BPs Macondo Blow-out, Gulf of Mexico - Case Study Example

BP’s Macondo Blow-out, Gulf of Mexico Macondo project is a gas and oil project situated at the Gulf of Mexico withinthe Mississippi Canyon block 252 off the coastal city of Louisiana. The project is owned and managed by two companies: the British petroleum company (BP), which has a 90% interest in the project and MOEX Offshore, which owns the remaining 10%. However, initially, the project was owned by three companies including, Anadarko Petroleum Corporation, which sold its 25% stake of the project to BP making it BP the main shareholder (Deepwater Horizon Study Group 1). The genesis of exploring this project is traced back to 1998, when KC Offshore conducted a hazard survey in Macondo to establish its viability. Later on in 2003, Fugro Geoservices collected the seismic data on the region, which revealed its potential for oil and gas. This prompted BP to buy the mineral right to explore oil in the project by biding with the Minerals Management Services (MMS) in 2008. BP America got permission to proceed with the mapping of the block, which later on received approval from the (MMS) to undertake the Macondo project in 2009 (Read 52). The drilling work for the project was conducted by Deepwater Horizon Company after the initially proposed plan to award it to Transocean Marianas rig was changed. However, a tragic accident occurred on 20 April 2010, when a fire explosion occurred on Deep Horizon leaving ten workers dead. Read reveals that two days after the explosion the rig also sank into the water at a depth estimated at about 1,500 meters (52). Currently is reported to lay on the seafloor, about 400 meters northwest of the well. It is also reported that the rig was about 52 miles off the southeast of the port of Venice, Louisiana according to Read (52). Deepwater Horizon Rig The rig used was a semi-submersible built by a South Korean company, Hyundai Heavy Industries Ltd and owned by Transocean. The construction work officially began in 1998 and ended in 2001. The Deep[water Horizon use is said to measure 396ft long and 256ft wide as is capable of operating under water at a depth of 8,000ft. It is also reported that the Deepwater Horizon is capable of expanding up to a 10,000ft under water, with a drilling capacity of up to 30,000ft (Schneier 57). The drilling work for for the project began in February 20 and halted just two months later following an explosion that occurred on the Deepwater Horizon. The drilling work is reported to have begun at a depth of about 5,000ft below water and was meant to go all the way through to a depth of 18,000ft, after which the drilling works were to be abandoned and plunged for later completion. According to the proposed plan, the rig was meant to drill the second or the two well that had been proposed for drilling. Nevertheless, the rig encountered poil spill at the wellhead and on the surface of the shore leading to the explosion (Deepwater Horizon Study Group 3). Following the tragic explosion, BP has undertaken major oil spill interventions aimed at preventing such future occurrences as well as determining the magnitude of the accident. It is reported that BP team has so far recovered more than 1,000 barrels of oil mixed with water. Currently BP is using remotely operated tools to examine the well under sea. In addition, plans are ongoing to set up a blowout preventer aimed at preventing any future explosions. BP is also intending to drill relief wells to secure the well (Deepwater Horizon Study Group 6). A plan I also already underway to drill a second well that connects with the Macondo well which would be done using rig DD3. The drilling of the second well will help inject heavy fluids that control the flow of gas and oil (Read 53). Causes of the Disaster Investigation that followed the disaster reveals a number of problems that led to the tragic disaster that saw more that 4.9 barrels of oil spill at the Gulf. The disaster reveals laxity on the part of the government, fawning press, corporate profit just to name but a few. During the investigation, the first organization found culpable was the Minerals Management Service (MMS), which was in charge of overseeing offshore drilling. Despite their responsibility, investigations revealed that they had a few staff of only fifty-five staff who could not effectively oversee more than three thousand facilities in the Gulf. Investigations also found out that a majority of MMS staff were puppets of BP. This is after FBI found out that most members MMS staff accepted golf and had sex with the representatives of the industry. Moreover, no inspection whatsoever was conducted on the rig prior to the actual work as required by law. In addition, the FBI also found out that no difference could have been made even if the MMS staff conducted the inspection as they did not know what to do (Deepwater Horizon Study Group 9). BP is another player that has been found culpable following its reckless actions aimed at cutting down cost and making profits at the expense of safety and good work. BP is said to have pushed Transocean Company and other subcontractors into doing shoddy work as a cost cutting strategy. For instance, BP is reported to have paid $500,000 as rent to Deepwater Horizon rig and promised to pay additional $500, 000 the sooner the company completed the drilling work. As a result, the urge to get the huge sums of money is seen to have made Deepwater Horizon to harry with the work resulting into shoddy work that led to the explosion (Read 60). Transocean has also been widely blamed for negligence in which the company is reported to have concentrated on preventing accidents to its workers through falls, and coalitions and not focusing its attention on the overall work. This was evident when the chief executive officer of Transocean played a visit at the site just before the ill-fated inferno to celebrate the company’s seven-year operation without injury (Read 60). Other investigations also found fault with Deepwater Horizon. In this case, investigation found out that as much as the rig required maintenance, it remained un-dry-docked for more than a decade. This is blamed of the Blow Out Protector, which completely failed to work. However, investigators unanimously concluded that reckless short cut witnessed in sealing the well is what contributed greatly to the blowout of the rig resulting in the spill (Schneier 57). Preventive strategy Investigations reveal that the fault started right at the time of awarding the project to BP, in which MMS failed to take up its responsibility to monitor and investigate the facilities. Therefore, investigations should have been done regularly by MMS to ascertain how the project was going on. This could have helped identify if there could be some faults that needed to be corrected (Read 63). Secondly, BP should not have interfered with the operation of Transocean and other subcontractors by putting them under pressure to compete the work within a short period as this is what made them do shoddy work. Any engineering work must be based on quality work and not profit motive, as was the case with BP. Allowing enough time would have enabled the contractors to do their work with due respect to professionalism andwould have prevented the accident from occurring (Schneier 61). Thirdly, Deepwater Horizon should have ensured that its rig is well maintained and serviced so as to prevent any failure. For instance, it was not completely in order to leave the rig unmaintained for more than a decade as this makes it hard to establish whether there is a fault. Finally, the engineered that worked on the Deepwater Horizon should have ensured that the well is properly sealed as this would have avoided any leakage that resulted into an explosion (Griggs 57). Total cost of the accident Considering the nature and gravity of the spill, BP has been forced to pay huge sums of money in damages and compensations as required by law. The New York Times estimates both civil and criminal penalty to cost BP more that $60 billion. Removal cost is also estimated to cost the company about $581 million. In addition, BP would also be expected to pay another $20 billion as damages to victims of the oil spill according President Obama’s directive. This brings the total cost of the oil spill to approximately $80.6 billion (Griggs 71). How BP raised fund to pay for clean up. Griggs notes BP obtained most of its funding for used for paying for clean up from the Oil Spill Liability Trust Fund, which had been given a go ahead by the government to finance BP to a tune of $1 billion for removal cost (Griggs 72). Names of those killed in the blowout and job designations 1. Jason Anderson-Senior tool pusher 2. Dewey Revette-Driller 3. Stephen Curtis- assistant driller 4. Donald Clark-Assistant driller 5. Dale Burkeen-Crane operator 6. Karl Kleppingnger-Roughneck 7. Adam Weise-Roughneck 8. Shane Roshto-Roughneck 9. Wyatt Kemp-Derrick man 10. Gordon Jones-Mud engineer 11. Blair Manuel-Mud engineer. Culpability of Halliburton Halliburton is reported as being the cement contractor used in Macondo project that blew leaving 11 people death and scores injured. Despite suing BP for culpability, certainly Halliburton is also to blame for the blowout. This is because cement is known to be very crucial in deep-water drilling and is capable of preventing blowout. However, investigations conducted on the well have indicated that there was a massive problem with cementing, which makes the contractor culpable for the blow. In addition, its subsequent actions after the incidence also raise questions. For instance, it has been established that Halliburton deliberately destroyed test results, sample of cement taken from the site, as well as computer models that could have helped in the investigation. This shows how culpable Halliburton is for the blowout since if it was innocent then it should not have destroyed the samples taken from the site (Niland Par. 2). Work Cited Deepwater Horizon Study Group. Final report on the Investigation of the Macondo Well Blowout. March 1, 2012. Griggs, John W. BP Gulf of Mexico Oil Spill. Vol. 32, No. 57, pp. 57-79. Niland, Kurt. BP tells court Halliburton destroyed key oil-spill evidence. 6 December 2011. Web. Nov. 6 2012: http://www.rightinginjustice.com/news/2011/12/06/bp-tells-court-halliburton-destroyed-key-oil-spill-evidence/ Read, Colin. BP and the Macondo Spill: The Complete Story. New York, NY: Palgrave Macmillan. Copyright, 2011 Print. Schneier, Bruce. Liars and Outliers: Enabling the Trust that Society Needs to Thrive. Hoboken, NJ: John Wiley & Sons, 2012 Print. Read More