidents and oil spills from offshore drilling operations,” the London-based company said in an e-mailed statement. “We therefore have cooperated with the committee and will continue to do so as it reviews the issues raised in its interim report.”

The blowout spewed crude into the Gulf for 87 days and shut thousands of square miles to fishing. Last month, the National Commission on the BP Deepwater Horizon Oil Spill appointed by Obama said cement recommended by Halliburton Co., the world’s second-largest oilfield-services provider, to seal the well was unstable and may have led to the explosion.

Rig Loss

It may not be possible to determine why oil and gas entered BP’s Macondo well because of the death of key witnesses, the loss of the rig and operating records and the difficulty in trying to obtain evidence from the site 5,000 feet (1,500 meters) below the surface, the report said.

The committee also lacks information from the blowout preventer, the device that failed to stop the flow of oil and gas in the event of a blowout. The committee offered no recommendations. A final report is due in June.

Obama halted oil and natural-gas drilling in waters deeper than 500 feet (152 meters) after the well off the Louisiana coast blew out. Randall Luthi, president of the Washington-based National Ocean Industries Association, said today’s report supports the industry’s view that a blanket moratorium was unnecessary. The drilling ban, scheduled to remain in effect until Nov. 30, was lifted Oct. 12.

‘Human Error’

“Today’s findings and previous reports point to human error and a series of questionable decisions,” Luthi said in a statement. “This is precisely why it is so important to find the root cause of the accident, before mandating wide-scale legislative or administrative fixes.”

Though tests indicated that cement meant to seal the well was suspect, workers on the rig proceeded with steps to temporarily abandon the exploratory well, said Mark Zoback, a committee member and professor in Department of Geophysics at Stanford University in California. The decision to accept the results without a review by engineers working on land “suggests a lack of onboard expertise and of clearly defined responsibilities,” according to the report.

BP well-site leaders Donald Vidrine and Robert Kaluza have declined to testify before a joint U.S. Coast Guard-Interior Department investigative panel studying the disaster.

Vidrine’s testimony is needed “to answer the question who made that decision,” Zoback said.

Bad Decisions, Delays

Bad decisions were compounded by delays in recognizing that oil and gas were flowing into the well. Hydrocarbons entered the well undetected for almost an hour before the first explosion. Actions to control the well weren’t taken and gas was funneled through equipment that vented above the rig floor instead of overboard.

“Of particular concern is an apparent lack of a systems approach that would integrate the multiplicity of factors potentially affecting the safety of the well, monitor the overall margins of safety, and assess the various decisions from perspectives of well integrity and safety,” according to the panel.

BP faulted its engineers for the fatal drilling-rig blast in an internal investigation, and said contractors Transocean Ltd., which owned the rig, and Halliburton share the blame.

The presidential panel investigating the spill found no evidence decisions were made to put profit ahead of safety on the drilling rig, its co-chairman said last week.

Lawmakers, Environmentalists

Environmental groups and lawmakers have said BP cut corners to reduce costs as the company sought to complete the doomed well that was $58.4 million over budget and move the Deepwater Horizon rig to another project. The U.S. House in July passed legislation that would bar BP from offshore drilling leases based on safety lapses.

“We certainly found no evidence that anyone had scrimped on safety, for example, to save money,” William Reilly, co- chairman of the presidential panel, told reporters Nov. 8. He later said, “What we have really heard today is a story of what appears to be several very human decisions made by competent professionals who missed signals.”

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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