BP CEO: Industry Needs to Reassess Deep-Sea Operations, Safety

By Will Dunham | June 4, 2010

Oil companies need to improve safety technology for deep-water drilling and the massive spill in the Gulf of Mexico should prompt the industry to rethink its business model for such operations, BP chief Tony Hayward said in comments published on Friday.

Writing an opinion piece in the Wall Street Journal, he said BP was in “uncharted territory” in trying to stem the oil gushing from the seabed about a mile (1.6 km) deep off the Louisiana coast — the worst spill in U.S. history.

“We need to be better prepared for a subsea disaster. It is clear that our industry should be better prepared to address deep sea accidents of this type and magnitude,” Hayward wrote.

Hayward, who has drawn fire for his comments and his company’s conduct during the ongoing spill, said the disaster points to the need for oil companies with deep-water operations fundamentally to reassess how they work.

“The industry and the government did not anticipate this type of accident — one in which all the ‘failsafe’ mechanisms failed,” Hayward wrote.

“Like the astronauts aboard Apollo 13 who had to build a CO2 filter from whatever was available in their capsule under the direction of engineers back on Earth, we are forced to innovate in real time,” he added.

Apollo 13 was the failed 1970 U.S. moon mission in which astronauts and engineers on the ground improvised a safe return for the crew after an explosion in space crippled their command module.

‘BETTER SAFETY TECHNOLOGY’

“First, we need better safety technology. We in the industry have long had great confidence in the blowout preventer as the ultimate failsafe piece of safety equipment. Yet on this occasion it failed, with disastrous consequences,” he wrote.

The reason for failure of the blowout preventer, an apparatus to seal off a well and uncouple the drilling pipe in the event of an emergency, remains a mystery.

Since the April 20 explosion of the drilling rig that killed 11 crewmen and triggered the spill, BP has been evaluating the undersea blowout preventers in its drilling work worldwide, as well as testing and maintenance procedures of drilling contractors using the devices, Hayward said.

“We will participate in industry-wide efforts to improve the safety and reliability of subsea blowout preventers and deep-water drilling practices,” Hayward wrote.

Hayward said in light of the Gulf of Mexico spill his industry “should carefully evaluate its business model,” noting that exploration and production companies have for decades “relied on outsourcing work to specialized contractors.”

Such was the case with the doomed Deepwater Horizon drilling rig, which was owned and operated under contract with BP by Transocean Ltd, while Halliburton Co. was working to seal the well when the blowout occurred.

“There’s much that makes sense about this kind of structure, and lots of talented people and well-run companies are a part of it,” Hayward wrote.

“But the question after the Deepwater Horizon accident is how all involved parties — including exploration and production companies and drilling contractors — can work even more closely together to better understand and significantly reduce the various risks associated with drilling operations.”

Hayward said that after the 1989 Exxon Valdez tanker spill in Alaska’s Prince William Sound, “the industry recognized the need to enhance its capacity to address oil spills” and the independent nonprofit Marine Spill Response Corporation (MSRC) was formed.

MSRC’s capabilities include an inventory of vessels, equipment and trained personnel, complemented by a large contractor work force, he noted.

“We now need to develop a similar capability for dealing with large undersea spills. BP intends to have a key role in creating this capability, and we believe that our competitors and counterparts in the industry will join us,” he wrote.

Hayward’s column comes two days after he issued a public apology for saying in media interviews that he wants “my life back.” He earlier sparked an uproar with remarks suggesting the environmental impact of the disaster would likely be “very, very modest” and for playing down the scale of the disaster.

(Reporting by Will Dunham and Steve Gorman; Editing by Michael Shields)

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