BP: watching from the sidelines

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Before digital, I did conventional PR and my first PR job was as a PR assistant during vacation time at college for the Liverpool Bay oil and gas development. I still have my Caithness glass paperweight which I was given as a souvenir of my small part in helping to bring the field online. I got this job, partly because I had previously worked downstream in an oil refinery.

Although I have been out of the industry for the past 15 years or so, I still have friends that work in the industry and have been watching the current BP debacle in the Gulf of Mexico with fascination. When I worked in the industry BP was respected for exploration prowess. It was said that BP could find oil anywhere and that Shell could sell it to anyone; I was surprised that this has happened on BP’s watch.

The upstream oil and gas industry (oil and gas exploration | extraction) is a horizontal industry so although we may thing of an oilfield being a BP, Shell or Exxon field it usually relies on several services companies – with everything being outsourced to the nth degree. Workers are often contracted through different employment agencies and different companies provide different services – rather like the property manager, lead contractor and sub-contractors on a large building site.

Tony Hayward, CEO of BP was on the BBC Today programme last Thursday and I found his comment interesting that Transocean was accountable for the “safety and operability” (is operability even a proper word) of the BOP (blowout preventer).

Whilst from a functional point-of-view that is correct, it may not be so from a legal point-of-view. It is an essential canon of law that anything you get others to do on your behalf, is the same as doing it yourself. Otherwise contract-killing would be more popular (and more cost effective) than divorce. Secondly, the layered structure of operations in a horizontal industry leaves less powerful players vulnerable to pressure from powerful organisations: they get hammered on price, on time and this can have an unconsidered and unintended effect of encouraging short-cuts, taking false economies with longer maintenance schedule periods and safety lapses. Who do you blame then?

At this point however we don’t know who, if anyone was to blame. That won’t come out until a proper inquiry is held into the event.

Things I find interesting, am curious about:

  • Blowouts are a well-known phenomena and the oil and gas industry has well over a century’s experience handling them. Why didn’t the (BOP) blowout preventer stop the event?
  • Did the cement casing hold firm in the shaft?
  • What was the nature of the fire and explosion following the blowout?
  • Why did the rig sink?
  • Why did the attempted sub-sea recovery system not take account of methane hydrates, given the depth and temperature of the sea, the formation of crystalised hydrate was predictable?
  • Given the potential impact that this could have on the regulatory environment for the oil industry what are BPs peers doing to help out?