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BP not prepared for deep-water spill

By Ed Crooks in Houston
Published: J une 2 2010 16:20 | Last updated: J une 3 2010 00:51

BP did not have all the equipment needed to stop the leak from its Macondo well in the Gulf of
Mexico in the aftermath of the explosion on an oil rig six weeks ago, the UK companys chief
executive admitted.
Speaking to the Financial Times in Houston as engineers worked on their latest bid to trap the
escaping oil, Tony Hayward said BP was looking for new ways to manage low-probability,
high-impact risks such as the Deepwater Horizon oil rig accident.

That bid suffered a temporary setback on Wednesday when a
saw was stuck during a risky operation to sever the leaking
pipe.
What is undoubtedly true is that we did not have the tools
you would want in your tool-kit, Mr Hayward said. He
accepted it was an entirely fair criticism to say the company
had not been fully prepared for a deep-water oil leak.
The containment effort on the surface, he said, had been
very successful in keeping oil away from the coast. Considering how big this has been, very
little has got away from us, Mr Hayward said. But in trying to plug the leak, BP had been
reaching for many of the same techniques used to control the Ixtoc 1 blow-out in the Gulf of
Mexico 31 years ago.
After the Exxon Valdez spill in 1989, the industry created the Marine Spill Response
Corporation to contain oil on the surface...The issue will be to create the same sub-sea
response capability, he explained.
With BP and the rest of the industry threatened with being shut out of the deep waters of the
Gulf, the most promising US region for oil development, Mr Hayward argued that reform could
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justify continued drilling in those challenging areas.
The gas blow-out that caused an explosion on the rig on April 20 that killed 11 men had been a
one in a million chance, Mr Hayward said, but that risk had to be cut to a one in a billion or
one in a trillion chance.
Analysts believe the disaster could cost BP $20bn (13.7bn) in clean-up costs, compensation,
damages and fines, and has done incalculable harm to the companys position in the US.
US officials now say the slick is approaching Floridas shoreline, with the National Oceanic
and Atmospheric Administration projecting that oil could hit the Panhandle within days.
Charlie Crist, governor of Florida, on Wednesday described the slick as disturbing and
disgusting he added: I was briefed on Memorial Day [Monday] about the oil being 80 miles
offshore and then today I hear its seven miles offshore.
BP believes that on the Deepwater Horizon rig there were seven separate problems that could
have contributed to the accident, including failures of the cement in the well, the tests run on the
well, and the blow-out preventer, intended to stop releases of oil and gas.
Those failures could have involved a number of different companies besides BP, including
Transocean, which owned and operated the rig, Halliburton, which cemented the well, and
Cameron International, which made the blow-out preventer.
BP was in overall control, but responsibility for safety was shared. That model may have to
change, said Mr Hayward.
Political pressure on BP from Washington increased further, with two senior senators, Charles
Schumer and Ron Wyd, calling on the company to suspend any plans to pay dividends. In a
letter to Mr Hayward, the senators wrote that it would be unfathomable for BP to pay a
dividend to shareholders before the total cost of BPs oil spill clean-up was calculated.
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6/6/2010 http://www.ft.com/cms/s/0/e1e0e21c-6e53-11df-ab79-00144feabdc0.html