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BP Said to Fault Staff for Mistakes Before Blowout

BP managers misinterpreted a stability test
The Transocean Ltd. Development Driller II rig operates off the coast of Louisiana. Photographer: Derick E. Hingle/Bloomberg

BP Plc’s internal investigation of the Deepwater Horizon rig disaster pins some of the blame on the company for mistakes made when finishing the oil well, including misreading pressure data that indicated a blowout was imminent, according to a person familiar with the report.

BP managers aboard the Transocean Ltd.-owned rig misinterpreted a test of the Macondo well’s stability on April 20, deciding the test confirmed the well was in good shape, said the person, who spoke on condition of anonymity because the report’s findings haven’t been publicly released.

That positive interpretation of the test data cleared the way for rig workers to begin replacing drilling fluid in the well, which is heavier than oil and natural gas, with seawater.

The seawater was too light to prevent natural gas that had begun leaking into the well from shooting up the pipe to the rig, where it exploded and killed 11 workers. The damaged well eventually spewed more than 4 million barrels of crude into the sea, enough to fill two supertankers.

“The entire industry should not be blamed for the actions of one single individual,” John Hofmeister, chief executive officer of Citizens for Affordable Energy and a former Royal Dutch Shell Plc executive, said in an interview with Peter Cook today on Bloomberg Television’s “Inside Track.”

A federal investigative panel comprised of U.S. Coast Guard officers and Interior Department regulators has focused on how BP employees aboard the rig and in Houston failed to detect signals that the well was about to erupt.

Halliburton Warnings

The probe also has questioned why BP engineer John Guide, the team leader overseeing the project, disregarded warnings of a potential blowout from contractor Halliburton Co., and why rig-based managers neglected to test for flaws in the cement outside the well intended to prevent explosive natural gas from seeping up to the rig.

Attorneys representing BP before the panel have sought to assign some of the blame for the catastrophe to Transocean and Halliburton, which mixed and poured the cement. Employees of Transocean, based in Geneva, and Halliburton, based in Houston, have told the panel they were following BP’s designs and directives.

Hung Nguyen, co-chairman of the panel, criticized BP last week for a convoluted management structure that has made it difficult to discern who was responsible for the well. Panel member Jason Mathews said five of the 12 BP managers assigned to the $140 million well had been in their jobs for six months or less.

Probing the Disaster

The U.S. Justice Department and several Congressional committees also are conducting probes of the disaster, which sank the $365 million rig, closed thousands of square miles to fishing for months, and halted deep-water oil exploration in the Gulf of Mexico. Under an agreement brokered with the Obama administration, BP agreed to set aside $20 billion to cover claims and damages.

The 200-page report was compiled by a team of BP investigators led by Mark Bly, the London-based company’s head of safety and operations. The report concluded BP bears at least partial responsibility for the incident that led to the largest oil spill in U.S. history, the person said. Bly’s team also found that Transocean shares the blame, the person said.

Releasing Findings

BP intends to announce the findings of their internal probe in the next 10 days, the person said. Scott Dean, a U.S.-based spokesman for BP, declined to comment on the report’s contents. Guy Cantwell, a spokesman for Transocean, said he wasn’t immediately able to comment.

Bly’s team began conducting interviews and reviewing internal documents just days after the Macondo well erupted about 40 miles (64 kilometers) off the Louisiana coast in the Gulf of Mexico.

Interviewees included BP vice presidents, offshore managers and engineers who designed the well in the company’s Houston office, according to testimony last week at the fourth round of hearings conducted by the Coast Guard-Interior Department panel.

Interview Notes

The eight-member Coast Guard-Interior Department panel asked BP representatives on Aug. 26 to turn over a copy of the Bly report as soon as possible. The panel has been relying in part on notes from interviews BP conducted with employees involved in the Macondo well, including Donald Vidrine, the senior manager overseeing the project aboard the Deepwater Horizon on the night of the disaster.

Vidrine, who was one of the managers in charge of interpreting the test data on the well, was put on administrative leave pending the results of BP’s internal investigation. Other workers also have been put on leave, BP America Inc. President Lamar McKay told the U.S. House of Representatives’ Energy Committee on June 15, though BP has not identified them.

McKay told the committee he knew of no one at the time that had been fired because of the disaster.

“If the investigation shows that people made mistakes that shouldn’t have been made, then certainly that would occur,” he said.

BP suspended billions of dollars in dividends to preserve cash to pay for damages from the oil spill and efforts to stop the flow of crude a mile (1.6 kilometers) beneath the sea surface. The company saw the value of its stock tumble as much as 54 percent. BP fell 1.5 percent to 379.7 pence Aug. 27 in London. There is no trading today because of a British holiday.

Offshore Ban

Federal offshore drilling regulators are considering tougher safety rules to prevent future accidents.

The Bureau of Ocean Energy Management, which oversees offshore drilling, is weighing rules that would set procedures in the event of irregular well tests, David Dykes, chief of the bureau’s Office of Safety Management, told a committee of scientists and engineers investigating the disaster on Aug. 12.

“One of our recommendations is that the agency set a standard negative test protocol that outlines specific procedures and how you should interpret the results,” Dykes said.

President Barack Obama “fraudulently accused the entire industry of not being competent” when he imposed a six-month moratorium on Gulf deep-water drilling, Hofmeister said. No new wells may be drilled during the next two years as the government reviews permit applications under new rules and probably fends off legal challenges from drilling opponents, he said.

“What he’s risking is his own re-election,” Hofmeister said of Obama. “If the gasoline price rises in 2012 because we’ve stopped drilling, it’s going to be on his watch.”

-- With assistance from Jim Efstathiou Jr. in Washington, Jim Polson and Adrienne Toscano in New York. Editors: Susan Warren, Tina Davis

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