This time last year, the horrors of the Macondo well blow-out were only just starting to unfold as millions of barrels of oil began spilling into the marine environment from the shattered well, just a few miles off the Louisiana coastline.
Throughout the 2010 Offshore Technology Conference, the American media and politicians of all persuasions, together with their president, were baying for “Briddish” Petroleum’s corporate blood. Not BP, you understand, but Briddish. Disgracefully, President Obama jumped on that particular bandwagon too.
And yet it was a Transocean rig operating under Transocean control, albeit overseen by BP personnel, that blew up. And there had been Halliburton cementing personnel aboard conducting cementing operations just before the gas escape that led to disaster.
But at that time it was BP and only BP that was in the tumbril; a foreign company sullying the precious American environment that had to be put in its place.
However, as the Presidential Commission that investigated the disaster was to conclude in its final report, all three companies were at fault.
The commission found that the well blew out because a number of separate risk factors, oversights and outright mistakes combined to overwhelm the safeguards meant to prevent just such an event from happening.
It rightly said that most of the mistakes and oversights at Macondo could be traced back to a single overarching failure – management was not doing its job, that is, management within all three companies, though I want to know why so little has been said about the role of senior management at Anadarko and Mitsui, BP’s Macondo licence partners.
Both were quick to distance themselves from the operator as the Deepwater Horizon blazed for several days and later sank. Indeed, Anadarko (25% interest) appeared to work very assiduously at limiting its liability to the massive impacts of the blow-out that now run to many billions of dollars.
Anadarko expressed the Macondo spill was preventable – of course it was – and that it likely constituted gross negligence or wilful misconduct by BP, thereby affecting the obligations of the parties under the joint operating agreement.
In June, Anadarko said BP should pay all the damages associated with the disaster because it was caused by the company’s “reckless decisions”.
Methinks Anadarko was too quick to speak out and that the company was banking on American citizens – and of course their magnificent media – wanting to lynch “Briddish” Petroleum, and conveniently forget that Anadarko was somehow not involved in planning the ultimately disastrous Macondo adventure.
But it was involved and this company has never been a shrinking violet around the business table. That’s why it is successful.
As is normal in such partnerships, Anadarko (and Mitsui) received regular updates from BP about drilling operations on the Deepwater Horizon rig. The company also approved aspects of the design for the well, something which the canny Financial Times picked up on in late June.
Bear in mind too, Anadarko was participating in a well on its home turf, which is surely an additional reason to be assertive, as BP is, by and large, regarded as a foreign company in the US, even though nearly half of its stock is American-owned and that it acquired Amoco and Arco, both of which were widely regarded as having inferior safety track records compared with BP.
On the other hand, BP has blotted its copy book in Alaska on several occasions, plus there was the heritage Amoco Texas City disaster, and so had become fair game.
As for Mitsui with 10% of the enterprise, while the Japanese trading house was less vociferous than Anadarko and would invariably have had a small voice at the project table compared with its much larger partners, nonetheless, it had a voice. Did it express concern over how BP was conducting drilling operations? Did it even have the competence to express concern in the first place – by that I mean making sure that people with proper experience were involved around the Macondo table?
The well was capped many months ago and, in December, the Obama administration sued the partnership, seeking a fine of $1,000 but possibly as high as $4,300 per barrel spilled. And the official tally seems to be around 4.1million barrels.
The fine could range from $4billion to $20billion, yet BP is arguing the toss with the authorities over what is fair.
And while that argument is going on, Anadarko and Mitsui unit Moex Offshore have filed papers denying that they acted with negligence or wilful misconduct. Not only that, they maintain that BP should pay the full cost of the spill.
Further, BP has filed an $80billion suit against Transocean, Halliburton plus Cameron. And Transocean is counter-suing BP.
This affair may disgust, but this is how big business behaves. It really is: “It wiznae me”, but on a grand scale.
What this industry would do to remember at OTC 2011, at Offshore Europe and every day besides, is that the road is littered with dangerous mistakes that have killed and maimed people, wrecked families and damaged the environment time and again.
I quote one of the Macondo Commission’s co-chairman, William Reilly: “My observation of the oil industry indicates that there are several companies with exemplary safety and environment records. So a key question posed from the outset by this tragedy is: do we have a single company, BP, that blundered with fatal consequences, or a more pervasive problem of a complacent industry?
“Given the documented failings of both Transocean and Halliburton, both of which serve the offshore industry in virtually every ocean, I reluctantly conclude we have a system-wide problem.”
While he was directing his remarks at the US industry, the reality is that they apply worldwide. It just happens that the North Sea has its house in somewhat better order than many other places.
But it is not perfect, not by any stretch of the imagination. And that should never be forgotten.