Daily Archives: September 8, 2010

Masa Serdarevic

The BP report spreads blame for the explosion and the spill far and wide.

The four-month investigation has found that the accident was caused by “a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces”.

The main points are indeed complex and technical, but here is Tony Hayward, BP’s outgoing chief executive, trying to make it easier to understand for those of us who don’t work on oil rigs:

To put it simply, there was a bad cement job and a failure of the shoe track barrier at the bottom of the well, which let hydrocarbons from the reservoir into the production casing. The negative pressure test was accepted when it should not have been, there were failures in well control procedures and in the blow-out preventer; and the rig’s fire and gas system did not prevent ignition.

Fitch had a present for BP ahead of the oil giant’s publication of its internal inquiry into the Macondo explosion – raising its rating back to A from BBB, having downgraded at the height of the oil spill crisis.

From the ratings agency’s statement (emphasis ours):

Today’s rating watch resolution and subsequent rating upgrade primarily reflects an end to the threat of further leaks from the Macondo well in the Gulf of Mexico. The ‘A’ rating 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. These actions include a substantial increase in BP’s committed standby credit lines (increase to USD17bn from USD5bn) and material short-term progress on the asset sales program (approximately USD30bn of which has been announced as of 30 June 2010).

Masa Serdarevic

The eagerly-awaited report from BP has just been released on the company’s website.

As was widely expected, BP has concluded that:

The investigation found that 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 which killed 11 people and caused widespread pollution in the Gulf of Mexico earlier this year.

Masa Serdarevic

The Deepwater Horizon accident investigation report prepared by BP’s internal investigation team on the causes of the Gulf of Mexico tragedy is expected to be published on Wednesday at 1200 BST / 0700 EDT.

FT Energy Source will have regular updates on the report during the day. Stay tuned.

Masa Serdarevic

Elsewhere this Wednesday:

- Rewarding results: how should we support the development of renewables?

- Iran and the Philippines: Mixing oil with bananas

- Fresh capital in the uranium fuel race

- Mafia cash in on EU wind farm handouts

Masa Serdarevic

- BP takes some blame in Gulf disaster – WSJ

- Australian government prepared to adjust mining tax – Reuters

- Dana pitch for higher KNOC offer falters – FT

- MPs warned on deep sea drilling ban – FT

- UK wind power hits record generation output – Reuters

- Crude oil caught in a ‘stalemate’ between $70 and $75 – Bloomberg

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