Transocean Challenges Agency Authority to Probe Blast

A federal panel that investigated the fatal 2005 Texas refinery blast that resulted in a $50 million fine for BP Plc hasn’t got the authority to probe the company’s April deep-water drilling disaster, according to rig owner Transocean Ltd.

Under federal law, floating rigs are exempt from oversight by the U.S. Chemical Safety and Hazard Investigation Board, Rachel G. Clingman, an attorney for Transocean, said in a letter to the agency obtained by Bloomberg. Transocean owned the Deepwater Horizon that burned and sank after BP’s Macondo well erupted April 20, triggering the worst U.S. offshore oil spill.

The chemical board’s power to investigate accidents aboard permanently moored offshore installations such as oil-production platforms doesn’t extend to rigs, which move from site to site, Clingman, from Sutherland Asbill & Brennan LLP in Houston, said in the letter. While Transocean plans to continue answering questions and providing documents to the chemical board on a voluntary basis, the company won’t respond to subpoenas from the agency, she said.

“Transocean always has sought cooperation over confrontation in responding to reasonable government inquiries,” Clingman wrote to Donald Holmstrom, a chemical board investigator, in the letter dated yesterday. “Please also advise if CSB would like to accept Transocean’s many offers to meet and confer.”

Blowout Preventer

The chemical board is one of several federal agencies and Congressional panels looking into what went wrong when a plume of gas and crude from BP’s well off the Louisiana coast engulfed Transocean’s rig, killing 11 workers, injuring 17 and bringing offshore energy exploration in U.S. waters to a standstill.

In the letter, Vernier, Switzerland-based Transocean also asked the chemical panel to turn over correspondence with U.S. Representatives Henry Waxman and Bart Stupak regarding the rig catastrophe, along with internal board procedures for conducting investigations and interviews. Waxman and Stupak, Democrats from California and Michigan, respectively, helped lead Congressional probes of the disaster.

Daniel Horowitz, a spokesman for the Washington-based chemical board, said the agency has jurisdiction to investigate the incident.

“The source of the flammable gas was the fixed well installation on the seabed, and the Deepwater Horizon itself was also functioning as a fixed facility during the drilling operation,” he said in e-mailed comments.

‘Disappointed’ at Transocean

The board also has broad authority to conduct studies of actual or potential safety issues under its statute. Most companies are cooperating with the board in its investigation, which is non regulatory and is aimed at preventing future accidents, he said.

“We are therefore disappointed with Transocean’s statements and have asked the Justice Department to enforce the CSB’s subpoenas so the investigation can move forward without interference,” Horowitz said.

Last week, the chemical panel criticized a joint U.S. Coast Guard-Interior Department board for allowing employees of Transocean and Cameron International Corp., maker of the blowout preventer installed on the well, to participate in inspections of the device. The preventer, a 50-foot (15-meter) stack of valves, failed to halt the surge of gas and oil when workers attempted to activate it from the bridge of the burning rig.

Public Trust

The chemical board said the involvement of Transocean and Cameron employees created a conflict of interest that “diminishes the credibility of the entire process and jeopardizes the public’s trust in the examination results,” Rafael Moure-Eraso, chairman of the Chemical Safety Board, said in a Dec. 23 letter to Michael Bromwich, who oversees the Interior Department’s Bureau of Ocean Energy Management, Regulation and Enforcement.

In 2005, an explosion occurred at BP’s Texas City, Texas, refinery when an octane-boosting unit overflowed as it was being restarted. The blast killed 15, injured thousands and was powerful enough to shatter windows five miles away. The Chemical Safety Board found numerous safety lapses that created “a catastrophe waiting to happen,” according to John Bresland, the board’s chairman.

To contact the reporter on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net.

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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