With one of the two key pieces of the failure of BP (NYSE:BP) in relationship to the Gulf oil spill having come to light - the poor cement mixture used by Halliburton (NYSE:HAL) to seal the Macondo oil well - BP could be one step closer to saving billions in fines connected to the Clean Water Act.
The second piece of the puzzle, the blowout preventer, which was provided by Cameron International (NYSE:CAM) is next to be decided upon, and once that is completed, BP will probably be exonerated as far as being considered grossly negligent, as the failure will end up being from contractors rather than BP itself.
That of course doesn't excuse BP from its oversight in the matter, which is where in fact it did fail.
Other major oil companies have noted the same thing, that they will have to be much more diligent in managing contractors than in the past, as that would probably have saved BP from even having experienced what they're now going through.
Showing posts with label Blowout Preventer. Show all posts
Showing posts with label Blowout Preventer. Show all posts
Monday, November 1, 2010
Friday, October 29, 2010
What Will Halliburton's (NYSE:HAL) Failure Cost Them? What Will BP (NYSE:BP) Gain?
The narrative has changed quickly concerning the BP (NYSE:BP) oil spill, as the investigation surrounding the cement job performed by Halliburton (NYSE:HAL) could drastically change the liability outlook.
So far BP has rightly been the main focus of investigations, but that couldn't have remained the case throughout the entirety of the story because of there being so many contractors and others whose equipment and actions may have led to the failure on the Deepwater Horizon oil rig.
Investigators from the oil spill commission have determined the cement used by Halliburton was unstable, and Halliburton has admitted the final formulation used wasn't completed checked for its stability.
While Halliburton continues to dispute whether the actual formula they used is the one being tested, it seems it is close enough or accurate enough to make a judgment over, as the commission, and an independent study by Chevron (NYSE:CVX) seems to have confirmed.
With failures to completely test the mixture, there is no doubt Halliburton will incur some liability in the matter. It's only a matter of how much liability, not if they'll face it. There is also the question of whether they're insured enough to cover the liabilities, or it'll cost their bottom line.
It has already pushed up the costs of doing business through the increase in cost of their credit-default swaps, and there will surely be more to come.
For BP, this could be helpful once liability is determined. Whether or not it comes from an insurer or Halliburton directly, it could ease the liability load for them, and release capital over a period of time.
The other major element in liability is the blowout preventer provided by Cameron International (NYSE:CAM), which also failed to do its job. That's being tested at this time as to why it failed.
Concerning liability, BP has probably seen the worst, and anything like this is positive news for them from a financial perspective, but also helps them some reputationally, as people realize they weren't the sole company responsible for the disaster, and in some cases, like with the cement mixture, was out of their hands.
That does bring up something all oil companies said they've learned from this, and that is they must keep a much closer watch on contractors, even those like Halliburton, who had had a pretty good reputation as far as quality work goes.
So far BP has rightly been the main focus of investigations, but that couldn't have remained the case throughout the entirety of the story because of there being so many contractors and others whose equipment and actions may have led to the failure on the Deepwater Horizon oil rig.
Investigators from the oil spill commission have determined the cement used by Halliburton was unstable, and Halliburton has admitted the final formulation used wasn't completed checked for its stability.
While Halliburton continues to dispute whether the actual formula they used is the one being tested, it seems it is close enough or accurate enough to make a judgment over, as the commission, and an independent study by Chevron (NYSE:CVX) seems to have confirmed.
With failures to completely test the mixture, there is no doubt Halliburton will incur some liability in the matter. It's only a matter of how much liability, not if they'll face it. There is also the question of whether they're insured enough to cover the liabilities, or it'll cost their bottom line.
It has already pushed up the costs of doing business through the increase in cost of their credit-default swaps, and there will surely be more to come.
For BP, this could be helpful once liability is determined. Whether or not it comes from an insurer or Halliburton directly, it could ease the liability load for them, and release capital over a period of time.
The other major element in liability is the blowout preventer provided by Cameron International (NYSE:CAM), which also failed to do its job. That's being tested at this time as to why it failed.
Concerning liability, BP has probably seen the worst, and anything like this is positive news for them from a financial perspective, but also helps them some reputationally, as people realize they weren't the sole company responsible for the disaster, and in some cases, like with the cement mixture, was out of their hands.
That does bring up something all oil companies said they've learned from this, and that is they must keep a much closer watch on contractors, even those like Halliburton, who had had a pretty good reputation as far as quality work goes.
Monday, October 25, 2010
BP's (NYSE:BP) CEO Bod Dudley Thanks Britain for Support During Gulf Crisis
Speaking at the annual CBI conference in Britain, BP (NYSE:BP) chief executive officer Bob Dudley thanked the British government for their strong support during the extreme attacks of some lawmakers in the United States during the Gulf disaster.
He said, "At the height of the crisis it made a big difference knowing we had such good friends at home."
Dudley added he felt the media was and continues to create a climate of fear around the Gulf oil spill, and there is still data to be gathered to find out the overall causes of the spill.
One of those is the blowout preventer awaiting to be fully investigated and examined as to why it failed.
British Prime Minister David Cameron has said a strong BP is vital to the interests of Britain and America.
He said, "At the height of the crisis it made a big difference knowing we had such good friends at home."
Dudley added he felt the media was and continues to create a climate of fear around the Gulf oil spill, and there is still data to be gathered to find out the overall causes of the spill.
One of those is the blowout preventer awaiting to be fully investigated and examined as to why it failed.
British Prime Minister David Cameron has said a strong BP is vital to the interests of Britain and America.
Monday, October 11, 2010
BP (NYSE:BP) Blowout Preventer Investigation Contracted to "Det Norske Veritas"
There is finally some movement on the investigation of the failed blowout preventer on the Deepwater Horizon oil rig operated by BP (NYSE:BP), and of which the blowout preventer was supplied by Cameron International (NYSE:CAM).
Norwegian foundation "Det Norske Veritas" was awarded the contract by the Joint Investigation Team which includes people from the Department of the Interior and Homeland Security.
The device has been sitting around for a month in storage by NASA in Michoud, Louisiana, as the federal government dragged its feet over the matter.
Even though it has taken a month to get it going, DNV will work on developing forensic testing protocols, consulting a number of government, commercial and academic organizations. Not having protocols was the reason given by the government as to why they hadn't gone forward yet. It took them a month to figure out who to choose to begin the process.
When protocols are in place, before testing begins on each one the the Joint Investigation Team will be have to give its approval.
“Chain of custody and evidence preservation protocols to ensure the proper handling of all evidentiary material have been in effect since the BOP was first retrieved in August,” said DNV.
The blowout preventer is the major piece of evidence in the oil spill accident, and determining what happened to it will decide a lot of how the liability will be passed around.
Norwegian foundation "Det Norske Veritas" was awarded the contract by the Joint Investigation Team which includes people from the Department of the Interior and Homeland Security.
The device has been sitting around for a month in storage by NASA in Michoud, Louisiana, as the federal government dragged its feet over the matter.
Even though it has taken a month to get it going, DNV will work on developing forensic testing protocols, consulting a number of government, commercial and academic organizations. Not having protocols was the reason given by the government as to why they hadn't gone forward yet. It took them a month to figure out who to choose to begin the process.
When protocols are in place, before testing begins on each one the the Joint Investigation Team will be have to give its approval.
“Chain of custody and evidence preservation protocols to ensure the proper handling of all evidentiary material have been in effect since the BOP was first retrieved in August,” said DNV.
The blowout preventer is the major piece of evidence in the oil spill accident, and determining what happened to it will decide a lot of how the liability will be passed around.
Friday, September 17, 2010
Transocean (NYSE:RIG) Issue with Blowout Preventer Resolved with Government
A battle had been heating up between Transocean (NYSE:RIG) and other oil companies over the major piece of evidence in the Macondo oil well disaster.
The blowout preventer was the center of the dispute, where concerns over the proper care of it and the potential compromising of its condition were at issue.
For some reason the government said it wasn't going to flush seawater and other fluids out of the control pods. Transocean said if that wasn't done, corrosion could easily set in, causing problems which could lead to malfunction as a result.
To settle the issue, the government did a turnaround and said they'll flush the control pods on the blowout preventer to keep it from corroding before it's examined to see why it failed.
Judge Barbier consequently denied a motion by Transocean to compel the government to protect the device while it was the target of the investigation because of the problem being resolved.
The blowout preventer was the center of the dispute, where concerns over the proper care of it and the potential compromising of its condition were at issue.
For some reason the government said it wasn't going to flush seawater and other fluids out of the control pods. Transocean said if that wasn't done, corrosion could easily set in, causing problems which could lead to malfunction as a result.
To settle the issue, the government did a turnaround and said they'll flush the control pods on the blowout preventer to keep it from corroding before it's examined to see why it failed.
Judge Barbier consequently denied a motion by Transocean to compel the government to protect the device while it was the target of the investigation because of the problem being resolved.
Wednesday, September 15, 2010
BP's (NYSE:BP) Outgoing CEO Tony Hayward Denies Cutting Safety Corners
Giving testimony before a British parliamentary committee, the outgoing CEO at BP (NYSE:BP) said concerning safety at UK North Sea operations that the company hasn't cut corners.
Being pressed by committee chair Tim Yeo, who reminded Hayward that he said three years ago that he was going to focus "laser-like on safety,"
and that "On your watch as chief executive, in that three years, now we've had the biggest ever oil spill in U.S. waters," Hayward responded, saying that the record of BP was "better than the industry average."
Hayward added that the oil industry will be better concerning safety as a result of the Gulf of Mexico oil spill, especially in regard to the testing of blowout preventers.
He said they will "significantly enhance the testing protocols of blowout preventers."
Concerning the calls by some for deepwater drilling to be banned, Hayward implied that was an over-response to the situation.
He added that there were failures on the part of all parties involved, including Halliburton (NYSE:HAL) and Transocean (NYSE:RIG), who owned the rig.
The British committee is gathering information in order to make a decision on whether or not to add any more regulations for drilling off the coasts of the UK.
Being pressed by committee chair Tim Yeo, who reminded Hayward that he said three years ago that he was going to focus "laser-like on safety,"
and that "On your watch as chief executive, in that three years, now we've had the biggest ever oil spill in U.S. waters," Hayward responded, saying that the record of BP was "better than the industry average."
Hayward added that the oil industry will be better concerning safety as a result of the Gulf of Mexico oil spill, especially in regard to the testing of blowout preventers.
He said they will "significantly enhance the testing protocols of blowout preventers."
Concerning the calls by some for deepwater drilling to be banned, Hayward implied that was an over-response to the situation.
He added that there were failures on the part of all parties involved, including Halliburton (NYSE:HAL) and Transocean (NYSE:RIG), who owned the rig.
The British committee is gathering information in order to make a decision on whether or not to add any more regulations for drilling off the coasts of the UK.
Tuesday, September 7, 2010
BP's (NYSE:BP) Internal Report to be Released Wednesday
While it won't be the final word on the matter, the internal report from BP (NYSE:BP) which investigated the causes which led up to the explosion on the Deepwater Horizon oil rig, will be released Wednesday morning, and should give a preliminary look at what went wrong.
One major piece of the puzzle missing from the report is the blowout preventer, which is considered the key piece of evidence in what went wrong that day.
The failed blowout preventer was raised from the Gulf bottom during the weekend and FBI agents were on board the BP vessel 'Helix Q4000' to take charge of it.
There has been some concern from other companies with potential liability in the oil well, like Anadarko (NYSE:APC) and Cameron International (NYSE:CAM) on how the blowout preventer will be examined.
The Department of Justice, which now has control of the preventer, hasn't communicated how it's going to proceed with the investigation at this time.
One major piece of the puzzle missing from the report is the blowout preventer, which is considered the key piece of evidence in what went wrong that day.
The failed blowout preventer was raised from the Gulf bottom during the weekend and FBI agents were on board the BP vessel 'Helix Q4000' to take charge of it.
There has been some concern from other companies with potential liability in the oil well, like Anadarko (NYSE:APC) and Cameron International (NYSE:CAM) on how the blowout preventer will be examined.
The Department of Justice, which now has control of the preventer, hasn't communicated how it's going to proceed with the investigation at this time.
FBI Swoops in on BP (NYSE:BP) Blowout Preventer
In anticipation of examining the failed blowout preventer on the Deepwater Horizon oil rig, the FBI was at the surface when the 5-story device was brought to the surface of the Gulf of Mexico, after being removed and replaced by a fully-functioning, new blowout preventer.
The original blowout preventer failed to do its job of keeping oil from being released into the waters of the Gulf, making it the primary piece of evidence for civil, and possibly, criminal charges in the near future.
It took almost 30 hours for engineers to lift the giant preventer from the bottom of the Gulf to the surface, which was a journey of about a mile. The device weighs in at 300 tons.
The huge device, which if fifty feet tall, will be moved to New Orleans to be stored and eventually examined.
Legal issues must be faced as some oil companies are challenging the U.S. government being the sole examiner of the rig.
Cameron International (NYSE:CAM) unsuccessfully attempted to keep the blowout preventer from being removed in order to take photos of the object to see if there had been any damage during the removal process. That was denied by a judge.
The original blowout preventer failed to do its job of keeping oil from being released into the waters of the Gulf, making it the primary piece of evidence for civil, and possibly, criminal charges in the near future.
It took almost 30 hours for engineers to lift the giant preventer from the bottom of the Gulf to the surface, which was a journey of about a mile. The device weighs in at 300 tons.
The huge device, which if fifty feet tall, will be moved to New Orleans to be stored and eventually examined.
Legal issues must be faced as some oil companies are challenging the U.S. government being the sole examiner of the rig.
Cameron International (NYSE:CAM) unsuccessfully attempted to keep the blowout preventer from being removed in order to take photos of the object to see if there had been any damage during the removal process. That was denied by a judge.
BP (NYSE:BP) Ready to Resume Relief Well Drilling
Drilling on the relief well which will be used to perform the final step to permanently plug the Macondo oil well in the Gulf of Mexico, is ready to be resumed by BP (NYSE:BP).
After the final step of removing the failed blowout preventer and replacing it with a new one, the way is cleared for the drilling to begin to reach the annulus of the well where cement and mud will be injected into the well to perform the "bottom kill," which will be the final step in the overall ordeal, which began April 20 when the Deepwater Horizon oil rig exploded and spewed oil into the Gulf.
Anadarko Petroleum (NYSE:APC) and Mitsui were also partners in the project, with Anadarko owning a 25 percent stake and Mitsui (Nasdaq:MITSY) a 10 percent stake through their majority-owned MOEX company.
Government lead man in the Gulf cleanup, Thad Allen, says the damaged well is now "secured," preparing the way for the resumption of drilling of the relief well, which is a short distance from its destination.
After the final step of removing the failed blowout preventer and replacing it with a new one, the way is cleared for the drilling to begin to reach the annulus of the well where cement and mud will be injected into the well to perform the "bottom kill," which will be the final step in the overall ordeal, which began April 20 when the Deepwater Horizon oil rig exploded and spewed oil into the Gulf.
Anadarko Petroleum (NYSE:APC) and Mitsui were also partners in the project, with Anadarko owning a 25 percent stake and Mitsui (Nasdaq:MITSY) a 10 percent stake through their majority-owned MOEX company.
Government lead man in the Gulf cleanup, Thad Allen, says the damaged well is now "secured," preparing the way for the resumption of drilling of the relief well, which is a short distance from its destination.
BP (NYSE:BP) Replaces Damaged Blowout Preventer with New One
One of the final steps in the process toward permanently plugging the damaged oil well by BP (NYSE:BP) has been achieved, as they have replaced the failed blowout preventer with a new one on Friday, setting the stage for the final stage of the "bottom kill," which will pour cement and mud into the well to complete the job.
The removed blowout preventer was taken on a journey of about one mile to the surface, where it has been taken possession of by government authorities who will eventually have it examined in order to find out the reasons it failed to stop oil from being released into the Gulf of Mexico.
Thad Allen, the government lead on the response, said the process went smoothly, and there was no discernible oil which leaked while the exchange was being performed.
"During the period of time between the removal of the damaged BOP and installation of the replacement BOP, there was no observable release of hydrocarbons from the wellhead," Allen said.
A new blowout preventer was decided to be put in place in order to ensure it can handle the pressure when the bottom kill is being done. Pressure will result from the relief well intersecting the damaged well, and they wanted that covered to be sure there wasn't a new oil spill into the Gulf.
The removed blowout preventer was taken on a journey of about one mile to the surface, where it has been taken possession of by government authorities who will eventually have it examined in order to find out the reasons it failed to stop oil from being released into the Gulf of Mexico.
Thad Allen, the government lead on the response, said the process went smoothly, and there was no discernible oil which leaked while the exchange was being performed.
"During the period of time between the removal of the damaged BOP and installation of the replacement BOP, there was no observable release of hydrocarbons from the wellhead," Allen said.
A new blowout preventer was decided to be put in place in order to ensure it can handle the pressure when the bottom kill is being done. Pressure will result from the relief well intersecting the damaged well, and they wanted that covered to be sure there wasn't a new oil spill into the Gulf.
Saturday, September 4, 2010
BP (NYSE:BP) Successfully Puts New Blowout Preventer in Place
The highly anticipated replacement of the failed blowout preventer has been successfully replaced by BP (NYSE:BP) Friday with a new one, while the failed preventer is being slowly pulled to the surface.
Once it reaches the surface authorities will take possession of it in order to have it checked out to see the reasons why it failed and who was liable for that failure. Potential billions could be at stake in what those results are.
The blowout preventer exchange was performed because of concerns over whether or not things in place could handle the pressure when the relief well intersects the original oil well. This ensures the best equipment is in place for when that happens.
With that in place, experts now believe whatever pressure arises from the increase in pressure can be handled while the "bottom kill" procedure is enacted.
According to federal spill response head Thad Allen, the relief well is about 50 feet vertically and 3 ½ feet horizontally from the point of intersection, and should take about four days to finish the drilling, and another several days to complete the rest of the task of injecting the mud and cement, and then conduct tests on the pressure and officially close the case.
Once it reaches the surface authorities will take possession of it in order to have it checked out to see the reasons why it failed and who was liable for that failure. Potential billions could be at stake in what those results are.
The blowout preventer exchange was performed because of concerns over whether or not things in place could handle the pressure when the relief well intersects the original oil well. This ensures the best equipment is in place for when that happens.
With that in place, experts now believe whatever pressure arises from the increase in pressure can be handled while the "bottom kill" procedure is enacted.
According to federal spill response head Thad Allen, the relief well is about 50 feet vertically and 3 ½ feet horizontally from the point of intersection, and should take about four days to finish the drilling, and another several days to complete the rest of the task of injecting the mud and cement, and then conduct tests on the pressure and officially close the case.
Friday, September 3, 2010
BP (NYSE:BP) Has Latched Onto Damaged Blowout Preventer
The next phase of the permanent sealing of the damaged oil well by BP (NYSE:BP) is to removed the damaged blowout preventer and replace it with a new one.
They reportedly have now grabbed onto it with their vessel, the Q4000, which will then lift it to the surface. The sealing cap had to be removed first, which was the initial task they performed in this final procedure.
After being delayed for some time, and facing the possibility of having to wait till next week, they are now finally able to get the job done as the weather has started to cooperate with them and the waves not as bad as they had been.
A second ship is ready to enter into the next phase of putting the new blowout preventer on, which will better protect the well when the "bottom kill" begins, which entails pumping cement and mud from the bottom.
They reportedly have now grabbed onto it with their vessel, the Q4000, which will then lift it to the surface. The sealing cap had to be removed first, which was the initial task they performed in this final procedure.
After being delayed for some time, and facing the possibility of having to wait till next week, they are now finally able to get the job done as the weather has started to cooperate with them and the waves not as bad as they had been.
A second ship is ready to enter into the next phase of putting the new blowout preventer on, which will better protect the well when the "bottom kill" begins, which entails pumping cement and mud from the bottom.
Thursday, September 2, 2010
BP (NYSE:BP) Starts Cap Removal in Preparation for "Bottom Kill"
With weather cooperating, BP (NYSE:BP) said they're ready to begin the first step leading to the permanently sealing of the oil well with the "bottom kill."
The first step in the process is to remove the cap they plugged the leak with, which has kept the oil from leaking into the Gulf of Mexico since July 15.
After the cap is removed, the next step will be to remove the blowout preventer which failed to do its job in preventing the oil leak from happening in the first place.
From there they'll put a new blowout preventer in place in order to protect the well when the final procedure is begun.
The trick and desired result is to remove the failed blowout preventer without damaging it, as it's a key piece of evidence in the ongoing investigation.
Each step will depend on the weather, so it could be one thing done at a time and then wait, if the weather doesn't cooperate.
The first step in the process is to remove the cap they plugged the leak with, which has kept the oil from leaking into the Gulf of Mexico since July 15.
After the cap is removed, the next step will be to remove the blowout preventer which failed to do its job in preventing the oil leak from happening in the first place.
From there they'll put a new blowout preventer in place in order to protect the well when the final procedure is begun.
The trick and desired result is to remove the failed blowout preventer without damaging it, as it's a key piece of evidence in the ongoing investigation.
Each step will depend on the weather, so it could be one thing done at a time and then wait, if the weather doesn't cooperate.
Wednesday, September 1, 2010
BP (NYSE:BP) May Resume Blowout Preventer Removal Sooner than Expected
Changing his time-frame for the continuation of removing the blowout preventer and replacing it with another, National Incident Commander Thad Allen said BP (NYSE:BP) may begin operations again within 24 to 36 hours.
The waves in the Gulf of Mexico had stopped the process from moving forward, and it was thought things could be put on hold all the way into next week.
Now Allen sees preparations to remove the blowout preventer by Friday and through the weekend, and the new preventer in place by Wednesday at the latest. That assumes the weather cooperates.
Once the new blowout preventer is put in place, the final steps for the "bottom kill" can begin, which would permanently plug the well. That is scheduled for September 7, according to Allen. It could take up to four days to complete, he added.
The waves in the Gulf of Mexico had stopped the process from moving forward, and it was thought things could be put on hold all the way into next week.
Now Allen sees preparations to remove the blowout preventer by Friday and through the weekend, and the new preventer in place by Wednesday at the latest. That assumes the weather cooperates.
Once the new blowout preventer is put in place, the final steps for the "bottom kill" can begin, which would permanently plug the well. That is scheduled for September 7, according to Allen. It could take up to four days to complete, he added.
BP (NYSE:BP) Won't Resume Blowout Preventer Removal Till Friday at Earliest
Government point man Thad Allen said BP (NYSE:BP) won't be able to resume the effort to remove the blowout preventer until at the earliest: Friday. It's more likely it'll be later than that.
Large waves continue to hamper the salvage efforts, and until that changes, there's nothing the oil company will be allowed or able to do.
Allen added it could even be next week before work can start up again.
The blowout preventer is the key piece of equipment which should be able to shed light on what caused the explosion which killed 11 workers on the Deepwater Horizon oil rig in April.
BP's challenge is to remove it in a way where no damage could compromise the preventer, so a conclusion can be drawn concerning liability.
Large waves continue to hamper the salvage efforts, and until that changes, there's nothing the oil company will be allowed or able to do.
Allen added it could even be next week before work can start up again.
The blowout preventer is the key piece of equipment which should be able to shed light on what caused the explosion which killed 11 workers on the Deepwater Horizon oil rig in April.
BP's challenge is to remove it in a way where no damage could compromise the preventer, so a conclusion can be drawn concerning liability.
Monday, August 30, 2010
BP (NYSE:BP) Puts Gulf Operations on Hold Because of Weather
BP (NYSE:BP) announced its attempt to replace the blowout preventer by removing the sealing cap has been put on hold, as concerns over bad weather has halted the process.
On the company's website they said the high seas is the major factor, and until those conditions subside, they won't proceed with the operations. They will wait till the Gulf waves reach "acceptable levels" before continuing.
A couple of things are important with removing the blowout preventer. The first is to do it in a way where no damage is done to it because it's the key piece of evidence in finding out what caused the accident on the Deepwater Horizon oil rig.
And second, to put a new blowout preventer on the rig in order to prevent the "bottom kill" - which will be the final step in permanently plugging the well - from wrecking the cement plug which was put in place in August.
On the company's website they said the high seas is the major factor, and until those conditions subside, they won't proceed with the operations. They will wait till the Gulf waves reach "acceptable levels" before continuing.
A couple of things are important with removing the blowout preventer. The first is to do it in a way where no damage is done to it because it's the key piece of evidence in finding out what caused the accident on the Deepwater Horizon oil rig.
And second, to put a new blowout preventer on the rig in order to prevent the "bottom kill" - which will be the final step in permanently plugging the well - from wrecking the cement plug which was put in place in August.
BP (NYSE:BP) to Start Removing Well Cap Today
Today BP (NYSE:BP) begins the difficult task of removing the temporary cap used to stop the oil from entering into the Gulf of Mexico, while at the same time attempting to remove the blowout preventer which didn't work as it should have to prevent oil from spilling into the water.
Most of the determination of who will be fined or liable is centered primarily around the blowout preventer, and it continues to be the key piece of physical evidence in the case.
The trick will be to remove it while not allowing the approximate 1,000 barrels of oil trapped to release into the Gulf, while also not damaging the vital piece of evidence.
When the company performed the "top kill," they inadvertently trapped the oil in the well, making it difficult to remove the blowout preventer without some of the oil entering the Gulf.
Expectations are the process will be performed without the oil leaking into the Gulf, but BP will be on standby to collect the oil in case it does.
Government point man Thad Allen gave the go ahead to start the operation today.
Most of the determination of who will be fined or liable is centered primarily around the blowout preventer, and it continues to be the key piece of physical evidence in the case.
The trick will be to remove it while not allowing the approximate 1,000 barrels of oil trapped to release into the Gulf, while also not damaging the vital piece of evidence.
When the company performed the "top kill," they inadvertently trapped the oil in the well, making it difficult to remove the blowout preventer without some of the oil entering the Gulf.
Expectations are the process will be performed without the oil leaking into the Gulf, but BP will be on standby to collect the oil in case it does.
Government point man Thad Allen gave the go ahead to start the operation today.
Wednesday, August 25, 2010
BP (NYSE:BP) Shocker: Says Transocean (NYSE:RIG) Changed Lock on Blowout Preventer
BP (NYSE:BP) executive vice president Harry Thierens said in a hearing today that Deepwater Horizon owner Transocean (NYSE:RIG) changed a locking mechanism on the blowout preventer which caused up to 24 hourse of delay.
The blowout preventer is what is used to prevent oil from leaking from a well if something fails. It took a minimum of twelve hours, and up to a full day to figure out what changes Transocean had made to the device and to receive drawings of those changes.
Thierens testified he had been immersed in the efforts to shutdown the oil well after the April 20 explosion.
BP is now trying to secure the failed device at the well without damaging it so a determination as to why it failed can be made, along with who is liable for the failure.
Cameron International (NYSE:CAM) provided the blowout preventer for the oil rig.
The blowout preventer is what is used to prevent oil from leaking from a well if something fails. It took a minimum of twelve hours, and up to a full day to figure out what changes Transocean had made to the device and to receive drawings of those changes.
Thierens testified he had been immersed in the efforts to shutdown the oil well after the April 20 explosion.
BP is now trying to secure the failed device at the well without damaging it so a determination as to why it failed can be made, along with who is liable for the failure.
Cameron International (NYSE:CAM) provided the blowout preventer for the oil rig.
Tuesday, August 24, 2010
BP (NYSE:BP) Gave Okay to Deepwater Horizon Use with 390 Overdue
When BP did an internal audit of the Deepwater Horizon oil rig, it found about 390 overdue maintenance problems, yet still decided to go ahead and let it begin operations, leading to the explosion and ultimate consequences associated with it.
The 390 overdue maintenance problems were revealed by BP’s Gulf of Mexico marine authority, Neil Cramond, when talking to investigators from the Bureau of Ocean Energy Management and U.S. Coast Guard.
BP’s audit said: "With excessive overdue maintenance and the recent introduction of more maintenance routines, it would appear that the
maintenance department is struggling to stay in touch with the planned maintenance schedule."
Even so, the final decision on whether or not to put the rig into
operation was BP's, as Cramond admitted and confirmed when queried by a lawyer from Transocean (NYSE:RIG) at the hearing.
Much of this is being done to determine, what, if any, liability
Transocean and others may have in relationship to the damage done from the explosion of the oil rig, which killed 11 workers and gushed oil into the Gulf of Mexico.
One of the most important pieces of evidence, the blowout preventer, is still on the Gulf floor, and is being worked on now to detach from the pipe in order to bring it to the surface as it was when it went down with the Deepwater Horizon.
At that time a lot more clarity will be added to the situation to make decisions on overall liability and how far it will extend beyond BP.
The 390 overdue maintenance problems were revealed by BP’s Gulf of Mexico marine authority, Neil Cramond, when talking to investigators from the Bureau of Ocean Energy Management and U.S. Coast Guard.
BP’s audit said: "With excessive overdue maintenance and the recent introduction of more maintenance routines, it would appear that the
maintenance department is struggling to stay in touch with the planned maintenance schedule."
Even so, the final decision on whether or not to put the rig into
operation was BP's, as Cramond admitted and confirmed when queried by a lawyer from Transocean (NYSE:RIG) at the hearing.
Much of this is being done to determine, what, if any, liability
Transocean and others may have in relationship to the damage done from the explosion of the oil rig, which killed 11 workers and gushed oil into the Gulf of Mexico.
One of the most important pieces of evidence, the blowout preventer, is still on the Gulf floor, and is being worked on now to detach from the pipe in order to bring it to the surface as it was when it went down with the Deepwater Horizon.
At that time a lot more clarity will be added to the situation to make decisions on overall liability and how far it will extend beyond BP.
BP (NYSE:BP) Bottom Kill Could be Delayed by Stuck Pipe
With the blowout preventer probably being the key evidence on what happened to the Deepwater Horizon oil rig and the resultant oil spill, it's imperative to successfully retrieve it without doing any damage, so there is no uncertainty if it is found to be the major culprit in the accident.
Another snag has emerged in the situation, as a 3,000 foot long pipe is connected to the blowout preventer, and BP hasn't been able to remove it so far.
National Incident Commander Thad Allen said if that continues to be the case, BP will have to come up with an alternative plan on how they're going to do it without damaging it, sometime today.
Allen said, “Our goal was originally to complete this in three days. It may go a little beyond that because of the diagnostics on the blowout preventer.”
“Technically it’s feasible to do it but it’s obviously harder if the pipe is still in the blowout preventer,” Allen added. “That’s the reason we’ve asked BP for an additional procedure if for some reason it becomes a problem removing a pipe.”
Another snag has emerged in the situation, as a 3,000 foot long pipe is connected to the blowout preventer, and BP hasn't been able to remove it so far.
National Incident Commander Thad Allen said if that continues to be the case, BP will have to come up with an alternative plan on how they're going to do it without damaging it, sometime today.
Allen said, “Our goal was originally to complete this in three days. It may go a little beyond that because of the diagnostics on the blowout preventer.”
“Technically it’s feasible to do it but it’s obviously harder if the pipe is still in the blowout preventer,” Allen added. “That’s the reason we’ve asked BP for an additional procedure if for some reason it becomes a problem removing a pipe.”
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