BP blames contractors for US oil spill

Last updated 06:20 09/09/2010

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BP STICKS AT IT: Work continues at the site of the BP oil well leak in the Gulf of Mexico.

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A BP investigation of the Gulf of Mexico disaster played down the company's role in the world's worst offshore oil spill, seeking to share the blame with its contractors.

The 193-page internal report made public on Wednesday drew fire from US lawmakers and one of the contractors, Transocean, called it a "self-serving" attempt by the British energy giant to escape responsibility for the "fatally flawed" design of its deepsea Macondo well.

The report threatened to reignite public anger over the massive spill, which caused an environmental catastrophe along the US Gulf Coast, devastated tourism and fishing in the area and damaged President Barack Obama's popularity.

BP investigators were unable to identify any single action or inaction that caused the Deepwater Horizon rig to blow up on April 20, killing 11 workers and rupturing the well 1.6km below the surface.

"Rather, a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces came together to allow the initiation and escalation of the accident," the report said.

"Multiple companies, work teams and circumstances were involved over time."

Investors had been eagerly awaiting the report to find out whether BP would be able to share the potential costs of the spill -- estimated by some analysts to exceed US$50 billion (NZ$69b).

BP shares traded in New York were up 3.2 percent and its London-traded shares closed 1.3 percent higher. Shares of Transocean rose 2.0 percent in New York and those of oil services company Halliburton, the other major contractor, were up 1.5 percent.

EIGHT KEY FAILURES

The rig explosion unleashed a surge of crude that lasted until the well was capped three months later on July 15, after 4.9 million barrels of oil had leaked into the sea.

The report, overseen by BP's head of safety, Mark Bly, also singled out Halliburton.

Halliburton said the BP report contained "substantial omissions and inaccuracies" and stressed it was fully indemnified for any allegations in the document.

Transocean also criticized BP's findings, with spokesman Lou Colasuonno saying the well's blowout preventer was "inspected, tested and went through a rigorous maintenance schedule prior to being placed on the Macondo well and was then tested weekly, right up until 72 hours prior to the blast."

"Any statement to the contrary is false," he said.

BP defended some of its own decisions, which have been characterised by US politicians as cost-saving measures that contributed to the disaster.

These included:

-- BP's much-criticised single-casing well design;

-- The use of fewer centralisers (devices used to ensure the cement casing is applied evenly around the well) than recommended and;

-- Replacing heavy drilling mud, which was keeping the well under control, with lighter water.

The report highlighted eight key failures that, in combination, led to the blowout of the Macondo well and the subsequent explosion.

"It would appear unlikely that the well design contributed to the incident," BP's outgoing Chief Executive Tony Hayward said.

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"HAPPY TO SLICE UP BLAME"

BP, which has seen almost US$70 billion (NZ$97b) wiped off its market value since April 20, has been trying to rehabilitate its tarnished public image, spending millions of dollars on positive television and newspaper advertising.

Hayward has faced withering criticism from US lawmakers for initially playing down the scale of the disaster and the potential impact on the environment.

"This report is not BP's mea culpa," said Democratic congressman Edward Markey, an outspoken critic of BP's handling of the disaster. "Of their own eight key findings, they only explicitly take responsibility for half of one. BP is happy to slice up blame, as long as they get the smallest piece."

Energy industry analysts were also not convinced by the BP findings, noting its investigators did not have access to all the relevant employees among the contractors.

"Make no mistake, our view remains that this is BP's well, and BP is in charge of design and execution," Houston energy investment boutique Tudor Pickering Holt & Co said in a note to investors.

BP denied it was shifting blame but its report included stinging criticism of Transocean and Halliburton.

"Over a 40-minute period, the Transocean rig crew failed to recognize and act on the influx of hydrocarbons into the well," BP said.

But Transocean said BP was seeking to conceal the critical factor that led to the rig explosion -- the well design.

"In both its design and construction, BP made a series of cost-saving decisions that increased risk," it said in a statement.

In pointing the finger at Halliburton and Transocean, BP said:

-- Halliburton had used an "unstable" cement mixture that allowed hydrocarbons to leak into the well;

-- There was "no indication" that Transocean had tested the automatic shut-off function on the blowout preventer before it was used on the Deepwater Horizon rig.

-- The rig crew diverted the flow of drilling mud and hydrocarbons into the wrong system after the blowout occurred.

This meant gas vented onto the rig floor, rather than being diverted toward the sea, where it would have been much less likely to cause a blast.

- Reuters