Introduction The Deepwater Horizon rig sank on April 22, 2010, two days after the Macondo well blowout

and explosion that killed 11 workers. The Deepwater Horizon accident, also known as the BP Oil Spill, was a project failure of immense proportions. It went from an oil exploration ³project´ to a massive program with portfolios of projects related to dealing with the families of those killed on the oil rig, stopping the oil leak, capturing the oil (from the well and from the ocean), cleaning the environment (seashores, wetlands, Gulf of Mexico), saving and cleaning wildlife (underwater and on shores), responding to human needs (fishermen, economically impacted families), dealing with the public (PR campaigns), dealing with shareholders and employees, and dealing with governments(state and federal). The mission and scope changed and grew significantly over night. It changed from a $500 million oil prospect development project to over a $100 billion program with global reach and hundreds of projects. In addition, the inability of BP to stop the flow in a timely manner, communication problems by BP management,and long lasting negative media coverage of the slow reaction to the spill have resulted in serious negative consequences for BP, subcontractors on the project and the oil exploration industry as a whole. Additionally, the US federal government responded to the accident with poor organization and leadership. Analyzing the chain of events, some of the lessons from the failure become very apparent including the facts thatBP and Transocean risk management plans were inadequate, BP was not prepared for the accident (or any accident for the most part), project management mistakes were made during drilling of the well, communication blunders were made by BP executives following the accident, the impact on the environment and stakeholders were underestimated, and the future of a company can be at risk from a critical failure of this magnitude.The DeepWater incident was largely a result of poor initial project planning, inadequateproject risk management, poor project management execution including decision making and communication, and unprepared crisis management on the part of BP and the US government in the event of project failure. This paper will analyze the series of events leading up to the April 20, 2011, disaster, the decisions and lack of actions which compounded the possibility and severity of project failure and the mishandling of the crisis that ensued after the failure of the well. Background On March 19, 2008, BP acquired the federal lease for Mississippi Canyon Block 252, located in 4,992 feet of water 50 miles southeast of Venice, Louisiana for just over $34 Million from the Minerals Management Service (MMS). BP was highly confident in the seismic data and the presence of oil that the company proceeded to implement the project of drilling a $100 Million well named, Macondo. BP hired Transocean to supply the crew and the oil drilling rig to drill the well. On October 7, 2009, drilling began on the Macondowell using Transocean¶s Marianas semisubmersible oil rig. The Marianas operated to a depth of 4,023 feet below the mudline, or 9,000 feet below sea level before it was damaged on November 9,

lost circulation. After fighting the stuck pipe for a week. the riser was hung in the tensioning system. This decision resulted in the only protection provided for the flow of oil and gas in to the wellbore was the cement that would be pumped down the casing and capped with a seal assembly at the well head. by Hurricane Ida. As the days wore on. If the cement failed. (In Too Deep pg25) After weeks of battling the well.2009. the oil and gas could travel up the pipe to the well head and escape uncontrolled. BP chose a cementing design which had one avenue of protection through a single cap as opposed to other designs that had multiple layers cementing and caps which provided additional protection in case of well failure. On February 8. The DeepwaterHorizon was a 33. the Macondo well had multiple incidents of trouble which continued until the disastrous day when the well blew out and went out of control. Once the preventer was latched up. Work on the Macondo well was suspended until January 31. the other necessary lines were hung.500 feet. During the early drilling in shallow depths. the engineers may have made a mistake which contributed to the well blow out. BP engineers decided to run one long string of casing from the bottom of the well all the way to the wellhead. the crew became wary after experiencing multiple kicks. and their pressures. the Deepwater crew placed a blowout preventer on the well in 5. and stuck pipe to the point that Mike Williams testified to the Joint Investigation Committee in July 2010 that the crew had been calling it the ³Well from Hell´. These measurements were used to make the decision to run pipe to the bottom of the well and to prepare the well for temporary abandonment prior to production. the crew separated the pipe from the assembly and placed a cement cap plug on it and continued to drill a sidetrack hole at 17. By choosing this single cap well design. A stuck pipe can be very dangerous and is indicative of poor well hole conditions. the crew experienced well-control events. 2010. their content. the BP engineers knowingly chose a less safe design and their managers willingly approved the decision. The Deepwater rig was extremely technologically advanced and viewed by many in the oil industry as having superior technology that was foolproof to error. the well reached its total depth of over 18. Research now shows that over the ensuing next three months.000 ton semisubmersible oil rig which was controlled by a satellite guided dynamic positioning system and had a series of thrusters to keep it afloat. Haliburton was the cementing servicing company hired by BP to cement the well and attach the seal assembly to cap off the well until a new rig was connected to . a drill pipe became stuck and could not move in or out of the hole. and dangerous lost circulation zones-sometimes all at once.200 feet and the engineers ran measurements to analyze the subsurface intervals. 2010. On four occasions prior to the blowout. gas kicks. when the Deepwater Horizon rig was delivered to the site. At this point. and the drilling commenced on the well. the crew experienced multiple well problems.067 feet of water and used remotely operated vehicles to guide the preventer to the latching collet on the well head using video feeds. During one of the well-control problems.

build. Such projects can be described as turnaround projects. where every minute is critical. BP was able to design. Additionally. on April 20. The lack of planning was even more evident within the issues of the inadequate risk planning and the execution problems that contributed to the failure of the project.Haliburton supplied the cement used in the sealing of the well which is now known to have been of inferior quality. a disaster comprised of death and monumental environmental damage was poorly addressed in that crisis management planning had not been addressed in the planning for the project as well. the oil and gas industry was unprepared to respond to a deepwater blowout. The research of the Deepwater incident indicates that the plan for the well was changed on multiple occasions and management seemed to be influencing decisions based on financial and schedule implications rather that the risk implications the decisions might present. Both industry and government must build on knowledge acquired during the Deepwater Horizon spill to ensure that such a failure of planning does not recur Planning is even more important during a crisis. Turnaround projects are often planned for months in advance.initial actual oil production. with a well definedset of actions which are constantly monitored. As a result of the failure. BP and its subcontractors did not use their initial planning to develop disaster response or recovery plans. and use new containment technologies. http://www. The crisis to contain the well itself would have been more readily addressed by BP had the company anticipated a blowout as a possible risk and therefore had a crisis management plan which had been communicated to all of its crew Second. while the federal government was able to develop effective oversight capacity. Instead the crisis itself is a First. According to the BP team¶s plan. if the cementing went smoothly. and everyone prepared in advance for everything they need to do. time and lives can be lost when a company is forced to react to a disaster such as the Deepwater. Haliburton could skip a scheduled cement evaluation. Transocean and Haliburton were unsure of which company was in charge at different points of the project. and the federal government was similarly unprepared to provide meaningful supervision. Without this type of planning built into the initial framework. There were numerous occasions in which the crew of the Deepwater which was comprised of employees from BP.pdf Execution Failure . Planning The project plan for the Macondo well should have been one unique to the well itself.oilspillcommission. in a compressed timeframe. scheduled in minutes. the lack of a clear project plan resulted in a poor organizational structure and accountability of the multiple subcontractors involved with the project.

Lastly. as reflected in the actions ofBP personnel on. As a result. officials madea series of decisions that saved BP. cementing. There were several causes for execution failure that were identified after the accident. and Transocean did not adequately identify or address risks ofan accident²not in the well design. the cement that BP and Halliburtonpumped into to the bottom of the well did not seal off hydrocarbons in the well. Transocean.and Halliburton employees regarding the risks associated with decisions being made. or temporary abandonment procedures. so individuals onthe rig frequently made critical decisions without fully appreciating just how essentialthe decisions were to well safety²singly and in combination. the temporary abandonment procedures for the well were finalized at the last minute by BP and required the crew to severely .and offshore and in the actions of BP¶s contractors Research prior to April 20 shows that most crew members felt that safety was not a priority for BP or any of the other contractors on the rig. This lower amount of cement resulted in the well not being sealed with a proper amount of cement weight. the engineers approved a lower volumeof cement to be used in the process. As a result. A September 2009 BP safety audit had produced a 30-page list of 390 items requiring 3.The lack of a clear. Second. Halliburton. and Transocean time and money²butwithout full appreciation of the associated risks.Transocean was the owner and responsible for running the rig. BP¶s safety culture failed on the night of April 20. The decision making process on the rig was excessively compartmentalized. Halliburton¶s owninternal tests showed that the cement mixture was unstable but the company still used the mixture on the Deepwater well. This extensive involvement of these contractors underscored the compelling need for BP to properly communicate a clear decision making process as well as emphasize safety. the cement slurry used in the sealing of the well was poorly designed. This poor safety culture was also evident in the meeting the day before the Deepwater accident in which the Transocean managers discussed with their BP counterparts the backlog of rig maintenance.Their management systems were marked by poor communications among BP. BP was lease owner and operator of the Macondo well and in that capacity had both the overall responsibility for everything that went on including promoting a culture of safety on the rig. First. 2010. Halliburton.545 man-hours of work. unique plan for the Macondo project exacerbated the likelihood of problems during the execution of the drilling of the well. A survey during the second week of March showed that 46 percent of crew members surveyed felt that crewmembers feared reprisals for reporting unsafe situations and 15 percent felt that there were not always enough people available to carry out work safely. Additionally. Deepwater rig had several players involved with the project which resulted in a complex interrelationship amongseveral companies all of whom had different roles and conflicting interpretations of their accountability and responsibilities. The lack of a safety culture may have contributed to the fact that BP. Haliburtonwas a servicing subcontractor who was responsible for cementing the well. This was caused by the engineers changing the plans for the cement job during the effort due to drilling complications that were encountered.

Before the Deepwater accident. which made the chances of another one seem remote. giving more time for intervention to protect the coast. Another problem for appropriate risk assessment was the failure to adequately consider published data on recurring problems in offshore drilling. Risk Management BP failed to analyze the risk possibilities and plan risk mitigation strategies for the Macondo project. largely because its occurrence was considered so unlikely. a BP management culture which stressed cost savings and time savings in decision making. Also. Additionally. many in the oil industry felt that drilling was safer in deep than in shallow waters. These problems occurred rarely and were of minor consequence relative to the number of wells in the world. Additionally.underbalance the well before installing anyadditional barriers to back up the cement job. these issues demonstrated that wells do not perform in a flawless manner and must be assessed for in risk planning.the companies working in the deeper waters were typically the ³big guys´ of the oil industry who could afford to utilize more advanced technologies than the smaller firms working near the coast. Therefore. little attention was devoted to containment of a blown out well in the deepwater. Since deepwater rigs worked farther off the coast. However. failing blowout preventer systems. many believed that these companies were more adept at handling challenging conditions with the more technologically advanced equipment. it would take longer for spilt oil to reach shore. and a lack of a detailed crisis management plan in an industry whose failures can be monumental. working in the deeper depths of the ocean posed a numerous problems after a loss of well control or a blow out due to failure of the blow out preventer. many of the same technologies used for the blow out preventers in shallow water drilling were used in deepwater drilling with little innovation. Risk Management and the Oil Industry Bias The Deepwaterincident has resulted in a dramatic reassessment of the risks associated with offshore drilling. That is despite the fact that containment problems become much more challenging and real-time decisions become more difficult when working in extreme depths of the ocean.Connecting and maintaining blowout preventers . Therefore. there had been no major well blowouts in federal offshore waters since 1970. This lack of risk planning and mitigation can be attributed to several factors including: a bias in the oil industry itself which dismissed the possibility of a disaster as monumental as the Deepwater Horizon. and the drilling of relief wells. This included powerful ³kicks´ of unexpected pressures that sometimes led to a loss of well control. Before April 20.

they may have picked a design which encompassed risk mitigation of several layers which prepared for failure. because of low temperatures and high pressures at the ocean bottom.thousands of feet beneath the surface can only be performed by remote-operating vehicles. 15 workers died in a 2005 explosion at its Texas City. This widespread view among the oil industry was reflected in the culture of the BP management and may have influenced some of appeasement with the lack of planning on the Macondo project. Additionally. Risk Management and Decision Making BP had a tarnished reputation for safety. by not really putting credence into the . Transocean did not adequately train its employees in emergency procedures and kick detection. Halliburton appears to have done little to supervise the work of its key cementing personnel and does not appear to have meaningfully reviewed data that should have prompted it to redesign the Macondo cement slurry. BP changed its plans repeatedly and up to the very last minute. If the engineers would have put more credence into the high risks associated with deep well drilling. BPµs management processes did not do so. BP did not adequately identify or address risks created by last-minute changes to well design and procedures. refinery. there was a major oil spill from a badly corroded BP pipeline in Alaska. and did not inform them of crucial lessons learned from a similar and recent near-miss drilling incident When the BP engineers were faced with making a decision on the well design. Texas. Among other BP accidents. As of April 20. the oil industry itself was overconfident and somewhat negligent in assessing the need for comprehensive and detailed risk management planning that addressed all facets of possibilities of failure within an oil well.´ Page 51 pres book All things considered. ³A 2007 article in Drilling Contractor described how blowout preventer requirements got tougher as drilling went deeper. More generally. In 2006. it often provided inadequate detail and guidance. But management processes must ensure that measures taken to save time and reduce costs do not adversely affect overall risk. Instead. sometimes causing confusion and frustration among BP employees and rig personnel. When BP did send instructions and procedures to rig personnel. the industry disregarded many of the possibilities as impossibilities despite the contrary research. It is common in the offshore oil industry to focus on increasing efficiency to save rig time and associated costs. The author discussed taking advantage of advances in metallurgy to use higher-strength materials in the blowout preventers¶ ram connecting rods or ram-shafts. BP and the Macondo well were almost six weeks behind schedule and more than $58 million over budget. he suggested ³some fundamental paradigm shifts´ were needed across a broad range of blowoutpreventer technologies to deal with deepwater conditions. they chose a design with one preventative layer.

including the Deepwater Horizon. To be in full response capacity. after 87 days. large volumes of oil and gas would be uncontrollably spewed into the environment. until September 19. a number of the mistakes made on the rig can be directly traced to Transocean personnel. because neither was ready for a disaster of this nature in such ocean depths. 2010. http://strategicppm. and the government had to mobilize personnel on the fly. Two days after the explosion. Transocean. and 9 of the 11 men who died on April 20 worked for the company. including inadequate monitoring of the Macondo well for problems during the temporary abandonment procedures and failure to divert the mud and gas away from the rig during the first few minutes of the blowout. BP needed 205 times the number of vessels and 32 times the number of aircraft initially deployed. The government organized a team of scientists and engineers. From April 20. the day the well blew out.wordpress. BP had mobilized a mere 32 vessels and 4 aircraft.possibility of a well blowout. who took a crash course in petroleum engineering and. when the government finally declared it dead. It took until nearly Day 80 before BP was a full response capacity. 2010. Project Crisis Management The effort and resources needed to contain and control the blowout of the Macondo well were unprecedented. stopped the flow of oil into the Gulf of Mexico. were able to provide oversight of BP. BP initially underestimated the scale of the disaster and overestimated their ability to address it. was a major contractor for the Macondo well and is the world¶s largest operator of offshore oil rigs. Transocean personnel made up the largest number of crew members on the rig at the time of the accident. BP had to construct novel . there was little action in the days following the accident that resembled crisis management. Therefore. in combination with the Coast Guard and the Minerals Management Service (MMS). over time. for instance. the engineers and BP management negated risk planning for the possibility of the environmental damage which could be caused by such a sizeable well having a blowout. BP expended enormous resources to develop and deploy new technologies that eventually captured a substantial amount of oil at the wellhead and. In a case of an uncontrolled blowout.

The agency¶s resources did not keep pace with the oil industry¶s expansion into deeper waters and reliance on more demanding technologies. MMS was not familiar with many of the technologies presented by oil companies and as a result it frequently relented to a lower number of required tests including testing on blow out preventers. As a result. Government Response Failure The failure of the US federal government to react to the Deepwater disaster is comprised of two components. BP immediately focused on repairing the failed the blowout preventer for the first ten days after the explosion. Even more troubling. TheMinerals Management Service (MMS) was responsible for approving the disaster plans of the oil companies as well as regulating their actions in the environment with the Environmental Protection Agency. which caused further delay. In reality. It is now evident that MMS failed miserably in the oversight of the offshore oil industry.000 barrels of oil discharge and used identical language to analyze the shoreline impacts under each scenario. The plan identified three different worst-case scenarios that ranged from 28. the BP Oil Spill Response Plan described biological resources nonexistent in the Gulf²including sea lions. BP did have an Oil Spill Response Plan for the Gulf of Mexico applicable to the Macondo well in the MMSfiles. As a result. the government organizations which were tasked to regulate the oil industry for safety compliance were not doing their jobs. At day 31. This resulted in all parties becoming fully aware as of the amount of oil leaking from the well and the response effort of BP and the US government continued to increase.033 to 250. rather than in parallel. However. BP had to develop alternate solutions. Ironically. the government established a public underwater feed and panel of experts to analyze the flow rate. There is little evidence that MMS or BP gave any scrutiny to the contents of the Oil Spill Response Plan submitted. Therefore.000 barrels a day.This understated reaction was driven by the belief that the well was only leaking 5. . BP did not have any alternate solutions prepared and developed in advance to be deployed immediately during a time of crisis. Five of the pages were copied from material on NOAA websites and as a result were not specific to the Gulf of Mexico region. the MMS Regional Office did adhere to the timeline to review and approve oil-spill response plans within 30 days of theirreceipt. and walruses.the well was leaking ten times that amount. The exception to that was the digging of relief wells which take several months to complete. BP did not have planned alternatives to address the incident of a blown out well. The facts indicate that BP didn¶t understand (or didn¶t want to understand) the scale of the project it was involved in.pre-disaster regulatory efforts and post disaster readiness and response preparedness. These solutions were explored sequentially. the MMS Gulf of Mexico Regional Office approved the BP plan without additional analysis. sea otters. when the blowout preventer could not be repaired. This lack of emphasis on the content of the response plan surely contributed to the lack of planning on both the part of the government and BP. First.

The Deepwater incident will continue to serve as an example to project managers everywhere that the basic concepts of project management should never be neglected. An accident. BP¶s public image and credibility. BP market valuation. when the disaster struck the MMS and the US federal government reacted slowly to the event. with serious repercussions. BP learned that adequate project planning and risk management analysis is essential in the event of a project failure. And disruptive events can have unexpected and significant consequences ± in this case. Conclusion Based on the mindset and common practices. anything and everything can change. For the first couple of weeks the government barely reacted as it thought BP was more prepared and capable to deal with the spill. lack of risk management analysis and lack of a crisis management plan in the face of project failure could have resulted in the demise of the company altogether. After a disruptive event. and possibly BP survival. and certainly any disaster. The government continued to work with BP and the other parties to find solutions to killing the well as well as manage the economic impact the disaster was having on the Gulf states. enormous impact on the environment. public perception of both BP and the oil industry itself. MMS was disbanded 19 days into the disaster. Additionally. All in all it can be assessed that the US federal government was even less prepared than BP itself. a crisis management plan for anunplanned disaster should always be in place prior to any possibility of occurrence. the government became more involved with the process. When it became evident that BP was coming up with solutions on a day to day basis.As a result. BP¶s$500 million oil prospect development project became a crisis management project which has cost over$100 billion to date. Many disruptive events can be both predicted and planned for. can be considered as a disruptive event. BP¶s lack of planning. even when you are one of the largest companies in the world. BP will continue to struggle with its public relations image as well as continue to deal with endless lawsuits and environmental and economic claims into the future. many other BP projects and people. . The lessons learned from the Deepwater Horizon project disaster and the BP Oil Spill will continue to influence the regulation of the oil industry into the future. This should be a major element of the risk planning associated with major programs and projects. it was only a matter of time for this kind of accident to occur within the oil industry.

wordpress. 28 May 2011 <http://www. XII Issue VIII .net/tips/2010/aug/Execution-Meltdown. Kuzmeski.pmworldtoday.Deep Water-The Gulf Oil Disaster and the Future of Offshore Drilling: Report to the President.html> Reed.September 2010.Vol. 28 May 2011 <http://www. Green Project Management and the BP Deepwater Horizon Spill. Deepwater Horizon: Lessons from the Recent BP Project Failure and Environmental Disaster in the Gulf of Mexico-Part I. David.pmworldtoday. and the Story Behind the Deepwater Well resident_FINAL. 28 May 2011 <http://www. Rich.28 May 2011 <http://www. Execution Meltdown: Four Key Failures That Sank BP. Rick.pmworldtoday. Pinpointing BP s Pitfalls: Eight Ways to Reconnect After a Disaster PM World Today.August 2010. . 28 May 2011 <http://www. Disaster on the Horizon: High Bob. Vol.oilspillcommission.Bibliography ³BP s Project Management of the Deepwater Disaster StrategicPPM. Vermont: Chelsea Green Publishing Company. PM World Today. Vol. New Jersey: Wiley and Sons. XII Issue VII . 28 May 2011 <http://www. 2011. High Risks.In Too Deep: BP and the Drilling Race That Took it> United States. Maribeth.pdf> . Cavnar. 3 August 2010. PM World Today. 28 May 2011 http://strategicppm. et 2010.html> Lepsinger. Stanley and Alison Fitzgerald.html> Pells.html> Maltzman. PM World Today. XII Issue VII . XII Issue IX.offshore-technology. Summing up Deepwater Horizon National Commission on the BP Deepwater HorizonOil Spill and Offshore Drilling. 7 May 2010.

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