David Hart, an analyst at Westhouse Securities, talks about the outlook for BP Plc after the company promised to use assets in the Gulf of Mexico as collateral for the $20 billion compensation demanded by President Barack Obama. He speaks on Bloomberg Television’s “The Pulse” with Andrea Catherwood.
BP Plc considered quitting its Macondo well in the Gulf of Mexico days before the drilling-rig explosion that killed 11 workers and caused the biggest offshore oil spill in U.S. history.
A team of engineers and technicians based in BP’s Houston office discussed suspending drilling and abandoning the project during a conference call in mid-April, Greg Walz, an engineer for London-based BP, said in testimony today to a federal panel investigating the blast.
The possibility of quitting the project was part of a broader discussion of what sort of well design to use, he said. Walz was questioned for more than three hours by the panel about a disagreement he had with a BP colleague over whether to employ a larger number of safety devices when lining the well with cement.
“We had contingency plans in place in case anything went wrong,” Walz told the U.S. Coast Guard and Interior Department joint investigation team probing the April 20 explosion aboard the Deepwater Horizon drilling rig. Walz was the drilling team leader on the project and helped design the well.
Engineers also were confused over the procedures for conducting a pressure test aboard the drilling rig to determine whether the steel pipe inside the well was fully sealed from the surrounding oil-soaked rock, said Walz, a 30-year veteran of offshore drilling who joined BP in 2000.
BP and the rest of the oil industry need to develop standard guidelines for how to conduct and interpret the pressure tests conducted during the final stage of completing a well, Walz said.
Cost Overruns
The eight-member panel is holding a fifth round of hearings this week in Metairie, Louisiana, into the catastrophe on the rig, owned by Transocean Ltd.
Walz told the panel he was aware the Macondo project was over budget and taking longer than expected, though he didn’t know by how much. The panel released internal BP documents yesterday that showed the project cost $154.5 million, 61 percent more than planned.
Four days before the well erupted, Walz advocated more than tripling the number of centralizers used to keep the well’s metal casing pipe centered while cement was poured around the sides, according to an April 16 e-mail between Walz and John Guide, BP’s wells team leader on the project.
Failure to use more centralizers left the well susceptible to “severe gas flow potential,” a report to BP by Houston- based Halliburton Co. warned that day.
More Centralizers
Walz told the panel today that he directed another BP employee to have 15 additional centralizers shipped to the rig from Houston by helicopter to augment the six centralizers the company originally planned to use.
Guide objected to using the extra centralizers, saying they were not of the design described by Walz, according to the e- mails. Walz told the panel today that once he heard Guide’s concerns, he concurred that the centralizers could be difficult to retrieve from the hole if the pipe got stuck on its way down and had to be removed.
An internal investigation by BP last month found that Guide and Walz were mistaken about the design of the centralizers that were shipped to the rig. Using fewer centralizers increased the risk of gaps in the cement, according to the Sept. 8 report.
The centralizers “likely did not contribute” to the cement’s failure to prevent gas from surging to the surface, BP said in the report.
Hours From Finish
BP was hours away from finishing the well 40 miles (62 kilometers) from the Louisiana coast when explosive gas surged up from beneath the sea floor and set the rig ablaze. The rig, which sank two days later, was leased to BP for about $500,000 a day.
The well, which tapped a geologic formation estimated to hold 50 million barrels of crude, spewed enough oil into the sea to fill two supertankers before it was capped on July 15. Deepwater exploration in the U.S. section of the Gulf of Mexico has been halted since a federal moratorium was imposed in May.
See video here: http://www.bloomberg.com/news/2010-10-07/bp-considered-abandoning-well-before-rig-blast-that-caused-gulf-oil-spill.html
