BP boss says company, oil industry learned from Gulf spill
BP CEO Robert Dudley on Tuesday predicted that the oil and gas industry will emerge from the Gulf of Mexico spill safer and smarter, developing new technology to tame runaway wells and stepping up standards that govern their design.
In his first formal public address since he took over as CEO soon after the disaster that claimed 11 lives and dumped millions of barrels of oil into the Gulf, Dudley embraced a presidential commission’s conclusion that the spill wasn’t an isolated exception.
“It would be a mistake to dismiss our experience of the last year simply as a black swan, a one-in-a-million occurrence that carries no wider application for our industry as a whole,” Dudley told 2,000 energy analysts and executives at the CERAWeek conference in Houston. “As we have learned in the past 11 months, one company’s calamity quickly becomes every company’s concern.”
After the lethal blowout at BP’s Macondo well last April, the Obama administration imposed a five-month moratorium on some deep-water drilling and imposed new safety mandates.
BP established a $20 billion fund to reimburse fishermen, hotel owners and others who lost business because of the spill.
The oil spill intensified charges that BP has had a lax safety culture — a claim that also emerged after a 2005 explosion at its Texas City refinery killed 15 workers and injured many more.
Dudley said the company has made broader changes to make safety a priority, including creation of a program to reward workers who call a halt to operations when they see problems.
As a result, Dudley said, BP has shut in a production platform in Azerbaijan to repair water pumps, rather than keeping it going while the maintenance work was under way.
The company also stopped work on a platform at its Holstein field in the Gulf of Mexico after BP discovered fasteners on the facility weren’t up to its standards. And it halted production at a field in southern England to accommodate work on a pipeline with walls thinner than the company wanted.
See a problem, report it
“This is exactly what we want to see happening at BP,” Dudley said after his speech. “When we see a problem, we want to be able to stop operations. We’ve sent that message all the way down our organization: When people see something, raise their hand and highlight it. We’re rewarding people for doing it, even though shutting in production is a very expensive thing to do.”
Dudley challenged the oil and gas industry to heed the widespread changes made by other sectors after major industrial accidents, including the partial meltdown at Pennsylvania’s Three Mile Island nuclear power plant and a pesticide plant gas leak that killed thousands in Bhopal, India.
In the wake of those disasters, the nuclear and chemical industries established safety institutes and deepened their collaboration.
William Reilly, the head of the presidential commission that investigated the spill, echoed Dudley’s call for more industry collaboration and said he was encouraged by the new containment systems companies are developing to trap crude from blown-out deep-water wells.
Dudley told the IHS Cambridge Energy Research Associates conference that he expects more technological advancements to come, including a new generation of blowout preventers designed to block unexpected surges of oil and gas.
Those technologies will guide the industry’s ventures into new frontiers such as remote, icy Arctic waters.
Robust assessments
Dudley said that BP now does more robust assessment of even unlikely ramifications of drilling plans. “It doesn’t mean that you become completely risk-averse,” Dudley said. “If you get good at risk, you can handle the risk.”
BP could face fines of up to $4,300 per barrel spilled in the Gulf under the federal Clean Water Action if the spill resulted from gross negligence. Dudley said he is not aware of any discussions with the government about resolving any such allegations.
Source: Houston Chronicle