X hits on this document

396 views

0 shares

0 downloads

0 comments

65 / 128

Triple Crunch Log                                                                                                            

8.9.10. Vince Cable: Barclays appointment of Bob Diamond as CEO highlights casino banking fears. The UK Business Secretary ratchets up pressure on the Treasury to split up the “casino” and traditional banks. Diamond, a high-profile investment banker, has taken home £75m in the last five years.789

City lobbies George Osborne to save banks from break-up. Banking rules to split retail and investment divisions “would drive banks abroad”, he is told. City law firms combine with the major accountancy businesses, insurers and banks to lobby for proposals to separate investment banking divisions from retail arms to be watered down or scrapped. An independent commission set up by Osborne is looking at possible reforms but is not expected to report its findings until next year.790

Industrial and political backlash greets BP’s internal reporton the Macondo spill. FT: “BP’s internal inquiry into the causes of the disastrous Gulf of Mexico oil spill provoked an immediate backlash from its contractors, as well as US politicians who said the British group was “happy to slice up blame, as long as it gets the smallest piece” (Ed Markey). The company’s report, presented in Washington DC by Mark Bly, its head of safety and operations, identified “a sequence of failures” that led to the accident on April 20 which killed 11 workers. BP accepted that its engineers should shoulder some of the blame but shifted much of the responsibility on to its contractors, Transocean, the owner of the Deepwater Horizon drilling rig that exploded, and Halliburton, the company responsible for cementing the Macondo well. The report identified eight critical factors that led to the accident, including weaknesses in the cement, design and testing of the well; misreading of pressure tests even though the well was not completely sealed; and the failure of the blow-out preventer – valves to stop gas and oil escaping – to operate. Tony Hayward, BP’s outgoing chief executive, said in a statement that “it is evident that a series of complex events, rather than a single mistake or failure” led to the tragedy. Transocean hit back, dismissing a “self-serving report ... that attempted to conceal the critical factor that set the stage for the Macondo [well] incident: BP’s fatally flawed well design. In both its design and construction, BP made a series of cost-saving decisions that increased risk – in some cases, severely.” Halliburton pointed to a number of “substantial omissions and inaccuracies”.”791

BP’s decision to use 6 centralisers to stabilise the steel casing instead of 21 was not the cause, though it may have been a mistake. So says Mark Bly, the company’s head of safety and operations who led the inquiry. FT: “BP’s failures, as set out by the inquiry, were primarily in its failure to manage its contractors properly and prevent the mistakes they made. The company’s much-criticised well design, using a technique called “long string” casing, is defended as a widely-used practice in that part of the Gulf of Mexico. … One of the report’s most eye-catching recommendations is the call for BP to assess its “high consequence drilling activities as a priority, starting with the Gulf of Mexico Exploration and Appraisal drilling team”. “We believe that we can drill these wells safely,” Mr Bly said. “Accidents should be preventable”.”792

BP deny that their problem is cultural. FT: “Bly acknowledged the report fails to address the key charges raised in Congress and elsewhere against the oil company: that it allowed a culture of recklessness to flourish, and that it was so anxious to finish work on a project that was 43 days over time and $20m (£13m) over budget that it omitted standard industry safeguards. The report does recognise there were gaping lapses in oversight on the Deepwater Horizon, going on to make 25 recommendations for tighter scrutiny by well owners – such as BP –of rig operations. But Bly rejected the idea that cost-cutting had dictated BP's decisions on the rig, saying: "What we see instead is, where there were errors made they were based on poor decision-making process or using wrong information." … No BP officials have been sacked for their role in the explosion, and Bly said there was no indication of any blame beyond the well-site managers. …. The report is far from the final word on the explosion and the subsequent oil spill, with Transocean, Congress and the federal government carrying out investigations. … But Robert Gordon, a lawyer for businesses affected by the spill, said it was unlikely to carry much weight in the months ahead. "BP blaming others for the Gulf oil disaster is like Bernie Madoff blaming his accountant," he said.793

BP's report “demolishes” Big Oil's 'safety first' mantra: Terry MacAlister in the Guardian. “What is doubly disturbing about the problems, be they "human judgments, engineering design, operational implementation" as the investigating team points out, is that they were produced by the industry's finest. BP is the largest operator in the US Gulf; Transocean is the biggest rig operator in the world; and Halliburton, targeted by the report for its "cement" work on the stricken well, used to be led by former US vice president Dick Cheney. They are the industry aristocracy. One shudders to imagine what might be happening at less financially secure and worse-managed companies.”794

“BP's report into the Deepwater disaster realises all our worst fears about the oil industry”: Guardian editorial. “This is BP's attempt to write the second draft of history – one in which as little blame as possible is apportioned to BP itself. An example: of the report's eight key findings on the cause of the explosion, five read as though they are really the subcontractor's responsibility rather than BP's.”795

BP oil spill report: how the explosion happened. It is believed that the oil and gas leak started around 8.52 pm, and after 9 pm pressure readings started to show some potentially worrying indications, but the seriousness of the problem was not appreciated until about 9.40 pm, when mud was blown onto the floor of the rig by the gas shooting up the riser (the pipe connecting the well-head on the sea bed to the rig on the surface.) At that point, the workers on the rig began to respond, but they did the wrong thing: they diverted the flow of oil and gas towards a piece of equipment that did not have nearly enough capacity to cope with the volumes that were escaping. Overwhelmed, that equipment - the mud-gas separator - allowed gas to spread out over the rig. If the rig workers had instead simply diverted the flow over the side of the rig, the explosion might still have been averted. Then comes the most harrowing part of the presentation, showing how the gas spread throughout the rig before igniting. A computer animation shows how in just four minutes, from 9.46 to 9.50, the rig became “enveloped in gas”, as the BP investigator put it. The gas escaped into the engine room, where the power generators went into overspeed. At 9.49 the first explosion hit, probably ignited by the generators, with a second coming ten seconds later.”796

BP oil spill report: Halliburton have taken lal action to withhold cement for BP analysis. FT: “Halliburton, the cementing contractor, has refused to supply BP with samples, and taken legal action to enforce that refusal.”

India and China’s scramble for coal reaches Indonesia. FT: “The battle for resources between India and China has arrived in Indonesia, where Asia’s emerging giants are scrambling to secure the vast supplies

Document info
Document views396
Page views396
Page last viewedSat Dec 10 19:15:46 UTC 2016
Pages128
Paragraphs2571
Words135569

Comments