RULE 26 REPORT ON BP’s DEEPWATER HORIZON MACONDO BLOWOUT RE: OIL SPILL by the OIL RIG “DEEPWATER HORIZON” GULF OF MEXICO APRIL 20, 2010 EXPERT OPINIONS BASIS OF OPINIONS ANALYSIS & DISCUSSION Prepared by: Dr. Robert G. Bea, PE Professor Emeritus of Civil and Environmental Engineering University of California, Berkeley and Dr. William E. Gale, Jr., PE, CSP, CFEI, CFI Forensic Engineer and Fire & Explosion Investigator ‘incipal, Bundy, Gale & Shields, LLC Prepared for: Atthe behest of Plaintiff Liaison Counsel, James P. Roy and Stephen J. Herman and Brian Barr & Scott Summy of the Plaintiff Executive Committee UNITED STATES DISTRICT COURT EASTERN DISTRICT OF LOUISIANA THE HONORABLE JUDGE BARBIER MAG. JUDGE SHUSHAN By order of jal Panel on Multi D Litigation August 26, 2011 TREX-20001Executive Summary On March 8, 2010, just over a month before the Macondo blowout, the well sustained a severe gas kick that in every way resembled the April 20" kick that killed 11 people. A member of BP’s Tiger Team (responsible for pore pressure analysis) sent an email to a BP geologist that would prove to be a harbinger: Everyone was aware of the gas but we decided to drill ahead to stay as close to the progfram-casing points as possible. The "prize" was to skip the contingency liner. After deciding to drill ahead, we encountered the losses. We were aware of the upper limit of the ECD [“Equivalent Circulating Density”] and exceeded it because we didn't believe the MWD [“Measurement Whilst Drilling”) LOT [“Leak Off Test”] values. I'm not sure it was a lack of communication or awareness as much as a "we can get away with this” attitude - after all, the surface LOT provided an additional 0.5 ppg of window. The ECD had already exceeded the closure and propagation values having been exceeded for a long, time before we encountered the losses. Given that the MWD LOT value wasn't trusted because it was lower than the surface value, I don’t think this is going to be a learned lesson... I'm sorry to push back on the lessons leamed. I know you've got to get something out there to make it look like we won't do this again. But without obvious indicators and with the real push to make hole and skip the contingency liner, | don’t see us really learning. The best bet is to hedge the "most likely" to have some centroid built in to the plan ini This communication highlights numerous problems: it identifies that risks were being taken in an effort to obtain the prize of a faster, cheaper drilling method; it makes clear that risks were not being assessed despite knowing they existed: it admits that key drilling indicators were being ignored in an effort to achieve the goal of quickly finishing the well; it admits that the attitude of “getting away with it” was placed above the known harm; and it concedes that lessons were not going to be learned from this event These were all Process Safety and System Risk Management failings that had also resulted in previous major BP accidents. Exh, 1136, BP-HZN-2179MDL00025882 (emphasis added).INTRODUCTION BP Management's systemic Process Safety and Risk Management failings caused the Macondo blowout. BP Management refused to identify the risk, refused to manage the risk, refused to establish operating guidelines commensurate with the dangerousness of deepwater exploration drilling, and refused to ensure that critical safety equipment was functional to industry standards. BP Management knew that drilling the Macondo well was a highly risky and dangerous venture that demanded taking a cautious and conservative approach to meet its objectives and obligations. However, at each major decision point, BP Management chose the cheaper and riskier path. BP's drilling operations violated industry accepted Process Safety and Risk Management standards and even its own Group Defined standards and practices. BP knowingly took unnecessary risks and committed the very same failures that resulted in major incidents at BP's Texas City, Grangemouth, Scotland, and Prudhoe Bay facilities. A. Professor Robert G. Bea and Dr. William E. Gale, Jr. Professor Bea and Dr. Gale are experts in the engineering field of Process Safety Management and Risk Assessment and Management. This Report is their expert opinion as to the cause of the Macondo blowout. Professor Bea has over 58 years of professional engineering experience with over 50 years of experience in the oil and gas industry.” Dr. Bea is a Professor Emeritus at the University of California at Berkeley in the field of Civil and Environmental Engineering and is a co-founder of the Center for Catastrophic Risk Management. Dr. Bea has authored, contributed to, and delivered over 500 articles, books, and reports on issues related to risk and risk management. From 1982 to 2005, Dr. Bea was periodically retained by BP as a consultant to provide advice and recommendations on issues related to safety systems, human error, and risk assessment for deepwater platforms, offshore drilling, pipelines, oil tankers, and refineries. Dr. Gale has over 40 years of professional experience in project engineering, des construction.’ Dr. Gale is an engineering specialist in all aspects of loss prevention, hazard and failure analysis, risk management and safety, including risk assessment Process Safety management, facility safety, and major risk incident investigations involving explosions, releases of hazardous materials, and fires. Dr. Gale eared a Ph.D. from the University of California Berkeley in an interdisciplinary program for Fire Safety Engineering Science as well as a ? Professor Bea’s full Curriculum Vitae is attached as Appendix “A” > Dr. Gale’s full Curriculum Vitae is attached as Appendix “