September 8th, 2010
03:08 PM ET

Highlights of the BP report on causes of the Gulf oil disaster

[Updated at 3:08 p.m.] BP released the findings of its internal investigation Wednesday into the Gulf of Mexico oil disaster. Some highlights from the report and reaction to it:

NEW

– Cement contractor Halliburton said in a statement that it has noticed "a number of substantial omissions and inaccuracies" in the BP report.

– "Halliburton remains confident that all the work it performed with respect to the Macondo well was completed in accordance with BP's specifications for its well construction plan and instructions, and that it is fully indemnified under its contract for any of the allegations contained in the report." the company said.

– "Deepwater operations are inherently complex and a number of contractors are involved which routinely make recommendations to a single point of contact, the well owner." Halliburton said. "The well owner is responsible for designing the well program and any testing related to the well. Contractors do not specify well design or make decisions regarding testing procedures as that responsibility lies with the well owner."

REACTION

– "I wouldn't want to comment on the timing or what the intent was of the BP report," said retired Adm. Thad Allen, the government's point man for the response to the disaster. "I would just say the more we know about this event in general, the better off we are." He said the report will add to a larger body of evidence that won't be complete until the joint investigation by the Interior Department and other investigations are finished, "but it's not the end-all be-all that's going to have to be done to address the issues associated with this event, why it happened and what needs to happen in the future."

– Gulf Restoration Network spokesman Aaron Viles said in a statement that "any investigation headed up by BP has as much credibility as my 3-year-old daughter's nightly assertions that it's not bedtime yet." Viles said BP "cops to much, but not all" in the report, and ultimately, it "is going to be used to bolster BP's case against the other potentially responsible parties, such as Transocean and Halliburton."

– "Frankly, I have fewer concerns about three enormous energy companies duking it out over who pays how much of the billions in liability than I do about the issues not covered in the report," Viles said. "Specifically, we need to make sure BP, the federal government and the entire oil and gas industry have far better plans and practices in place to respond to their mistakes. ... With nearly 4,000 oil and gas structures in the Gulf of Mexico, all capable of polluting the Gulf, effective cleanup and containment technology needs to be immediately accessible. The 87 days necessary to stop the flow of oil and gas is inexcusable."

– Transocean said BP's report is "self-serving" and "attempts to conceal the critical factor that set the stage for the Macondo incident: BP's fatally flawed well-design."

– Transocean accuses BP of making "a series of cost-saving decisions that increased risk - in some cases, severely."

– Transocean said its own investigation is ongoing and will be concluded "when all of the evidence is in, including the critical information the company has requested of BP but has yet to receive."

– "This report is not BP's mea culpa," Rep. Ed Markey, D-Massachusetts and chairman of a House subcommittee investigating the accident, said in a statement. "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."

– Markey said BP is correct that no one event caused the disaster and that many parties share blame. "From the assurances given by the oil industry that this type of accident wouldn't happen and could be contained if it did, to the overly-cozy relationships established between the oil industry and regulators, the series of events leading to this spill stretches back decades and the blame spans across the entire oil industry," he said.

PREVIOUSLY REPORTED

– "Multiple companies and work teams" contributed to the April 20 explosion aboard the Deepwater Horizon offshore oil rig, which unleashed the worst oil spill in U.S. history, BP said its internal investigation concluded.

– BP says its team "incorrectly accepted" results of a negative pressure test aboard the rig before the blast, but the company's internal report on the disaster assigns much of the blame to rig owner Transocean. BP owned the Macondo well, which is in about 5,000 feet of water about 45 miles off southeastern Louisiana, and hired Transocean and Halliburton as contractors.

– "Over a 40-minute period, the Transocean rig crew failed to recognize and act on the influx of hydrocarbons into the well until the hydrocarbons were in the riser and rapidly flowing to the surface," the report states.

– The investigation "did not identify any single action or inaction that caused this accident," the report says. "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. Multiple companies, work teams and circumstances were involved over time."

– BP investigators found signs of "potential weaknesses in the testing regime and maintenance management system" for the blowout preventer that failed to shut down the well at the heart of the oil disaster, the report said.

– "Weaknesses in cement design and testing, quality assurance and risk assessment" contributed to the April 20 blowout, according to the report.

– "To put it simply, there was a bad cement job and a failure of the shoe track barrier at the bottom of the well, which let hydrocarbons from the reservoir into the production casing," outgoing BP CEO Tony Hayward said in the report. "The negative pressure test was accepted when it should not have been, there were failures in well control procedures and in the blow-out preventer, and the rig's fire and gas system did not prevent ignition."

– The conclusions follow July remarks by Hayward, who said that the disaster "was the result of multiple equipment errors and human error involving many companies." Bob Dudley, who is replacing Hayward, said Wednesday's report "makes that conclusion even clearer."

– "We deeply regret this event," Dudley said in a statement accompanying the report. "We have sought throughout to step up to our responsibilities. We are determined to learn the lessons for the future and we will be undertaking a broad-scale review to further improve the safety of our operations. We will invest whatever it takes to achieve that. It will be incumbent on everyone at BP to embrace and implement the changes necessary to ensure that a tragedy like this can never happen again."

– BP acknowledged that its team leaders aboard the rig should not have accepted the results of a key test of the cement seal on the well shortly before the explosion. Those well site leaders, Robert Kaluza and Donald Vidrine, have refused to appear before a Coast Guard-Interior Department board investigating the disaster. Kaluza has invoked his Fifth Amendment rights against self-incrimination and Vidrine was excused for medical illness.

– BP stock jumped more than 3 percent after Fitch upgraded the company's rating three notches in after the report's release. Shares of BP rose 3.2 percent in premarket trading.

– "A clear finger" is being pointed at Halliburton over the cement design, said Don Van Nieuwenhuise, professor of petroleum geoscience at the University of Houston.

– "I think there are a number of procedures in place to cause people to check and recheck and stop at certain points along the way," Van Nieuwenhuise said. "What's interesting in this case is that they actually went through eight steps and no one said, 'Hey, stop.' That, to me, is more of a rig problem than, say, systemic problems across the oil industry."

– BP's investigation concluded that Halliburton used a "likely unstable" cement mix that was not fully tested before it was used.

– Mark Bly, BP's head of safety and operations, said in a video accompanying the report that Halliburton "did not conduct comprehensive lab tests that could've identified potential problems with the cement." But he added, "We believe that BP and Halliburton working together should have better identified and addressed the issues underlying the cement job."

– In addition, e-mails from BP engineers, released by a congressional committee in June, suggest that the oil company had its own concerns about the well. Drilling engineer Brian Morel called it a "nightmare well which has everyone all over the place," while Mark Hafle called it "a crazy well."

– Hafle told the investigative board in May that BP was confident about the safeguards on its Gulf well. But BP reported problems controlling the well and won a delay in testing the blowout preventer in March, according to documents released by the House Energy and Commerce Committee. Committee leaders said the documents suggest BP took a cost-cutting and speedy approach to drilling the troubled well.

– Both Hafle and Morel invoked their Fifth Amendment rights against self-incrimination during the most recent round of hearings by the investigative board.

– The report states that service records for the blowout preventer and the condition of critical components "suggest the lack of a robust Transocean maintenance management system" for the device, which is meant to shut down the well in case of trouble.

– Halliburton engineer Jesse Gagliano testified in August before a Coast Guard-Interior Department board probing the disaster that he warned BP its well design was inadequate. Gagliano said he told BP that the well design did not have enough centralizers - devices used to position the cement casing around the well bore.

– The design called for six centralizers, but Gagliano recommended 21 because of the "severe gas flow problem" in the well. BP engineer Brian Morel replied by e-mail that "It was too late and we had to deal with what we had on the rig," Gagliano testified.

– Eventually, 15 more centralizers were shipped to the rig. But BP's well team "erroneously believed that they had received the wrong centralizers" and decided not to use them, according to Wednesday's report. Nevertheless, the decision not to use 21 centralizers "likely did not contribute to the cement's failure to isolate the main hydrocarbon zones or to he failure of the shoe track cement."

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Filed under: BP • Gulf Coast Oil Spill
soundoff (9 Responses)
  1. kevinho

    BP wants to blame everyone else, but which company is continuing their drilling in the gulf with the "weaknesses in the cement design", the "potential weaknesses in testing regime and maintenance plans" (potential..?, several dead people and billions of gallons of oil say there is more than just a potential), the "likely unstable cement mix" (again, likely...?), a broken fire and gas suppression system, and procedural errors. It may have easier to say what went correctly.

    Watch the 60 Minutes interview of one of the rig workers. The blow-out preventer was knowingly destroyed and nonfunctional, but work continued.

    When was BP planning on testing this faulty cement design? Should they test it before there is a problem? The only functioning piece of equipment on the well was the drill. That's what brings home the money.

    September 8, 2010 at 12:07 pm | Report abuse | Reply
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      September 9, 2010 at 1:03 am | Report abuse |
    • ::: BreakingNewsBlog.us for CNN :::

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      they're only trying to share with others the multi billion$ compensation they should pay for the accident
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      September 9, 2010 at 2:18 am | Report abuse |
  2. Peter

    All interesting stuff this??? BP did not cut and run when this tragic incident occurred. Unlike other US companies trying to limit their liabilities. BP America, I believe is run by american management teams. Does that even bear a thought??
    BP like most other oil/gas companies rely on other reputable contractors to conduct their business in a professional manner. The BOP I believe was tested days before the incident - by which company?? and what was reported. All legal issues -let the courts decide.

    September 8, 2010 at 1:04 pm | Report abuse | Reply
  3. KT Yeo

    BP was trying to save money. A CBL, USIT or any cement evaluation log should have been run. Even a good pressure test will not tell you if the cement job is good, Only sure way is to run a log. But the BP team at the the time does not want to know as it is very, very costly to fit a poor cement job. Just want to P&A ASAP to save money.

    September 8, 2010 at 1:07 pm | Report abuse | Reply
  4. abby

    There will be a whole lotta finger pointing going on - no one wants the rap for this disaster - BP, Halliburton, anyone –
    Do I think that there will be an honest and fair investigation? No. Do I think that the guilty parties will be held appropriately accountable? No. Does our government kiss the oil industry's derriere? Yes.

    September 8, 2010 at 3:55 pm | Report abuse | Reply
  5. philipe12

    Haliburton is indemnified. That deal was struck months ago. This haggling over who pays what and for why is just a dog and pony show. The gulf wasn't cleaned up before this disaster, and looks as if it won' be after, reckon?

    September 8, 2010 at 9:05 pm | Report abuse | Reply
  6. philip12

    There was nothing wrong with the BOP other than having 60 ft. of drill pipe sandwiched inside. The bottom hole pressures to accomplish this must of been around 100,000 psi. BP reported 40,000 psi clear up at the well head!

    September 8, 2010 at 9:10 pm | Report abuse | Reply
  7. philip12

    We definitly have the technology to safely drill into these kinds of depths and pressures. We just don't have the personnel.

    September 8, 2010 at 9:14 pm | Report abuse | Reply

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