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Hayward.BP.2010.6.14

Hayward.BP.2010.6.14

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08/16/2010

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HENRYA.
WAXMAN
.CALIFORNIA
CHAIRMAN
JOHN O.DINGELl.MICHIGAN
CIt/URMAN
EMERITUS
EDWARDJ.MARKEY.MASSACHUSETrS
RICK
BOUCHER.VIRGINIA
ONEHUNDRED ELEVENTHCONGRESS
FRANK
PA
LLONE.JR
.
NEW
JERSEYBART GORDON.TENNESSEEBOBBY
L
RUSH.ILLINOIS
ANNA
GESHOO.CALIFORNIA BART STUPAK.MICHIGAN ELtOT
L
ENGEL.NEWYORK
GENE
GREEN,TEXAS
DIANA
DEGETrE.COLORADO
VICE
CHAIRMAN
ctCongrcss
of
tbc
Wniteb
$tates
j!)OU£ie
of
~epre£iel1tntibe£i
LOIS CAPPS.
CAUfORNIA
",IIKEDOYLE.PENNSYLVANIA JANE HARMAN.CALIFORNIA
JAN
SCHAKOWSKY.ILUNOISCHARLES
A
GONZALEZ.TEXAS
JAY
INSLEE.WASHINGTON
TAMMY
BALDWIN.WISCONSIN MI
KE
ROSS.ARKANSASANTHONY D.WEINER,NEW
YORK
JIM
MATHESON.UTAHG.K.
BunERFIElD
.NORTH CAROLINACHARLIE MELANCON.LOUISIANAJOHN BARROW.GEORGIA BARONP.HILL.INDIANA DORIS O.MATSUI.CALIFORNIA DONNA
CHR
ISTENSEN.VIRGIN ISLANDS KATHY CASTOR.FLORIDA JOHN SARBANES.MARYLAND CHRISTOPHERMURPHY.CONNECTICUT ZACHARY T.SPACE.
OH
IOJERRYMcNERNEY.CALIfORNIA BETTY
sunON
.OHIO
BRUCE
BRALEY.IOWA
PETER
WELCH.VERMONT
Mr.
TonyHaywardChief Executive Officer
BPPLC
ISt.James's Square London SWIY4PDUnited KingdomDearMr. Hayward:
COMMI
TI
EEONEN
ER
GY
ANDCOMMER
CE
21
25
RA
YBURN
HOUSE
OFFI
CE
BUILD
ING
WA
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gycommerce
.
house.Qov
June
14
,2010
JO
EBARTON.TEXAS
RANKING MEMBER
ROY
BtuNT.
MISSOURI
DEPUTY
RANKING
MEMBER
RALPH M.
HALt
,TEXAS
FRED
UPTON.MICHIGAN CLIFF STEARNS.FLORIDA
ED
WHITFIELD.KENTUCKY
JOHN
SHIMKUS.ILLINOIS
JOHN
B.SHAOEGG.ARIZONA
STEVE
BUYER.INDIANAGEORGE RADANOVICH.CALIFORNIA JOSEPH R,
Pins
.PENNSYLVANIAMARY BONOMACK.CALIFORNIA
LEE
TE
RRY
.NEBRASKAMIKE
ROGERS
.MICHIGANSUE WILKINSMYRICK.NORTH CAROLINA
JOHN
SULLIVAN.OKLAH
OMA
nM
MURPHY.PENNSYLVANIAMICHAEL C.BURGESS,TEXAS
MARSHA
BLACKBURN.TENNESSEEPHILGINGREY.GEORGIA STEVE SCALISE.
LO
UISIANAPARKER GRIFFITH.
ALABAMA
ROBERTE.LATTA.OHIO
We arelookingforward to yourtestimony before theSubcommitteeon Oversightand Investigationson Thursday,June
17
,2
010,aboutthecauses
of
the blowout
ofthe
Macondo wellandtheongoing oil spilldisaster
in
the
Gulf
of
Mexico.As youprepareforthis testimony,we want
to
share with you some
of
the results
of
theCommittee'sinvestigationand advise you
of
issuesyou shouldbepreparedtoaddress. The Committee'sinvestigation is raisingseriousquestionsaboutthe decisions made by BP in the daysandhours before theexplosion onthe Deepwater Horizon.On April
15
,five daysbefore theexplosion,BP
's
drillingengineer called Macondo a"nightmarewell."
In
spite
of
thewell'sdifficulties,BP appears
to
have made multiple decisions foreconomic reasonsthatincreasedthedanger
of
a catastrophic wellfailure.
In
several instances,these decisionsappearto violateindustryguidelines and weremade despitewarningsfrom BP
's
ownpersonnelandits contractors.Ineffect,
it
appearsthat
BP
repeatedlychose riskyproceduresin order toreduce costs and savetimeandmade minimalefforts to containtheaddedrisk. At thetime
of
theblowout,theMacondo well was significantlybehindschedule. This appearsto havecreatedpressure
to
takeshortcutstospeedfinishing thewell.
In
particular,theCommittee is focusing onfivecrucialdecisions madeby BP:
(I)
thedecision tousea well designwith fewbarriers togasflow;(2) the failure
to
use a sufficientnumber
of
"centralizers"toprevent channeling duringthecement process; (3)thefailureto runa cement bondlog to evaluatethe effectiveness
of
thecementjob;(4)the failure tocirculatepotentiallygas-bearing
 
Mr. TonyHaywa
rd
June
14
,20
10
Page 2drillingmuds o
ut
of
thewe
ll
;and(5)
th
efailuretosecurethewellhead withalockdownsleeve beforea
ll
ow
ingpressureonthe sealfrombelow.Thecommonfeature
of
these
fi
vedecisionsis that
th
eyposed a trade-off betweencostandwe
ll
safet
y.
We
ll
Design.On April19,onedaybeforethe blowout,BP
in
stalled
th
efinalsection
of
steel tubingin thewe
ll.
BP hada choice
of
twoprimaryoptions:itcouldlowera
fu
ll
string
of
"cas
in
g"fromthetop
of
the wellheadtothebottom
of
th
ewell,or
it
could hang a"liner"from
th
elowerend
of
th
e casingalready
in
thewe
ll
and
in
sta
ll
a"tieback"ontop
of
theliner.The liner-
ti
eback option would havetaken extratime and wasmo
re
expensive, but
it
would havebeensaferbecauseitprovidedmorebarriers
to
the
fl
ow
of
gasup theannularspace surrounding
th
ese steel tubes.A BPplan reviewprepared
in
mid-April reconunended againstthe fullstring
of
casing because
it
wouldcreate"anopenannulusto
th
e
we
llhead"and make thesealassembly atthewellheadthe
"o
nl
ybarrier"
to
gasflow
if
th
e cement jobfailed. Despitethis andother warnings,
BP
chosethe more
ri
sky cas
in
goption,apparentlybecause
th
elineroptionwould
ha
vecost$7to $10millionmoreand takenlonge
r.
Centralizers.When
th
efinalstring
of
casingwas
in
stalled,onekey challenge was making surethecasingran down
th
ecenter
of
thewe
ll
bore.AstheAmericanPetroleum
In
stitut
e's
recommended practices explain,
if
th
ecasingisnotcentered,"it isdifficu
lt
,
ifnot
impossible,
to
displacemudeffectively from
th
enarr
ow
s
id
e
of
theannulus,"
re
sulting
in
a faikucementjob.Halliburton,the contractorhiredby
BP
tocementthewe
ll
,warned BP
th
at
th
e we
ll
couldhave a"SEVERE gasflowproblem"
if
BPlowered
th
efinalstring
of
casing witho
nl
y sixcentra
li
zersinstead
of
the
21
recommended byHalliburton.BP rejectedHalliburton
's
advice
to
use additionalcentralizers.Inan e-mailonApr
il
16,aBPofficialinvolved inthe decision explained:"itw
ill
take
10
hours
to
insta
ll
them....Idonot likethis."Later
th
at day,another official recognized the risks
of
proceedingwith insufficientcentralizersbut commented:"who cares,it's done,end
of
story,willprobably be
fi
ne."CementBondLog.BP'smid-Aprilplan reviewpredictedcement failure,stating "Cementsimulationsindicate it isunlikelytobe a successfulcement
job
due
to
formation breakdown."Despitethis warning and Halliburton'sprediction
of
seve
re
gas
flo
wproblems,BP did not runa9-
to
12-hour procedureca
ll
eda cement bond log
to
assesstheintegrity
of
th
ecementsea
l.
BP hadacrewfrom Schlumbergeron
th
erigonthe morning
of
April20forthe purpose
of
rUlUlin
gacement bond log,but they departed afterBP told
th
em
th
eirservices were not needed.An independentexpe
l1
consulted by
th
e
Com
mittee ca
ll
edthisdecision"horribly negIgent." Mud C
ir
culatio
n.
In
exploratory operationslike
th
eMacondowe
ll
,we
ll
sare genera
ll
yfilledwithweightedmudduring the drilling process.TheAmericanPetroleumIns
ti
tute (API) recommendsthat o
il
companiesfully c
ir
c
ul
atethedrillingmudin
th
e we
ll
fromthebottomtothe topbefore
com
menc
in
gthe cementing process.Circulating
th
emud in
th
eMacondowe
ll
co
ul
dhavetakenaslongas12hours,butit would have a
ll
owed workers on
th
erigtotest themud for
 
Mr.TonyHayward June
14
,2010Page3gasinfluxes,tosafelyremove anypockets
of
gas,and
to
eliminatedebris and conditionthemud soas
to
preventcontamination
of
thecement.BP decided
to
foregothis safety stepandconduct onlya partialcirculation
of
thedrillingmud beforethecement
job
.LockdownSleeve.BecauseBPelected
to
use
ju
stasinglestring
of
casing, the Macondowe
ll
had
ju
st twobarriers
to
gasflowup
th
eannularspacearoundthe finalstring
of
casing:
th
ecementat the bottom
of
the we
ll
andtheseal at thewellheadon
th
e sea floor.Thedecision
to
useinsufficientcentralizerscreateda significant
ri
sk that thecement
job
wouldchanneland fail, while the decision not
to
runa cementbond logdenied BP theopportunitytoassessthe status
of
thecement job. Thesedecisions woulda
pp
ear
to
makeitcrucial
to
ensure
th
eintegrity
of
thesealassemblythatwastheremainingbarrieragainst aninflux
of
hydrocarbons.Yet,BPdidnot deploythecasinghanger
lo
ckdownsleevethatwould havepreventedthesealfrombeingblown out frombe
lo
w.
Thesefive questionabledecisionsbyBPare described
in
moredetail below.We askthat youcome prepared on Thursday
to
address the concernsthat thesedecisions raiseaboutBP's actions.
Background
BP
stm
teddrilling the Macondowe
ll
onOctober7,2009,us
in
gthe Marianas
ri
g.
T
hi
s
ri
g wasdamaged
in
HurricaneIdaonNovember9,2009.Asa result,BPand
th
e
ri
goperator,Transocean,replaced
th
eMarianas
ri
g with
th
eDeepwater Horizon.Drilling with theDeepwater Ho
ri
zonstartedon February 6,20I
O.
TheDeepwater Ho
ri
zon rigwas expensive.Transoceancharged BPapproximately $500,000per dayto
le
asethe
ri
g,
pluscontractors'fees.]BP targeted drillingthewe
ll
to take
51
daysandcostapproximately $96 million? TheDeepwater Horizonwas supposed
to
bedrilling
at
an
ew
locationas early as March8
,20
10
3
Infact,
th
eMacondowe
ll
to
okconsiderablylonger than plarmed
to
complete.ByApril20, 20
10
,thed
ay
of
the blowout,the
ri
g was43 da
ys
latefor
it
snextdrillinglocation, w
hi
ch mayhavecostBPasmuchas $21 million in leasingfees alone.Italsomayhave setthe context forthese
ri
es
of
decisionsthat BP made inthedaysandhoursbefore theblowout. ]According
to
theterms
of
the contract,thedailyratewou
ld
rangefrom$458,000 in March 2008 to
$5
17,000in September20I
O.
See
Transocean,
TransoceanFleetUpdat
e,
fn.
II
(Apr.
13
,20I
0)(o
nlineathttp://
www
.d
eepwater.com/fw/mainiFleet-Update-Report-58.html
).
2
BP,
GOM
ExplorationWells
Me
252
#i
-
MacondoProspect
Well
in/ormation
(Sept.2009) (BP-HZN-CEC0087
14).
J
Testimony
of
SteveTink,BP,Health,Safety andEnvironmentalManager,beforethe U.S. CoastGuard/MMSMarineBoard
of
Inves
ti
gation(May 26,20
10
).

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