BP Knew of Halliburton’s Troubles Before Gulf Blowout
BP Plc failed to “adequately” supervise Halliburton Co.’s work at its Gulf of Mexico oil well that ruptured even after uncovering troubles the contractor had on a different well, according to a presidential panel.
In a 2007 audit, BP found that Halliburton lacked experience testing well cement work, Fred Bartlit, the chief counsel for the National Commission on the BP Deepwater Horizon Oil Spill, said today. Issues identified in 2007 “mirrored problems” at BP’s Macondo well, where Halliburton was in charge of designing cement to plug the well.
Bartlit’s report underscores the commission’s finding that the spill was the result of poor management by BP, Halliburton and Transocean Ltd, owner of the rig. The April 20 blowout of BP’s well, which killed 11 workers, destroyed Transocean’s $365 million Deepwater Horizon rig and spewed crude for 87 days, was preventable, Bartlit said in his report.
“BP‘s failures are especially troubling because it had previously identified several relevant areas for concern during a 2007 audit of Halliburton’s capabilities,” Bartlit said. The audit “identified several issues that mirror problems at Macondo.”
Halliburton and BP lacked a management process to ensure adequate testing of cement used to prevent oil and gas from seeping into the well, the report found. Both companies were aware that tests of the cement before the blowout showed the recipe wasn’t stable.
Cooperation Declined
BP didn’t question Halliburton about the cement mixture even after it failed to perform properly during testing, Bartlit said. Once Bartlit’s team identified issues with the cement recipe, Halliburton declined to cooperate with investigators. The panel didn’t have power to subpoena witnesses or documents.
“BP has made every effort to understand the causes of the Deepwater Horizon accident to help prevent similar events from occurring in the future,” Scott Dean, a company spokesman, said in an e-mail. “The findings of the Presidential Commission -- particularly that the accident was the result of multiple causes, involving multiple parties -- are largely consistent with those contained in the BP internal investigation report.”
A spokeswoman for Halliburton didn’t respond to an e-mail seeking comment.
The panel, appointed by President Barack Obama, presented its full report on Jan. 11. It identified failures by government regulators and warned that a similar accident may occur without “significant reform.”
New Inspectors
In his 2012 budget released Feb. 14, Obama proposed raising fees on offshore drillers to help hire more than 100 inspectors to oversee the industry. The administration also has begun to revamp the offshore regulator to eliminate potential conflicts of interest between officials charged with collecting government royalties for oil and natural gas production and those responsible for enforcing safety and environmental rules.
Bartlit also helped to investigate the 1989 Occidental Piper Alpha North Sea platform explosion that killed 167, the deadliest oil rig explosion.
“The sad fact is that this was an entirely preventable disaster,” Bartlit said in a statement. “Poor decisions by management were the real cause.”
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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