Unless it’s the Munsters, I don’t like horror on the box. Even if there’s nothing else on, I still won’t watch the stuff. I hit the off button instead. Not so the horror story that is Macondo. Watching the joint US Department of the Interior Department and US Coast Guard inquiry makes compelling viewing – it possesses a macabre fascination.
There is the saying that fact is so often stranger than fiction. Like many of you out there, I have watched the movie, There Will Be Blood – a tale built around the very earliest days of drilling for oil in the US. Except for the end, where the director seemed to lose the plot – at least that’s my view – it was an honest attempt at portraying the brutality of pioneering for black gold.
I urge all of you to log on to the US Coastguard website – watch at least some of the inquiry video files, read some of the transcripts and, most importantly, learn from them.
Ask yourself, whether you are an operator or a main contractor, or a drilling contractor, or a small firm embedded in the supply chain: are you guilty of cutting corners – forcing others to do the same, perhaps by screwing contract margins so tightly that those working on your behalf have no option if they are to make any money at all?
Have you been lying to yourself about it? Are you a director and, if so, do you understand the consequences of your actions and that you could wind up in jail or face a hefty fine if you get found out?
And if you are one of those people who are responsible for the safe regulation of this inherently dangerous industry, are you doing your job properly?
It may be many months, even years, before the real truths of why the Deepwater Horizon disaster was allowed to happen – because, indeed, it was allowed to happen – through a series of decisions, or lack thereof, especially at corporate/senior management level in companies at the heart of the disaster.
There is also the issue of sloppy regulation, something the US authorities are most surely guilty of. How else can one explain why it is that, prior to the disaster, the Deepwater Horizon had been operating with 390 unresolved maintenance problems, faulty safety equipment and dangerously (apparently deliberately) disabled alarms and switches that might have saved lives had they been functioning when the Macondo well blew on April 20?
Let’s focus on the alarm system aboard the Deepwater Horizon. That anyone should be so callous or stupid as to think they could get away with such an action truly beggars belief.
Giving evidence at the inquiry on July 20, chief technician aboard the rig, Mike Williams, said the system had been “inhibited” to prevent false alarms disturbing the sleep of off-duty crew.
A consequence of that action is that 11 crew aboard the rig will sleep forever.
Williams said, too, that other alarms were set off before the semi caught fire.
However, when some of the rig’s safety-critical equipment was retrieved from the seafloor two weeks after the rig sank, the dead-man switch that should have tripped when the blowout occurred, and signalled the BOP to seal the well and uncouple the drill pipe, was found to not have been functioning.
As an aside, and I’m not clear whether this has come out in the inquiry – if so, I’ve failed to spot it – I was told by a drilling-industry source that the battery back-up pack located on the BOP was known to be dead but that no one had bothered to replace it. Fact or fiction? I just don’t know.
Screeds and screeds have been written about the BOP that lies at the heart of the Macondo disaster.
It was revealed on July 20, too, that this device had not been fully inspected in 10 years and that six parts were found in bad or poor condition just one month before the disaster.
In which case, what the hell was the now “re-engineered” Minerals Management Service, which was responsible for ensuring that BOPs worked properly, doing?
This and the other revelations noted above were made public on what turned out to be the final day of phase one of the hearing in Kenner, Louisiana, prior to a short recess. The inquiry will resume this month, but in Houston.
I am interested in the actions of one of the two BP managers who were named as subjects of the federal investigation and summoned to testify about the Deepwater Horizon disaster on July 20.
Robert Kaluza, who oversaw operations on the rig, is reported to have twice declined to appear, claiming “US Constitution Fifth Amendment rights against self-incrimination”. Interesting.
Personally, I am less concerned than others seem to be that the Deepwater Horizon had not been dry-docked in the nine years since it entered service.
This is commonplace and done with the approval of the certifying authorities.
Modern coating systems, coupled with good anodic protection and regular underwater cleaning, make this possible.
As I said at the beginning, there is a macabre fascination about the Macondo affair, the consequences of which will likely haunt the offshore oil&gas industry for decades to come.
But will anyone actually learn?
BY THE time this appears in print, the battle may be over. I hope not. I mean the bid for Dana Petroleum by Korea National Oil Corporation.
To capitulate at £18 a share would be a betrayal of the company. That’s exactly what Dana’s largest shareholder, Schroders, wants to see happen. This offer values the company at about £1.7billion which, as far as I can judge, is not a fair reflection of the doyen of Aberdeen-headquartered exploration and production companies.
Years ago, when Dana shares could be picked up for a few coppers, I bought a load of them. It was my first dabble on oil stocks. I did quite well. But, during a rough period for the company, its board decided on a share consolidation. I think it was one new share for 20 old ones, or suchlike.
I disagreed with the proposition said so and got out.
Very big mistake.
I note a line in Stockopedia about Dana that sums up how I would feel if I had not been so stupid and sold.
The commentary goes: “Why on Earth would you sell? You have only to wait and eventually you will have a nest full of eggs worth twice the offer being made. If you take the money, you will find it very difficult to find another goose that can lay golden eggs. Why not just keep on accumulating the eggs as you have done for the past 10 years? If you really want to sell the eggs, why sell the goose as well? Especially when the price you’ve been offered includes next to nothing for the bird itself. Isn’t the goose actually worth more than the eggs in the nest?”
And that’s the point. Sooner or later, great companies like Dana do get taken over. But let it be at a price that more fairly reflects its worth.
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