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BP Focused on Cost, Made Risky Decisions Before Deepwater Horizon Disaster

Jun 15, 2010 | Parker Waichman LLP

Did BP’s focus on cost containment lead to the Deepwater Horizon oil spill? Some in Congress definitely think so. In a letter to the oil giant’s CEO, Democratic leaders on the House Energy and Commerce Committee questioned “five crucial decisions” that BP made in designing and completing the well that they say “posed a trade-off between cost and well safety.”

BP CEO Tony Hayward is scheduled to testify before the Energy and Commerce Committee on Thursday. In their letter dated June 14, Chairman Henry Waxman and oversight subcommittee Chairman Bart Stupak also request that he bring along other officials and technical experts to answer questions under oath.

The Deepwater Horizon oil rig exploded in the Gulf of Mexico on April 20. The blast killed 11 crew and sunk the rig, spawning the worst oil spill in U.S. history. The well continues to leak, and already potentially more than 100 million gallons of crude have poured into Gulf, far outpacing the 1989 Exxon Valdez disaster.

In their letter, Waxman and Stupak point out that at the time of the Deepwater Horizon explosion, the well was significantly behind schedule, a fact which they say appears to have created pressure to take shortcuts to speed finishing the well. They assert that cost pressures played a part in the five following decision that may have led to vulnerabilities in the design of the well:

• the decision to use a well design with few barriers to gas flow;

• the failure to use a sufficient number of “centralizers” to prevent channeling during the cement process;

• the failure to run a cement bond log to evaluate the effectiveness of the cement job;

• the failure to circulate potentially gas-bearing drilling muds out of the well;

• the failure to secure the wellhead with a lockdown sleeve before allowing pressure on the seal from below.

To back up their assertions, the letter cites various internal BP, TransOcean and Halliburton documents, including an email in which a BP Drilling Engineer described the site as a “nightmare well”.

“It appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk,” Stupak and Waxman wrote. “If this is what happened, BP’s carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig.”

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