BP CEO defends safety records

BP Chief Executive Tony Hayward defended the oil giant’s safety culture under a grilling from MPs as regulators released dozens of documents questioning the company’s record.

Cost cuts were not behind the Gulf of Mexico oil spill, and the accident highlighted industry failings rather than flaws particular to BP, Hayward told a parliamentary committee on Wednesday

“It’s been easy for some parties to suggest that this is a problem with BP. I emphatically do not believe that that is the case,” Hayward told the Energy and Climate Change Committee.

Hayward denied that there was any underlying link between the Deepwater Horizon rig blast in April, which led to the United States’ worst ever oil spill, and previous safety lapses at BP such as a 2005 refinery blast that killed 15 workers.

“It’s very dangerous to join up dots that may not be appropriate to join up,” he said.

Hayward said rivals such as Royal Dutch Shell Plc and Exxon Mobil criticised the way BP designed and drilled the well because they were motivated to do so by the political climate in the United States at the time.

Exxon denied this and said it believed that BP’s choice of well design, the type of cement used — which BP acknowledged contributed to the rig blast — and BP’s failure to conduct a common safety check, were key mistakes.

“This was a deviation from standard industry practice,” a spokesman said.

BP capped its blown out well on July 15 and is preparing to seal it permanently. Analysts said they had expected BP to take a tougher legal and public stance against opponents after the well was killed.

SAFETY CITATIONS

Britain’s safety regulator released documents on Wednesday that showed it found, just three months before the Gulf of Mexico rig blast, that BP lacked a clear chain of command for dealing with a loss of well control on a North Sea oil rig.

Health and Safety Executive (HSE) inspectors visiting the Magnus platform 160km northeast of the Shetland Islands in late January discovered there was confusion about who would order a well shut-off in the event of a blow-out.

“Baker Atlas personnel stated that in the event of a well control incident requiring the well to be closed in, that BP would make this decision,” the HSE said, referring to a unit of oil services provider Baker Hughes.

“The BP well services supervisor expected that Baker Atlas would make this decision,” the HSE added in the letter to BP.

The Deepwater Horizon blast followed a loss of well control and survivors told investigators that there was confusion on board the rig about who was in charge following the incident.

The HSE added in one letter that on a BP’s Clair platform there was “evidence of a culture among your contractors, Seawell (up to senior levels of management), of working outside of procedures, permit or permit conditions.”

BP, whose safety culture has been criticised heavily by U.S. politicians, responded by saying:

“The letter from the HSE last year relates to comments made by a contractor which the safety representatives on the platform strongly felt did not reflect the reality of the platform’s safety culture and practices.”

“Following further engagement with the HSE the matter was closed,” BP added.

Stavanger-based Seawell’s chairman, Joergen Rasmussen, said he was surprised by the HSE comments.

BP also failed to provide adequate safety training to North Sea staff and to conduct adequate oil spill response exercises, the Department of Energy and Climate Change said in separate documents, although the department said the matters had since been addressed.

GENTLE GRILLING

Hayward got less confrontational treatment from the committee than he received from a U.S. congressional committee, which interrogated him for several hours.

The committee chairman, Conservative party MP Tim Yeo, quizzed Hayward about whether he had been pressured by the White House into cutting BP’s dividend and whether the U.S. government and media had treated him fairly.

President Barack Obama’s popularity in the UK has been hit by what many Britons consider as Washington’s anti-British attacks on BP.

Hayward refused to offer a view on whether the criticism he received was fair and denied it was pressure from the White House which forced BP to cut its dividend.

Hayward steps down in two weeks to be replaced by Bob Dudley, who is running the oil spill response. Hayward said his own poor image in the U.S. made his position untenable.

BP plans to drill in the deep water west of the Shetland islands in 2011, BP’s North Sea boss, Bernard Looney, said.

He said the rig which will likely drill the prospect would have a blow out preventer (BOP) with two shear rams, rather than just one, as the BOP on the Deepwater Horizon rig had.

The failure of the BOP to operate and to slice through the drill pipe of the blown-out well is one of a series of failures that BP said caused the disaster.

BP’s shares closed down 2.7 percent at 404 pence, lagging a 1.0 percent drop in the STOXX Europe 600 Oil and Gas index.
Source: Reuters