The Final Decision is Out, BP (BP), Transocean (RIG), Halliburton (HAL) Are All to Blame
September 14, 2011 2:38 PM EDT
streetinsider.com
The Bureau of Ocean Energy Management and the U.S. Coast Guard released their final report today on the oil spill in the Gulf of Mexico that claimed the lives of eleven workers aboard the Deepwater Horizon rig.
The report blames BP (NYSE: BP) and its contractors Transocean (NYSE: RIG) and Halliburton (NYSE: HAL) for making risky and unsafe decisions while criticizing the government for overlooking gaps.
Failure in the cement at the bottom of the well was cited as being the main cause of the disaster, although no particular reason for the failure was found.
Transocean was also blamed for keeping the escaping gas on the rig when it should have sent it overboard. The Bureau stated that Transocean's well-control operating manual should have had a section on what do in these circumstances.
The report does not only point the figure at the companies for making mistakes, but provides suggestions to reassure that a problem of this magnitude can be prevented in the future.
Some of the new suggestions include changes to make sure gas isn't sucked into the engines, strengthen the blowout preventer, and a series of valves that will shut down operations in case of complete loss of control. The Bureau also states that more random inspections should take place on oil rigs while tightening government regulations at the same time.
The reports states that the oil spill and the deaths of the eleven workers, "were the result of poor risk management, last minute changes to plans, failure to observe and respond to critical indicators, inadequate well control response, and insufficient emergency bridge response training." It criticized the crew for continuing to work on the rig after already noticing problems and hazards, and BP for not investigating a decrease in the flow of gas and oil coming up from the well. The WSJ notes that these problems were noticed around a month and half before the explosion.
BP owned the well and was in control of the operations while Transocean owned and operated the drilling rig. Halliburton was responsible for conducting the cementing operations. |
