Tag Archives: Deepwater Horizon

OFFSHORE | BP forms ‘powerful’ new safety unit

Originally published in bbc.co.uk, 2010/09/29

BP has formed a new unit to oversee safety across the company following the Gulf of Mexico oil disaster.

The oil giant says the division will have “sweeping powers”, including the authority to intervene in operations to uphold safety standards.

Mark Bly, who headed BP’s internal investigation into the hugely damaging US oil spill, will run the new unit.

He will report directly to Bob Dudley, who takes over as chief executive on 1 October.

BP hopes the new unit, along with a number of other organisational changes, will help rebuild trust in the company.

It is also splitting its Upstream business into three divisions – Exploration, Development and Production.

As part of the reorganisation, it will examine how it manages third-party contractors.

BP’s internal investigation, published last month, blamed a “sequence of failures involving a number of different parties” for the Deepwater Horizon oil spill.

It said it was responsible in part for the disaster, but also placed some blame on other companies working on the well.

Safeseas note 1: to learn more about the “blame” of other companies, I would suggest this BBC’s article: Who’s blamed by BP for the Deepwater Horizon oil spill

Safeseas note 2: in such big, high-profile disasters, one has to be very careful to avoid the trap of blame. The “blame game” creates an hostile environment to the progress of safety.

Safeseas note 3: 11 men died as a result of the Deepwater Horizon tragedy. This should not be forgotten.


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SAFETY AND ENVIRONMENT | The cost of beancounting

The following article was written by Clay Maitland, one of the most respected voices in the maritime industry.

Im my opinion, it is worth reading, if only to remind us that, at a time when cost management tends to be more important than safety risk management, beancounting can be indeed very expensive.

Here is Mr Maitland’s article:

Robert Dudley is an American oil man who became an employee of British Petroleum, oops, BP, when it absorbed Amoco, the former Standard Oil of Indiana, in 1998.

As of Friday,  Mr Dudley has taken the lead in managing BP’s, er, response to the Gulf oil spill.

Amoco, remember, was the owner of the Amoco Cadiz.

There are similarities between what happened to that vessel in 1979, off the coast of France, and what is happening now; both oil companies had/have rigid cost control systems in place, but no apparent means of minimising risk, or an awareness of the consequences of a failure to control it. In both cases, this failure led to vast financial and environmental loss.

One of many ironies is that the methods by which risk may be analysed and managed began with the Corporation of Lloyd’s, in the coffeehouse kept by Edward Lloyd in Tower and later Lombard Streets, in the City of London, in the reign of Charles II.

To assist shipowners and underwriters who frequented the coffeehouse, a list was maintained of the ships offered for the insurance of hulls and cargo.

These lists became in 1760 a printed volume or register book, and by 1775, the familiar classification of A1 Lloyd’s was used to denote the highest class of ship. The analysis and control of risk of loss became an essential principle, without which ships and cargoes could not be profitably insured, and shipowners avoid ruin.

Today, some of the world’s most knowledgeable and sophisticated experts in containing risks can be found within the ranks of London marine insurers. One hopes that Mr Dudley, who may be the successor to Tony Hayward as BP Chief Executive, will make use, at long last, of this resource.

It is also fervently hoped that he brings with him an institutional memory of the cause of the Amoco Cadiz oil spill.

Many readers will remember that she and her sister ships were ordered and built at the Astilleros yard in Cadiz; that all had a design flaw affecting their steering gear (not good for large tankers to have); that this caused significant loss of hydraulic fluid, which if not remedied, resulted in loss of control.

Amoco was warned to get this problem fixed on all of the Astilleros builds. This would have cost piles of money, so a less expensive solution was found: equip each Amoco tanker with large spare supplies of hydraulic fluid, carried in barrels.

This less expensive solution worked to management’s satisfaction, if not that of Amoco’s crews, until Amoco Cadizwas caught in a storm in the Bay of Biscay.

As part of the Amoco management system of control of all things great and small, each of its masters was required to be in close and frequent contact with company headquarters in Chicago. The effect of the sustained heavy weather encountered by the AMOCO CADIZ, culminating in a particularly severe storm as the vessel approached Ushant, was that most of the spare hydraulic fluid had been used.

Steering control failed, and the master, Capt. Bardari, radioed Chicago for permission (Amoco policy denied him the authority to do this without head office approval) to call for salvage tugs.

At first, and for some time, Chicago declined to grant permission to Capt. Bardari to do so, since this would probably entail his signing a Lloyd’s Open Form of salvage agreement. Surely a less expensive solution could be found.

Eventually, head office in Chicago relented, and allowed Capt. Bardari, poor soul, to call for assistance.

The stormy weather continued,  and his emergency call was answered by only a few salvors, one of which was a famous company called Bugsier.

More time was lost haggling over the potentially costly Open Form. The Bugsier tug, appropriately named Samson, arrived too late, and Amoco Cadiz was driven on the rocks of the Breton coast. The oil that spilled onto the French beaches and oyster beds, among other resources, resulted in very large damages against Amoco. A less expensive solution could not be found.

A noteworthy result of the Amoco Cadiz disaster was an extensive revision of the SOLAS Convention.
What has not, however, been done from 1979 to the present time, either in national or international law, is to deal with the disastrous effect of a business model that, particularly at some large companies, has tended to put cost controllers in policy-making positions.  This was true, at the time, at Amoco.

Such a man was Lord John Browne.

In contrast to the new management of Exxon, after the Exxon Valdez allision, (1989) which adopted pervasive, and effective, quality and safety management policies, John Browne was a ferocious cost-cutter who reined in spending across the board, including safety.

So has his successor and protege, Mr. Hayward. Despite the lash of outrageous circumstances: the Prudhoe Bay pipeline leak, the Texas City explosion, and about 760 safety violations in its refineries, cited by the U. S. Occupational Safety and Health Administration between 2007 and 2010, the corporate culture, despite all the “green” advertising, resisted effective awareness of the extraordinary risks that were being run.

Not so Exxon, now Exxon Mobil. Shortly after the Exxon Valdez spill in Prince William Sound, Alaska, Exxon’s board of directors met, and fired the CEO. It then convened a committee of senior executives, and instructed them to create and institutionalise a pervasive system of safety awareness and management within all of Exxon’s plants and other assets, including ships and rigs. Exxon Mobil now has an outstanding safety record.

This kind of cultural change requires leadership by example. If deepsea drilling is to be resumed, as I think it must, then a way to do it safely and competently will have to be found. All of the oil companies, and their suppliers and contractors must be forced to abandon hardheaded “cowboy” cultural attitudes toward safety and the environment.

There is definitely a need for federal legislation that defines and requires certificated safety management programmes; the Exxon Mobil system would provide an excellent model. A structure of outside audits will be a necessary requirement. The Institute of London Underwriters could provide useful advice.  A safety management and risk control system that delivers value, and is not “bolt-on” window dressing, requires the active engagement of senior officers of the company, and freedom from a “one size fits all” budgetary corset.

Much in the manner of Sarbanes-Oxley, there must be explicit accountability for safety awareness, and the company’s management system, from top to bottom within the company, from the “C” suite to the wellhead.

The key element is of course government enforcement; yes, another layer of bureaucracy is now inevitable! The Exxon Mobils, who will voluntarily change their safety culture, are not universal phenomena; without laws that compel compliance,the cowboys and the beancounters will continue to make their own rules, and life will be risky for those pensioners.

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OIL & GAS | Norway bans new drilling

Norway has banned any new deepwater drilling until a full inquiry is conducted into the Deepwater Horizon oil spill disaster.

“We are moving ahead with the 21 licensing round. We will have the accident in the Golf of Mexico in mind going forward,” said Norway’s energy minister Terje Riis-Johansen.

“There will be no drilling in any licenses on deep waters coming out of the 21st round before we have sufficient knowledge of this accident, including possible implications for our regulation.”

“In addition to that, before awarding licenses in the 21st round, I will ensure I have deeper knowledge about the accident.”

“The precautionary principle combined with a predictable framework, have to be the foundation for our petroleum politics,” Riis-Johansen said.

Reports say this is the first such decision outside the US, which has placed a six month ban on deepwater drilling in the Gulf of Mexico.

On Tuesday the UK’s department of energy announced it would increase its inspection of drilling rigs and monitoring of offshore compliance.

Energy Secretary Chris Huhne has also asked a new oil industry group to report back on its findings on the UK’s ability to prevent and respond to oil spills.

“I’ve had an urgent review undertaken to reassure myself and the public that all appropriate measures are in place around our shores,” Huhne said.

On Tuesday trading in global energy stocks were mixed despite the fallout from the Deepwater Horizon disaster.

Goldman Sachs downgraded the oil services sector Tuesday from attractive to neutral suggesting deepwater drillers are in for a tough time.

The US investment bank says the current six-month drilling memorandum could stretch to 12 months.

On Monday US-listed offshore contractor Oceaneering International cut its full-year earnings forecasts by up to 14% due to the spill.

It said demand for ROV and other equipment used in offshore drilling has tumbled since new drilling restrictions in the US were announced.


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GULF OIL SPILL | Accidents, tragedies and catastrophes

Michael Grey | LLOYD’S LIST

ONE cannot possibly envy poor Tony Hayward, the chief executive of BP, in his dreadful task on the shores of the US Gulf.

Every expert that can be dragged in from the world of offshore petroleum has been put to work, but the poor chap still cannot do anything right in the eyes of his critics.

Goodness, he dare not open his mouth, lest he be condemned for disrespecting those who lost their lives aboard the Deepwater Horizon, or for showing a lack of sympathy to the shrimps or the shrimpers, many of whom are getting a pretty good daily rate for participating in the clean-up. The corpse of a dolphin has been sighted, which probably means old Hayward’s goose is cooked.

The language of US greens becomes more lurid by the day, as they marshal more Big Oil haters to their colours, demanding pretty well everything short of the death penalty for the evil Brits who have caused such a catastrophe.

Prosecutors are rushing to get in on the act, while BP is occupying a place in the lexicon of horror in Washington that was once reserved for world communism.

Experts who would be better employed in actually trying to stop the outflow of oil, or helping to defend the coastline. are wasting hours having to give evidence to politicians, whose role in the fight against pollution must be considered questionable.

Even President Obama, of whom one might have thought better, is starting to use the same sort of language he employs when referring to the Taliban.

I am sorry, but having spent an hour or so reading various US newspaper columnists inveighing against the Brits in general and BP in particular, it is very difficult to remain either measured or polite.

Of course, it is a wretched business, and we know US lawyers do not understand the concept of an accident, but is it yet a “catastrophe”? The US media want it to be so described, and pander religiously to the greens by parroting their extravagant language.

On May 27, we were told, breathlessly, that the quantity of oil that had been emitted was now the greatest spill in US history and had exceeded that which had gushed from the Exxon Valdez, which is the popular yardstick that everyone in the US likes to remember. Ask any American child to name a ship, and if it is not the Titanic; this is the one they remember.

That unfortunate navigational miscalculation spilt 11.2m gallons of North Slope crude into Prince William Sound, which, when we spell it out in this modest and homely unit, seems an astronomical amount of oil, but amounts to some 36,446 tonnes of the stuff.

This is less than half of that spilled from the shattered wreck of the Braer around Shetland, and almost exactly half of the crude oil that washed around the pretty coves and beaches of Pembrokeshire after Sea Empress failed to make the entrance to Milford Haven.

I know language is relative and that used by politicians and those with a point to prove is far from accurate, but a “catastrophe” to me is the Second World War.

In modern marine terms, it might be used in connection with Dona Paz, which killed nearly 4,500 people after colliding with a tanker, or the 1,000 who died in the Estonia. The 29 dead men and the 270,000 tonnes of crude that spilt into the Atlantic off Tobago from Atlantic Empress, and the 30,000 tonnes that leaked out of the very large crude carrier with which it collided, could better be described as a tragedy.

The current tragedy is the sudden deaths of the workers on the rig. The same word could probably be employed with justification over the terrible outpouring of an entire cargo that poured out of the wrecked Amoco Cadiz, or the entire quarter million tonnes lost from the ABT Summer and Castillo de Bellver respectively.

And for sheer nastiness, the heavy oils lost from Erika and Prestige sinkings come high up on the scale, because of their persistence, which is not usually the case with crude in warm waters.

But while thinking of nastiness, you do not get much nastier and more ill-informed than some of the muck that is being thrown at BP by the US media, dancing vigorously to the shrill pipes of the environmental campaigners, who seem increasingly to dictate the political agenda in the US.

Don’t any of these people ever use petroleum products, or realise that the average American burns about four times as much per capita as people in other industrialised countries?

Maybe they all ride bicycles. They probably don’t remember the 167 mainly Brits who died when the US oil company-operated Piper Alpha blew up in the North Sea.

But as I recall it, the aftermath of that tragedy (still a bit short of a catastrophe) was not a hysterical witchhunt on Americans, but a serious inquiry to discover what had happened, and to make sure it would not happen again.

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GULF OIL SPILL | Voice of Reason

Peter Holloway* | LLOYD’S LIST

WHERE in all the hyperbole surrounding the Deepwater Horizon is the voice of reason?

‘Gushing’!, ‘Spewing’!, ‘Ecological disaster’! ‘Devastation’! How is it that any time oil is released into the sea emotive words are dragged out of the dictionary by journalists and second rate politicians? How is it that rational people are bamboozled by these exaggerations? How is it the press cannot report honestly on the ample evidence that oil spills are not long term in impact and never cause lasting environmental damage?

An oil slick, if it is thick enough, has the power to smother seabirds and the intertidal zones in the short term, but once the source is stopped, the oil disperses by chemical and physical weathering, and diminishes by bio-degradation.

Why is every oil spill an environmental disaster and the act of a criminal, instead of an industrial accident? Bhopal was an environmental disaster (20,000 dead). Chernobyl was an environmental disaster (More than 140,000 affected, untold numbers dead). Three Mile Island nearly was. Exxon Valdez and Deepwater Horizon, although unpleasant, are not. Nature can and does recover from oil within a short space of time in the marine environment and there is much supporting evidence for this worldwide, and to convince the public otherwise is at best cheap sensationalism, at worst a form of dishonesty.

It does not help the forces of reason either when grotesque comparisons are made by heretofore respectable champions of the environment such as Erin Brockovich (for whom I once held a huge respect) who has been wheeled in to whip up more hysteria by suggesting there are similarities between an accidental release of oil into a significant volume of sea water and a long term and deliberate poisoning of groundwater by a utility company. This caused real human suffering by persistent deception even when the consequences of human ingestion of a truly toxic and deadly chemical was apparent.

Ms Brockovich’s role, however, is not on the scene to clean up beaches, but “to connect ‘victims’ to lawyers”. So, as expected, it’s actually all about money.

Last time I looked, oil, a hydrocarbon, which also happens to be the basis of most life-forms on this planet, is not in itself a deadly chemical at the exposure rates probable. The residents of Hinkley, if the film was based on fact, were lied to, and they died because of it. No one is likely to die from exposure to the Deepwater Horizon oil leak except the unfortunate riggers who seem to have already become the forgotten victims, lost in a sea of hysterical reporting in what may happen to seabirds, coral reefs (last time I looked these were mostly underwater) and fish, also underwater.

What the doomsayers and ‘experts’ do not report is that it is unlikely that such levels of oil will be stopped by any booms in the open sea, that the spill is not a criminal act, but a result of an accident. It is almost certain that more birds are destroyed by vehicles than will be destroyed by this spill, but there is no oil major to blame for that.

Why the complete lack of rational thinking and the instant appearance of doomsday ‘experts’ prophesying environmental catastrophe, which to date has never occurred at any oil spill? For the gullible, photographs in the press have already shown a desiccated seabird which had died of natural causes long before the oil spill and a very healthy looking cod on a sea shore without a trace of oil on it. Again, where is the voice of reason? Where is the evidence that oil, which floats on the sea surface, kills these fish?Certainly oil can enter the water column below the surface of the sea as it disperses, but I am not aware of fish mortality from this.

It may be that the scale of the leak was underestimated but I would venture to say this is more a result of the insatiable demand for cheap oil that has driven exploration into these new and extreme working environments, and there has been complete transparency on what efforts are being made to kill the well, and how difficult the task is.

Where is the honest expert to explain that oil booms are an expensive waste of time and money in combating the spread of oil in even the most benign conditions? Why are the aircraft burning good aviation fuel (increasing global warming) by spraying dispersant on oil that has clearly emulsified, which is also a complete waste of time and money?

This is not to minimise the immediate concerns that the Macondo oil well is uncontrolled (temporarily), and that there is a ban on fishing (temporarily) because of the exaggerated perception that fish will be contaminated, and that there may be beaches and mangroves that will be oiled (temporarily), and those who earn a living from holidaymakers in the region will have cancellations in 2010. So far the kind of smothering layers of oil that I have experienced in past spills has not materialised to any great extent, and if a higher concentration of oil than sheen or globs does reach the shore it will affect some sea birds, and this is regrettable.

Activities to control and stop the spill are openly discussed, and the difficulties of controlling the well are equally apparent, but somehow the politicians find it more satisfying to rant that not enough is being done, without explaining how much more could be done, and that someone is to blame. It is a sad indictment of the morals of politicians that common sense and a balanced view will not be allowed to prevail, and that some understanding and an appreciation of the vast scale of the problem, and how much is actually being done, cannot be voiced. With three of the highest specification oil rigs in the world recovering oil and drilling relief wells, and an armada of support vessels it is undoubtedly the largest spill response in the history of marine oil spills.

The well will be controlled and the spill will disperse, as they always do. Credit should be given to the huge efforts to control the well. It should be remembered that some people have lost their lives in this incident. That is the already forgotten tragedy, that an oiled fish has more coverage than human life, buried under a xenophobic outpouring of hysteria.

* Peter Holloway is a maritime surveyor with extensive industry experience working on oil spills and maritime casualties

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OIL SPILL | Transocean slammed over Admiralty defence

Deepwater Horizon on fire (photo USCG)

CONGRESS and the White House have rebuked Transocean’s move to use 160-year-old admiralty law in an effort to insulate itself from Deepwater Horizon damage claims.

In court documents filed on 13 May, Transocean sought to invoke the Limitation of Liability Act of 1851 to limit its damages to $27M, the estimated value of the Transocean interest in the offshore rig when it blew up on 20 April, killing 11 people and causing a huge spill.

At a Capitol Hill hearing yesterday on liability issues, Oregon Democratic Senator Ron Wyden chastised Transocean for trying to limit its liability and asked Associate Attorney General Thomas Perrelli to comment on the strategy.

“I can’t say it’s illegal, but it’s certainly unacceptable, given the tragedy that happened in Gulf [of Mexico],” Perrelli answered.

Wyden also questioned Transocean’s plan to distribute $1Bn to shareholders despite the disaster, wondering how that would affect the company’s ability to pay claims. But Transocean noted that it has insurance to cover the rig and other claims.

Also yesterday, at a US District Court hearing in Houston, where Transocean filed its petition, attorneys alleged that negligence by BP and Transocean would make the old law inapplicable, Bloomberg reported.


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BP OIL SPILL | UK warned Transocean about blowout preventer in 2006

UK SAFETY officials warned Transocean in 2006 about a defect in one of its rig’s blowout preventers – the same safety device being blamed in the Deepwater Horizon disaster.

Oil is continuing to spill into the Gulf of Mexico from a well leak caused by an explosion on Transocean’s Deepwater Horizon rig last month, which has been linked with the failure of its blowout preventer.

The fatal blast took place four years after the UK’s Health & Safety Authority issued an improvement notice to Transocean relating to one of its other rigs.

“The multipurpose tool used in blowout preventer pressure testing was not so constructed as to be suitable for the purpose for which it was provided: and failed in service, exposing persons to risks that endangered their safety on 29th April 2006,” the authority said in the notice dated 9 June 2006.

The company successfully complied with the notice by the authority’s November deadline.

Earlier that year, the authority also issued a notice pointing out that the removal of the rig’s forward secondary de-ballast pump had “prejudiced the integrity of the installation, and you have failed to put in place suitable arrangements for ensuring the pump is replaced in timely manner.”

Geneva-based Transocean also complied with this notice.

Meanwhile, Transocean said yesterday that the US Department of Justice has asked it to preserve evidence from the explosion, fire and sinking.

In addition to the DoJ, the Department of Homeland Security and the Interior Department also investigating the disaster, the company said in a public filing, while the US House of Representatives and Senate have asked it to participate in hearings.

As for BP, its BP spokesman Robert Wine told Fairplay: “A blowout feeder on the seabed didn’t manage to stop a surge of pressure from coming up from the well in the Gulf of Mexico. We don’t know why it happened.

“We have been doing our best to respond to the incident from a safety-at-sea point-of-view.”



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