by Agence France-Presse. LONDON — Failures by BP and other companies led to the Gulf of Mexico oil disaster, BP concluded on Wednesday as it sought to defend itself against possible multi-billion-dollar lawsuits. As expected, BP’s inquiry did not admit “gross negligence” for the oil rig explosion in late April that killed 11 people and caused the worst environmental disaster in U.S. history. The report did put forward 25 recommendations, including improved staff training, designed to prevent a repeat of the Deepwater Horizon rig disaster. “No single factor caused the Macondo well tragedy. Rather, a sequence of failures involving a number of different parties led to the explosion and fire,” BP said in a summary [PDF] of the 200-page report [PDF]. The company said decisions made by “multiple companies and work teams” contributed to the accident, which arose from “a complex and interlinked series of mechanical failures, human judgments, engineering design,” and communication breakdowns. The four-month probe, led by BP’s head of safety and operations, Mark Bly, is viewed as key to how BP defends itself against legal proceedings involving the spill. “This report likely does its job in providing ammo for BP in future court cases, where the avoidance of the charge of ‘gross negligence’ is critical,” said Peter Hutton, an oil market analyst at NCB Stockbrokers. In the report, BP also blamed Transocean, owner of the rig, and Halliburton, which had cemented the well. “The investigation report provides critical new information on the causes of this terrible accident,” said BP’s outgoing chief executive Tony Hayward. “It is evident that a series of complex events, rather than a single mistake or failure, led to the tragedy. Multiple parties, including BP, Halliburton, and Transocean, were involved.” Hayward said key failings included a “bad cement job” at the bottom of the well that allowed gas and liquids to flow up the production casing. Additionally, the results of a negative pressure test were incorrectly accepted by BP and Transocean, while the rig’s blowout preventer on the seabed failed to automatically seal the well. U.S. lawmakers have accused the oil giant of sacrificing safety to improve its profit margin, but Hayward denied this during a hostile grilling in Congress in June. Hayward subsequently announced he would quit the top job in October. Under U.S. law, fines could be as much as $4,300 per barrel spilled, if negligence is proved. This means BP could theoretically face fines of up to $21.1 billion for the 4.9 million barrels that poured into the sea. The leaking Macondo well has now been secured, but the disaster is still being examined in a string of court cases and probes, including a criminal investigation being carried out by the U.S. Department of Justice. BP has already spent $8 billion trying to contain the disaster and has forecast that it will eventually cost the company more than $32.2 billion after cleanup costs and compensation are taken into account. Also on Wednesday, ratings agency Fitch upgraded BP’s credit rating three notches, citing an end to the threat of more leaks from the Macondo well. The upgrade to A from BBB also “reflects both the improved visibility of potential liability scenarios the company could still face and substantial progress that BP has made to date in building up liquidity to address potential financial payments,” Fitch said in a statement. BP’s market value slumped by tens of billions of dollars amid the crisis as its share price fell, but its stock has recovered somewhat in recent weeks. Following the report’s publication, BP’s share price was up 1.88 percent to $6.43 in late London trade. Related Links: BP report says there’s plenty of blame to spread around for Gulf explosion Michigan governor’s race: Snyder vs. Bernero ‘Avatar’ director vows to publicize Amazon tribe’s eco-struggle
Original post:
BP takes share of blame for Gulf of Mexico oil spill
