RICE University

POLI 461 Politics, Risk and Energy

Assignment 2
Anastazija Ristovska
Rice Class of 2013
March 14, 2011

ABKOWITZS CASE STUDY FRAMEWORK

APPLIED TO THE
BP MACONDO WELL INCIDENT

The Deepwater Horizon semi-submersible Mobile Offshore Drilling Unit (MODU) was
owned and operated by Transocean, one of worlds largest offshore drilling contractors, hired to do
drilling in the Macondo Prospect oil field in the Gulf of Mexico by BP, worlds third largest energy
company. Deepwater Horizon was an ultra-deepwater offshore oil drilling rig built by South Korean
Hyundai Heavy Industries famous for having drilled the deepest oil well in history at a vertical
measured depth of 35,055 ft 250 miles southeast of Houston. Seven months later on 20 April 2010, as
Deepwater Horizon was drilling an exploratory well at the Macondo Prospect in the Mexican gulf, 41
miles southeast off the coast of Louisiana, at a water depth of 5,000 feet, a blowout caused an
explosion on the rig killing eleven crewmen and erupting into a fireball visible 35 miles away.
Even though Transocean had an overall record of no major incidents for the last seven years,
expert reviews give a more ambiguous evaluation of its safety records after Transoceans November
2007 merger with rival company GlobalSantaFe. Records show that from 2005 to 2007 Transocean
owned 30% of all active oilrigs in the Gulf, and was responsible for 33% of incidents inspected by the
Minerals Management Service (MMS), whereas in the years from 2007 to 2009 it owned 42% of all
Gulf rigs but was responsible for 73% of incidents. The company was also noted for having poor
management of cement seals and blowout preventers installation. BP in contrast had been a finalist for
a MMS national safety award for two consecutive years prior to the spill. In response to critics of
BPs contracts with Transocean, BP presented the fact that, Transocean was in the pool of companies
from which BP usually hires rigs, i.e. companies which had had better safety records than the industry
average for six consecutive years. There were almost no indications of technical difficulties before the
explosion.
In a 2009 exploration plan and environmental impact analysis for the Macondo well, BP
reported a high unlikelihood of an accident occurring that might lead to a major crude oil spill posing
danger to the environment. Eleven workers have been killed and 1.6 million gallons of oil have been
spilled in just the first ten days of the accident. The oil was gushing from the well nearly 5,000 feet
bellow surface, making it virtually impossible for the leak site to be reached and repaired.
BP spokesperson describes the spill as something the company has never experienced before,
a blowout at its depth. At the same time President Obama halted all new offshore drilling activities
unless rigs are secured against another disaster by safeguard measures. Urgent steps were taken to
minimize environmental damage, such as efforts to prevent the oil spill from spreading to Louisianas
fishing grounds and nesting areas. Louisiana had already closed some fishing grounds and oyster beds
due to fears of contamination. Regular containment activities such as sucking up the oil with skimmer

vessels, using floating barriers, or simply burning the oil off could hardly be embarked upon in the
first ten days after the spill due to rough seas and strong winds.
Prior to the explosion, not only had BP filed a 52 page exploration guaranteeing the high
unlikelihood of an accidental surface or subsurface oil spill taking place from the proposed activities,
it had also been granted a 2008 loosening of regulations waiving BP from filing a detailed blowout
plan. Part of the excuse for not filing the detailed blowout plan was the close proximity of the rig to
the shore of only 48 miles, making it easy for quick response capabilities to be implemented, reducing
to a minimum the expectations of any adverse impacts in case of a spill.
Environmental lawyers voiced their dismay at the lack of a detailed concept framework and
planning on the technology needed to control a spill at such great depths of water, arguing that, when
drilling in 5,000 feet of water for oil the ability is needed to control and contain any undesired
circumstances.
Most of the lawsuits filed at the wake of the spill claim the explosion was caused in the
process of workers capping, or cementing the well, which was allegedly done improperly by the
workers hired from the oil services Hallinburton Inc., which in turn denied this has ever happened.
However, according to a MMS study, 18 out of the 39 Gulf of Mexico rig blowouts experienced
cementing to be a contributing factor to the incidents, with gas seeping in the process of or after
cementing the well.
Two days after the explosion the crude leak rate was determined to be about 8,000 barrels per
day, with BP Vice President expressing fears the incident may grow into a major spill, reaching a leak
of up to 17,000 billion barrels of fuel. The oil leak was discovered on April 22 when a large oil slick
appeared at the site on the surface above the sunken rig. Remotely operated underwater (ROUV)
vehicles were employed to determine whether oil was indeed flowing from the well or leaking from
the sunken rig and the ROUV report was negative, claiming no leak is underway. However the next
day the Coast Guard Rear Admiral announced that a damaged wellhead was indeed leaking oil into
the Gulf, describing it as a very serious spill.
The Flow Rate Technical Group is a group of scientists and engineers from US universities,
the federal governments and research institutions formed with the specific purpose of estimating the
flow of oil in the Deepwater Horizon Spill. According to the Flow Rate Technical Group the leak has
exceeded the 1989 Exxon Valdez oil spill which leaked 750,000 barrels over 11,000 square miles of
ocean, and the 1979 Ixtoc I oil spill as the largest spills that had ever occurred in U.S.-controlled
waters and the Mexican Gulf respectively.
The leak was estimated at 4.9 million barrels by the group. BPs official risk assessment prior
to starting the Deepwater Horizon drilling activities reported that the worst case flow might reach
162,000 barrels per day. Coast Guard and BP officials initial estimate of the leak rate was 1,000
barrels per day, determined based on the oil slick size and with the help of the remotely operated
underwater vehicles. Official estimates reached 60,000 barrels per day on June 15. Internal BP
documents later released by Congress displayed estimates of as much as 100,000 barrels per day.
The oil spill covered 580 square miles by April 25, and five days later the estimated spill area
was 3,850 square miles. The endangered ecologically sensitive areas included: the Chandeleur Islands
that were reached by the oil sheen on May 6, threatening the ecosystem of this wildlife refuge; the
Delta National Wildlife Refuge was also reached by the oil slick, and a wide variety of wildlife
species were endangered, including tens of thousands of wintering waterfowl, large numbers of other
bird species, wading birds, shorebirds, furbearers, game mammals, fish and shellfish species; the
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Breton National Wildlife Refuge was closed on May 7 to allow for clean-up operations to take place
after the oil spill reached the refuge on April 30. The spill did not escape into local water currents and
streams such as the Loop Current and the Gulf Stream, which would have threatened increasing the
area of the spill.
On the day of the spill executives of Transocean and BP were abroad celebrating seven
straight years without major incidents. However, Transoceans records after its $18 billion deal merge
with rival GlobalSantaFe, were raised from one in three to three in four of every MMS investigated
rig incident, demonstrating the adverse effects of the stretch of merging on the pioneering deep-waters
drilling company. These negative effects on Transoceans performance were also captured by an
industry survey of oil companies as a drop in quality, performance and safety in comparison to fellow
companies.
The fact that Transocean had demonstrated an increasing pattern of malfunctions
triggered lawmakers to question BP PLC and MMS as the ones failing the obligations of greater
carefulness in making the choice of the companies they hire, raising the security requirements and
regulations, as well as being stricter and hard-and-fast in giving security assessments and enforcing
security rules. The recent MMS award presented to the rig must have had thrown a veil over any
Transocean shortcomings in the eyes of BP, and as long as the business interaction was functional
there were no openly exposed reasons for BP to doubt Transoceans professionalism; the relationship
between the two companies after the explosion was not officially discussed by either side, though;
however BP continues to use Transocean rigs, much to MMSs refusal to comment.
MMS records show that Transocean had problems with both the cement seal intended to
prevent oil and gas escaping the well, and the blowout preventer which is a set of valves on the ocean
floor ready to close off the well in case of an emergency. Transocean failed at setting up a blowout
preventer failed in 2006 due to maintenance issues. Some of Transoceans rig incidents have been
fairly minor involving small leaks, dropped equipment and injures, whereas others have been linked
to workers failure to follow company procedures. In 2008 a worker removed a pipe segment on his
own initiative and Deepwater Horizon flooded tilting to the side, an incident regulators found no
violations with. Other Transocean incidents have included four fires on board of deep-water drilling
rigs, a power outage to the thrusters that keep the rig in place above the well almost causing a spill, a
54 barrel hydraulic fluid leak from the blowout preventer shut down by two robot submarines, debris
getting in the blowout preventer reducing its effectiveness, and extended use of the blowout preventer
without inspection and maintenance.
Following the spill, BP announced it was asking all contractors to review compliance to
safety guidelines, particularly those pertaining to blowout preventers and cement seals. Transocean
is complying with the instructions, and it has also accepted greater responsibility over other oil rigs
across the globe, in particular two deep-water drilling rigs that went offline on May 6, partly
because of blowout preventer equipment problems. Experts tend to suggest that the merge of
Transocean with rival GlobalSantaFe in 2007 to a degree damaged Transoceans reputation, seeing
the merger as the main reason for the companys clumsiness: The company is so large, they dont
even know which assets and related equipment are available and when. Apart from a couple of
failures, Transocean is regarded as the prototype of the offshore deep-water driller of the future,
bravely paving the way and mastering the technology needed to drill in deep waters.
In order to fully understand the complexity of and the degree of human-error involvement in
the situation which led to the spill, one must understand the detailed technicalities of operating a rig
in deep waters. Although Deepwater Horizons wellhead had been fitted with a blowout preventer,
it was not fitted with acoustically-activated triggers or remote control intended for use in cases
when an urgent platform evacuation is required. The dead mans switch present on the rig may not
had been activated in order to be able to respond by automatically cutting the pipe and sealing the
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well in case communication with the platform is lost. Even though the MMS at one point
considered requiring acoustically-activated triggers for all wells, a policy already implemented in
Norway, drilling companies questioned the cost-effectiveness analysis of the device and both the
MMS and companies discarded it as redundant among a few other well-cutting-off systems already
in place.
Deepwater Horizon oil rig had a history of spills, fires, a collision, and other equipment
failure and human error related incidents. The last of these incidents, the explosion and the great
spill, happened due to equipment failure at the bottom of the ocean where the complicated pipes
and valves network refined with concrete broke down in less than a day after the pipes cementing
had finished. One of the technicians injured on the rig in his lawsuit against the company claimed
the cementing was improperly performed by Halliburton, the company hired to perform the
cementing, increasing the pressure of the well and contributing to the fire, explosion and resulting
oil spill. The blowout preventers failed to activate and seal off the well right after the explosion.
Several other workers who also filed lawsuits reported that, the cause of the explosion might has
been a bubble of natural gas rising to the rig floor and being drawn into the machinery, causing the
explosion. The Deepwater Horizon lubricant spill which happened a few years ago was caused by
similar problems of low quality pipes cementing. The MMS has since required increasing the
amount of cement in the pipes cementing process. Weather-related incidents have also been a
shadow over the Deepwater Horizon oil rig which operates in the hurricane-prone area in the north
of the Mexican Gulf. In June 2003 the rig released 944 barrels of oil when it floated off course in
high seas due to bad weather. Due to a rising record of similar minor incidents the Coast Guard
issued six enforcement warnings to Deepwater Horizon, labeling the vessel as an acknowledged
pollution source. In 2008 77 people were evacuated from the platform in the accident of recklessly
removing a pipe from the ballast system causing the platform to tilt and start sinking.
Almost a year before the explosion BP engineers expressed safety concerns regarding the
blowout preventer, and the metal well casing which they feared it might collapse under high
pressure as a worst case scenario. Because of the great risks it posed, using the type of metal
casing they used was in violation with the companys safety policies and design standards,
requiring a special permission from BP officials for the departure from the company safety
regulations, a risky permission which was indeed issued. When addressing the ways in which the
casing would be sealed to prevent gases from escaping up the well, BP engineers expressed
concerns the casing cementing would not be successful. Additionally, the well casing plan was
unable to fulfill Minerals Management Service regulations, and was a risky course of action
undertaken among a couple of other safer alternatives. BPs internal investigation reports to
Congress indicated there were early warning signs of gas bubbling into the well immediately before
the explosion, a clear indication of a potential blowout.
The main reason why the well was not sealed off right after the explosion and continued
spilling oil into the ocean from many consecutive days instead of being immediately shut off was
the failure of the fail-safe blowout preventer which was supposed to slice through the drill pipe as
soon as the explosion happened. The blowout preventer had been in the light of increasing
Transocean concerns regarding its functionality for many months prior to the incident, such as the
fail-safe device leaking fluid on at least three occasions. The lack of urgency to act upon these
concerns was a definite conscious increase of the probability of an incident.
Parallel to the investigation of the causes of the oil spill there were intense efforts to contain
the spill and reduce environmental damage. Some of the strategies included containing the oil to the
surface, dispersing it into less sensitive areas, and sucking it out of the water. The crude from the
well was a heavy flux of asphalt-like substances. This type of oil cannot be well-consumed by
microbes, does not evaporate easily and does not burn well, especially not after being mixed with
water, increasing the difficulties of cleaning up the spill. A coastguard crew has set fire on some of
the oil slick in an attempt to protect some of the coastal wetlands, and a controlled fire on the slick
surface was set off thirty miles east of the Mississippi River delta, in an obscure effort to ultimately
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shut off the flow. Engineers made efforts to create a device that would cover the oil spill and pump it
into container vessels, but the device could not be finished until many days after the spill began, and
sealing robot submarines to try seal the leaking took months to implement. There were 320
promising cleanup strategies BP received from various sources. The US military joined efforts in all
cleanup activities, along with 125 commercial fishing boats, 170 vessels including skimmers, barges
and tugs, 7,500 personnel, and 2,000 volunteers.
The White House and Homeland Security agencies and the Pentagon ensured federal
government resources are fully mobilized to assist in response to the incident, and a statement was
issued that, as the responsible party in the incident, the government will hold BP accountable for
the costs of the deployment.

Sources:
http://news.bbc.co.uk/2/hi/americas/8651624.stm
http://www.huffingtonpost.com/huff-wires/20100430/us-gulf-oil-spill-the-rig/
http://www.nytimes.com/2010/07/22/us/22transocean.html?_r=1
http://www.nytimes.com/2010/05/30/us/30rig.html
http://abcnews.go.com/WN/oil-rig-explosion-survivors-reunite-land-coast-guard/story?id=10446518
http://abcnews.go.com/Business/wireStory?id=10515973&page=4
http://online.wsj.com/article/SB10001424052748704423504575212031417936798.html
http://www.nytimes.com/gwire/2010/05/04/04greenwire-warnings-on-backup-systems-for-oil-rigs-sounde-30452.html
http://www.washingtonpost.com/wp-dyn/content/article/2010/05/04/AR2010050404118.html
http://www.reuters.com/article/2010/05/06/oil-rig-leak-exemption-idUSN0621334420100506?type=marketsNews
http://online.wsj.com/article/SB10001424052748704307804575234471807539054.html
http://www.huffingtonpost.com/2011/03/12/jewish-family-stabbed-west-bank_n_834924.html
http://www.huffingtonpost.com/2011/02/28/bp-transocean-ask-dismiss-oil-spill-claims_n_829472.html
http://www.politico.com/politico44/perm/0410/cabinetlevel_oil_spill_meet_bcb87e48-b21e-4b72-8716-3d3a87ac7ffa.html