While BP says it will pay to clean up the mammoth oil spill in the Gulf of Mexico, the British oil giant has repeatedly placed blame elsewhere for the tragic rig accident last month that started it all.
How much longer it will be able to keep saying so, however, is another question.
The company likely will face a high legal bar in proving contractors involved in drilling the BP well were at fault and liable for damages, given protections BP agreed to in its lease contract for the Deepwater Horizon drilling rig, one industry analyst said.Then, there's the question of how much oversight BP had over contractors during the various stages of drilling and building out the well prior to the April 20 blowout that sent the rig up in flames and killed 11 workers.“I don't see how BP can distance itself from its responsibility associated with being the final decision-maker,” said Bill Herbert, industry analyst with Houston investment bank Simmons & Company International. “Sure, the service providers are recommending and implementing solutions, but it's BP's drilling engineers who are approving the solutions.”
Last week, in an interview with the Houston Chronicle, BP CEO Tony Hayward again sought to downplay BP's role on the rig.“The way the industry works is that the operators are in essence the architects. They design the well. And the drilling contractors drill the well,” he said.“And in terms of the safety and the reliability of equipment on a rig, that is absolutely the accountability of the rig contractor, regulated by the MMS.” he said, referring to the Minerals Management Service, a federal agency.Other parties cited
It could be months before investigations yield answers about the causes of the Deepwater Horizon accident. Judges and juries could take years more to apportion blame.
But BP, knowing its financial health and efforts to promote a green image are at stake, has tried to get in front of the growing crisis — as well as remind the public that it's not the only party involved.
Switzerland-based Transocean, owner of the now-sunken Deepwater Horizon, is responsible not only for the half-billion-dollar rig but also the drilling of the well and safety equipment involved, BP says. The latter includes a large stack of seafloor shut-off valves, called a blowout preventer, which apparently failed.
BP says the blowout preventer, or BOP, should have prevented the accident.
But Transocean appears to face limited financial exposure to the incident under its contract with BP for the rig, said Robert MacKenzie, analyst with FBR Capital Markets. Transocean disclosed parts of the contract in filings with the Securities and Exchange Commission.
If the blowout was caused solely by something it did or didn't do, Transocean might be liable.
“However, given the multiple contributing factors to the blowout, a finding that the blowout was caused solely by an act by Transocean seems highly unlikely if not impossible,” MacKenzie said in a report Friday.
Transocean could lose some protections against liability for cleanup and economic losses if found to be “grossly negligent” in its operation of the rig. Yet, that would be a hard thing to prove, he said.
The question of BP oversight at Deepwater Horizon could also be important. Though oil companies tend not to have many employees aboard a rig, those “company men” are often very closely involved in the operation, particularly at key stages.That would include the final steps of securing the well in preparation for temporarily abandoning it — the stage BP says was in progress at its Macondo well at the time of the blowout — said an industry expert who asked not to be named because of pending investigations.
In that stage, the company would have been ensuring that seals in the well were adequate to hold oil and natural gas in place in the reservoir, so that heavy drilling fluids could be removed and the well secured for going in again later.If problems arose, equipment on the rig should have signaled a change in pressure, and BP should have had time to make corrections long before the blowout preventer was needed to block oil and natural gas from shooting out of the well, the expert said.No prior problems
It remains unclear, however, whether such signals appeared and weren't heeded, didn't show at all for some reason — or if the situation spun out of control so quickly that crews couldn't respond.
Six of 126 people aboard the Deepwater Horizon were BP employees. All survived.
BP's Hayward said he was not aware of problems with the project prior to the incident, calling it a “relatively straightforward well.”As for sorting out responsibility, he said, “The explosion is one incident. The failure of the BOP is another incident. Our focus is on both, but we need to wait for the results of the investigation to understand what happened.”
Officials with Transocean and Cameron, maker of the blowout preventer, declined comment. Officials with both companies, as well as BP and Halliburton Co., which also performed work on the well shortly before the blowout, are scheduled to testify before Congress this week about the Deepwater Horizon incident.
BP, as owner of the federal lease, is required by a 1990 oil pollution law to pay the costs of regaining control of the damaged well.A diffirent moment
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