NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY, NOVEMBER 8, 2010

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NATIONAL COMMISSION ON THE BP DEEPWATER HORIZON OIL SPILL AND OFFSHORE DRILLING ---------------------------x FIFTH MEETING, DAY ONE : Transcript of Proceedings : ---------------------------x Monday, November 8, 2010 Grand Hyatt Washington 1000 H Street, NW Washington, DC (202) 582-1234 9:00 a.m.

CONTENTS Call to Order 4 Opening Remarks by Co-Chair Graham 7 Opening Remarks by Co-Chair Reilly 9 Presentation by Chief Counsel Bartlit 13 Presentation by Mr. Sankar 75 Presentation by Mr. Grimsley 116 Presentation by Chief Counsel Bartlit 155 PANEL DISCUSSION 1 Panel Discussion with BP, Transocean and 184 Halliburton: Mark Bly, Executive Vice President of Safety and Operational Risk, BP Bill Ambrose, Director of Special Projects, Transocean John Gisclair, Insite Support Service Coordinator, Halliburton/Sperry Sun Drilling Service Richard F. Vargo, Jr., Gulf of Mexico Region Manager - Cementing, Halliburton

Job No.: 5957 Pages: 1 - 398 Reported by: John L. Harmonson, RPR
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National oil spill commission meeting held before:

SENATOR BOB GRAHAM, CO-CHAIR WILLIAM K. REILLY, CO-CHAIR FRANCES G. BEINECKE, MEMBER DONALD BOESCH, MEMBER TERRY D. GARCIA, MEMBER CHERRY A. MURRAY, MEMBER FRANCES ULMER, MEMBER CHRIS SMITH, Designated Federal Official

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Pursuant to Notice, before John L. Harmonson, Registered Professional Reporter in and for the District of Columbia.

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PROCEEDINGS MR. SMITH: Good morning, everybody, and welcome to this the fifth meeting of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. I am hereby calling this meeting to order. My name is Chris Smith and I am the designated federal official for this Commission. I also serve as the Deputy Assistant Secretary for Oil and Natural Gas for the U.S. Department of Energy. I'll be helping to guide this group through two days of busy hearings today and tomorrow. Before we proceed, I would like to familiarize everybody with the safety procedures for this building. In case of fire or emergency, you'll see the main exits to my left, your right. Simply exit, turn left and go up the escalators and you will see the exits to the street. So that's in case of emergency. I'd also like everybody to turn your phones and BlackBerries to silent or vibrate. The President established this bipartisan

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NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY, NOVEMBER 8, 2010
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commission to examine the root causes of the BP Deep Water Horizon oil disaster and provide recommendations on how we can prevent future accidents offshore and mitigate their impacts should they occur. The President appointed two co-chairs to lead the Commission, former Senator Bob Graham of the state of Florida, and the Honorable William Reilly, who led the Environmental Protection Agency under President George H.W. Bush. The President -- The Commission is rounded out with five other distinguished Americans who are selected because of their extensive scientific, legal and knowledge of offshore operations. They include Frances Beinecke, the president of the Natural Resources Defense Council; Dr. Donald Boesch, president of the University of Maryland, Center for Environmental Science; Terry Garcia, the executive vice president of the National Geographic Society; Dr. Cherry Murray, dean of the Harvard School of Engineering and Applied Sciences; and Fran Ulmer, chancellor of the University of Alaska at Anchorage.

via the website, which is www.oilspillcommission.gov. That, again, is www.oilspillcommission.gov. And at this point I would like to hand the floor over to our two co-chairmen, Senator Bob Graham and the Honorable William Reilly. CO-CHAIR GRAHAM: Thank you very much, Mr. Smith. We appreciate the service that you have provided throughout our hearings. As a commission, we've been charged by the President with helping the American people understand the root causes of the largest oil spill in American history, a disaster that claimed the lives of 11 workers on the Deepwater Horizon rig. We have held four public meetings thus far and numerous site visits. We have heard from the people of the Gulf, learned about regulation of offshore drilling, examined the important issues of response and Gulf restoration, and had our first occasion to deliberate on key findings. Today we turn to an important piece of the puzzle. Our chief counsel, Mr. Fred Bartlit, will give an overview of what he and his team have learned

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This Commission is conducting its work in compliance with the Federal Advisory Committee Act which sets a high standard for openness and transparency. And as such, today's hearing are being broadcast via live video feed and are being held here in this public forum. Before I hand the event over to our two distinguished co-chairs, I would like to provide a quick summary of today's agenda. This morning we will be hearing a presentation by the Commission's chief counsel, Fred Bartlit. Mr. Bartlit will lead a discussion on the ongoing investigation on the causes of the accident and will present some preliminary findings for the Commissioners to consider and deliberate today and in future public sessions. We'll break for lunch at 12:30 and reconvene at 1:30 for a panel discussion with BP, Transocean and Halliburton. There will not be a public comment period today, but there will be one tomorrow afternoon at 5:00 p.m., and any member of the public who wishes to submit a written comment to the Commission may do so

to date about what happened on the rig. I believe this will be the clearest presentation the American people have received to date of what led to this tragedy. Fred Bartlit is the right man for this job. He is widely respected, a tenacious lawyer, has enormous credibility thanks to his unquestioned reputation as a straight-shooter. His experience with this issue is very deep. He led the influential investigation of the last major disaster on an offshore rig, the Piper Alpha explosion in 1988 in the North Sea. The commission that investigated the Columbia Shuttle disaster made a very important point. Complex systems fail in complex ways. There is a natural tendency to focus on one crucial decision or misstep as the cause of disaster. But as they observed, doing so gives a dangerously incomplete picture of what actually happened. We will learn for the next two days the many ways in which this complex system failed. We are not looking for scapegoats, but we do believe we have

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NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY, NOVEMBER 8, 2010
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an obligation to uncover all relevant facts. Only by understanding what happened can we extract the important lessons from the Deepwater Horizon disaster. There is much that we know now. There are still areas of uncertainty and disagreement. These meetings will go a long way in clarifying where we stand. I want to personally thank, and on behalf of the Commission, Mr. Bartlit and his dedicated team for their work so far. I also would like to thank our witnesses today for their cooperation with the Commission. I would now turn the gavel over to co-chair, Mr. Bill Rielly. CO-CHAIR REILLY: Thank you, Bob. Good morning. The disaster in the Gulf undermined public faith in the energy industry, in government regulators, and even our ability as a nation to respond to crises. As a commission, it is our hope that a thorough and rigorous accounting, combined with

have an obligation to ensure that such a set of conditions offshore must be subject to a safety culture that is protective of lives, livelihoods and the environment. Extracting the energy resources to fuel our cars, heat our homes, power our industry and light our buildings can be dangerous. Our reliance as a nation on fossil fuels will continue for some time. And the bulk of new oil and gas discoveries lie not on land but under the water. The risks taken by the men and women working in energy exploration benefit all Americans. We owe it to those who manage and accept those risks to ensure that their working environment is as safe as possible. Over the next two days we will learn from Fred Bartlit and Sean Grimsley and Sam Sankar about what went wrong on the Deepwater Horizon. This detailed account of what led to the loss of 11 lives and the largest oil spill in American history will guide our thinking as we move to final deliberations on findings and recommendations.

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constructive suggestions for reform, can help restore public trust. Our prior meetings have confirmed that investigations -- that investments in oversight, safety and response capabilities failed to keep pace with the rapid move into deep water. It appears that at least in some quarters that business and regulatory culture exhibited inattention and a false sense of security. Over these next two days we will be looking in detail at what happened on the rig. Our investigative staff has uncovered a wealth of specific information that greatly enhances our understanding of the factors that led to the blowout. One question I think we all have and have had from the beginning is to what extent this was just a unique set of circumstances unlikely to be repeated, or was it indicative of something larger. In other disasters, we find recurring themes of missed warning signals, information silos, and complacency. Without prejudging our findings, no one can dispute that industry and government together

So today we are fulfilling the first of the fundamental tasks that -- and most fundamental tasks that the President gave to us in the executive order establishing this Commission, and that is determine the cause, find out what happened. I will be most interested in the lessons we may learn today that help inform the Commission's recommendations for the future for how we create policies that prevent something like this from ever happening again. I want to remind all of you here that the information that you will be exposed to today that was gathered by our investigative team was achieved without the power to subpoena witnesses or evidence. I compliment the companies whose cooperation made this possible. I compliment Fred Bartlit whose reputation earned the kind of trust and cooperation that this displays. And to those few senators who blocked this Commission from receiving subpoena power, let me just say that I hope you are pleasantly surprised by what we have learned and not disappointed.

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Because it will save us a lot of time in writing up our report if we can put to side issues where there is disagreement and we can let the Commission know what the areas of disagreement are that they might need to focus on. Sam Sankar will be taking part of it.COM . Then this afternoon we will have witnesses from Transocean. We're trying to walk a fine line between looking at root cause and not getting into the legal issues.PLANETDEPOS. Exxon is the gold standard of safety in offshore drilling. and then we're privileged to have the CEOs of Shell and Exxon. I will turn to our chief counsel. Halliburton and BP up here. it's easy to forget why we're here. they've shown that she was smart in picking them. This is not a cross-examination. Bill. My partner Sean Grimsley will be taking part of it. Fred Bartlit.3767 | WWW. Because nobody wants to hear one person talk for three hours. Macondo. MR. what we are going to accomplish today and how we are going to go about it. But our goal is to look at cause. and I'm going to ask today for all of us -. We're here because 11 men died. what are we going to accomplish? We very carefully hewed to the presidential mandate. We are not making any legal judgments as to liability. Then we will inform everyone at the end of the morning of our tentative views on root cause. We want to be sure we get it right. But first it's very easy when you're enmeshed in these technical engineering and scientific details against a background of huge financial exposure. It's not a trial.360 feet down at the bottom of the Macondo well. And I've asked prior to today. So what I would like to do is start by having a few moments of silence where we talk for three hours. they changed the safety regime in the Gulf of Mexico offshore drilling.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY." And Mr. We are not assigning blame.the parties have these tentative conclusions. 2010 4 (Pages 13 to 16) 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 With that. and maybe we'll accidentally step across the line. some regulators. people said to us informally.we're all lawyers most of us -. It's just -. and maybe one person doesn't want to other ways. The more information we can get. BARTLIT: Now. They will be invited to comment on any of our tentative conclusions.to put aside our natural desire to be advocates and keep in mind these brave. They are tentative. And they were picked back as young men to be the best and the brightest. perhaps. the better.433. Everybody will get a copy. It's a hard thing to do. And keep in mind that we will honor them if we can get to the root cause without a lot of bickering and self-serving statements. and we -.As a matter of human interest. I want to start by setting the stage. and we will ask questions. We'll be trying to find out what the areas of differences are and what the areas of agreement are. Tomorrow there will be some panels of technical experts on deepwater drilling. and we might then have to suggest 14 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 each reflect on these men that are gone now. A hundred years from now we want the world to say. we invite that.) MR. Everywhere we went in the industry. And if any of them or any parties want to file written elaborations on these issues within five days. BARTLIT: Thank you. Tillerson is going to come here and tell us how -how he achieved that position. (A moment of silence. hard-working men that died on the rig that day. and we each promise their families that we will honor them by getting to the root cause and being sure this never happens again. not liability. of resolving some of these issues.the other -. We are not considering negligence or gross negligence or any legal issues at all. "Fred. PLANET DEPOS 888. NOVEMBER 8. we'll split it up. We'll first explain to the public what happened 18. it's quite interesting that these two young men clerked together for the legendary United States Supreme Court Justice Sandra Day O'Connor. I'll be taking part of it. And working on this Commission. which is examine the facts and circumstances surrounding the root cause of the blowout.

And I've worked with -. The report they did. They're not getting paid. to be sure that our observations were consistent with custom and practice in the deepwater drilling business.3767 | WWW. So let's go.In 50 years as a trial lawyer. Transocean had to put aside the normal tendency of a trial lawyer to stonewall everything until the last -. but it's a contribution to this hearing. and we must get it right to honor the men that died that night." And throughout this thing our purpose has been to be totally transparent. This is what we're thinking. and a chance to respond. We showed the presentation to some of the top deepwater drilling experts in major oil companies not involved in this litigation to be sure we got it right. "Fred. We don't have any money on this Commission. I particularly want to thank BP for the report they did. Now we'll start -.433. We also showed this presentation last week to Transocean. the presentation you will see today has been vetted as thoroughly as possible. The last thing I want to say is that as we met with all the parties in the last week. told their counsel. and we're -we thank you for doing it. We must get it right. And I want to thank from BP John Hickey and Jamie Gorelick. and we thank you guys very much. Halliburton.I'll begin the run-through. And when we get to the cement issues. When we get to the negative test and the temporary abandonment issues. There is a lot of 20 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 probably a half million dollars of graphics that basically were done for free by Megan and Bill. from Schlumberger.PLANETDEPOS. If we're wrong. their counsel. They have given us an unprecedented degree of cooperation in situations where their clients had serious issues to face. As Bill observed. Everybody has pitched in.until you finally have to go to court and cooperate with us. "We must be doing something right because everybody hates me. And I thank you guys again. We don't agree with everything. They've been willing to meet with us. and we couldn't be where we are without it. the parties and counsel have kept in mind that purpose and often. from Dril-Quip. Megan O'Leary and Bill Lane. every time we had a meeting. and Bill is one of the top graphics artists in America. I want to thank two other agencies. you're not getting it right." Okay. You're going to see today what is 18 chance to prepare. Just a -. 2010 5 (Pages 17 to 20) 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I want to thank everybody for their cooperation here.I'll -. So their team was led by a real engineer. sublimated what might be the normal reaction of trial lawyers to an investigation like this.COM . we've had cooperation from Chevron. Halliburton and Sysco.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. As you'll see. And to a degree that surprised me. as the people here will know and some of them will be smiling. we don't have subpoena power. from Shell. and I say to you guys. you're being too nice to somebody else. People ought to have a chance to know what is going to happen. Finally. Megan unusually has a master's degree in engineering. Paul Ortiz. They've leveled with us and cooperated. because everybody was told in advance. So I told my guys.We're all familiar with it. which some people in the newspaper said was self-serving. Sysco Corporation volunteered to send us one of their top litigators.during the meeting. And I want to thank Trial Graphics. from Exxon." Everybody said that when they -. It's not only the parties that have cooperated. And Don Godwin for Halliburton. Sam Sankar will take over. There is no pride of authorship. "I don't believe in surprises. The entire offshore drilling industry has cooperated. NOVEMBER 8. people said. They blew me away. from parties that make this equipment. to work with us on our Commission gratis. a extremely valuable work that was done there that cost BP a lot of money. I believe. I want to thank Rachel Clingman for Transocean. tell us. but so everybody PLANET DEPOS 888. we'll first talk about the rig itself. It's a very unusual sacrifice they made. You're treating us harshly. They've been up all night. and the work product was done by one of the best graphics people. Now. Sean Grimsley will take over. I've worked with the best graphics teams in America. Sysco is paying the cost of it. we agree with about 90 percent of it. And there were sometimes some hash words. That means that to a certain extent BP.

and that -. Pay sands is where oil and gas is. The BP people.certain data which was saved. They have top engineers. here is Houston. A Halliburton unit called Sperry Sun captured data. the bottom of the well. they can't keep track of where they are and that kind of thing. subsea manifolds. And finally. It's in the Mississippi Canyon. what we call the mudline. In the oil business they call it pay because that's where the payoff for drilling the well is.3767 | WWW. here is the Deepwater Horizon. Schlumberger was on the well the day of the explosion to do certain logging.The work down there at the bottom is done by these robots. the temporary abandonment issues. NOVEMBER 8.they call it the town or Houston or shoreside -. Cameron made the blowout preventer. in 50 years of trying cases. If gas comes to the surface and gets on the rig. When gas gets in the well. 10. and they've helped us interpret what happened with that equipment. So as we go through these terms that a lot of us have never heard before.000 feet. does cementing. in the riser. the work of geologists and the like.000 feet. that's bad. Now. they know where it was and what was unique about it. and what we'll be talking about. that's called a kick. The Gulf last year -. and then they went down 13.who was on the rig PLANET DEPOS 888. Transocean was the owner and operator of the rig.433.000 feet into the formation underneath the seabed. the blowout preventer.360 feet are the hydrocarbons they were drilling for that had been Sperry Sun unit that sent shoreside -. A huge industry here.and you'll see -. So down here 18. Of course.COM . Transocean and Halliburton. this is where the pay sands are. I've learned when people hear names they lose track of them. Here's the Macondo well. the famous centralizers you've heard about were made by Weatherford.PLANETDEPOS. Halliburton. Now. M-I SWACO is a Schlumberger company that handled the drilling mud.we'll have big blowups and animations showing what happened down there.000 feet.but this cement down here is where the leak occurred. you'll see gas expands rapidly as it comes to the surface. some recent questions raised about cement. and then the Macondo timeline. Here is the rig. This cement you see here -.you'll see enough cement today you'll be sick of it -. Here is the famous BOP.We use the term "hydrocarbons.The Gulf last year. It's actually a canyon that was formed as the Mississippi River came out eons ago.000 feet of water. 2010 6 (Pages 21 to 24) 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 is on the same page. You will hear a lot of names. Oceaneering -. They've been very cooperative. deepwater. Most people aren't aware there is a very dense network of wells. And there's some interesting issues about that. The data that was on the rig that night went down with the rig. Water depths. And now we go down from the seabed another 13. and we'll be spending -. We'll then talk about what it's like to drill offshore wells generally. here's New Orleans. Kick means that -. The water depth here was 5. Okay. a whole established earlier by seismic work. Here is the 5.we'll discuss that. What happened occurred right down here. And then we have the -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Okay.sometimes you'll see people call that in town -. Then we'll come to cement issues. pipelines. Here is the Gulf of Mexico. but Halliburton had a 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 community of helicopters. They have a lot of rigs all over the world. here's Tampa. a mile down. I'll be sure to explain them. kick detection. We all know BP. So what we've done is this: We have a chart of the onshore -. Oceaneering did it. among other things.the onshore organizational chart." Hydrocarbons are gas and oil. there were $170 billion worth of oil and gas produced. And then we'll talk about the blowout itself. offshore vessels. You'll learn more about what drilling mud is and what the purpose of it is. Dril-Quip made wellhead and casing hangers. Generally speaking. we're talking about here begins about a thousand feet. You'll see pictures of Dril-Quip equipment.

It can actually sail away and go to the next location. Almost as long as a football field in two ways.3767 | WWW.360. Here is the rotary. This business has been around a long time and there are terms -. And we'll hear a lot more about drilling mud in a moment. We won't talk about all these people today. This is the Deepwater Horizon rig. Giant derricks on top that can handle 400 tons or more. This is the mudlogger shack. This is a mile down. Now. you can separate it here. But you get an idea. To make it easier to keep track. The drill shack where the drillers are is pretty close. Of course. It's a big thing and it's heavy. some by cables. and pipeline shoreside. Now we're going to learn a little bit about this rig generally. When you're on it. and then there are computers onboard that operate these big thrusters underneath. Pipes stored. There are some rigs in the world that are anchored by 26 28 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 drill down to 18 -. The first place. The mud pits are important because when the drilling mud is circulated it's stored in the mud pits. it's not anchored. PLANET DEPOS 888. We tend to put the depth up here. natural gas entrained. All right. because this thing is not towed around. It floats. we've put around the room these big charts with all these names on it. and it's been called the moon pool ever since.433.Years ago somebody looked down there at night and saw a reflection of the moon coming up. It has a captain just like any ship has.this rig is a ship. get rid of the gas up here and put the mud in the mud pits. Halliburton personnel. but we've done this so that everybody can follow the names and follow what's going on. It's kept on station by these thrusters. It's 32 degrees. Now we're going down the riser to the seabed. divert oil and gas overboard so maybe it doesn't end up on the rig. caught up in mud. you're not really conscious that you're being on a ship. we'll also explain who the players are and who they work for. It's a drilling rig. it's taken from the mud pits. the Transocean team operating the rig. And these thrusters keep the Deepwater Horizon over the well. Helicopter pad. The moon pool. and of course that's one of the reasons the Coast Guard has been involved in this. At the breaks you can walk up and look at it and get a feel for it. They ended up going down to 18.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. It gets positioning signals from a satellite. it's okay. The BP well-site leaders. Now we're getting to where the action happened. under some circumstances. High as a 40-story. It receives the positioning signals. But the technology is amazing. the gas came up and the explosion started. if you have gas. if you get confused what's going on. A lot of people don't know there are production rigs that stay on station for a long time and have a lot of dry gas separators and things on board. It's -We've had to artificially illuminate it here. The -. to walk up and take a look at this. as we go through this. You'll hear about the diverters which tension legs.COM .they originally were going to go down to 20. Okay. It's important that everybody understands what's going on. You can't see anything. This was a drilling rig that was going to can. This is one of the lower decks. And when you hear the mud came up. And the mud-gas separator pipe. And as far as I'm concerned. It's not anchored. They've got all the controls and they sit in chairs. This is the riser that goes down through the moon pool. they work long shifts. This is where the well is drilled. which is Halliburton.this is the deck and then there's -there's not much else. this is the drill floor. NOVEMBER 8. This rig is more complicated than it initially looks. it's moved around in the mud pits and that sort of thing. It's like the captain of a 747. 12-hour shifts. It's easier to understand a rig when you do it in this sort of a cartoon fashion. When you're down there it is black dark.000 feet. a lot of people look at this and they think that the -.PLANETDEPOS. that's where it is. and you'll see pictures from the inside of the drill shack of the people sitting there. monitoring all this information. 2010 7 (Pages 25 to 28) 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that night.

NOVEMBER 8. It closes the area around the drill pipe. These rams weigh maybe one -. It's not just an emergency device. As we say.i. to pull up the drilling equipment takes 18 hours. You'll hear about the annular preventers. another two and a half miles or so. There is a six-foot man. This is the BOP.You'll hear more about it. because you'll hear a lot about it. this black deal here is like a giant 18-wheeler truck tire made out of the hardest rubber you've ever seen in your life. These arms go up and it squeezes this giant hard rubber tire into the annulus -. very hardened steel.we'll first show you how the annular preventer operates. The drill string comes down through it. of course.360 feet the temperatures are as high as 265 degrees Fahrenheit. And if anybody has anything like that. Here is a BOP.This is the seabed. the blowout preventer. And the blowout preventer sits at the wellhead on the sea bottom. You'll see them operate in a moment. The blowout preventer sits on the wellhead.It won't surprise you to learn that the out-of-pocket all-in costs to somebody like BP of running one of these rigs is about a million and a half dollars a day.s. I'll say it again at the end. It weighs about 400 tons. many hours. And you'll hear a lot about Okay. I'll talk more about that later. The BOP travels with the rig. put on the new tools.that's a cost. Casing string. Now. The variable bore ram. sometimes called the mudline. that -.000 p. To date we have not seen a single instance where a human being made a conscious decision to favor dollars over safety. The blind shear ram. and then the drilling goes down here through the sands through the formation. The blind shear ram is the last resort in shutting down the well in an emergency. the drill pipe. and we're going down another 13. go down for many. 2010 8 (Pages 29 to 32) 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 The BOPs -. of course. And. welcome it. you pressure up these deals. actually slices through the pipe.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. It's a stack of valves designed to shut down the well in emergencies but also used for different tests and functions during the drilling of the well. Now. Let's look at the variable bore pipe ram. These are the control pods you read about in the papers.COM .It's 50 feet high. do the work. down at 18. which is -. Again. Now we're going to talk about drilling offshore wells. We haven't seen it. The pipe rams close on the pipe. The -. closes off the annulus and fits tightly around the drill pipe and closes it off. but it's important you keep that in your mind as we go. Hydraulic pressure comes up here. So if you're going to -. because there are a lot of unique technologies and truly brilliant engineering involved in these endeavors. it takes a lot of time. Witnesses is one of the most important issues. Okay. The pressures are as high as 14.433.PLANETDEPOS. So we're already down a mile. The -. This is the Horizon's BOP. of 30 what happened down here. Now we'll show you -. It costs about $25 million. as you will see.When you get all the way down there. I'm going to say something now. this is where the action was. we. it's a stack of giant valves that can open and close on the drill pipe. 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 course.you'll hear more about the annulus -and keeps any hydrocarbons or pressure or anything from coming up the annulus outside the drill pipe. So this is what we'll call the annulus PLANET DEPOS 888. then back down again. if you're taking four or five days running drill strings up and down to do work.000 feet. again. Here is the pay sands. We'll talk about it and explain some of these functions so when we get down towards the end -. There's been a lot said about it. So when you do work down there.if you want to do something down there. We have not found a situation where we can say a man had a choice between safety and dollars and put his money on dollars.one blind shear ram may weigh 1400 pounds. It's almost as hard as a Bakelite plastic. It does not close the drill pipe. another 18 hours up and. it takes 18 hours to pull up the drill string.3767 | WWW. Okay. And when you want to close the annular preventer. When it comes up. Now we'll go down. And we'll show how they operate now.

And here is the blind shear ram. it cuts through the drill pipe and no hydrocarbons. as you'll see. This is very important. you may be surprised to know that we're not going to talk much about the BOP. And you'll hear that the -. NOVEMBER 8.3767 | WWW. It's nothing like that at all. Okay. was it energized. Drilling mud is used to take the cuttings from the drill bit and get them off the bottom. and about 40 seconds later it's cut through the drill pipe and the well is shut down in that regard.or 3-million-dollar contract. The red arrows will always be the weight of the drilling mud. and they're going to analyze this thing from soup to nuts. It goes over a screen. So we're not going to talk about the BOP simply because it's not productive.COM . all of these issues. because the drilling mud is designed so that the weight of the drilling mud counterbalances the pressure of the fluid. The brown color here is drilling mud. We'll be talking about when it's to be triggered and who is supposed to do what. But it's important to understand that the pay sands. If it's too light.433. but it's not. It's like a hard sandstone that you could stand on. As you get into the pores here. what happened.people think that there's these pools of oil and gas down there. And we'll see that.PLANETDEPOS. And one of the key issues we'll be talking about again and again is the tension between keeping the drill mud at exactly the right weight. Now we're talking generically about drilling a deepwater well. the green oil and gas comes into the well. and it's pretty hard rock. When you trigger it. and they keep the drilling mud at a weight such that it's heavy enough to keep the green oil and gas under pressure from getting into the well bore. if it didn't work. It gets heavier than what's called the fractured gradient. There is a big red button behind him. The drilling mud also serves to keep the fluid. I'll stop it. Here's the drill bit. At this height it might be seawater pressure.People continually monitor these pressures. The mud goes through and the cuttings stay so you don't get the bottom of the well just full of all these cuttings. oil and gas. and you drill down and you stick a straw in it and you suck it up. the drilling 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the BOP. The cuttings are going PLANET DEPOS 888. 2010 9 (Pages 33 to 36) 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 there. And it's a 2. it can actually fracture the sides of the well. what a lot of people don't understand is people -. although you've heard a lot about the BOP. why. and the pores have oil and gas in them under extremely high pressure. So when you come down to one of these layers of hydrocarbons. Now. This is the last resort. getting it too heavy and getting -. the green the pressure of the fluid. And the reason for that is this: The government has retained a Norwegian engineering company to analyze the BOP. Drilling mud is maybe 14 and a half pounds per gallon.Here comes the drill. and the rock is full of pores. Now. He can push that big red button and that energizes the blind shear ram. So that as you're drilling down here. Some hoped it would be done by now. hopefully. The mud comes to the top.the drilling -the driller sits there at his chair. under pressure in the reservoirs at bay. oil or gas or anything can come up the drill pipe. it would be very premature for us to speculate when in some reasonable period of time we will know. If it's too heavy. did it work. We're going down. It's not done yet. Down here these pay zones are pores in rock. You'll see that the weight can change. but we will not be talking about any failure modes in the BOP today. the pay area we're drilling for is rock. Here's the pressure in the formation. actual rock with pores in it that contain this fluid under pressure.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Here's the previous casing. And for us to speculate on what happened to you can -. you're drilling down to get to the pay zones so that mud -.or getting it too light. the gas and oil. you can start getting oil and gas out.

and changing the mud. this is key. The pressure is here. The brown is the drilling mud. you can lose cement. As you go deeper. And there is a mud engineer at the surface. While you're drilling. And as they drill down here. And as you will see in a minute. it would be really bad to get oil and gas in the well. And you'll see -.every time you see a picture of a well. So you don't want to break the formation unavoidably.This isn't the bottom of the well. if the mud pressure keeps getting higher and higher and higher." So what we do is we -. the mud pressure which is needed -. obviously. cement. down comes the cement.the mud which is needed down here to counteract the pore pressure could be so high up here that it cracked the formation. then you run cement down the center. casing. The mud weight is bigger.360 feet up they'll say. That's one of the keys.3767 | WWW. It can take a couple of days to do some of these things. it's what is called a kick. which is here. there's a kick. So the weight. Remember.PLANETDEPOS. cement. the pressure's changed. It always turns the corner and goes up. The cement goes to the then bottom of the well. this is important. It keeps getting smaller and smaller as we go down. which was a Schlumberger sub. When you're setting casings in the bottom it can take 18 hours to bring up the drill pipe. to get oil and gas in the well at the wrong time. That is one of the secrets of deepwater drilling. You do not want. Mud weight is bigger. Up comes the drill string. turns the corner and goes up the side. the pore pressure gets higher and higher and higher.if the pressure starts coming in here. down comes the casing. Here is a place where it's coming very close to the pore pressure but gets -. Now. "Uh-oh. you'll see they're continually changing the mud weight to stay in between the green line and the blue line. bring up the casing tool. casing. Okay. So they're going to have to -. it's like a telescope. the easier it is to keep the hydrocarbons from getting into the well. 2010 10 (Pages 37 to 40) 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 39 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 up.they have to drill this out when they -. Now. NOVEMBER 8. there is something I want to explain right now. And the mud engineers continually change the weight of the mud as they go down and get down. it doesn't take so long. This is the fracture gradient. The fracture gradient is the amount of pressure it will take to put a hole in the formation. it'll change everything all the way up to the top and 18. continually fine-tuning it. You'll see casing. The reason for that is that as you get down here and the pressure is higher.when they get this casing set. It gets bigger. bad things can 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 information on the formation. You'll see the -. Casing is just a circular piece of steel that comes down. And after you run the casing.and when -when you get to a place where you're challenging these two. They're under very high pressure. This is hard for a lot of people to grasp PLANET DEPOS 888. Up on the surface the mud engineer is doing this. Now. put the drill pipe back down. The pressure of the mud has to overbalance the pressure in the formation. mixing the mud so it's exactly the right weight to stave it so it keeps out the green pressure and doesn't break through the blue formation. You can lose some of your drilling mud. Here it was somebody called M-I SWACO. If it does get in the well. the heavier the mud is.you'll notice when you look at these pictures of a well. you'll see these from the top on happen. so the casing is thoroughly cemented in.COM . periodically you run a casing.we continually increase the mud weight as the pressure gets bigger. to set one of these casings at the surface. It gets bigger. cement. Here's the pore pressure.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. So as you get deeper and the mud weight gets heavier and heavier. If you put a hole in the formation or crack it. you're going to keep -. and it can be sensed at the top because if -. Remember that the hydrocarbons are in pores in the rock. that's when you put in another casing. keep the red mud in between these two lines as you go down.433. You're going to have to keep drilling this. put on a casing.

But it's not easy to get cement all the way around here in this small little annulus over the height of a hundred-story building. of course. When you imagine somebody lowering from a mile up a 400-ton piece of equipment and putting it in place like that. please.We have to distort this in order to make our points. At the bottom this might be a thousand feet of cement. Of course the drill string going through the well. I told you that in all these interim steps as you go down.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Now.at the very top you don't need any drilling mud to balance the pressure because the pressures aren't that great. So remember. Sean will just take this up and down the aisle so everybody can see it.3767 | WWW. this is a half inch to an inch. as I pointed out. Once the BOP is on. (Laugher) Okay. This is the casing in the center. And once we get PLANET DEPOS 888. I got tired of watching it go at the right speed so.cut through the drill string. That's as high as a hundred-story building. So when you start drilling down. you can shut off -. These are called tool joints. And you'll hear if hydrocarbons get in the riser. when you look at the annulus here. there's no gaps. and you can -. Here's the riser. Stop it. Just as a matter of interest. but as Sean showed you. this -. it's not as rocky as it is. It's a very small space. You simply send water through the drill pipe and jet it out. This is up the center of the casing. you don't have to drill it all the way down. the drill pipe.000 feet up from the BOP to the rig.you can close the annulus.the annulus is very small and 44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the Commissioners at length. But it has -. Okay. coming down through the moon pool. you have to vent the water out through here. Well. But we brought this out here. But this is pretty much to scale. completely shut the well down. as you'll see. and Sean Grimsley will take this around and show people. you can just jet out.you have to get the cement in the annulus. we've heard the term "riser. Wellhead. This area here is called the annulus. We've gone -. it looks like it's a big wide thing and it's just pumping up cement. Up we go.PLANETDEPOS.433. It means somehow they've gotten past the blowout preventer. Set the casing. that's bad. Now we're lowering this 400-ton BOP from the rig to put it on top of the wellhead. It doesn't go this fast. because that's above the BOP. then you have to drill out the cement you just laid. The Commissioners are.We've shown 42 contain the mud. they're in the riser. and we have to pump cement. And as we'll see. this is the formation. This is maybe 36 inches. This is -. It's interesting that when you first start at the surface drilling a well. to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 there's some skill involved and a mild -.COM . The gaps are called channels. So if you can imagine this. you imagine the engineering talent that's involved in this deepwater drilling. aware of this. It is an art to be sure that all of this is filled with cement all the way around. you cement around. We'll talk about that later. but you need to drill that out so you can continue drilling down through the formation. 2010 11 (Pages 41 to 44) 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 right away." It's an important term. into this small area. as we'll see. But the annulus is very small. the drill pipe is like this and then there is a big riser around it that goes 5. It looks pretty big. if it's operating properly. Now we're going to talk a little more about drilling a deepwater well. Before you -. The rig up here. And when you look at these. NOVEMBER 8. now we've cemented in another casing. Always please remember. But later on you need some tube to go around the actual drilling pipe. of course.. the formation is not as hard as it is. You can just jet out the formation with water. once they get in the riser they come up very fast and they're very dangerous.at the -. You want to keep the cement in the annulus. This is called the annulus. Okay.a modicum of unpredictability in getting the cement and the annulus all around the well.you can actually cut -. And then..

it means you've got a problem down there.let's back up one.as we call this the primary cement job at the bottom. the mud is returned to the surface. They started the cement job in I think the evening or the afternoon of April 19th. Marianas was damaged and they had to take it off and bring in Deepwater Horizon. Here's the cement work at the bottom. Remember. Hydrocarbons are somewhere down there and there's an indication at the surface that pressure shows you that there's gas getting in. It's not big. And there were lost returns here. difficult drilling conditions. we've -. And you've seen how generally cement is used. In other words. PLANET DEPOS 888. So we'll now learn what lost returns are. And that the cement here has to isolate the hydrocarbon zone.What we're going to do now is to show you -. and the cuttings and the used mud will come up here. we've talked to everybody we can find about the Gulf of Mexico. I told you the problem is at the bottom. NOVEMBER 8. is very important.PLANETDEPOS. And on April 3 they get severe lost returns. The cement job has to keep the hydrocarbons in those pores cemented off from the well bores so they don't come up the well. That's called lost returns. We can now see the whole well.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Circulation of the mud is very important. Believe it or not. There were difficult drilling conditions here. Here they had a kick. what did they know? No. and many say that you frequently encounter difficult drilling conditions. here is the Macondo timeline. We'll make it again and again.down the center of the drill pipe and then comes up on the riser on the outside. it will be cleaned. what was known about the situation in that well. This is 17 days before the blowout. you put it in and it circulates. the day before the blowout. This is one of the most vertical wells people had seen. please -. So they can change the angle of the cement job -. That's called a bypass. This. it's tiny. and the mud circulates on the outside of the -. When they started the -. And lost returns can be important.we've talked about the rig generally. Now. And this is the annulus. 2010 12 (Pages 45 to 48) 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 down a certain depth. 1. Now.COM . And if the hydro -. We now know what a kick is. it wasn't at an angle or anything like that. they can come down and they can just go off on an angle and keep drilling. the well is very straight. I'll make a point that's very important. It's called zonal isolation.at the time of the key cement job. They finished a little after midnight on the day of the blowout. they can get into the well and come up to the surface. So what they did is they're able to -believe it or not. You'll see more about it. again. and then it will come back down and they just continue circulating it. move it over. But the mud will come down through here.000 feet and Hurricane Ida came along. Deepwater Horizon drilling began February. So the 46 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Okay. drilling. And you ought to get as much mud up at the top as you put in the well. Macondo was being drilled by a different Transocean rig called the Marianas. In other words.433. even after they bypass.if the cement here does not isolate the hydrocarbons in here. There are different points of view. Now we're going to talk about the timeline of Macondo. they'll drill at the bottom. If you're not getting up as much as you should be. but this is a closed system. you've seen how the casing is laid and that sort of thing. avoid the problem and start drilling again. Now. the drill string is in the center of the riser. Some say not this difficult. We've talked about the science of drilling offshore. It was about 9.at the time they started the cement job. we're back to where we started a little bit. So we're going to go through a number of things that were known. And if you begin losing mud. My only -.3767 | WWW. Originally. That means it's straight up and down. The formation that they were trying to produce oil and gas from was here. What they had to do here is the kick caused a certain piece of equipment to actually get stuck in the pipe. you better stop and check it out.

So don't assume when we say that the -that there was a narrow fracture gradient here. looking at photographs of this equipment. And as you can see. called a long string.433. they're good at keeping the mud where it ought to be and doing these things. It doesn't have enough barriers. is not an easy thing to do. And Sam will explain more where the cement is. The leak came up the center through what's called the shoe. and again I'll say this as often as I can.into one of these areas. Halliburton and BP.this is the fracture -pore pressure fracture gradient at Macondo. including I think BP and Transocean. this is -." People drill that all the You can't see the cement down there at all. two of them. "Oh. They had to isolate the hydrocarbon zone. So. but not so high that it causes a problem calling -. Now. from here to the Iwo Jima Memorial or something like that. this is -this is not at all abnormal. I told you. says it was a difficult well. the cement is placed high enough to block off the zone. And Sam will talk more about this. But as we see it now. it has implications for cement placement. Here's the difference. people look at things and say. and some of these things need to be said twice. "Oh. Here is another choice which is a liner. and it works. every time you get the mud over in this -. I mean. you put a casing in. so that a leak could go all the way up here into the wellhead. That's 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 time. and people deal with it all the time because of the engineering talent that they have. Mr. Each one of the things I'm showing you.closing up the annulus and causing a heating problem. we are ready to listen to anybody from any source that knows something we don't know. Considering the narrow pore pressure and fracture gradient in that well. As Sam will explain.This is the actual Macondo pore pressure fracture gradiant. They were having somewhat of a hard time keeping the mud in between where it had to be.COM . You want to be sure. And you keep going down. Transocean driller. It happens. But the cement placement is critical. and many experts have said that nobody in their right mind would use a long string. you've got to have the cement between the hydrocarbons and the well so it doesn't leak into the well. Okay? Now." It's not terrible. my God.the long string has implications. NOVEMBER 8. there's various degrees of frequency.PLANETDEPOS.the design they did use. Now. And this is why you get this typical kind of a telescope-looking deal. that they had a challenge in getting a good cement job because of this narrow fracture gradient. It has implications for whether the cement can get contaminated. Burgess. my God. You have to sense by secondary measures like pressures. So people knew when they were doing this. And I'm going to say some things. It was difficult. and they're supposed to drill it. This is the well -. obviously. Some have said that the long string design does not have a barrier here. So that the -. PLANET DEPOS 888. This is the BP report. Again. which Sam will talk about. And you can see here the mud is getting very close to the pore pressure from time and time and time again. You'll notice that there is a long string all the way from the bottom. But that's what these guys do. I will show you the proof I think all of us now believe. that the leak did not come up the annulus. 2010 13 (Pages 49 to 52) 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 None of these -. we've heard a lot about the long string. The liner would only go to here and would be tied back here. you put a casing in. But talking to the designers of the equipment. all the way up here into the wellhead. as we go down. Remember. Wouldn't say worse than others. So there's no doubt here that the conditions they were facing created a challenge. The mud gets closer here. that's terrible. The press has said again and again. the things I'm showing you. that's terrible. The annulus is open.3767 | WWW.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Placing cement when you're up three and a half miles above. planning the cement job to achieve effective placement and zonal isolation was a challenge.

15. it became a well integrity and safety issue. That's converting the float equipment. And let's focus in on the float valves at the top. had forced our hand. This was something like a 60-barrel cement job. And this means if you -. So they saw conditions. you're -. Now." That's another one of these oil business terms. 2010 14 (Pages 53 to 56) 53 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 which I will show you. right up through here into the riser. 2. Okay. The reamer shoe at the bottom that leads the long string down. Now. You have to be aware that surprises in the reservoir can cause you to make changes. one-way valves -. You want to get full returns. our view is that the leak did not come up this annulus but came right up the center.PLANETDEPOS. Let's look at it. Now. You want to have as much mud coming down -. this is lower. BARTLIT: It's nice to have Sandra Day O'Connor clerks to correct you when you screw it up. If you're at the surface now.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. You're now losing drilling mud. it can go into the formation.This is a valve that has to be PLANET DEPOS 888. Surprises like that can affect what happens later. caused probably by the formation.360.Pull on this. And it was a relatively low volume cement job. And Sam will explain the implications that the well design has for cement jobs. not bad. you're going to hear the term "shoe track. they faced a tough decision.one thing that can happen is you've cracked the formation and the mud is going into the formation.3767 | WWW. Here's the bottom of the well.000 feet. This is a BP employee that says drilling -. And here is something called the float valves up in here. But it's good. Having a 14. gosh.000. So BP. NOVEMBER 8. Let's put that up. People look at this and say. They didn't go as deep as they could have gone. So you have to be aware of two things.Thanks. which caused them to stop short of where they planned to go. We also know they had lost returns. so it's actually circulating from one reservoir to another. Drilling any further would jeopardize the well bore. this is the pore pressure. near as we can tell in talking to our experts. Here's our drilling mud circulating around up and down. West Texas where she comes from. And why was that? Because when they got down there. they did the right thing here. My wife's family is in the oil business. you can lose cement in the formation. They were getting lost returns into the formation. If mud can go into the formation.coming up as is coming down. well integrity and safety. BARTLIT: So -. we know there's difficult drilling conditions. We had run out of drilling margin. exposed sand and taking losses in a nearby reservoir. it's the wrong one." They stopped because they were interested in well integrity and safety.COM . Now. I know I keep saying this. So when you -. And you have to keep in mind that if you can lose mud into the formation. Oh. say. you know. then if you cement the job. to stop here for safety reasons. you're putting down more mud than is coming up. 54 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 too. You have to keep it in the back of your mind. (Laughter) MR.000 feet short. taking away all the cuttings. They talk about oil business. And if the mud -if the drilling mud pressure gets too high. They drilled it only to 18. There were pretty serious lost returns here as they got down near the bottom. originally they were going to drill this well down to about 20.when you put the long string down these float collars. Sean. It's important you know the differences between these two. and they might have reached more hydrocarbons because they wanted to stop so they didn't create safety problems.360 feet.433.if you lose returns. It's in the float collar. "Oh.they were going to drill to 20. "Shoe track" is an oil business term. Total depth was caused at Now. So as we -. this next point is a complicated point but it's important. They were at 18. that means that this is higher pressure. It's the height of a 19-story building. What's a lost return? You're drilling. At this point. cement could go in the formation. these valves. (Laughter) MR. 18. The shoe track -everything is big down here.

So how do you take this at the bottom and convert it? It's pretty ingenious. pretty simple and pretty ingenious. So 18. It's a two-way valve. Reamer shoe. you'd try to push it down against all that mud in there.s. And we'll see these two little holes here. it doesn't work. 2000 p.s. Now.i. So they've got a pretty ingenious way of doing it. maybe fracture the formation. Maybe.PLANETDEPOS. Float collar converts. It's closed.3767 | WWW. pressure can come here. falls all the way down to the bottom. to get this out of there. because now it's down in place and you want to be sure that hydrocarbons and things can't come back up through it. The ball sticks because there is a collar here. You're set. Fourth attempt. Now. The valve is converted.COM . Now. and you would create high pressures. You've got to remember they want 58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 down in the center. 2010 15 (Pages 57 to 60) 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 59 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 open when it's going down.i. About 750 p. 190 feet. As you can see that the valve is now open and it holds it open. It goes to the bottom.s. They put it down. maybe.i. Sixth. what could have happened is that the ball was forced out of the tube on the ninth attempt but the tube stayed there so it's still a two-way valve and hydrocarbons or anything can go PLANET DEPOS 888. Ninth. 1800. BARTLIT: So what -. Valves close. Pressure can come here. this will give you an idea. and there's a lot of different things that could have happened here. 2500. Second attempt. it doesn't work.s. you turn a two-way valve into a one-way valve. It's 190 feet. it doesn't work. it doesn't work. Reamer shoe comes down to the bottom of the well.433. 190 feet down. NOVEMBER 8. Circulate it. It has to be open when it's going down because if it was closed.s.i. Eight. 2000. 1900. 2750. And there were some anomalies. when you get to the bottom and the shoe is in place. Third attempt. ends up in the reamer shoe. Not anomalies that are never encountered.i. We'll run through this again up here just so we get it.000 it converts. So the mud is coming out of the holes but the holes are smaller than the original deal was. We'll run it. Now. They have it open and they put -. Shoe track.the normal float valve conversion.i. Here is the valve before it's converted. it doesn't convert. It's supposed to convert at 750 p. don't put too much import on any one event. it's still stuck there. Very simple. and pretty soon the pressure is such on the ball that this ball goes out.360 feet down. We'll talk more about the reamer shoe later. Here's the pay zone. it doesn't work. For example. Fifth attempt. what happened here? Reamer shoe comes down. The ball falls. so that you increase the mud flow and increase the mud flow. We don't really know if it ever converted or not because it's now cemented in down there.while the long string is going down. We're now building up to all of the different events that were known in the minds of the men on the rig that night when they got ready to pour the cement job. Then you pressure it and it goes all the way down to the bottom in the shoe track. it doesn't work.s. (Laughter) MR. This may seem like a small issue. you want close this valve. 2250. 2000 p. Seventh. They had to try nine separate times to get this float collar to convert. So now let's talk about the problems in converting the -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. the problem is that these things are supposed to convert at about 750 p. as we've seen. I have to keep warning you. I'm always glad to see a guy nodding that actually knows this and the press get's it right. It didn't work out this way.you want to have this open while the long -. Now. First attempt. What they do is they drop this little ball We've now got the valve the right way. but normally these things convert pretty readily at about 750 p.This tube is in here. Float collar. not anomalies that were necessarily anybody's fault. doesn't work. again. Finally at 3. but there were anomalies that people would be aware of.

even if -even if it converts under the kind of pressures we're dealing with." The cement is a barrier. We see pressure lower than was expected. It was expected to be about 570. But we know that they had a problem converting the low valve and after that the pressure was low. The pressure of the mud circulating was. The BP man on the rig.and I stand ready to be PLANET DEPOS 888.000. Spoke with Mr. 2010 16 (Pages 61 to 64) 61 63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 back up the valve. almost a little less than half of what it was -. not what was expected? Here's what they did. 62 And we'll see that the cement job is important because the way -. And you can debate about what was done to decide was it incorrect. it was still wide open both ways. And they decided the rig stand point pressure gauge was incorrect. So what do we know? We know there was an anomaly. though. these pressures showed 64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 some won't. Now we've had a problem converting float equipment. Now. Some people will say this is a barrier. secondarily here.Was this ever resolved? It was not.the way the newspapers report things these days. Some debris went out. Okay. But it didn't. Did they simply say "We think it's incorrect"? Did they test it? That's for further inquiry. BARTLIT: Some say that this whole thing is such that under the kind of pressures that were established when the reservoir -. When you look at this valve. This is the pressure.I've learned how -. These are the best judgments of possibilities and nobody will ever know what really happened. I don't believe it ever got resolved. mud that's been scraped off the walls on that long trip down some 13. it's possible in a long string well that you can get debris. (Laughter) MR. Certain seals are a barrier.some say -. this whole thing could come apart. meant that the cement job was the only barrier. we're just trying to list the events that were in the men's minds during that night as we come closer and closer to pouring the cement job. it's easier to get leaks. Clearly. It was only 340. We know they normally convert at 750. Messrs. So as we're getting ready to do the cement job. this may mean something or it may mean nothing. Kaluza and Vidrine. That's the Halliburton cement engineer on the rig that night.the way the rig was handled on the evening of the blowout.000 feet. it's worthwhile looking at what people knew. it's not altogether certain that a failure to convert is a huge problem. As Sam will explain.COM . Because most people in the industry do not consider the float collar as a barrier. That's always a BP guy.433. One could -. Low circulating pressure. 2. And what did they do? Did they ever resolve this situation? Here's what happens next. maybe it wasn't. the well-site leaders are always called the company man. the pressure dropped. Did -. Now we see that after it's converted. So what did the rig -.a little more than half of what it was supposed to be.hydrocarbons got into the well.PLANETDEPOS. third. Again. this is oil industry lore. The company man -that's BP. They felt the gauge was wrong. And apparently -. it would not be impossible to get leaks around it. So BP was uncomfortable with the circulating pressure being so low. NOVEMBER 8. Now. if we could go back to No. and we don't know if it ever converted. if it's wide open. It took nine tries and it was over 3.3767 | WWW. Gagliano. Okay.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. we see another anomaly. beginning at eight o'clock at night. It's possible that when they're pushing and pushing and pushing here that this was jammed with debris.what did the crew do when after they just had this problem with the conversion of the float valve. On that long trip down it's possible that you can get debris in the bottom of the reamer shoe. And the people up on the rig know this. Secondly. You'll see the term "barriers. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 up wrong. you know. the only barrier preventing hydrocarbons from getting into the well. Maybe it was incorrect. We're not saying good or bad or up or down. We don't know if that happened. and they thought that the float collar converted.

hopefully. that's solved. Sam will explain this when we get to the cement job. Okay. they had done about -. Presumably it was. This is normal.Those are valid reasons for not doing full bottoms up. It comes up from the bottom to see if there's any hydrocarbons in it. If we do full bottoms up. but we don't -. At any rate. it's coming down the center.Now the cement is added. supposedly. The reasons are -. They didn't want to disturb the formation anymore." BP said. there can be consequences. Before you pour cement.BP didn't just say. Now. you wait for the bottoms-up marker to get to the surface.433. If you're drilling a well in the Gulf and you go to Houston and you go to BP or Shell or any of these companies and you go in their offices. no one of these things is the be all and end all. They had a reason for doing it. Remember.some people might have said. The bottoms-up marker goes all the way to the top. Secondly. Why do you do bottoms up? Well. they circulate the mud. Here's what BP did.PLANETDEPOS. not to put behind you events in the past and then start from scratch each time you do something new. So when you circulate the whole thing. but there can be consequences in that the shoe track cuttings might not have been cleared out. We're not saying they didn't either. over here you waited until you got to the top. Here's the indicator of the mud that was at the bottom.COM . "Well. PLANET DEPOS 888. Mr. We now know what the shoe is. Remember. Maybe there has to be a way where people keep in mind the other things they've been experiencing as they went down here when they make their final decision. there will be a room almost as big as the end of this room that's dedicated to the Macondo well. would this make a difference? We're not saying that it did. it -. And the shoreside engineers and personnel will be in that room. and we can always -once we get this up to the wellhead. for -. BP did not do bottoms up before the cement job here. Guide is the shoreside -shoreside well team leader.we'll never know for the reasons you've heard. "We want to save time. and it sort of looks like once another hurdle was over 66 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the well. maybe a fourth of the circulations normally done. So when they did bottoms up. And I'm not saying -. 2010 17 (Pages 65 to 68) 65 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 corrected -. we might have more problems with the reservoir down there. But again. No bottoms-up circulation.it circulates the cuttings. And there's reasons for doing it.because we -. Remember.apparently they assumed the gauge was wrong and that was the end of it. it makes sure you get uniform mud throughout When you don't do full bottoms up. They didn't just decide to hurry up and here's -. We're listing things that happened and describing how the people on the rig reacted to it that night. you're changing the mud weights as we go. and here's what their reason was. That's -. out of the shoe. and maybe there has to be a way to keep track of everything that's gone before. They had had lost circulation." and sort of started from scratch.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. we can always circulate it to the surface and check it and look at the cuttings and look at things. But the fact is there were a lot of events." We don't know if that was done. people -. We see things happening and we see people having good reasons for it.3767 | WWW. It allows the crew to look at the mud. That is the normal way of proceeding. Here's the bottoms-up marker. Before you add cement.here's what they did. cleaning this out down here. One of the things that we'll talk about when we discuss this with the Commission is that it's important. We're not saying there are. We're not saying that people did forget all this. circulating. maybe.I don't know. the mud is conditioned.that's something I don't know as I stand here today. Here's bottoms-up circulation. we'd had these formation problems down here. and maybe the hydrocarbons weren't tested before cementing. circulating. NOVEMBER 8. BP sent the cement down when the bottoms up was only there. They had a reason for doing it. "We lost circulation. gets any cuttings out of here.

it is known in the industry that these cement jobs are from time to time not perfect. Send down this equipment.000 feet. And March 6. fills up. And. the only barrier in the well between the hydrocarbons and the rig.you have to remediate or fix a cement job. Guide said. this is something that a lot of people are not aware of. fills up. "Why didn't they do complete bottoms up?" The biggest risk with this cement job was losing circulation. For those who have been in the military. Can't go here. as we explained.3767 | WWW. And for one or another reason the annulus doesn't have cement in it here." That's why they made the decision. Guide said. and you decide you want to replace that cement down there 18. these engineers have developed ways of being down there 18.this can take two to five days to do this. And then they send cement down. 2010 18 (Pages 69 to 72) 69 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 And the data from the well will go to that room. First comes a packer.can look at the data and communicate with the well are frequently asked questions about the well. replace that mud there with cement. You still want to get cement in here. it doesn't get in here and leaves mud. How in the world do you do that? Well. Mud can't keep hydrocarbons out of the well at that -under those conditions. There were no other mechanical barriers in place. and it should. the cement job at the bottom was the sole barrier. as Sean Grimsley will explain. and they send an electrical charge through and they actually put a hole in the casing. So what do we know now? We take stock. We know that sometimes these barriers are somewhat defective when they first go PLANET DEPOS 888. They are very powerful bullets in effect. You're going to squeeze in here. So it's blocked off here and blocked off here and you want to get cement here. You set this down so the pressure is blocked off here. Now. they had to have the BOP open. So let's look at this. you're getting less at the top than you put in and you're losing circulation. it starts to squeeze through these holes into the formation.433. We know that the cement at the bottom in the last hours was the only barrier. Mr. what's interesting is. Here's the situation. We explained that during the final hours of the well. to fill a thousand feet of narrow annulus with cement. Remember. of course. February. And when it's full. So Mr. The term "squeezing" is important because there is a critical e-mail that uses that term. That's because to do 70 centered in the well -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. How are you going to do that? You set a packer here. he asked. it's pretty hard to center sometimes -. Believe it or not. this wasn't -. "We decided to get circulation established and we could always do full bottoms up later once the cement was in place.COM . it's stuck. And you have to -. pull up the tool 18. Here is a cement job. And suddenly they've repaired this -. Nobody has screwed up. So the cement job was it. Cement keeps hydrocarbons out of the well. fills up. So all of the information is gathered.this is done with some frequency and it had been done twice before on this very well. If the casing isn't penetrate tank armor.360 feet. and you can see it -. but they have repaired the missing cement in the annulus from the top. these are like the shaped charges they use to 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 what they did. a bridge plug. So we know that in October they had done a squeeze job. It's called squeezing. losing circulation. And here's what they do. 1 risk. That was the No. Can't go here. here's what you do.000 feet and fixing that. we explained that if the mud or cement gets into the formation. So it fills up. and the shoreside people who are -. This is the area. cement squeeze. It's not an easy thing. and they put in cement. fills up. NOVEMBER 8. Now.this is that skinny little annulus that Sean Grimsley showed you.and as you'll see. and that's why we have some of it today. It's not an awful thing. So sometimes you have spaces in the annulus. Now.then maybe when you put the cement in around here.PLANETDEPOS. squeeze. So you know there's a problem here. They put down basically a perforation gun.

When you come back to the well after you have finished drilling and cementing it. So you have to send things between them to keep them separate. it happens. I'm going to show it to you a couple of times.we're not saying it was vulnerable.And it's nice to hear somebody else's voice. didn't put any faith in the BP model. you have to be careful. there is something called cement modeling. These jobs -. We know there are ways to fix these jobs. When you're cementing a job where you know you're going to have lost returns or you have a threat of lost returns down in the formation. that kind of thing. Design centralizer placement. It's the only barrier. The one that we should focus on right now is the serious lost returns in the zone to be cemented. That's routine. The mud is oil-based and the 76 74 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pressures. And you also have cement all the way up here in the annulus covering your pay zone. BP has a program called OptiCem. It's not a big deal. And it turns out that the well team leader. It happens. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 cement is water-based. We're just saying that -. separated by separating fluids and by mechanical plugs. you produce PLANET DEPOS 888. And Sam Sankar is our cement guy on our team. And at the end of the job you had cement in the shoe track between where -. But the importance is you know that the cement jobs are from time to time not perfect. And we're not saying that it was right or wrong and that that caused any problems.what happens is you send these materials down the well.between the location of the float valves and the reamer shoe. So BP designed a cement job for this process that was somewhat complicated. a purple material called base oil. And there is nothing wrong with that. thought it was wrong a lot. but the potential vulnerability was known. MR. NOVEMBER 8. And there are books written this thick on how to fix these jobs. and we're going to go through the various fluids that BP pumped down the well. What you'll see here is an orange material called spacer. the possible potential vulnerability of the very critical cement job. So the issue you want to think about. The only question is what was known that night. again. but it complicates the cementing.a proprietary software program BP owns that is used to figure out what is going on down there.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.433. You may be wondering how do you actually get the oil out after you do all this work to isolate the pay zone. So we've been emphasizing a lot the importance of isolating the pay zone. I'm going to give you a little preview of something that Sean's going to explain a little more as well. is not in and of itself a tremendous problem. I'll explain a little bit more what those were for. John Guide. optimizing cement. The two don't get along. I imagine there will be a dispute emerging about whether it's right or wrong.3767 | WWW. predict So Sam will take over and talk about the -the rest of the cement issues. Having serious lost returns.that the -. is you have to send them in sequence. He's been involved in this from the beginning. Now. they were running these cement models. because it's down there. these software models. Now. And -. And they've developed all kinds of ways of fixing it. Okay.Sometimes these jobs have to be fixed and remediated. and things that were known on this rig. For now it's sufficient to recognize that these things went down in sequence. The first time I'm just going to show it to you in three dimensions. Now we're going to turn to this particular cement job.they were running these. Now. SANKAR: So what we see here now is that the crew on the rig is facing a number of known issues at the time that they're doing their cement job. shoreside. and the BP man in charge didn't think they were worth much. He went down with Chevron when they did the test. At this point we've been setting the stage for all the things that are known in the industry generally. 2010 19 (Pages 73 to 76) 73 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 down.COM . This particular cement job was never remediated for reasons that Sam Sankar will explain. And it's a software program that -.PLANETDEPOS. the first fluid -. evaluate job results. the potential -. as you will see as Sam explains.

For now we're first trying to get a good cement job that will allow us to isolate the hydrocarbons. NOVEMBER 8. the volume in the shoe track. So a lot of this cement job was designed to reduce the pressure on the formation. As these materials come up into the annular space. they're right. Now. You've heard a lot probably about nitrogen foam cement recently. Lost returns are caused by. But that's later when you're getting the oil out of the well. they're very 78 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 80 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Halliburton worked together to perform the process. and you send a tool down. now in schematic view. The whiter stuff here is the cement that does have the nitrogen in it. again. the base slurry that they were pumping down there. it takes pressure to lift the cement up. that it was not going to be an easy one. There's e-mails showing as early as April 1st that BP recognized that this was an important job. The purple here is showing the base oil. So now I'm going to go back and explain again the cement job that BP used at the bottom of the well. this was a complicated cement job. and also again the skinny annular space that Fred has shown you.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. again. gravity was helping you. and you've got your cement currently isolating them from the annular space. That plug right there mechanically separates worried about lost returns at this point. and the annular space should be filled with lighter foam cement. In fact. And remember that. So now we have a slug of unfoamed cement.COM . You're going to see a plug land out very shortly there. is the float valves. And in BP's report issued after the incident it is repeatedly recognized that cement placement was PLANET DEPOS 888. among other things. I'm going to show you a little more what that is. Base oil is a lightweight oil that they decided to use on this well in order to lighten the weight of the materials in the annular space. The orange material again is a spacer. The first thing that comes down. you poke holes in the casing and the cement. you're circulating mud. much like the one used in the squeeze job. the reamer shoe. Halliburton was the cementing contractor for this job. The number of different fluids that were being placed down the well and the threat of lost returns led everybody to understand that this was a complicated cement job. So now what we have here is a stripe of the spacer and a stripe of the base oil. So now what you have is holes in the steel casing and in the cement that allow the oil to flow into the well. So again what we see here. Now. followed again by the heavier cement.PLANETDEPOS. Now. It's a material that's compatible both with the mud and with the cement and helps keep them separate. followed by lighter cement. On the way down the well. except now you're doing it in the pay zone. Now. You have that cement in the annular space. this yellow area here is full of hydrocarbons. Remember again when we're doing this that we're talking about the annular space that Sean had showed you when he walked around. I mean BP in conjunction with Halliburton. overpressuring the formation. On the way up here. that slide may have struck you as a little bit complicated. and BP and the cement from the mud. The mud is going down through the float valves. primarily with a thinner layer of unfoamed cement at the top. The dark gray material is the cement. another perforating gun. as always. And that pressure is something you feel in the formation. The shoe track should be full of unfoamed cement. Final position of the cement job is you have a top wiper plug in place.433. what's important to note here is that the first material that goes down the well is the first that comes up the annulus as well. you send a perforating gun down. So to begin the job. To get them out. It's the small narrow area in there between the casing and the formation itself. they're exerting pressure backwards. This is cement that hasn't yet had nitrogen added to it. a bottom wiper plug in place. And when I say BP here. You go back down to the bottom. is that base oil. 2010 20 (Pages 77 to 80) 77 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 79 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 it by doing something very similar to what you did when you squeezed it.3767 | WWW. you see some dark gray material and then some lighter gray material.

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critical, that there was a complex design, and that the cement crew and the cementing engineers and the design team were focused primarily on achieving an acceptable equivalent circulating density during cement placement to prevent lost returns. Equivalent circulating density is a fancy phrase for pressure on the formation. They were trying to make sure that the pressure on the formation didn't get too high. This was, as BP has acknowledged in its report, this was a challenge. Another way of reducing the pressure on the formation is to pump the cement more slowly. If you pump it very fast, it takes more pressure. You've probably had experience with that. In order to make a liquid flow through a pipe faster, you need to increase the pressure on it. So the design team chose a low cement flow rate. Again, this is showing that same animation again only we're going to emphasize flow rate now. Again, the faster you pump, the more pressure you use. And so the cementing design here, in order to avoid problems with overpressuring the formation, use the

and of itself is not a problem and it's not uncommon, but it's something that the crew needed to be keeping in their mind as they were thinking about the long-term quality of the cement job and what they could expect out of it. Another factor, low cement volume. Again, driven by the very same concern about pressuring -about overpressuring the formation. Again, what -- what we've been explaining is that if you -- if you overpressure this formation, you risk losing the cement into the formation -losing cement into the formation. The cement doesn't do what you want to. It doesn't isolate the hydrocarbon zone. So one way, again, to reduce the pressure is to reduce the top cement, keep the cement lower in the annular zone than it would otherwise have been. BP had at least two reasons for reducing the height of the cement that it put in the annular space. One reason was about trapped annular pressure. As this animation shows, if you close off all of the area in the annular space over here, you

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low cement flow rate. Now, a high cement flow rate is helpful generally when you're cementing because, among other things, it helps clean the formation and scour out any remaining gelled-up mud or debris from the annular space. Again, you have the experience that a fast jet of water will clean something better than a slow jet of water. And that's why a high flow rate in cementing is helpful. Here, however, we recognize that that would be preferrable but, because of that circulating density concern, because of the concern of overpressuring the formation, the team chose a lower rate. And again, as Fred has been saying, these were decisions that were made consciously. As the report acknowledges -- I'm sorry. As the cementing design acknowledged, they had consciously chosen a reduced rate of cementing in order to avoid -- again, there's that phrase, ECD -- ECD means pressure, in order to lower the pressure on the formation. Again, now, we have another issue that in

can increase the pressure on this -- on this casing. And that's because the oil in the bottom of the well is quite high. Fred explained it can be up to 260 degrees. When you take hot oil and run it up the inside of this production casing, it's going to make the things around it very hot. In particular, it will make this space right in here, this annular space in between the two casing strings, it will tend to make it expand. And when it expands, it creates pressure. That pressure can be very problematic. If it goes too high, it can collapse the inner casing string. That's a disaster for the well. So if that pressure in the annular space gets too high, you collapse the casing and you've lost your well. Again, a disaster that you want to avoid. So that's one reason BP was -- one thing BP was concerned about. And they did two things to address the concern. First, they put burst disks in -- in one of the outer casing strings. And the burst disks are there so that if that pressure got too

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high, the burst disk would allow it to escape rather than collapsing the casing string. But they gave themselves another way out as well. They said, "We're going to not cement the casing all the way up into the next liner. That will leave us an open space here that will give any pressure a second way of getting out." Now you have an alternate path for that annular pressure to be -- to escape. So there we see the pressure escaping. The end result of this is a lower top of cement. As Fred described, this was a low-volume cement job, about 60 barrels of cement. That decision was driven in part by the annular pressure concerns and in part by the concern about overpressuring the formation. Again, the higher the cement goes in this annular zone, the more pressure it exerts on the formation and the more likely you're going to have lost returns. So in the end BP chose to run the annular cement about 800 feet above the pay zone. Now, MMS

space than with a liner. You can see there is a much bigger open space here for the mud returns to come back up to your riser in a liner. So that's one reason why a long string can be -- can require more pressure to cement than a liner, all other things being equal. There's -- As you see over here, when -when the liner comes down, these returns are coming up. Again, the wider space here, not the skinnier space that they're using in a long string. Another reason as well, differing risk of contamination. Now, we've been showing these wiper plugs largely in schematic view. I'm going to show you in a second more closely what they do. The point for now is to recognize that as they come down, they take some mud with them. That long three-mile tube, even after you've sent wiper plugs and spacer down there, it's going to have a film of mud on it. And again, as I've said, the mud and the cement don't get along. But there is going to be some contamination, and everybody knows this. The

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regulations only require 500 feet, but BP's internal guidance documents required a thousand feet. It is okay to deviate from those -- from those guidance documents under certain situations. And here the team said, "We want to reduce the pressure on the formation; we are consciously going to make a choice." Fred previewed this issue for you again. The -- the concerns about long string and liner -versus liner that have been expressed in the press have often gone to the presence of barriers in the annular space. That's the first difference between long strings and liners. Again, as Fred showed you, there is a seal up here on a long string. There is similarly a seal down here on the liner. It's called a liner top packer. That goes to whether or not the hydrocarbons could come up inside this annular space. But there are other reasons that a long string versus liner decision becomes important. One is, again, the cement circulating pressure. In a long string you have to push the cement a little harder to get it to come up the annulus because it's a skinnier

contamination, all other things being equal, can be more with a long string. With the liner, you're running the plugs down less distance. Here's the plugs in more detail. What I was talking about before was that if you have these wiper plugs scraping the mud down the sides, they will leave that mud in the shoe track. Fred showed you a slide in which mud in the shoe track, cuttings in the shoe track could cause problems with -- with having -- with converting the float valves. And here what we see is mud in the track brought there by the wiper plugs as they come down. The fourth difference between liners and long string is the cementing approach. On the long string you need to leave that little annular space open to allow for pressure to escape. So again, you don't want to run your cement as high as you might otherwise. On the liner, by contrast, you can eliminate the annular space entirely. You can run the cement all the way up to that seal. And the result is

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that you have a completely sealed system here and more cement. The point here again is that more cement is good. You're running your cement down a long pipe in an uncertain area. The more cement you put down there, the more cushion you have to make sure the job goes well. BP recognized that liners and long strings had different consequences for cementing and engaged in a debate in April in conjunction with Halliburton in deciding how to do things. The original design called for a long string way back before they actually started drilling the well, but the engineering personnel changed their minds when they looked at the ECD issue. And they said, "Let's use a liner instead. It reduces -- it could reduce the pressure on the formation as we cement this well." But finally, after looking at the Halliburton OptiCem models again, in conjunction with an internal BP cementing expert, the team decided that the long string could in fact be cemented.

right in the center. And remember, this is a thousand feet or so. So you want to be -- you want to do everything you can do to keep it centralized. MR. SANKAR: And one way you can do that is with a centralizer. A centralizer -- That's a model. We have a real one sitting up here for a smaller diameter well. It's nothing more than this. It does exactly like what it looks like it would do. It helps hold that pipe smack in the middle of the hole that you've got. MR. BARTLIT: And as you can all see, even with this little artificial centralizer, it keeps in the center all the way around. It doesn't get up against the side. I'll just walk around like Grimsley did so everybody in the back can see. These will be up here, by the way, if you want to look at them during the break, people are welcome to look up. You want to keep it in the center, obviously. MR. SANKAR: So now I'm going to show you in this animation what the value of the centralizer is. If you don't have your pipe centralized -- and we're going to use the one on the right as an example

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Now, the long string has some value over the long-term life of the well. So there were reasons why they wanted to use a long string that weren't directly related to these initial cementing concerns. Again, using the long string itself, not a huge problem, just requires more attention to the way that you do the other operations. So now we're going to talk a little bit about the famous centralizers that you may have heard about. Fred will show you what these look like. So we're going to go back and show you an animation about what the -- what the actual centralizers do. The actual centralizers used at this well were about 4 feet high. So the ones that we have here are just little models. The point here is that you have that skinny annular space. I'll hold it, you wiggle it. And if you don't have the pipe right in the middle, you can cause problems. Among other things -MR. BARTLIT: You want cement all the way around it, and if it gets down here, it may be harder for cement to get in here. So you want to keep this

of a noncentralized pipe and the one on the left as a centralized pipe. I'm going to start running the mud now. First, I'll show you again what you've seen. This is in plan view what the effect of an uncentralized pipe actually looks like. If you're running the mud, the mud is fine, it's going everywhere. But the cement, you want it to come up on both sides of the well. You can see on the one on the left the cement is flowing evenly on both sides of the pipe. And the one on the right, there is some mud left behind. The mud is taking the preferential flow -- or the cement is taking the easier path up and leaving some mud behind. That mud area is called the channel. That's an area where it's easier for gas and oil to come in. You want to avoid it. So BP's original design called for more centralizers than they eventually used. But there was a problem. There weren't enough of the kinds of centralizers they preferred. They're called centralizer subs. So what's a centralizer sub?

PLANET DEPOS 888.433.3767 | WWW.PLANETDEPOS.COM

slip over the pipe and require some stop collars to hold them in place. We'll probably be fine and we'll get a good cement job. This e-mail is important because it shows that the team recognizes that squeezing is a possibility. SANKAR: So Greg Walz says. talks to Greg." The concern here is that having those external centralizers not well anchored to the casing can either hang up the casing in the wellhead. They're not going to move around. The 15 plus the six will give them the 21 they need. and they decrease the possibility of having to squeeze by choosing to use less centralizers. again a senior engineer on the project." The long string design was going to require that they have more centralizers. are screwed into the pipe joints as they go down. "Now I have a total of 45 pieces. to reduce the risk of channeling in this well. "We only have those six centralizer subs. but it would be better for Sam to finish this issue. David Sims here.PLANETDEPOS. we've learned that the Weatherford person who was on the rig who knew exactly PLANET DEPOS 888. MR. if that's all right. second. There is a picture on the left of a centralizer sub versus a centralizer with a stop collar. So what happens as a result of that? BP says. was in the office." All right. or they can come off and not do their job. 21 to be exact. "I gave Brett the go-ahead.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. In addition. Halliburton personnel. that are going to be external to this casing. CO-CHAIR REILLY: We agreed.COM . we think that you're going to need a fair number of centralizers on here. David. those 15 centralizers and two stop collars each. "Look. the centralizer subs. the BP report has concluded that in fact the centralizers sent out to the rig were the right kind of centralizers. "I just found out that the stop collars aren't part of the centralizers." And he means the go-ahead to send more centralizers out to the rig." He's talking now about separate stop collars. The stop collars would have been part of the original centralizers. "I think there is a potential 94 MR. 2010 24 (Pages 93 to 96) 93 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 95 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I'll show you on the next slide. says. What are we going to do?" A BP engineer named Greg Walz sends an e-mail to the design team and says. When you have those stop collars. and they were talking about the long string and the liner. His subordinate. What is interesting is that since the event.3767 | WWW. There is a potential for flow due to the six centralizers. I would rather have to squeeze than get stuck above the wellhead." So the 15 centralizers go to the rig and they're there. So Jesse Gagliano tells the BP engineers in their office -. who is one of the senior engineering managers there. "We need to honor that model." This is why Fred explained to you what squeezing is. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 makes it very difficult to finish the well. when they talked to Halliburton. The ones on the left. Brett Cocales. says. who cares? It's done.he works with them in the same office -. "In thinking about this. We need to honor the model to be consistent with our previous decisions to go to the long string. and I'm worried about them." This is based on a computer simulation. which are more like this. But there is a last-minute decision not to use the additional 15 centralizers. and they agreed that they are going to need more centralizers on this job. That means they're very securely on there. End of story. it's going to take ten hours to install them. we're adding 45 pieces that can come off as a last minute addition. and they wouldn't have had too many pieces to be sliding around on there. Jesse Gagliano. He says. BARTLIT: If the Commission please.he says. "We've lined up a Weatherford hand to install those centralizers and we're putting them on a helicopter to get the centralizers and the Weatherford hand out to the rig.433. Whereas the ones on the right. ran the Halliburton OptiCem model and said. John Guide. So the end result is that Greg Walz says. So now BP. which 96 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 problem here. you have additional material on the outside of your casing as it's going down. top and bottom. NOVEMBER 8. First of all. it's time for our break.

Now. they did have the wrong centralizers on the rig.PLANETDEPOS. Stop it there. again. and you're pumping 60 barrels of cement in it and trying to PLANET DEPOS 888. they didn't go back to Halliburton and say. full returns seen throughout entire job. Lift pressure. We will resume.i of lift pressure. The point for us to convey to you is that there is no clarity even now on whether the additional centralizers should have been used on the rig. what we have here is a list of issues at the time of the cement job being pumped. it's an indication that the cement may be going somewhere you don't want it to. You're looking at your pressure gauges. 2010 25 (Pages 97 to 100) 97 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 99 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 what to do with the equipment wasn't actually consulted by the team on the rig. for every barrel of cement you put in. it's that there's no direct indicators of cementing success. and when they do things. Let's reconvene at 11:15. The other thing you see during this is something called full returns. And I think we'll stop there for now and take our break. (Recess taken. you're interpreting what's happening at the bottom of the well. I was just having a minor glitch in the audio-visual here. again.let's go back to the previous slide for a second -. probably without a whole lot of problems. Halliburton sent a report back to BP. Again. They suggested that things might have gone well. "Can you rerun the OptiCem model? We want to see what the effect of having these six centralizers is going to be. When it turns the corner and starts going up into the annulus.433. it's this long. And you see that at the rig. it takes additional force. What you can't see at the rig is lift pressure. And again. please. So it may be that they had the right centralizers. Sam Sankar. The problem is these are indirect indicators of something that is happening three miles away down a pipe of this small diameter. Everything you're seeing from the top of the rig is basically pressure.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. As you continue on. MR. Do I have the right mouse here? All right. If the plugs land on time. We don't know at this point whether they had the right ones or the wrong ones. the cement is coming down." They instead went with their engineering judgment and they proceeded with the well. full returns and the plugs landing on time. gravity is helping it.) CO-CHAIR REILLY: May I ask you to take your seats. It said the cement job was pumped as planned. As Fred described. That tells you that the cement is going down the well and not into the formation. we'll go on manual controls here and see if we can get that going again. and it relied on some of these indicators. after they pumped the job at Macondo in the very early morning hours of the 20th. you want to see a barrel of mud come back at the top of the rig. Next slide. SANKAR: Thank you.3767 | WWW. and it goes through.s. in our interviews with the BP engineers -. There is one last little point that we wanted to talk about here. What you see here is. When that plug hits. please. NOVEMBER 8. So you have three indirect cementing indicators: lift pressure. And what you'll see is the first thing -- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 losing a lot of returns. is the pressure you see from the cement coming up in the annular space. the next thing you see is something called lift pressure. Imagine your three-mile-long pipe. that suggests that the cement arrived down in the bottom of the well. It said both plugs were bumped. And there's a couple indicators that we're going to see. I will turn this back over to you. Now. One of the first things you can interpret happening is the bottom plug landing. that same image of the cement being pumped down the well. So these were good indirect indicators of the cementing process.what we found is that some of them actually believed that despite what the BP report says. again. And they estimated 100 p.COM . The final issue is one that is common in the industry that everybody knows about. it takes some pressure to burst it. If you're 100 98 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CO-CHAIR REILLY: I have just about 11:00. The next point is that when BP decided to run with only six centralizers.

2010 26 (Pages 101 to 104) 101 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 103 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 figure out what's happening at the other end and all you've got is these secondary indicators. now we have -.let's stop it there -. You have temperature logs. If you take a bell and you ring it with a hammer. Those bullet points again. Next slide. but it cannot evaluate the shoe track cement. none of them are individually a huge problem. The best way to describe what it does is to think about a bell. They're dealt with all the PLANET DEPOS 888. it would make a different kind of a sound. Cement column back pressure is a fancy word for lift pressure. Many people would have saved the cement evaluation log step for the production phase. And on the next slide we'll see that BP's report issued after the incident concludes that if the team had done a better risk assessment of cement job in light of all the conditions that existed. and the industry knows this. And here it wouldn't have had that amount of time. NOVEMBER 8. which I'll talk about in a second. There are tools in the industry that recognize these things. it makes a certain sound.433. And you have something called cement column back pressure. It's lowered down in the well. When you're trying to think of a cement evaluation tool or a cement bond log. to repeat. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 What's important to recognize is that many operators have told us that they would not have run a cement evaluation log in this instance.a cement evaluation tool. You have cement evaluation logs. So even if you had run the cement evaluation tool. So it can evaluate this top section up here. It's actually a series of different instruments sent down the well. it says. Most of them are known in the industry. before perforating the well to get the oil out of it. So now I'm going to move on to some questions about cement. and that's why BP's own cementing manuals say that when you're trying to determine zonal isolation you have a couple of different options." Here the mud weights and the So the cement bond tool even then has some limitations. What's important is that it notes. And one of the key limitations at Macondo was that it couldn't go past this float collar. and something that looks almost like a torpedo. which we're not going to discuss but weren't at issue in this -. 104 102 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 cement weights were in fact very. You could have at least seen where the top of cement was. What we've gotten to so far is a list of bullet points that you've seen before about all the issues that the crew is dealing with at the time that they've run the cement job. "Lift pressure will only give you a very coarse estimate and where cement and mud weights are very similar is unlikely to provide a sufficiently accurate estimate. they would have run the log then to get a sense of the cement. But these indicators alone are imperfect. And in the interim they would have relied on extra heavy mud in the well bore or extra plugs in the well bore to help add additional safety to keep the hydrocarbons from coming out of the well. Three options listed in the manual.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. They would have come back and. So again.3767 | WWW. The cement evaluation tool is -.in this incident. please.COM . it might have chosen further mitigation options to address those risks. that's functionally what it's doing. and this may have included running a cement evaluation log.PLANETDEPOS. It's not easy. very similar. You could have gotten some gross indicators of how well the cement job had worked. and with a number of sensors it's pulled back up the well and it looks at the cement and tries to get a sense of how it works. you wouldn't have seen at least one potential flow path up into the well. But if you took that same bell and coated it in cement or concrete and you whacked it again. Now. It's checking to see how well the cement in the annular space has bonded to the casing and also secondarily to the formation outside. what's important to note is this unevaluated section here includes pay zone and it includes the shoe track. Those logs work best if the cement has 48 hours to cure. That's not to say that the cement bond log tool wouldn't have been useful.it's also been called the cement bond log in the press.

COM . into the cement. But it's important before you use foam cement to test it. you can end up with a foamed cement. The point is.3767 | WWW. is critical. You leave a head space in the top of gas so that when you blend the cement and create the foamed mixture. four. Remember that slide when I showed you the animation of heavy cement. And it says explicitly it's a good fit for extreme lost circulation problems where nothing else will work. That can be a sign of instability. you can test it in one of two ways. You take the blender and you fill it up with some cement. On the rig it's generated in a different way than it's generated in the laboratory. you've got a foamy mixture now that is evenly blended air into the cement.000 feet or deeper. it fills the entire sealed container and gives you a foamed cement that is the same density as the cement you're going to put down the well. Because if all the pieces are much heavier than the initial foam cement you poured in there. Everybody we have talked to in the industry says pre-job cement testing. You can also pour it into a plastic cylinder and let it cure for 48 hours in a hot water bath and you can evaluate that as well. To do this.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. it's similar. NOVEMBER 8. you let it cure for 48 hours. And it says foam cement can be mixed at very light weights. you're comparing the density of the top and the bottom. see what it does. just like making a margarita. again. you'll find the top is lighter and the bottom is heavier. But before we get to the negative pressure test. And the lack of some of the safeguards that they might have had would lead you to have to rely even more on the negative pressure test that Sean is going to describe after I'm done. Now. One of the things that can happen is you'll get some segregation.000 feet or deeper and 79 jobs at 18. So after you have created the foam cement in the lab. light cement and then heavy cement in the back? You can make heavy cement lighter by pumping nitrogen in it. In the laboratory you use a blender. Halliburton says it's used foam cement in over a thousand jobs. You take it. suggesting that the bubbles have migrated upwards. and then you slice it up. 2010 27 (Pages 105 to 108) 105 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 107 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 time in the industry. So Halliburton recognizes that this is a technology that they believe is good in deep water. Great if you've got lost return problems. So you've got a model in the lab of what's going to be pumped down the well. whether foam cement or any other kind of cement.i. When you go back in there and look at the top density and the bottom density using a syringe. So the base cement is 16. graduated cylinder. But if it's unstable. Nitrogen is inert in cement. you want to reduce the pressure on your formation. foam cement is useful for a lot of purposes. it's done a lot of these jobs. And as a result.433. It doesn't affect its chemical behavior. I want to show you a little bit about how 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 looking to see whether the foam cement that was originally all one density is changing densities over time. So a stable foam cement will stay just the same way over two hours in a glass cylinder. first I want to go back to the foam cement concept. and Halliburton is one of the leading providers of foam cement. You cut it in any number of different pieces. But there are things that a prudent design team and a prudent cementer would be keeping in their head at the time they're doing the cement job. Foam cement is 14.5 pounds per gallon. two. things can happen. you're comparing the pieces against each other.s. if it's at a high foam you test foam cement in a laboratory. You're 108 106 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 percentage.5 pounds per gallon. three. that means the bubbles have come PLANET DEPOS 888. we want to talk a little bit about some questions that have been raised about the cement that was pumped down the Macondo well. and you're also comparing them against the design.PLANETDEPOS. If you do it with the plastic tube method. But with either method the point is the same. So by pumping nitrogen in at a 1000 p. and let it stand for about two hours and just watch it. That's lighter than the original cement. you're looking for density variations. You can pour it in a glass. including 279 jobs at 15. It almost looks like gray shaving cream. One.

Why does that matter? It takes 48 hours to run the tests in Halliburton's lab. You immediately foam it and you send it down the well. and you can see that the lab results bear a date of April 12. Others have said that's pretty good. Now. You mix it in the tank. But the foam stability test did not. So when we looked at the data again. what we noticed was that it actually seemed to have been tested on the 18th. and we used off-the-shelf versions of the same material. there is a long travel time down the well. So mixing it for a long time in a lab can help that foam perhaps become more stable. after some time it starts setting up and developing some strength. We went back to Halliburton and we talked 110 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 112 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that's an unstable foam. The vast majority of it went down with the rig. We can talk about that this afternoon. When we looked back at the original data in the lab. you'll see one strip of data here first. it's a way of measuring density. excessive gap. Half a pound per gallon variation is not terrible in the laboratory. Remember. it may have been that that test was not finished even inside of Halliburton before it was done. one and a half gallons. Now. that it wasn't given to BP before the job was run. we went and looked at these criteria. There's still a small amount of it. We see again the three-hour conditioning time. What's also important to note for now is the conditioning time. the cement isn't conditioned before it's foamed. What Halliburton provided to us was off-the-shelf ingredients identical to the ones used at Macondo. when they were sent to BP. Most of the tests that they ran on other qualities of the cement came out pretty similar to what Halliburton got.3767 | WWW. But. 2010. then we found another test in April. visual signs of segregation and large variations in density. among others. which is acknowledged to be one of the best in the industry. The Chevron lab. This is the American Petroleum Institute's foam stability criteria. And in that lab result they show the results of the foam stability test. And so the investigative staff worked with Chevron to actually to them about this. there's no clear cutoff.433. More than a trace of free fluid. We're not sure whether it's stable. Some have said run tests on very similar materials provided by Halliburton. SG means specific gravity. on the rig. 2010 28 (Pages 109 to 112) 109 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 out. Now.5 pound-per-gallon cement and they got 15 at the top and 15 at the bottom. NOVEMBER 8. we're quite sure. And we see that 15-pound-per-gallon density. Anybody who has worked with cement knows that the longer you mix it. This test looks like it got started at about 2:00 in the morning on the 18th. all of them were unstable. said that none of the tests that they ran on the foam were stable. it's increased in density. So if you run it for 48 hours. What you will notice is that these are all somewhat subjective. Conditioning is nothing more than mixing the cement before you test it in the lab. But we used the exact recipe that Halliburton used.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. we didn't have the actual cement used at Macondo. It's finished pumping by 1:00 in the morning on the 20th. and you can read them for yourself. What's important to note here as well is that on the rig it's not conditioned before it's foamed. and after the incident we looked back at those results. And the end result here is they planned on having a 14. with some of the best cement experts that we could find. the cement job is pumping. So there were questions raised about this cement after the job by BP. and that's the data from the April 12th test that I displayed to you earlier. that's held under an evidence preservation order that may be tested in the near future. bubble breakout noted by large bubbles.PLANETDEPOS.COM . There's no numerical criteria. again. So they mixed it for three hours. So Halliburton just before the job reported some results. The criteria for determining when you have a failed test are anything but clear. We also know. Running the tests nine different ways. Now. This one looks like PLANET DEPOS 888. SG top and SG bottom.

You don't want to have sponge-like cement if you're trying to isolate hydrocarbons. No conditioning time.PLANETDEPOS. It has the same test ID number. You could have nitrogen migration and incorrect cement density. It was done on a slightly different recipe and may have been done on slightly different materials. if nothing else. February 13th. I'm going to say this yet another time. our experts tell us.you may have seen the letter that the investigative staff wrote to the Commission to explain our concern about some of these things. 2010 29 (Pages 113 to 116) 113 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 115 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 it was run on April 13th.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Again. BP concludes the cement job PLANET DEPOS 888.m. What I'd like to do now is reset the stage and bring you back to the Deepwater Horizon on April 20th. Available before the job to Halliburton? Yes.3767 | WWW. MR. Shortly after midnight on the morning of April 20th. is what does it mean to pump unstable foam cement down a well. clear foam breakout. and even though we are sure it was available to Halliburton before the job was run. a lot of these things individually are common in the industry. clear instability. The overall design was very. is clearly unstable. Our primary concern based on the Chevron test was that the data strongly suggested that the foam cement used at Macondo was unstable and that that may have foam concern. Also interesting is that it has a different conditioning time. a Halliburton cementer on the rig e-mails back to shore and says the cement job went well. but this one is much more dense at the top and more dense at the bottom than the test that was reported. but we also have all of these indicators that were known at the time of the job. on February 17th. This one. And the academic articles emphasize the importance of having successful foam stability tests before you run a job. Half the conditioning time of the later test. 114 contributed to the blowout.m.433. Conditioning time again different. you get some very troubling foam stability results. which is test the job. Everybody agrees that you shouldn't be using unstable foam cement.or academic articles I should say. What's interesting is this one was reported to BP. of course. At 5:45 a. Taken together. If we'll look even further back. yet another pilot test result. soon after the lab test request went in. At 7:30 a. NOVEMBER 8. the rig crew and cementers finished the cement job. GRIMSLEY: So now we've heard quite a bit about cement and foam cement and cement testing. the same target foam density. The interesting question. regular lab sheet sent to the BP engineers. we have that unstable 116 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 It listed zero as the conditioning time even though the lab sheets show. that's sponge-like. This one clearly was never given to BP before the job. a pilot test is not exactly the same as the test that they ran in April. Back in February. So what we have now. And this time this one was reported to BP in March. On the basis of the Chevron tests and some of the evidence we'd seen in the internal Halliburton documents -. that is the bubbles could come loose. And the truth is nobody really knows with any precision. So then we look further back. It doesn't appear that anybody at BP recognized the significance of this information. I should introduce Sean Grimsley.COM . very similar. that it was two hours of conditioning time.. and BP's report says you could have nitrogen breakout. clearly unstable. The worst yet. Unstable foams lead to a poor structure that is highly interconnected. And again. Now. the cementing team at the time it was cementing the job and. but it listed the wrong conditioning time. yields high density. There's also a fourth test. should have led them to be very careful and very concerned about what they were going to do next. Halliburton ran a pilot test. And in February. Ever reported to BP? No. they are something that should have been in the head of the design team. This could cause a host of problems. It doesn't appear that anybody highlighted this information. saying good foam stability is required to maintain the initial foam structure until setting. or at least suggest. There are textbooks saying that -.

m. 120 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 The process by which the Deepwater Horizon buttons up that well is called temporary abandonment. Now. NOVEMBER 8. obviously. then.COM . they will be stopped by that surface cement plug. believe it or not. a But for present purposes all we need to know is that lockdown sleeve actually locks the long string casing in place. how on earth is that casing going to lift up. But notice. The temporary abandonment phase is basically just the procedures that the well undertakes -. And this is basically a 300-foot plug of cement.. and rather than keep heavy mud in that space.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. above that surface cement plug is seawater. There's been a lot of talk in the media about this lockdown sleeve and the fact that PLANET DEPOS 888. When a production rig actually come backs to produce this well. And also the rig brings with it its blowout preventer. If hydrocarbons begin to leak in. this casing string can actually be lifted up.BP chose to run a very deep surface cement plug. bringing it from the picture on the left to the picture on the right. the temporary abandonment phase. Heavy-weight mud is about 6 pounds per gallon heavier than seawater.we'll talk a little bit more about it later -. Well. 14 and a half hours later. The last point I want to make on this slide is the lockdown sleeve. that the rig crew will put in place before they actually temporarily abandon the well. It locks it to the wellhead so at no point. BP chose to fill it with seawater. you'll notice the rig is gone. And that cement plug acts as a backup. one thing I would like to -. so the decision to replace all of that heavy-weight mud there with seawater took a lot a substantial amount of pressure from out of the well that was otherwise pushing down and helping to hold the hydrocarbons at bay. there are quite a few differences between those two pictures. And you may ask yourself. that the rig crew ensures that that well has integrity and is fully buttoned up.the drill people are here -. is the first explosion on the rig.or the rig undertakes to get from the picture of the well on the left to the picture you see on the right. from the well. of casing.PLANETDEPOS. It does not extract hydrocarbons. a 30-story building of cement. So it's critically important that this well is going to be sitting there in the Gulf of Mexico without a blowout preventer. and they're also moving somewhat quickly.000 feet below the mudline.one myth I'd like to deal with. it's bringing up very hot hydrocarbons up this production string. All the mud. And in this case -. The depth here is 3. What I think many people may not realize is that the Deepwater Horizon does not actually produce the well. So you see here there is no blowout preventer. So what is the crew doing on the rig after the cement job? They're moving to the next phase of the well. The rig has taken its riser with it. So the lockdown sleeve's purpose is to prevent that from happening during the completion or production phase. millions of pounds perhaps. will the casing actually lift up. And you'll see. and then ultimately will cement it in. button it up to leave it for a production or a completion rig to come back at some later date. 118 backup barrier just in case anything happens with the cement down at the bottom. So I'm not trying to change you short here. The heat and the movement can actually create lift. 2010 30 (Pages 117 to 120) 117 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 119 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 went so well that they actually decide to send home the contractors they had brought out to the rig to perform the cement evaluation tool. at roughly 9:49 p. some of the other differences you'll see is a cement plug. There's hundreds of thousands of pounds. The lockdown sleeve is represented here by these two black boxes which obscure -. So it's critical to understand what happened in that 14 and a half hours. Now.433. the heavy-weight mud that's in the riser is gone along with the rig. it has to do with the completion and production of the well. First.obscure a tremendous amount of engineering technology.3767 | WWW. It drills the well. and if the lift gets great enough. oil and gas.

NOVEMBER 8. Now. whether it may or may not make sense that this should be an additional safety measure when drilling rigs are out there drilling these wells. The first is called the seal assembly test. which is right here between the casing and the wellhead. The positive pressure test is testing something different. and nobody disputes that it was a good test. So there are a variety of tests that the crew will undertake to make sure that the well has integrity.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. But just keep in mind. this being one of them. there is a space there that needs to be sealed.back it up.COM . And the way the crew sets up the test is to close now a different set of rams. it would not have been unusual at all for BP not to have set a lockdown sleeve at all before the Deepwater Horizon left.PLANETDEPOS. they're going to isolate this space right here and create a closed container. They actually close around the pipe and create a seal. So at this point you have created what should be a closed pressure vessel. And this is how they do it. As you might imagine.but they're basically pipes that run from the BOP back up to the rig.we haven't talked much about them -. And those pipes allow the rig crew to send fluids down into the well and bring fluids back up without having to rely solely on the drill pipe or the riser. which is the positive pressure test. that's another story. But suffice it to say. This time the blind shear rams. So those pipes are used for a variety of different activities -. going forward. So we'll move on to the next test. BP. this animation obscures a substantial amount of very high-tech engineering.one of which is the seal assembly pressure test. So again. please -. or at least have a very good idea that those seal assemblies are doing well in holding pressure. and then watch for some period of time to make sure that the pressure holds. and pumps in pressure. temporary abandonment. close the valve at the top of the rig.3767 | WWW. what the crew does is pumps pressure -. So the crew shuts in the well. The rig then pumps down pressure through one of these three lines. They do that by running a drill string down with a packer. The next thing they will do is close these variable bore rams. But it is not just an emergency measure. If the pressure doesn't hold. What the positive pressure test is testing is actually the integrity of the casing down in the well. This packer right here seals off the top of the well from the bottom. Typically lockdown sleeves are not actually placed until the completion or production rig comes back to produce the well. you want to make sure there are no leaks in this well when the Deepwater Horizon picks up and moves away. like many other parts of the BOP. isolating the bottom from the top. And out here on the Macondo they ran a seal 124 122 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 So the first step in the temporary abandonment sequence is to test the integrity of the well. discussed earlier. If the pressure holds. for whatever reason. you can be sure. it is that BP was going to set it at all during this phase of the well. which is when the rig is going to move away. And there have been questions as to whether BP should have set this lockdown sleeve earlier in the procedures. for regular operations. The seal assembly test basically tests the seal. And you see in these three lines -. 2010 31 (Pages 121 to 124) 121 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 123 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 it was not set before the time of the blowout. So Fred talked a little bit before about the blind shear ram and how it's used in an emergency to cut the pipe and shut in the well. And again. The PLANET DEPOS 888. to what you see on the right. So the crew will pump pressure down into this closed vessel.pumps pressure down into the well and see if that pressure holds. it indicates that there is a leak.433. It's actually used. So the crew needs to test the casing hanger seal assembly. as Fred 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 assembly test and it passed. I will tell you if there is anything unusual about the lockdown sleeve here.stop it right there -. getting the well from what you see on the left at the end of the cement job. First. are part of the BOP. These variable bore rams. And again. made a decision here to set the lockdown sleeve at this stage.

000 feet with seawater.433. So what you're going to want to do is remove the effect of the downward pressure of some of that mud and then watch what happens to the well. And we've now come up to the negative pressure test.i to watch if it holds. The problem. If it holds. and nobody disputes that the positive pressure test here indicated that the casing had integrity. that's a good positive pressure test and it indicates that you have good integrity. So I would like to explain just a little bit basically what a negative pressure test is. what you do is you remove pressure that is already in the well 128 126 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 at Macondo that actually tested the integrity of the cement at the bottom. that mud alone was sufficient to hold the hydrocarbons at bay. The next question you've got to ask is how much of that mud do we want to remove. Next slide. With the positive pressure test." So it's a very important test. And in fact. It went well. and also the casing itself. when starting the negative PLANET DEPOS 888. The crew at Macondo performed a positive pressure test here.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.PLANETDEPOS. the positive pressure test.or the crew will then pump in 2500 p.s. before the cement job. Transocean general manager for the Gulf of Mexico. "Please tell the Board how important or not important a negative test is. because the negative pressure test is the only one that tests the integrity of the cement at the bottom. So here is testimony from John Guide. with both the positive pressure test and the casing hanger seal assembly test is that neither of them test the cement at the bottom. and they're actually on a ledge. but it is the last test actually performed. There is only one test that was performed This is the testimony from Daun Winslow. If it does. though. And the thing you're worried about leaking from the outside in are the hydrocarbons down here. if anything leaks from inside the well to outside." "Answer: It's very important.i pressure and watch if it holds for 30 minutes. the situation at the time of the cement job.COM . you're pumping against those wiper plugs so the cement is not really seeing any of that pressure. That removes pressure from the well.s. NOVEMBER 8. recall that there's 18. So here. who was BP's well team leader for the Macondo well. That exerts a substantial amount of pressure down on the bottom of the well.3767 | WWW. 2010 32 (Pages 125 to 128) 125 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 127 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 crew will pump in pressure for five minutes at 250 p. you're pumping a lot of pressure in here. With the negative pressure test." So I want to set the stage for the negative pressure test.000 feet deep and replace the mud in that 3. That's the negative pressure test.000 feet of heavy-weight mud. A negative pressure test is in many ways just the opposite of the positive pressure test. "What is a negative test designed to evaluate? "Answer: It's also designed to see if the float equipment and the cement. Not only is it the only one that tests cement. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 and see if anything leaks from the outside in. it is a critical test in the life of the well. "Question: Is it accurate to say that this is the last evaluative test that is performed on a well before the BOP is pulled and the rig is demobilized?" "That is correct. but there are these two wiper plugs at the bottom. at least within the casing string down in the well. you're pumping pressure in and seeing if it holds. You see. Now. then for 30 minutes the crew will pump in -. So when you're pumping pressure into the well. which all acknowledge is really the only test performed on the cement job that day. Here recall BP decided that it would set its cement plug 3. or the effect of which do we want to remove? And that's going to depend on your temporary abandonment plan. So the question is: How do you go about removing pressure that's already in the well? Well. You've seen all those bullet points that we put up before. things that might cause concern in the minds of people about the integrity of the cement job. actually the cement in inside the casing is holding.

COM .8. Right there.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. That annular preventer will create a seal which isolates the mud and spacer in the riser from the well below. The only problem right now is that there is some residual pressure left over in the system from having actually displaced that seawater. these little bow ties. If you open it up.433. So here is what a basic negative pressure test might look like. So whenever you are going to displace mud with seawater. But it then must 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 before you start your negative pressure test. And here on the side is what it's supposed to look like.will displace the mud from 3. or the blowout preventer.000-foot column of water that simulates or replicates the pressure gradient that the well will see once it has been temporarily abandoned. But in a good regular negative pressure test. Stop it. So here you are displacing mud. in this negative pressure test. And if it turns out they're seeing a lot more fluid come back than they anticipate. That is what is called displacement.000 feet of seawater that this well is going to see at the time of temporary abandonment. they just watch.3767 | WWW. you want to simulate that situation. around the drill pipe. that can be a problem. NOVEMBER 8. has removed the effect of this 3.000 feet of mud in the riser that you're taking out. it's kind of an orangish-purplish interface. fluid comes up. pushing it down through the drill pipe. 2010 33 (Pages 129 to 132) 129 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 131 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pressure test. green open. so you want to remove the effect of that 3. So keep rolling. it's open. In this case it's fluid. Displacing. That represents spacer. This is not what happened at Macondo. it's closed. you don't want them to mix. They can do those calculations. you open it up. up here I just want to point out.PLANETDEPOS. So they bleed it down until they get the pressure to zero. or seafloor. water and mud don't get along. And when I say bleed off pressure. And how that is done is with the drill pipe.at the rig and bleeds off pressure. And people will have a very good idea beforehand how much fluid should be bled off before they will reach zero. This one right here when it's green. I just want to give you a sense of how it might be done. those are valves. a temporary abandonment. So keep an eye on the bow ties. So the crew runs a drill pipe down to 3. So the next thing the crew does is opens up that valve on the drill pipe at the top of the -. So at this point the crew. Because recall. all that means is that you're taking one fluid. heavy-weight mud with seawater. The active displacing that seawater. Like Sam talked before.s. When it's red. Because what the crew has now done is taken PLANET DEPOS 888.i when you start your negative pressure test.000 feet down below the mudline to above the annular preventer. you need to bleed off that pressure. we have displaced mud with seawater through the drill pipe. you get some pressure that gets trapped in the system and 132 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pushes whatever fluid was there already out.000 feet of mud in the well you're taking out plus what ultimately will be 5. what the criteria for success are. So the drill pipe itself now is an 8. The other thing to note here is the interface you see. And the goal is to bleed off pressure to where you get it down to zero p. When that fluid rounds the corner. air comes out. and then will shut another one of these rams. you're going to have this spacer in between. So the crew has run the drill pipe.000 feet below the mudline. It then does what is called displace the mud above that 3000-foot depth. it then 130 simulate also the 5.000 column -. So at some point the crew will get -. it's just like opening up your valve on your bike tire. in this case the annular preventer. So let's walk through just a generic negative pressure test. Now.000 feet of heavy-weight mud. red closed. And the next step is simple. So this is what you're trying to simulate. and then talk about what actually happened that night. they bleed off the fluid. So the crew at this point is almost ready to conduct the negative pressure test.

But for whatever reason. At Macondo the crew set up the test and then they got to the point where they were going to bleed off that pressure. They bled it down on the drill pipe. close it in. Others suffered severe medical injuries or are suffering from such severe medical conditions that they have simply been unwilling to talk at this point. It's basically just a tube. So at this point they move it to the kill line off the drill pipe.i pegged on the drill pipe.m. and I think everyone who has looked back at this. after three hours. Criteria. none of these men out on that rig want to die. if you think about the criteria for success. So we may never know.433.3767 | WWW. Many of the individuals who made those decisions. Now. They close in the drill pipe. pressure comes back up to 1400 p. once that pressure is bled down to zero. These are some quotes from the BP report. that night. No pressure buildup when that drill pipe is closed. the only explanation for it coming back up is that something is flowing into the well.i. But we do have some information.s.s. So at this point I would like to go over in PLANET DEPOS 888. None of the men out on that rig want to jeopardize their own safety." And what that means is the well was flowing. The kill line is one of those pipes that goes up from the BOP we talked about before.s. Couldn't get it actually to go all the way to zero. everybody at this point.s. NOVEMBER 8.m. that's fine. got it down to zero this time." Another quote: "There was 1400 p. The crew does it. "Abnormal pressures observed during the negative pressure test were indicative of a failed or inconclusive test. to 8:00 p. And others have asserted their Fifth Amendment right not to testify. You see. agrees that this was a failed negative pressure test. No flow. that drill pipe is communicating with the well. This is not what happened at Macondo.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. hydrocarbons. decided it was a good negative pressure test. bleed it off. The question is why these experienced men out 136 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 So they closed the drill pipe back in and the pressure came up to 1400 p. get it down to zero. Because remember. it means something is flowing into the well from down below.PLANETDEPOS. And you can run a test on a kill line. Hydrocarbons were leaking in. again. and you do not have well integrity. the test was deemed successful. however.i on the drill pipe. 2010 34 (Pages 133 to 136) 133 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 135 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 all of the pressure out of the system.i. The interesting question is not so much whether it was or was not a good negative pressure test. members of the rig crew who participated in those discussions died in the explosion.i. and a little flow comes out and stops. that there is a leak. The other thing the crew can do is shut in the valve at the top and see if pressure builds up. They open it up. The drill pipe and kill line are two straws that are going into the exact same place. So three times they try and bleed it down and get rid of the pressure and three times it comes back up. So it's fine to run the test on that. No pressure buildup. We have snippets from witnesses who walked in and out of the rig floor that night during those three hours. So that is what a good negative pressure test would look like. They open up the kill line. The question is: Why did they come to this conclusion? We may never know the answer to that question. because. it looks like that test on the kill line was good. all parties. They then watch that for 30 minutes. None of the men out on that rig want to jeopardize the safety of the men and women they work with day in and day out. They opened the drill pipe again to bleed it off. and we have the data itself. They should be seeing the exact same pressure. the crew. it comes back up to 1400 p. on that rig talked themselves into believing that this was a good test that had established well integrity. from 5:00 p. no flow for a substantial period of time when that drill pipe is open. There shouldn't be any difference whatsoever between them. but they never reconciled the fact that there was still 1400 p.s. 134 Now. If there is any flow after this point in time.COM . an indication of communication with the reservoir.

and the annular preventer is labeled. 16. they should be able to get it to zero. 140 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the rig sitting around in two different tanks. That's almost twice the density of seawater. These materials were what were known as lost circulation materials. which also has a pressure gauge. these lost circulation materials down into the well. they're bleeding off some fluids. But there is an exception to that requirement for water-based drilling fluids. If BP does not send this spacer. but here the crew does something unusual. PLANET DEPOS 888. Now. the seawater is pushing the spacer back up during the displacement. Fluid is coming out. So next the crew then tries to bleed down the pressure on the drill pipe. The pressure on the kill line goes down to 645.This is the negative pressure test at Macondo. they should be the same pressures. circulate them back up to surface where they can then overboard them because of that exception. a whole lot of sense given that these should be communicating with the same vessel. There is no dispute that that was the decision that BP had made They open up the drill pipe. Lost circulation materials are viscous fluids that you can actually put solid particulate matter into that you send down into the well when there has been a lost circulation or lost return event. So BP wants to send these materials down into the well. So at this point the rig crew opens up the kill line just to see perhaps if the pressures are equal. the spacer. That in and of itself is not a problem. that's not terribly significant for us except to note that at some point the rig crew is going to use the kill line during these procedures. Because. Now. We're not entirely sure why they do that. So keep that spacer in mind. You have those three lines going up from the BOP. but they can't get it to below 260. again. BP had some of this stuff laying around on the rig and wanted to get rid of it.3767 | WWW. The clue is that the kill line. This doesn't make.COM . 1250 on one should mean 1250 on the other. You've got the riser. So at this point they are setting up the test and. So here is the setup. a significant volume of leftover materials. So the rig crew may have wanted to see if the drill pipe and kill line would equilibrate.5 pounds per gallon.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. So let's start to run -. but what's perhaps more problematic is nobody had used these combined materials as spacer before. The spacer here was unusual. And that material can actually patch or clog up any of the holes in the formation. and something odd happens. So the rig crew gets the spacer and mud to above the annular preventer and closes the annular preventer in. And when you have a lighter fluid trying to push a much heavier fluid. BP wanted to use some leftover materials that they had on 138 here. So the mud engineers from M-I SWACO were consulted. NOVEMBER 8. in the abstract. So at that point the crew sees what in some ways they expect to see. the pressure on the drill pipe goes up to 1400. And they stop at 1250. This is the first thing to note at this point.433. and they bleed down the pressure but they can't get it below 260. And you recall. But everybody acknowledges that they had not used these materials as spacer before. So they go to bleed it down. it has to dispose of it as hazardous waste back onshore. and they said it should be okay.PLANETDEPOS. They stop. was there at 1250. the concern is that heavier fluid will drop down into the lighter fluid and so may confound some of the testing that is done later. 2010 35 (Pages 137 to 140) 137 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 139 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 more detail what that data looked like and what information we have that might explain why the rig crew and well-site leaders there that night came to this decision. But we have a clue. The other thing to keep in mind about the spacer is that it's very heavy. they're going to displace mud with seawater and spacer to above the BOP. If everything is okay. these two materials. like I said before. this residual pressure left over in the well. here is a quirk of environmental regulation. The first thing that the crew is going to do after running the drill pipe in is to displace the mud out of these three lines.

and they get the drill pipe pressure down to zero. Now. who is a BP well-site leader trainee." So that was the explanation. It wouldn't explain why the pressure would keep coming back up.s.Stop. Anderson saying about the bladder effect? Can you tell us?" "That the mud in the riser" -. there was a discussion on the rig floor.i.s. puts a flashlight down in and sees that the fluid level has dropped. They notice that the fluid level -.433. It doesn't say where. has now leaked down below the annular preventer.but according to some of the BP witnesses. that viscous material. or at least how it was explained to him by the toolpusher on the rig floor. Some of that spacer could have gotten into the kill line. the bladder effect does not exist. But what we know now is that everybody who has looked at this agrees. But what's happened now is some of that heavy-weight spacer we talked about. there's all that heavy-weight mud -. They attributed the cause to something called 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 place -. NOVEMBER 8. But at least the crew has now solved one possible reason as to why there might be a leak. according to witness testimony. So the rig crew shuts back in the drill pipe and the pressure goes back up again. Okay. So what does the rig crew do? Keep going." So they did. So after these discussions -. in turn. said about the bladder effect. at least on the kill line. on the drill pipe. some of this is in dispute -. then looked good. But they never reconciled the fact that there's that 1400 p.so remember. And then they shut it in again. The rig crew then decides we'll try and bleed off the pressure on the drill pipe through the kill line. They get a little bit of flow. it indicated. So one of the well-site leaders said. that it would run the negative pressure test on the kill line. at this point the crew notices something. the Transocean rig crew explained why they were getting this 1400 p. everything. 142 the bladder effect. One is the spacer. which you can do. They notice the fluid level in the riser has been dropping. So the crew pressures up on the annular preventer to close it fully. there are a number of possibilities that people have floated.3767 | WWW. which then stops. "What was Mr. And to the extent such an effect might exist.and again. How can those two things possibly be reconciled? Well. Maybe the mud in the riser is somehow pushing on the drill pipe and creating these pressures. They then close in the drill pipe to watch what happens. They opened up this kill line.PLANETDEPOS. and the drill pipe pressure jumps back up again.s. still on the drill pipe. This is starting now not to make sense and to indicate that there is in fact flow coming up from the well. PLANET DEPOS 888.i. it doesn't say what it is. We all know that there was a leak in the annular preventer and that spacer actually leaked down below. which would.one of the BP well-site leaders said.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Water is flowing.i. Keep going. so they go to try to test again. "Let's move the test to the kill line from the drill pipe. the enduring mystery here is why on earth was there 1400 on the drill pipe and zero on the kill line. but there's a leak. And here is what Lee Lambert. And like I said before.COM . Now at this point. for whatever reason. And the drill pipe pressure goes back up to 1400 p."would push on the annular and transmit pressure downhole. and this time it does go down to zero. be seen on your drill pipe. And according to certain BP witnesses -. "Let's move it to the kill line. Somebody actually walks over on the rig crew." And the reason given was that when BP submitted its application setting forth its temporary abandonment procedures. And what they realize is that the annular preventer is leaking. again. it wasn't closed quite enough. it certainly would not explain the data that the crew was seeing that night. there is a dispute as to whether they actually took 144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 So the crew bleeds off the drill pipe.and. Now. 2010 36 (Pages 141 to 144) 141 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 143 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 This indicates very clearly that there is a leak somewhere in the well.

And there is no indication to any of us thus far in the evidence that anybody spoke up and said.s. The next step would then have been to set the surface cement plug. it's going to be taking its riser. BP would then -." So it's eight o'clock at night and the crew is going to move on to the rest of the temporary abandonment procedure. Once that was done. is to actually patch holes and clog materials.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. We are not trying to assess blame or fault or liability. That's not our job. Another possibility is that a valve was closed wrong. and it needs to get rid of that heavy-weight mud. So then the question is: Why would these men not have realized that this was a bad negative pressure test? Oh." Similarly. "It could be different on every single rig depending on what the team agreed to. and just to show you here. But why would these men not have realized this was a bad negative pressure test? Nobody really in the industry or in government had set forth any procedures governing what the negative pressure test is. If you can't explain that 1400 p. again. as you might imagine. the next step that was planned was to displace the riser entirely. as a viscous material. Can you help us out?" It doesn't appear that anyone from BP did that. And John Guide said. And that is a process concern that we raise for the Commission to take into consideration. the final thing -. This is what it should have looked like in a perfect world. which was the 146 that at no point in time during that three hours did anyone on that rig floor call back to shore to say.3767 | WWW. had they not conducted a negative pressure test. they too require a negative pressure test in these situations. "There are problems. how to conduct it or how to interpret it.433. So for instance. Transocean has said that it is BP's responsibility as the well-site leader to sign off on the test. had no regulations governing procedures for conducting or interpreting a negative pressure test. "Boy. There is a possibility that that spacer over time clogged that kill line. at least prior to this event. The parties have. BP.and the rig crew would set the lockdown PLANET DEPOS 888.PLANETDEPOS. So it was to keep pushing seawater up the riser and pushing the mud out. 2010 37 (Pages 145 to 148) 145 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 147 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 And remember. Now. One can make the argument that the crew that night..final two things I'd like to say on the negative pressure test. one is a process point. We don't know what the explanation is for this difference. The only point we want to make is that those men. It doesn't appear that anyone from Transocean did that. the well-site leaders and the rig crew that night at eight o'clock all had 148 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 regulatory agency in charge of deepwater drilling in the Gulf of Mexico. the MMS. it's not a good negative pressure test. we shouldn't go ahead. And I'll just put forward here an animation explaining what the next steps at least were planned to be. while it requires a negative pressure test in these situations. Transocean. and that is that it appears to us 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 convinced themselves and agreed that this was a good negative pressure test. we're getting weird readings.COM . there were no regulations requiring one at all. doesn't have any set procedures nor does it train its well-site leaders in particular procedures.once the crew and well-site leaders green-lighted the negative pressure test. 30-story building cement plug. One other point. that 300-foot. but the fact is there's no good explanation for that difference. BP and the crew. zero. So once -. the Deepwater Horizon is going to be leaving. but they too have no set procedures or no training for their people. wanted us to assess blame on this.i. there is a problem here. the purpose of that spacer. Because. Indeed. would have been violating no regulation. Whose responsibility was it to interpret that negative pressure test? Who signed off on it? BP has said it was Transocean's responsibility as the rig crew in the first instance to do so. NOVEMBER 8. it's 1400.

basically.COM . So that's as of April 14th.000 pounds of weight was to hang. that is why they needed to set the surface cement plug so deep. And here is some testimony that you can look at. It's wide open. So at that point there would have been a barrier set. Stop it right there. And I'll just go through these very briefly. the more stress you're actually placing on the cement job. It doesn't have enough force to hold these hydrocarbons at bay once you pull up and there's no more heavy-weight mud in the riser. the plan would have the crew move right into displacement. then you've got a problem. And I'll talk about two points here. basically. So the more seawater you remove. in order to lessen the risk of this situation.is that BP chose to displace the mud from the riser before setting that cement plug or some other barrier. at this point I would like to make a few comments about the particular temporary abandonment procedures that BP chose and the sequence that they chose to put the steps in from getting from Point A to Point B. but still it helps. the negative pressure test. on the rig. The last point I would like to make is a process one.433. So that's one thing. the crew would pull up the riser and the blowout preventer and go on to the next job. 2010 38 (Pages 149 to 152) 149 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 151 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 sleeve. And the way that BP chose to achieve that 100. a barrier would be in place before PLANET DEPOS 888. 3. Just one thing to note about the lockdown sleeve. essentially. They needed that 3.000 feet below sea level. And what happens at this point is the BOP is open. And here it says -. The second problem with these procedures -or not problem but something that introduced additional risk -. the cement job.it depends on a human.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. the procedure was to run your drill pipe down to 3. If that cement job fails. of additional downward pressure. The reason for that is that the lockdown sleeve needs 100. could have either set the surface cement plug before displacing the riser to create a second barrier to flow or put in a mechanical plug of some sort.000 feet of space to accommodate the weight from the drill pipe to set the lockdown sleeve. So the decision to displace that much mud with seawater was a decision to stress the cement job perhaps more than was necessary. NOVEMBER 8. then set your surface cement plug.i. and hydrocarbons get past that 150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 152 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 certain amount of risk into the situation that may not have been necessary.3767 | WWW. We've talked a little bit about this already. the only thing you've got in the way is that blowout preventer. once the lockdown sleeve is set. It's helping out. that mud is exerting a force down on the bottom of the well.Oh. So on April 14th. What is of additional concern to us is that the procedures for temporary abandonment were changing up until the very last minute. because we think they introduced a testimony that setting the surface cement plug 3.PLANETDEPOS. And the blowout preventer depends on human -.000 feet deep was not only unusual but in fact unheard of. If a human doesn't notice that there are problems down here such that the BOP should be shut in. And it is a decision that puts a real premium not only on the cement job but on the test of the cement job.it basically eliminates 1128 p. Now. but to put in another barrier to flow during this time of the well. and there has been uniform BOP. Remember. There is a straight shot from the bottom to the rig. Finally. This again puts a very large premium on the cement job at the bottom and the negative pressure test that tests the integrity of that cement job at the bottom. And because BP wanted to set the lockdown sleeve last. You'll see that there is all this drill pipe hanging beneath it when it's being set. So once the negative pressure test was passed. Only once that barrier had been set would there be a negative pressure test and then would the crew displace the mud from the riser.000 feet of heavy-weight mud. As of April 14th.000 pounds of weight to be set. The first.000 feet of drill pipe.s. one of the engineers at BP sends out the temporary abandonment procedures. We believe that BP. but it's the removal of that 3. Two -.

and opted to give up safety for cost. and then you set the surface cement plug. it does not appear. I want to be sure you don't confuse what Mr.we do not say everything done was perfectly safe. we're running a tad late.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. And at this point you'll see again that surface cement plug is being sent last. which means we don't need to get into it. Now we're going to kick detection. that it was a different type of negative pressure test. I'm not saying -. like we talked about before the negative test. the point in time that the crew is about to start displacing the riser. They decided we could do the displacement and negative test together.3767 | WWW. The team in town wanted to do something different. Then they're displacing. the driller has to shut the well in quickly. There are people that make observations about what they thought other people might be doing.They've got a volume this thick on how you operate in deepwater.PLANETDEPOS. Last slide. And this is the ops note that was actually sent by the engineers to the rig on the morning of April 20th setting forth what the temporary abandonment procedures would be. Kaluza was not in on those conversations or told about why these procedures might be changing.and people have said people traded safety for dollars. It's complicated stuff. They say a kick is when oil and gas gets in the well bore. running the negative test. should have been changing up until the very last minute. Now. We welcome anybody that gives us something that we've missed. NOVEMBER 8. And with that. Maybe trying to save time. BARTLIT: And now if the Commissioners please. That I -.has to continuously monitor what's going on. This is a note from an April 28th interview of Robert Kaluza. this is where the blowout occurred. He was one of the BP well-site leaders out there that evening on the rig. We studied the hell out of this. This is Transocean's -. BARTLIT: I said earlier. I would like to go back to eight o'clock on the Deepwater Horizon. at least preliminarily to us. We'll take a shorter lunch break if necessary. First. Fast-forward two days to April 16th and the procedure has morphed. I understand the Commissioners want to keep going. At that point in time you displace mud from the riser. then you go into the hole to 8300 feet.433. We have not seen that. But we don't see a person or three people sitting there at a table considering safety and cost and giving up safety for cost. aware of safety risks. It strikes us at certain times and with certain issues you have to change things on the fly because drilling conditions change." So they combined displacement and negative test. It's critically important that everybody understand this. CO-CHAIR REILLY: We do. or in fact if they had changed. 2010 39 (Pages 153 to 156) 153 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 155 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 displacing the mud from the riser. that the driller -. Kaluza said with what I said earlier. MR. MR. And as it turns out. then setting that "Don't know why. But this type of temporary abandonment procedure. before that cement plug was ever set. The process point here is it is not clear to us why decisions on these procedures are changing in the last week before the blowout. there have been additional changes. Mark was on vacation. So now they moved putting in the barrier from before the displacement to after the displacement. Now the negative test is first. which is impressive indeed. We're saying -.COM ." So what is important about this is it appeared that at least Mr. you'll see him sitting in his chair -. then displacing.that's a Transocean person. I said we see no instance where a decision-making person or group of people sat there 154 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 156 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 cement plug. PLANET DEPOS 888. aware of costs.And you have to be sure you understand that. you monitor the well. Let's go now fast-forwarding to April 20th. And he says of this sequence on April 20th: "It was a different sequence. At the end of the well sometimes they think about speeding up. You know. they're going into the hole to 8300 feet. If there is a kick.

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Speed will determine the severity. As I said early, and I'll show you one more time later on, you have to remember things really happened fast. At the bottom what might be three or four barrels of gas, by the time it gets to the surface, because the pressure is less, it's moving like hell, it will erode. It's powerful beyond belief. You'll see the impact of these gas influxes just eroding away carbon steel all the way up to the surface. This really happens fast. Once -- once oil and gas get into the riser, you have almost no time to act, and that's important to understand. Okay. You remember I showed you at the beginning the rotary where the oil and gas came up on the rig and I showed you a little glass shack nearby? This is the driller's shack. This is the driller. He's sitting there and he has a screen in front of him, and he can choose what's to be on that screen and how it's to be displayed. The fact that he can choose what is on the screen is important because we so far do not know what

office that night; everybody had gone home. Okay. We're going to stop this now. This is the Sperry Sun data. And the information as to what was happening when the cement job failed at the bottom of the well and created a kick is here. Let's zero in a little bit. This is the information. And what we've done here is to move it sideways because every time BP displays this information they take it, flip it sideways and expand it. And that's because it's easier to see that way. And that's okay. So here's drill pipe pressure. Here's a pump pressure. Here's the Sperry Sun information. Now, this is a little complicated. We don't know that anybody in the world saw this specific information that night. It was available in the drill shack. It was available in the Halliburton mudlogger shack which I showed you. It was available back shoreside in Houston. But we don't know that anybody was looking at it, because the driller, remember, had this

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was on a screen like that that night. We don't know what was on the screen because it went down with the rig. It could have been -- We don't know how it was set up. We'll be asking questions of TO and others as to what they think it showed. But we only have a secondary source as to what the -- what the kick evidence really was. Here's a better shot of the driller's screen. We've all been out on the rigs, some of the Commissioners. Commissioner Murray went out on the rig with us and saw this. Now, if you look here, off to the side there's another screen. That has what's called Sperry Sun data. The driller has the Transocean high-tech data. The Transocean high-tech data is gone. Sperry Sun is a subsidiary of Halliburton. Sperry Sun keeps separate information that's available here. It's also available shoreside at BP's office there. If you went into the Macondo office that BP had that night, you could have seen the Sperry Sun data there. There was nobody in the BP Macondo well

information available but would have been looking at the TO screen, not this. So it's a little -- it's difficult for us to surmise what this information shows when we don't know anybody ever looked at it. But what it does show is this. Here -- and I try to imagine myself having been there for eight hours in that chair watching this stuff, and I imagine, "Is this a big deal?" Well, here it is here turned sideways and spread out and the drill pipe pressure -- the pump pressure is constant. You have the drill pipe pressure is increasing. It's a slight increase. It's subtle. Now, if the driller knows that they are at the same time displacing heavier fluids, mud with lighter fluid, seawater, then maybe it makes this upward move of the drill pipe pressure more significant. And one of the points we're going to make here is that this system depends on the right person watching this information at the right time, having

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enough knowledge about all the other activities that are going on on the rig to interpret it the right way, and to act very rapidly. It depends on a -- on people getting every -- basically one person getting everything right at the right time when you have to move fast. At any rate, we've talked to a lot of people here about whether if they were sitting there -- people in the industry generally. And, you know, because I don't have subpoena power, I have to look you in the eye and say I'm telling you what people told me. I can't subpoena people and put them under oath. I wish I could, respectfully to the Commissioners, because I think it's damn important. But it's the way it goes. People in the industry have said to us, "Of course, we would have noticed that. That's a kick detection. We would want to move fast." So I pressed them like I'm pressing myself here. And people then began to say, "Gee, I don't know," at least about this first one. Now, the second one is interesting because

Now, this is a little bit unfair because I'm talking about the Sperry Sun data, and the data the driller was looking at was the TO data. And maybe the TO data was a lot clearer than this. Maybe it wasn't as clear. Maybe there was -- there was digital information that was easier to pick up. We would sure like to know that, if the Commission please. But we don't. I would expect, I guess, that the TO screen, just common sense, would be better than Sperry Sun because it's their rig and their investment and their money. But I don't know that, I'm just -- It's shear total guesswork. But it's a critical thing that would be good to know. Now, one of the issues, we know there was -- there was -- there was a kick then. We know hydrocarbons were coming through the cement job that had not been remediated. It could have been remediated if people had decided to but wasn't. We know there was a leak. Remember I told you earlier that we would discuss where the leak occurred. Did it come up this

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they turn off the pumps totally to perform a test. The pumps are off, and now the drill pipe pressure is going up quite a bit. We've met with TO at length, and they've given us a lot of data and useful explanations that can explain why at the beginning and the end some of this happened. But nobody can say that in the core of this period the drill pipe pressure wasn't going up when the pumps were off. And most people we talked to throughout the industry say that's a kick and it should have been defected and somebody move fast. The explosion occurred at 21:49. This is 21:10 to 21:12, a half hour to act. The BOP can be closed in 46 or 47 seconds. So the -- the -- We'll be talking about this later, but when I looked at this, just an ordinary person, I said, "Gee, with all the skills that NASA and people have, isn't there a better way to display this information so that it's clear, and we have algorithms that point when things are heading in the wrong direction?"

annulus here or did it come up the shoe? Let's go to the next one. Okay. This is a casing hanger seal. We've talked to Dril-Quip. They made this. They're very cooperative. These guys have some of the best engineers I've ever met, and I've been in this business a long time. And they say there is no damage to the casing hanger seals at all, they are pristine. If the leak came up the annulus, there would be some damage to the casing hanger seals. Remember I told you you would be blown away by the power of this gas under pressure coming up through the riser carrying sands and everything? This is the way the inside of the casing looks when it's made in the factory. This stuff is so strong that on the inside quarter-inch deep slots have been just totally blown away by the force of your own gas coming up through that casing. Amazing, the force of this stuff. But the inside is totally eroded and the outside is pristine. BP agrees that the leak was up the shoe and

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not the annulus. I think TO agrees. We're not sure about Halliburton. We'll ask them today. They may say, "We don't have a dog in that hunt." We don't know that, but that's what we'll be doing this afternoon. At any rate we feel, and more importantly Dril-Quip, who is sitting back here, has told us their view is that the leak came up the shoe and not the annulus. They say if the flow from the annulus -had been the annulus, it would have come from these holes. You've seen what that pressure can do in a big area. These little holes would have been just torn apart if it had come up through the annulus. That's more evidence our way. Now, there has been a discussion here of what happened at the very end. Transocean was good enough to prepare this slide for us which shows the kinds of activities that were going on. The negative test took three hours. They did it two or three times. Sean Grimsley has told you about the discussion. At eight o'clock they deem it
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what everybody else is doing. That's part of the regulatory aspect of this. Now, the -- Here's the diverters, here's the mud-gas separator. Remember that the hydrocarbons come up here. The crew has a choice of sending the stuff that's coming up. Mud is now on the rig floor. Mud is there because the pressure of the reservoir is pushing the mud up first. And if the mud comes up first, gas is coming up next. When gas comes up, that's really bad. So the crew could send this stuff to the mud-gas gooseneck. It's a mud-gas separator. Mud sometimes has gas in it. You can -- you can separate the mud from the gas, put the mud back in the mud pits, put the gas overboard and you're fine. The mud-gas separator is a very relatively lightweight piece of apparatus. The mud-gas separator in no way could have stood the pressures that were coming up from the bottom of the well. And it didn't. And there's a question here as to whether if the crew had diverted it overboard, if immediately as soon as they saw a problem, instead of sending it

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done, wrongly, erroneously. We have to keep repeating, nobody thought they were taking a chance. Nobody thought that the negative test had been screwed up. For one reason or another, they convinced themselves that a faulty test had actually succeeded. Critical point in this thing. Now, you will have a chance to look at this. We're not going to go through these at length. Transocean has given us this. But it shows the activities that were going on from eight o'clock when they began displacing the riser. Again, these aren't familiar terms. When you take the seawater out of the riser, when you take the mud out of the riser and put in seawater, then there is less pressure holding in the oil and gas at the bottom of the formation. And anyway, we see the different activities that were going on, and it will be up to the Commission to decide if those were too many activities, if they're all being done by different people at different times, if you should have rules about what activities are going on so everybody knows

to the mud-gas, if they had sent it overboard, would that have stopped the explosion? Would it have mitigated it? We have some information on diverters. Remember gas is in the riser now. The issue is BP says the TO crew might have done better if they had sent it overboard instead of to the mud-gas separator. Time is happening rapidly. We're all dealing in hindsight now. Let's see what the existing knowledge was on diverters. The -- This is a Transocean document. Having gas in the riser, bad thing. If there is rapid expansion of gas in the riser, the diverter must be closed and flow diverted overboard. If you look at the TO manual, you're really impressed by it. It's a safety expert's dream. Everything anybody could ever imagine is in there. Richard Sears and I tomorrow will talk a little more about it, because as one looks at it, everything under the sun is covered. It's hard to see at a particular place somebody saying symptoms of that or this. If you see that, do this.

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COM . The last two hours. which underbalances the well and allows the hydrocarbons to come up. People knew that this was something you've got to really be careful. And again. The BOP is open. Hydrocarbons emerge on the rig. the well was underbalanced. I've agreed with Transocean and its lawyers that this slide accurately reflects the -. And we can't assume it until somehow we try to figure that out.433. They're not easy issues. The cement. And that's where the initial explosion is. They begin to remove the heavy mud. Finally. remember I showed you the Sperry Sun kick detect information. 1992 to 2006.what was learned from that explosion. One would hope the driller was looking at information that was clearer than that. Production rigs are -. 2010 43 (Pages 169 to 172) 169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 171 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 This is not said by way of criticism. There is a report on diversion. Let's go to the next. Transocean had had an earlier well control problem in the North Sea. The success rate for diverters was very high. although nobody pressure going up? And I said the problem is. not a rig expert. Transocean tried its darnedest to be sure that people knew that problems could be caused when wells are underbalanced. explosive gas coming up into the riser at extremely high pressures mixed in a perfect air mixture. But Transocean knew that they had to highlight to the driller what the kick detectors are when you're not drilling. Now.a lot -. that that's not probably what the driller was looking at. they say it twice. what's high vigilance? I mean. a lot of this depends on the right person with the right knowledge and the right background and the right experience being in the right place at the right time and seeing the right information and making a decision quick. the red drill pipe 172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 protected. And this is a point we've covered before. if you've got huge volumes of a highly inflammable gas. Drilling rigs are not as fire 170 knew it. Secondly. We'll get to that tomorrow."The only barrier we had that night was the cement. It has been wrongly interpreted as successful when everybody now agrees it was unsuccessful. They were not drilling. you've got to recognize when the well is underbalanced. there might have been different ways to make clear exactly what should have been done in a short period of time. There were kick detectors. that's a lesson they learned and communicated to their people. Transocean and the well's operator analyzed the event and here are the conclusions they reached: "High vigilance is required when you have one barrier underbalanced. To an ordinary person. 16 of 20 diverter uses were successful. what are the five steps you ought to take? Should you have your hands somewhere? I don't know. NOVEMBER 8. Some were subtle. and the well was underbalanced. PLANET DEPOS 888. The cement had failed the negative pressure test.a lot of attention is paid to every light fixture being sealed. We all know now that a little gas at the bottom is a lot of gas at the top. but we all agree that TO. some say were less subtle. pretty likely something is going to happen. and gets confusing. This is what happened. There's been talk of can you fireproof a rig. is the only barrier. It's 8:02. Again I say. but we don't know that. which we now know was flawed. this is a wonderful observation. People have tried like hell in this manual to get it right. I don't envy the Commission their task here. But it may be that when time is short. Let's just cut to the next slide. and that called for heightened high vigilance by everybody and their crew. Anybody who has any engineering at all knows that gas and air creates a perfect substance for an explosion.PLANETDEPOS. The negative pressure test is over.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. You have to be aware the well is underbalanced and you have to have heightened vigilance. We're now going to the blowout.3767 | WWW." So people knew there was one barrier. but how do you highlight it? These are some of the issues the Commissioners will be dealing with. You've seen the erosion and we can cut to the chase. things like this." We had the -.

People are advocates. There's anomalous drill pipe pressure. Eight minutes later the gas is up. There's a nearby ship. There are disputes between Halliburton. I keep saying this.433. We don't know if that's accurate. the hydrocarbons will start entering the well. power lost. they don't want them to get involved. there are all these ships working around them. It seems like it's a week ago. Even if the BOP is shut at that point.I showed you early on. That means if the -. they're in the riser. Okay. about who has responsibility for what. The mud is in the top in the riser.so far I have no reason to believe anybody's intentions -. Now the well is underbalanced. good ones. 21:38. Senator. The cement is the only MR. We assume that it's sensible. there will be 20 standoff ships. It took 50 minutes of taking out the heavy mud and putting in the seawater to underbalance the well. The hydrocarbons are coming up under enormous pressure. you can't stop the influx of hydrocarbons. you know. And if you go out in the North Sea. The BOP is open. there is nothing you can do to stop that. 21:40. They say. That's that big tire that closes -. You'll see how fast this happens. First explosion. When they're above the BOP. The BOP is open. Now the annular preventer is activated.on the hydrocarbons PLANET DEPOS 888. I'm just telling you what BP says." Gas comes out on the drill floor. but it's so easy to get confused. We do not know what Transocean's driller was looking at. because it's going to be hard to resolve those unless I can sit people down in a room in a very professional. You know what I mean by that. It's like a small community out there.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. They think of the ship. If you shut the BOP down. They are going to get up in the drill pipe. something bad is going on. (Laughter) anything to me that they don't believe. A little after that. Annular preventer activated. 2010 44 (Pages 173 to 176) 173 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 175 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 50 minutes later BP calculates through their -. They're going to come out on the rig. we get this subtle increase.this is the first action taken by the crew when they physically see the mud coming up on the floor. If there is an explosion. The drill crew does exactly the right thing. Now. NOVEMBER 8. The symptoms are now starting to show up again on this very Sperry Sun data. We'd get a lot of arguments. high-powered ones. mud actually is coming out on the rig floor.they have some software called OLGA which we have not unpacked yet. "Move back. And nobody has really quarreled with some -. So the crew. 21:38. if the Commission please. We sat down with everybody. The well is underbalanced. You see clearly that it's when the negative pressure test is wrongly concluded to have worked and they start removing the mud until the pressure on the -. There are disputes. what's believable and what's not believable. BARTLIT: It shows the -.if the cement job is failing. operated then at 21:41. Now we get -. This really brings to life those last couple hours and what was going on. BP as to who said to who one -.The pumps are off and then now we see the drill pipe pressure going up more steeply. nine minutes after that.I've put up here BP's conclusions that most people don't disagree with. When they get up in the drill pipe above the BOP. you're probably going to have a big explosion. Hydrocarbons are coming in the well. We haven't gone through it and figured out. gentlemanly way and cross-examine them and find out. the Damon Bankston. you've still got a mile of riser full of hydrocarbons.said what to who when. they're pushing the mud out on the rig floor. If you go out to these wells. They're above the BOP.It closes the annulus. But there are -.PLANETDEPOS. the BP report calculates that hydrocarbons are now in the riser.3767 | WWW.COM .said 174 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 176 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 barrier. would that have solved maybe some of the later problems? Maybe. There are disputes between BP and Transocean as to who said what to who when. Transocean's crew. Things happen fast. Imagine the volume. Not that anybody's intentions -. BP says this is the first kick -. This is where subpoena power. would be helpful.

We don't know that. We think that setting the temporary abandonment plug. and in some portion of the annular space failed to isolate the hydrocarbons. something. We have -. I don't want anybody after January 11th saying. Not commenting doesn't mean they agree. The Halliburton -. This is -. The cement may be contaminated. maybe they would have run the cement bond log instead of sending Halliburton home. Preliminary. but might not have shown some of these other things. But we don't know what the cement log would have shown. BP had good reasons for doing that. The negative pressure test repeatedly showed the primary cement job had not isolated hydrocarbons. if they don't want to comment. I think Sean Grimsley drove that home. (Laughter) MR. all those cement issues.000 feet instead of 300 feet reduces the pressure holding the hydrocarbons in at the bottom of the well. we'll use those papers to cross-examine people further. the annular space cement is what walls off the hydrocarbons.or BP conceded in its report that maybe if they had done a risk assessment at that time of all the things we showed the Commission earlier. BP and TO treated the negative pressure test as a success. I said earlier we would give this group. And if we ever get subpoena power. Despite showing that. I mean. and we're ready to be talked out of it if we made a mistake. I don't think we are.If there is something that I'm PLANET DEPOS 888. We look at some of these differing results and we think maybe more time could have been spent getting consistent results. fine. That means we will change them if somebody gives us information that we're wrong. which would be the good thing to do. But we feel. They candidly admitted that. you don't stir it for three hours before you foam it. Now. with every kind of idea under the sun in it. 300-foot plug. It may be scientifically that foaming it and then taking that long trip down the well gets the same scientific result as first conditioning for three hours and then foaming it. Pre-job laboratory data should have prompted redesign. The negative pressure test -. Halliburton and TO. Setting down at 3. that low instead of 300 feet introduced some additional risks. Most operators would not have run the tools at that time.3767 | WWW. it's just a statement. they don't have to. 2010 45 (Pages 177 to 180) 177 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 179 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 is released. channeling. Okay. and you have every chance in the world to prove. 178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 180 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 exactly what we're thinking so nobody is surprised.PLANETDEPOS." Tell us now. Remember that the -. you know. But I told all the parties at the beginning of this back in August that I would tell you On the rig. that's when everything starts going south. BP's temporary abandonment procedures introduced additional risk.Oh. I'll say. It probably would have shown top of cement.most of the lab reports show that this stuff works better if you stir it for three hours in the laboratory before you foam it.I don't mean that in a threat. may be displaced by other materials in the shoe track. tell us how we screwed up and how we're wrong. "Does anyone want to comment on any of these?" They're free to comment. which you heard. And when we begin the afternoon. They can submit a paper within five days. as long as it wants. but everybody makes mistakes. "You missed something Fred.COM . They would have relied on the negative pressure test. I keep saying this. Remember.433. NOVEMBER 8. BARTLIT: I'm not -. So the hydrocarbons couldn't get in unless something happened there. contamination. and we've given them already to BP. You foam it and then you send it down the well.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Flow path was exclusively through the shoe track and up the casing. our preliminary technical conclusions. The sequence is different. cement evaluation tools might have identified the failure. If they want to comment.People have told us looking at this that the simultaneous activities and the nature of the monitoring equipment made detection more difficult during riser displacement.

and triggering the emergency disconnect earlier might have shut in the well and limited the impact of an explosion. or themselves. I would hope the information would be at least as good as Halliburton's Sperry Sun information. MELCHERT: Good afternoon. Fred. sending it overboard. we're going to do it the cheap way instead of the safe way.433.PLANETDEPOS. Nevertheless. And I've been on a lot of rigs. And I'll turn it back to you. I explained the diverters. the kick indications which I showed you. With that. it's premature. CO-CHAIR REILLY: We will now resume with the panel discussion with BP. If you don't comment. That's why we say might have shut in the well.COM . that $1. and it really is important that you -I've mentioned this three times that you distinguish what I'm saying. the two drill pipe red lines. I'm the commission manager at the Department of Energy. Bill. Thank you. As I said at least five times. Designated Federal Officer Deputy Assistant Secretary Christopher A. They want to do a good job. that doesn't mean you admit them. 2010 46 (Pages 181 to 184) 181 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 183 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 less certain about than others. there were options that might have prevented or delayed the explosion.3767 | WWW. even in the United States government today. So there is a complex sort of a matrix here. if observed. it will be safer. Once the rig crew recognized the influx. CO-CHAIR REILLY: Thank you Fred. and we've asked everybody. See you then. were clear enough that. I think it's more complicated than that. would have allowed the rig crew to have responded earlier. Transocean and Halliburton. and in the afternoon we'll be asking a number of questions of the panels.5 million is overhanging the heads of people on the rigs. I call this meeting back to order and turn it over to the chairs. 182 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 emergency disconnect would have worked. it's this one. because you can argue endlessly over the effect of moving mud around in these pits.5 million a day is a lot of money. Sean.right now PLANET DEPOS 888. Diverting overboard. As we stand here today. this is really dangerous but the guys in London will make more money. Commissioners. Thanks so much for your attention. we were going to give you a chance to comment on any of the conclusions. I'm Elena Melchert. I'm sure you wanted to hear more about the BOP. were the cables damaged. Smith has appointed me to serve as the designated officer for the remainder of this meeting. We haven't seen that. this is personal. BARTLIT: Thanks. we don't see where a man or two men or a group of men were making one of these decisions and they had in their minds that if we do it this way. we don't see a concrete situation where human beings made a tradeoff of safety for dollars. the representative for this Commission.now. The irony here is we don't know what the drill -. it will be cheaper. but they don't want their buddies to get killed. MR. I don't believe people sit there and say. or at least until his return. And there are issues as to whether the costs $1. But we've heard this enough times that that is a preliminary conclusion we're confident we're prepared to make. but they don't want to risk their lives or the lives of their buddies. Okay? So what we're saying is that human beings that made the decision shoreside and on the rig. NOVEMBER 8.) MS. We know. Gentlemen. if we will do it this way. I do not believe anybody on these rigs -. other things would have worked.what TO's driller was looking at. We will resume at 1:30. Instead of putting this stuff up through the mud-gas separator. And finally. "Well. for that tour de force. There's a lot of complexity to this. it means that you didn't -." I don't think they think that way.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. (Recess taken. And the -. Technical conclusions regarding the BOP should await results of the forensic BOP examination and testing. as I said earlier. And the idea that a day's delay Sam. And the matrix is they want to be efficient and they don't want to waste money. That's in 30 minutes.

CO-CHAIR REILLY: Yeah.with the conclusion that's drawn.i. BARTLIT: Do you have a view on whether the flow path was through the annulus. down into the casing and up into the annulus. You don't both have to have opinions. And I do disagree with the -.. But basically.COM . obviously we had indicated to BP.a cleanout trip was run after logging. as a result of the cementing operation and displacement. and we'll consider it. Do either of you have an opinion regarding where the flow path was? CO-CHAIR REILLY: I'm sorry. First. VARGO: I think it was initiated up the annulus.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. like BP said in their report. up through the shoe track? MR. This is with -. Gisclair and Mr. 2010 47 (Pages 185 to 188) 185 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 187 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 you weren't prepared to add something. and you feel that supports your view that the leak came up through the shoe track. At the point of the -.s. AMBROSE: Just from the work we've done And I'm not really in a position to contest it either way. to introduce themselves. BARTLIT: And what do you base that on? MR. Mr.433. NOVEMBER 8. Mr. MR. MR. a second. VARGO: My name is Richard Vargo. Fred. PLANET DEPOS 888. MR. I'm the Gulf of Mexico cementing manager for the region. VARGO: That's fine. It was noted that there was 1200 units of gas that was circulated out of the well prior to them coming out of the hole.doing a bottoms-up circulation was not performed. People can add material later.000 p. MR. If you go back before the actual incident and -MR. it may be a first for you. obviously. I'm John Gisclair. BARTLIT: Is that better? CO-CHAIR REILLY: Yes. Vargo. We know BP agrees with that because we read the report. I need to interrupt. VARGO: Basically there's a -. MR.PLANETDEPOS. could we get a little more amplification? MR. What that does is -. I'm sorry to interrupt. GISCLAIR: Yes. and that's roughly 13.down the drill string.3767 | WWW. BARTLIT: Are you doing further work? MR. we believe that gas and oil was pushed up the annulus. plus or minus. sir. when they are the first to answer a question. BARTLIT: You both looked at the seal assembly that came up. Let's put the long string up there so we can see what we're talking about. AMBROSE: We continually look at new evidence as it comes in such as when the seal assembly was pulled. BARTLIT: That's unusual for me. the flow path was through the shoe track and up the casing. we will determine our final answer. MR. Ambrose. the one that I showed on the screen. please. that positioned those fluids all throughout and trained all throughout the annulus. 186 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 188 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to date. But I just want to go through this again. we agree with it's the most likely path of hydrocarbons.there's a few pieces of data that we have. Melchert asks that people speak into the microphone and begin. do you have a position on that? CO-CHAIR REILLY: Fred. As they started to pump mud down -. I believe that gas was allowed to coalesce in that area. you're both Halliburton. not the annulus. BARTLIT: Do you think that the leak came up the annulus? MR. insite support service coordinator for Sperry Drilling. (Laughter) MR. And when we come to final conclusions.and because we indicated that there's no losses. BARTLIT: Excuse me. We might talk to you again about it. If you go back before the casing was run and the cleanout was run -. send it in to our website within five days. Ms. Once casing made it on bottom and circulation -.this is with the mud in the hole. MR. and I think that's been shared already.at the end of the cementing operation. yes. MR. it is. you're essentially taking that pressure from downhole and you're essentially carrying that pressure up into the annulus up towards the base of the seal assembly.

s. you then take off that margin and now you have a resulting pressure that's acting up that's almost 11.i. And as we did the cement job and displaced it. And we know from the prior trip that gas had coalesced inside the well bore. MR. BARTLIT: BP concluded in its report that there were no leaks from the reservoir. It's my view that as we began the cementing operation. VARGO: Yes. Remember. and you have roughly 3400 or 3600 p.i. MR. and you drug that pressure from the base of the pay sands and you drug that pressure all the way up to the seal assembly. for a second. NOVEMBER 8. Because remember. I take it you agree with that? MR. it was pushing that gas and oil up into the annulus and bringing it up towards the seal assembly up to the top near the BOP. That 11. MR. and you're going to create now a differential across that seal assembly.s. If the casing test was successful and we had gas and oil coming in through the shoe track. BARTLIT: Is it your position that hydrocarbons never entered the well through the Halliburton cement job but they were present and pushed up here and those were the hydrocarbons that exited on the well floor? MR.000 p. Okay? So you're trapping that pressure that's underneath. we then go into the negative test operations. And we don't see that in the pressure test. I disagree with that. either before or during the cement operation. sir.433. When you now evacuate that mud and you put seawater inside the riser. BARTLIT: Let me just interrupt. it pushed these hydrocarbons up the annulus? MR. because you would be pressuring up gas which would pressure up at a different rate than you would have liquids pressure up. you would see anomalies in that casing test.i.i. as you pressured up and did that casing test. we did a casing test. BARTLIT: Only to set the stage.s. VARGO: Yes. Now think about the 13. That results in around 9500 p.. sir. So I don't believe anything has entered inside the casing at that point.i. MR. that gas and oil was present there. BARTLIT: No leaks of hydro -. MR. during the negative test. MR.000 p.The hydrocarbons did not enter the well before or during the cement operation? MR. we sealed the seal assembly. and as the cement came out and turned the corner.it's already been brought out that we felt like there was going to be channel present potentially in the cementing operation. which would then allow communication for those fluids to continue to flow. VARGO: I believe the hydrocarbons went up the annulus. they made it up to the 192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. essentially what you're doing is you're removing that pressure.i. VARGO: Yes. the well is very much in balance. or prior to the negative test. and we agreed that the casing test was successful. So you would have a change in slope of that pressure test. that there were hydrocarbons in the annulus here. and we continued to push that up into the annulus.000 p. after the cementing operation. BARTLIT: When do you think the hydrocarbons entered the well? 190 As you indicated before.COM . It's roughly 13. VARGO: Well. After the casing test.000 p. So I believe gas was continually coalescing inside the well bore. We do the pressure test. essentially sitting on top. And as I said. is then acting on that PLANET DEPOS 888.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. MR. BARTLIT: Do I understand Halliburton's view.i.s. It indicates good integrity on the casing. MR. VARGO: I believe they entered the well while we were doing the cementing operation and displacing. As soon as you create the negative test and you reduce that pressure of the hydrostatic mud on that seal assembly. That's the mud weight that's pushing down on that 13. then. sir.3767 | WWW.PLANETDEPOS.s. seal assembly. 2010 48 (Pages 189 to 192) 189 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 191 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 and I think it's been -.s. acting up on the seal assembly. then.000 p. MR.s. VARGO: There was no leaks. that when the cement operation began.

and then confirmed it with additional information that became available to demonstrate that it had not come up the annulus. Bly. which was the weak point in the casing. I believe you had a failure point at the 9-7/8ths by 7-inch casing. I know you agree with that. not least of which is the picture that you have here which demonstrates it did not come up around the seal assembly. I think I get the outlines of what you're saying. Subsequent rapid flow of the fluids moving up. came up here and came in -MR. Mr. Mr. I believe the gas and oil was already present in the annulus and that's what caused the initial blowout. BARTLIT: No? MR. VARGO: -.I could not follow the logic of his description. And then we'll allow the other parties to examine it. So that's just a rough quick assessment. VARGO: The hydrocarbons are sitting up MR. BARTLIT: Mr. we've looked at some level of the cement. BARTLIT: Let's go back to our conclusions.3767 | WWW. new to everybody. AMBROSE: Bill Ambrose of Transocean.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. I was very confident when the report was issued two months ago today that that had been the flow path.5 million pounds of force that's now acting up on that seal assembly.COM . The next conclusion is cement potentially contaminated or displaced by other materials in the shoe track and in some portion of the annular space failed to isolate the hydrocarbons.as a result of the cementing operation and displacement. BARTLIT: Is this where you're looking? MR. That gas and oil then go ahead and coalesces inside the BOP area. We demonstrated that with well flow modeling matching the surface pressure data.433. which is a weak point in the casing. I believe the blowout was initiated from gas and oil coming in during the negative test and coalescing in the BOP area. Vargo is making? MR. So they're sitting up there waiting. MR. It's new to me. With the rapid influx. It's roughly 237 inches squared force area. PLANET DEPOS 888. Presently. BARTLIT: So you think during the negative test. now you have a seal assembly lift up. do whatever math. you give us a written piece on this. BARTLIT: I guess I would respectfully suggest. VARGO: Yes.PLANETDEPOS. MR.000 feet from the shoe assembly after the pressure test all the way up that casing and then cause a blowout. MR. And -- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. but it's outside of our area of expertise. This topic as to the flux issue is covered extensively in the report. And since that report has come out. sir. If you run those calculations. then I believe potentially parted the 9-7/8ths by 7-inch crossover. once it started. in the appendices. there has been further confirming information. do you? MR. So you end up having a resulting force up of 1. sir. and comment on it. And I guess. NOVEMBER 8. BARTLIT: Up here? MR. and allow you to -and then I'll allow you guys to comment in return. BLY: I -. do you have any comment on that? MR. Ambrose. Vargo.5 million pounds. you're roughly looking at close to 2.5 pound per gallon of mud weighing down -. Mr. The casing inside the 14. And then you went ahead and you circulated out after the negative test and you thought everything was okay because the gas and oil is already there. and I think that's when fluids then began to move up the casing. hydrocarbons got in here. Bly. MR. MR. You're not going to have gas and oil migrate 18. 2010 49 (Pages 193 to 196) 193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 entire seal assembly from the 22-inch all the way into the 9-7/8ths. Okay? Once you do the negative test and you create that pressure differential across the seal assembly. BARTLIT: Do you understand the point Mr. BLY: Only to go back to the work that we did in our report.and that mud weighs roughly 750. 196 194 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 at the seal assembly already -MR.000 pounds. VARGO: No.

COM . However. And that was our view at the time of our report. but is it true that a cement evaluation tool.proposition No. VARGO: -. NOVEMBER 8. BARTLIT: Well. BARTLIT: Mr.433.the hydrocarbons in the annular space. VARGO: Based on the laboratory results at the time of the job. as most people do. The CBL was. That was particularly around foam stability and other matters. BARTLIT: Thank you. BARTLIT: -.PLANETDEPOS. MR. BARTLIT: Mr. do you -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. MR. is it -. MR. MR. Bly. BARTLIT: We put up a list of issues pertaining to the nature of this job earlier to the cement work. 2? Thank you. very important point. do you have a view on that? MR. the one that Sam showed. maybe you disagree with that one also? Let's put it up again. I have to defer on this point.and I don't know if there is sufficient expertise. Ambrose? MR. MR. BARTLIT: So you agree with -MR. 3. Our next point is that pre-job laboratory data should have prompted a redesign of the cement slurry. So I think this is a very. I agree that it did not isolate -MR. Let's first ask. please. I believe those results were adequate to continue with the job. BLY: So the criticism that we raised was that we didn't see any individual point that was wrong. What is the risk assessment that BP could have done at the time that you're referring to in your report? MR. I was interested to see the letter that came out within the last ten days from the commission that seemed to concur with that and the fact that there may have been even further information that wasn't available to the team. When our report came out. obviously there was a lot of design that was working towards the point when we actually executed the job. do you agree with that looking at it now. or don't you know? MR. that most people would do the test later on. you know. MR. Mr. 2010 50 (Pages 197 to 200) 197 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 199 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 So we defer today to Halliburton and BP to address this issue. VARGO: Yes.in hindsight today.the team could have done a more formalized risk assessment. BLY: I think it's worth making a comment on this because there has been new information since we concluded our report. or disagree? MR. BARTLIT: The next point is that cement evaluation tools might have identified a cementing failure. But we did believe that given the nature of this job. MR. do you agree or disagree with that conclusion No. you might have done the cement bond log at the time rather than waiting. tentative conclusion? MR. depending 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. would have probably been able to identify top of cement? Is that true or not.3767 | WWW. a matter of engineering judgment. BLY: I'm not an expert. they could have -. Cement failed to isolate hydrocarbons in the annular space.don't have a position. That may have led to a CBL if they thought it was appropriate at the time and may have led to other mitigation measures. VARGO: -. Vargo. BARTLIT: I guess. BARTLIT: So BP agrees with what Sam said. VARGO: I'd say we're still looking into it right now and -MR. MR. Mr. You said in your report that if BP had done a risk assessment at the time. Vargo. The experts that worked on this on my team suggested it might but that it's a much more reliable test to do after cement has a long time to set up. 200 198 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that we felt this was the case and we saw evidence -we didn't see evidence that some critical information had been looked at in the testing and used in the design process. Would the formal risk assessment have involved going through all of those factors as a group rather than taking them one at a time? PLANET DEPOS 888. we had signaled on which lab test that you're looking at. AMBROSE: Again. MR.

believe me. MR.or there was a number of factors that the team saw that indicated they were okay. And so at face value there was -. et cetera. Let's look at that." Is that a process that's used within BP? MR. VARGO: I think cement evaluation tools are good in identifying top of cement. But what I want to know is. So I think some of those things would be in there. you know. Mr.might have.maybe I've seen it. you know. MR. BLY: I -. "Look. NOVEMBER 8. You know. The low difference between lift pressure that was described. As my team went back through it. not hers. MR. sir. You said in your report that if you had done a formal risk assessment you might -. BARTLIT: Let's turn to the -. BLY: Yes. I take it you all agree with that? 202 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 agreed I'm going to -. can you tell us in a nutshell what would that formal risk assessment have monitored? MR. AMBROSE: BP in this case. but that's the way it goes. Negative pressure test repeatedly showed that primary cement job had not isolated hydrocarbons. BP and TO personnel treated the negative pressure test as a complete success. kid. PLANET DEPOS 888. As you -. Mr. MR.there was a lot of confusion at that period of time. In meeting with you and TO people. the choice of foam cement by the cementing contractor and many of the things. They can use ultrasonic-type tools to identify top of cement. Ambrose.3767 | WWW. BARTLIT: Despite those results. Those were well understood and in fact informed subsequent decisions around. those could have caused the team to think a bit more carefully about it. do you have a view on the utility of cement evaluation tools. MR. yes. That was really the nature of that -. 2010 51 (Pages 201 to 204) 201 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 203 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. in hindsight. BARTLIT: The operator is BP. I know I catch you by surprise. the cement bond log? MR. The first few were to do with the nature of drilling in the Gulf of Mexico and the difficulties. You said in your report. Ambrose.COM .whether your people maybe didn't take a position on it and you wanted to put -. BARTLIT: Mr. If industry standard is that the operator will provide approval for negative test -MR. yeah. in your words. They'll use what they call a cement bond log tool.I think the way that the 13 that you showed isn't probably how it would have actually worked.that area of the report.it was reported earlier this morning.there was a lot of confirming evidence that things were okay.we're going to stick with your report. and of course we MR. because people may have forgotten why that's important. I may be wrong -. And this is my fault. BLY: Yes. there was reports back from the rig that said. they said. And that's a lousy question. And yes.433. BARTLIT: Yes? Yes? Yes? Yes? MR. to the demonstrative on top of cement. MR. the cement job went well. AMBROSE: I think when you look at the negative test. let's go to the next one and we'll come back to it.Megan. BARTLIT: I'm not familiar with the term "formal risk assessment. I have seen a difference emerging as to whether your people -. because I think there was linkages and contingencies in those. there were a lot of -. you know.it was BP that had this responsibility." et cetera. You told us that the cement bond log could have value in identifying top of cement.PLANETDEPOS. run the cement bond log. BLY: What we were thinking about was that -. But I don't believe the 13 is actually how someone would have sat down and looked at it. that was all right but there were some factors here. they are effective in identifying tops of cements and foam cements and conventional cements as well. do you agree that BP and TO personnel treated the negative pressure test as a complete success? MR. While you're looking for that. Vargo. sir. BLY: There's a number of different processes that could be described as formal assessment. That we said. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Now. BARTLIT: It would be good to get some idea. But it typically would be a process.

also believed that the negative pressure test was a success? MR. MR. BLY: I believe -. BARTLIT: So as far as you know. MR. today. This is an example. you don't know whether the TO personnel we've listed here had the experience and training to tell if a negative pressure test is successful or not? MR. You've seen the facts develop. PLANET DEPOS 888. And our conclusion was that there had been a number of discussions between BP and Transocean personnel. when in 20/20 hindsight we look at this today. AMBROSE: Today I don't know. AMBROSE: I can't sit here today and tell you if they did or did not have the training and experience to do the interpretation. When the decision -. but at the end of the day they misinterpreted the results. BARTLIT: Did your people on the well that night have the training and ability to interpret a negative pressure test? MR. they would say so. our people proceeded ahead on good faith that it was a good test. MR. MR. AMBROSE: Interpretation is the responsibility of the operator. the operator will design a negative test and we will set that negative test up to that design. even if arguendo. BARTLIT: Do you have any reason to believe. that the TO personnel. BLY: Yes.I believe they both thought the test was a success.did not have the experience or the authority to approve or disprove a negative test. And that added confusion. I told you yesterday that I would try to point out areas where having subpoena power and the ability to actually cross-examine people might be useful.we can say that when the test was set up on the drill pipe to monitor it back.3767 | WWW. BARTLIT: If under Transocean's policies. your people on the rig saw a test they believed had failed. did they have the training and experience that Transocean people to look at that 1400 pounds that was always stuck on the drill pipe and draw a conclusion as to the meaning of it? MR. Bly.COM . it was giving correct results. I suppose. BARTLIT: That wasn't my question. BARTLIT: Mr. BARTLIT: Do your people know what a negative test is? MR. Bly. AMBROSE: In this particular case. attempted to go back and piece together every step that had happened. And so when the approval came back that it was a good negative test. there were complications with regards to the negative test. which is the role of an engineer. MR.433. was it? My question was not whether whose responsibility it is. then. BARTLIT: This is one of these areas. My question is: Did they have the training and experience to interpret a negative test? MR. which I'm sure we'll get into in some detail. Because we haven't been able to talk to those people as to what they were thinking or how they may have discussed that situation. and in that regards the test became complicated. I take it you agree with that second-to-last bullet? MR. Mr. Commissioners. assuming this. With the depth that it was being displaced to and the complications of the spacer. MR. to sit people down under oath. NOVEMBER 8. yes. AMBROSE: Absolutely. 208 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. MR. We covered this again in some detail in our report. 206 formation. AMBROSE: When you look at the structure of negative tests. BARTLIT: You do them all the time? MR. BARTLIT: Were your people. that we believe that it was communicating with the It appeared that they were trying to do this test correctly. along with your people. sir.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. where it would be useful. MR. it was BP that was supposed to do the primary interpretation. And then their interpretation of that test and the experience to interpret that test resides with the operator. if your guys. that spacer placement became ever so important but may have been overlooked. MR.PLANETDEPOS. wouldn't they? MR. AMBROSE: Certainly in the course of normal business we understand what a negative test is.When the crew was told to change that lineup to the kill line. 2010 52 (Pages 205 to 208) 205 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 207 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 our personnel are not -. we can -.

and it has a good engineering basis.I didn't remember that. VARGO: Yes. VARGO: Many. BLY: Correct. Is that your experience. yeah. BLY: I can't tell you for a fact. VARGO: I've never seen it set this deep before. MR. BLY: I think there is a mixture of -MR. MR. Obviously. yes. But I was going to just remark that setting a plug in seawater is a pretty common practice. VARGO: My whole career. You were going to set the cement plug in mud at that time.In our work we went through what turned out to be the eight critical things that we thought had contributed causally here. isn't -MR. MR. MR. BARTLIT: You guys are the guys that set these plugs. BARTLIT: Can you quantify for the Commissioners in some way how often you set the plug as low as the 3000-foot plug was set here? MR.some set in seawater. MR. right? MR. At least the people who did testify thought it was unusual instead of setting the upper cement plug at 300 feet. BARTLIT: Some -. MR. BARTLIT: Here's the original April 14th Morel e-mail. BARTLIT: In your whole career? MR. 212 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. his plug. VARGO: Sure. MR.000 feet. in your career? MR. BLY: I can't remember that detail. it was unusual to go down to 3.COM . BLY: Yeah. BARTLIT: You saw the testimony. we're setting them in mud.I don't exactly agree.and I'm sorry to interrupt -. BLY: So it seems to me there's two things that happened here.We clearly identified the -the -.PLANETDEPOS. BARTLIT: Now. BARTLIT: Okay. I don't remember that. which is the decision that says you'll circulate the seawater before you plug the well. Thousands. Vargo? MR. VARGO: Yes. if setting a plug in mud PLANET DEPOS 888.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. In our -. can you put up Sean's sequence? People do set cement plugs in mud. initial abandonment plan? MR. good. don't they? MR. MR. VARGO: I'm sorry.that's a good way to get a firm plug. sir. they're set in either mud or seawater. So we didn't see the procedures here as particular to that. Bly -MR. We don't quantify the additional risk. VARGO: On the surface plugs. MR. MR. That was said this morning and I just -. MR. BLY: I recall it from this morning's discussion. BARTLIT: Originally you were going to set in mud. 2010 53 (Pages 209 to 212) 209 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 211 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Now. BP's temporary abandonment procedures introduced additional risk. I think many in the industry would say that's -. MR.you know. Do you agree or disagree with that. We felt they were covered in the other things we described. Mr. right? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. MR.3767 | WWW. BARTLIT: A thousand? MR. BLY: I -.000. BARTLIT: Megan. BARTLIT: So the initial plan -. We clearly -. Your initial plan was to set it in seawater. It depends. BARTLIT: Let me just stop you for a second. the failure to isolate at the bottom of the well and the negative test and subsequently the monitoring. Mr. One was the decision to set a cement plug in seawater. BARTLIT: How often do you set them in mud compared to setting them in seawater? MR.was the one you would have been working on for a long time. Bly? MR. We know this was set down to 3. And I -MR. How many plugs have you set in your experience. isn't that true.433. I can comment on that. You saw that? MR. BARTLIT: Now. BARTLIT: Mr.typically we'll displace out at the top 300 feet to seawater and then set the plug at other areas in the well. NOVEMBER 8. Do you recall that now? MR. yes. you said you typically set to 300 feet. I would say that we set them -. 210 MR.

MR. I can't do that.I think the point. BLY: -. increasing the underbalance. You know -MR.what I said was it was more drawdown. sir. BLY: I don't believe so. MR. BARTLIT: Okay. would they? MR. BLY: Yeah. Does the panel agree with that? PANEL: Yes. NOVEMBER 8. right? And increasing the underbalance means there is less force at the bottom of the well to holding the hydrocarbons in. MR.that decision had to do with the depth of the plug setting as opposed to the decision to set it in seawater.there's no reason at all to believe that increases the risk. and I think setting it in mud is something that happens sometimes and sometimes people choose to set them in seawater.433. if they're qualified. MR. MR. If the plug had been set at. BLY: Well. BARTLIT: Who is Mr. But it's not a mistake to set it in mud. BLY: I don't -. Let's go to the next page of our conclusions. BLY: I think that's a separate decision. sir.what -. right? MR. the same thing would have happened. BARTLIT: Is he a vice president? You said -. BARTLIT: But -. BARTLIT: Was that a yes or a no? MR. 216 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. It's an engineering tradeoff decision. I know you didn't. I'm sorry. that's correct. I think it's hard to even gauge how much of a change in risk there actually was. BARTLIT: Well. You're saying there is a small change in risk that you don't think was a causal factor? MR.PLANETDEPOS. And if that -. BARTLIT: Who would have been part of the decision to initially set the cement plug in mud other than Mr. BLY: No. Morel? 214 didn't set the cement plug at 300 feet of mud was because you wanted to hang all that drill pipe on the -. MR.you know. MR. BARTLIT: And of course. 2010 54 (Pages 213 to 216) 213 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 wouldn't work. AMBROSE: Agree. So I think -. BLY: Yes. is it's making a judgment about a very small change in risk that I think is not -.000 feet did take a lot of the mud out of the well. I did. BLY: That would have been the engineering and ops team I think would have worked together on those kind of design decisions. right? MR. BLY: I think there's engineering choices you're making throughout the course of these things. your guys wouldn't have made the initial proposal to set it in mud.in setting the lockdown. wasn't a causal factor in this -MR. is that true? Does the whole panel get that? MR. can we. didn't it? MR. You asked me to speculate about what they were thinking and why they decided.Oh. that may be. you knew they were qualified to make a decision like this? MR. BARTLIT: Okay. then we can't say. you know. BARTLIT: People set them in mud all the time and it works. If you PLANET DEPOS 888. MR. BARTLIT: Oh. MR. MR. and the reason that I've taken an exception to it. I don't know what was in his heads. Yeah. There's no -. BLY: Yes. MR. BLY: I didn't say that. that's called underbalancing the well. the well would have still been underbalanced.3767 | WWW.if the flow indicators had been missed during the negative test. that it's a mistake to set it in mud? MR. That -. BARTLIT: And when you replace mud with seawater. it's going to flow. Once it's underbalanced. the reason that you MR. MR. MR.COM . BARTLIT: Now. MR. BP.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. PANEL: Yes.We haven't completed the point.but moving the upper plug down from 300 feet to some 3. BARTLIT: So if your team who made this initial decision to set it in mud later changed it. MR. What I can tell you is there's engineering choices that you make. VARGO: I agree. Morel? Is he an engineer? MR. 500 feet below the mudline. BLY: It increased the underbalance on the well. he's a BP engineer.

as you can see. AMBROSE: So yes. Bly. these kinds of activities at the end of a well.COM . but you said it might happen. I've carefully read your report. those conditions were not observed that we can temporarily abandon the well.you know. and you don't reach a conclusion on whether the simultaneous activities did obscure it. You -. you and your team. Is this routine. 40 or 50 minutes before the event. AMBROSE: I think the term "simultaneous" operations or activities for us may mean something different.The purpose of this.you know. and acted on until quite late into the event. GISCLAIR: I would agree with that statement. Number of simultaneous activities and nature of flow monitoring made kick detection more difficult during riser displacement.PLANETDEPOS. MR. BLY: No. and that it indeed was flowing. Ambrose. you have to get into the heads of the people that were on the rig to understand. It's more -. Gisclair. it didn't have to. I take it Mr. Transocean was good enough to give us a slide which we used. MR. And you're right. Mr. for whatever reason. and if we need further work.433. 2010 55 (Pages 217 to 220) 217 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 219 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 don't catch it -. you just opined that a lot was going on. the same? You don't have a dog in that dispute? MR. And unfortunately. you're welcome. MR.they're necessary steps to make sure 218 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 We'll start with Mr.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. We can -. Or excuse me.Do you have anything to add to that since your report was filed? MR. But what we also said. BLY: Yeah. Mr. we will invite submissions. is so that you can see the differences emerge. you didn't try to put yourself in the head of any particular person. The number of simultaneous activities most certainly would have obscured a lot of the data that would normally be used to evaluate a kick. And I think the -. You probably don't have any opinion on whether any kick detection was obscured by all the other activities going on. And the chart. NOVEMBER 8. BARTLIT: I think BP said 8:52? MR. What I can say at this point is when you look at the trend on a minute-by-minute basis. we can't do that. that was our estimate. BARTLIT: Mr. AMBROSE: Ten minutes till. may have made it so that the crew didn't notice. MR. Can you -. the same thing is going to happen. You weren't certain about it. if you want to submit that. we said it's possible that the activities going on may have -. Vargo. we do in our analysis also agree that the underbalance point happened just before eight o'clock. And there were different things happening during that time. MR. and that through the course of that. the primary thrust of our findings and work was that. MR. Okay? Okay.I think in your report.Up to the point where we start noting the well control activities. you said that might have been the case.to finish the end of the well. because we believe the well was monitorable even with the simultaneous activities underway. sir. Ambrose? MR. BARTLIT: As I told all of your counsel. the activities you're talking about in this regard are really sequential activities required to -. it does show that a lot of these things are sequential in nature and they just -. BARTLIT: I think -. And I would perfectly be willing to accept a short paper from BP on why there was no increase in the risk by going down to 3. BARTLIT: Right. I take it you disagree with that. if so. MR. which I guess you prepared. MR.If you miss the negative test. we told the Commissioners yesterday. Bly. with PLANET DEPOS 888. AMBROSE: Up unto -. You offered the opinion that it might. We can only suppose maybe what was going through our crew's head that night. or.000 feet. I mean. the risk was small and inconsequential. the purpose here is not to argue or cross-examine. BARTLIT: Is this a very normal end-of-the-well sequence of activities? MR.the dilemma is one of the things that you said in your opening remarks.3767 | WWW. just before nine o'clock. Mr. we believe that the well was in a condition where it could flow for quite some time. And here it is.You know. I mean. you know.

MR. MR. 2010 56 (Pages 221 to 224) 221 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 223 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 20/20 hindsight you see trends that when the driller took actions. that's an interesting point I haven't thought of. we would appreciate it and we will receive it and consider it. MR. You know. Commissioners. AMBROSE: I think when you look at particularly the sheen test. let's go those -. AMBROSE: Well. That's just their internal lingo for that. BARTLIT: Well. that the TO representation on the driller's screen of these events. to the chart that's got the red line and the pump line. This is something that we've talked about a lot. it's a very high-tech system. When we went to the Nautilus. yes. what I call the kick chart. if in December you think more about these end-of-the-well activities and have any concrete ideas for how you could segment them to avoid things like that unfortunate coincidence you told us about.what that looked like.433. And until we get all the facts.he did your -the necessary thing at that point to put the 14-pound oil-based mud that was in the strip tank back into the mud pit system. I sure did. you know. you don't know what it looks like as you sit here today? MR. MR. I believe it was three weeks ago with your assistance. it's hard to make those kinds of conclusions. MR. MR. So today we don't know. coincidence is not your best friend sometimes. depending on the operation at the time.you know. BARTLIT: Fair enough. AMBROSE: The driller's screen. And. NOVEMBER 8. Okay.COM . because that's something I mentioned briefly but didn't explain. the data might be presented differently. received some more information that helped us understand better what was happening the last hour. there were points in time when things were masked. we haven't concluded our investigation yet. Okay? MR. BARTLIT: Why don't you explain to the Commissioners the sheen test. So we can only suppose that he was looking at something similar to what we've provided the Commission.Megan. and I -Have you -.you said it was a coincidence and that the actions regarding the strip tank could have masked what is going on. you know. And it's true. 222 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 224 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Have you thought about any different ways of conducting these end-of-the-well activities that could avoid. BARTLIT: Thank you.it might be different. MR. So.PLANETDEPOS. The day old logger for the drilling system. isn't it. AMBROSE: Okay. Would you expect the driller to have been looking on your system at some -. like you said. BARTLIT: For the record. we just. AMBROSE: And he did -. the driller could have been looking at the screens in any one of different formats. BARTLIT: Good point. MR. By the way. he saw trends that he expected to happen. An example of that is when the trip tank was emptied into the flow line towards the end of that period. Before the Commission's report is due in January. AMBROSE: We'll continue to be cooperative with the investigation. I think that is one of the areas where you're talking about -MR. I think you had a good impression of -MR. AMBROSE: -. It's -. BARTLIT: Would you expect him to be monitoring that at all times during this period? MR. for the high-tech drilling system went down with the rig. The sheen test was a period where shortly after nine o'clock the 14-pound oil-based mud is coming back into the mud pits and they're expecting that the 16-pound water-based spacer PLANET DEPOS 888. and it's just unfortunate that at that point in time it masked what was the biggest inflow at that point. AMBROSE: The driller would have had standpipe or drill pipe pressure on his screen. They're very customizable. an unfortunate coincidence which masked what was really going on? MR. BARTLIT: Yes. but some indication of drill pipe pressure? MR. TO refers to their system as the high-tech system.3767 | WWW.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. let's go back. where the flow just started coming in. MR.has Transocean given attention since this -.

433.3767 | WWW. BARTLIT: So let me be sure I understand. Is that what you're telling me? MR. for example. that yes. Gisclair. BARTLIT: Right. they might turn to do something else and not be focused at all times on those lines times as they evolved? We don't know. that would have told him that things appeared constant in the well. a Sperry Sun person like you. GISCLAIR: The expectation would be that if hydrocarbons were introduced into the annulus. as I said normally when you're receiving a kick you would expect a drop in standpipe PLANET DEPOS 888. GISCLAIR: Again. MR. and it's very difficult to spot that 100-pound increase over that extended period using that particular presentation. MR. this four and a half minutes. to get an idea of maybe what would happen?" And having looked and seen 60 seconds of constant pressure. if the Commission pleases. BARTLIT: So you agree that looking at this.COM . AMBROSE: -. Mr. it basically draws a straight line. "How would you go about this period of time. he may have then turned to do the next step in the process which was line up another mud pump to pump down the kill lines. The log that you have there on the left is the actual log that they were watching on the Horizon. that this what to a layman is a small increase. Mr. this will MR. NOVEMBER 8. we're really guessing. And we appreciate your coming here. And so the natural tendency -and we've talked with drillers on the rig to say. And the standpipe pressure. be for you. was an indication that the hydrocarbons were coming from the reservoir into the well? Do you agree with that? MR. Do we all agree that at a time when you're putting heavier fluids in instead of lighter fluids and the drill pipe is steady. especially that first increase. there was almost 60 seconds of constant steady drill pipe pressure.We're doing our best to estimate because we can't talk to Dewey. and Mr. And I appreciate the forthrightness of your remarks. If it were represented in this fashion and if the mudlogger had been looking at the screen. 2010 57 (Pages 225 to 228) 225 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 227 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 is about to arrive back. Now. MR. BARTLIT: Does everybody on the panel agree that in hindsight. Gisclair is with Sperry Sun. either of these. they would have seen that ramp up and it might have given pause and he would pick up the phone and call the driller. but it would be something to investigate. you would see a decrease in the standpipe pressure while pumping. if it were presented in this fashion. MR. BARTLIT: Would this second period on the Sperry Sun data be more of an indication of a kick than the earlier one that we've got circled? MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. So shortly after nine o'clock the mud pumps were shut down for a period of about four and a half minutes. What you're doing is shutting down your pumping operations to look for the interface to make sure that you have 16-pound mud back at the top of the riser because that's the point where you then discharge overboard after that point. MR. Gisclair. concentrating on the standpipe pressure. But you're using your judgment based as somebody who has been in this business a while. MR.PLANETDEPOS. and he's an expert on the Sperry Sun data. this being a fairly unconventional response to a kick. AMBROSE: We're just -. And there isn't anybody in the world that knows more about this data or studied it more than he has. It's not necessarily an indication of a kick per se. would have wondered what was going on down there? Would it have been a cause to make further inquiry? 226 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 228 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 And then when he confirmed that. You're saying that people might look at this for 60 seconds and if it looked okay. So I think this is where you have to go minute by minute with the driller to understand what he may or may not have seen when it comes to the driller screens. Precisely after the mud pumps were shut off.we can't talk to Dewey. GISCLAIR: Yeah. We spend time with him.

PLANETDEPOS.433. Wouldn't the fact that the crew was putting -. they take this and flip it sideways and stretch it out. and that is the difficulty of somebody sitting there at the end of an eight -. This is this first kick line here. And of course. To present that sideways comparison on that much reduced and zoomed-in scale on a standpipe pressure would make it very difficult for them to track large increases or decreases in standpipe pressure. certain responses. you're great. it's only realtime as you're watching it. it's no longer live. and make them look more or less significant. But yes. GISCLAIR: Again. MR. And to view this data and to watch this data in realtime is significantly different than going back post job and looking at it. The scales that are chosen for displays out in the mudlogging shack. It doesn't matter if that replay is two minutes later or two hours later in the news. Let's sort of start up here. But the mudloggers will select a scale. MR. So it's not your typical indicater of a kick but it.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. BARTLIT: You pointed to something that concerned us as laymen. at least -. this 100-pound increase. GISCLAIR: -.I'm not familiar with the ones that are presented to the driller. while it was collected in realtime and monitored in realtime. and I pointed out today that whenever BP wants to explain this data. it's not something -MR. This in fact increased the standpipe pressure. and that's sort of what he would be seeing as it traced down there. BARTLIT: Ahh.clear up a little something regarding the data itself and how you would actually be watching this. MR. So when you're staring at these traces. we all know that this is not the way it was presented on PLANET DEPOS 888. turning it sideways and changing the scales and changing the time frame. again. And you don't want to see that when you're monitoring the well. And keep going. Megan. MR.was displacing heavy mud with lighter seawater have given more significance to that line? MR.COM . MR. And the rate of drop would depend on the flow rate in. When you're looking at that replay. GISCLAIR: I'm sorry. GISCLAIR: Yes. 2010 58 (Pages 229 to 232) 229 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pressure due to the lighter hydrocarbons introduced into the annulus. GISCLAIR: Yes. you would expect a slight drop in standpipe pressure. I know we've got one on this one.3767 | WWW. For instance. is something to give pause. I would like to just -MR. which enables you to see things. engineers but not experts in your business. What you would end up with is the standpipe would reach the top of the scale and you would have to either wrap it up from the bottom or it would just hit a peak and flatline. MR. BARTLIT: Here is another -.Here is the sideways one going more slowly.that would be normal -MR. but in the strictest sense. BARTLIT: Yes. BARTLIT: Megan. this left-hand one? I can't remember that. but they're not really conducive to proper rig monitoring. We refer to this data a lot as realtime Did we ever animate this one slowly. BARTLIT: We worked at one time on -- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 have. those will work in situations like this when you're trying to do an analysis. you're going to have to wait a significant number of minutes in some cases to notice a certain trend. So. If I may. You can emphasize certain traces. The displays that you 232 230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 data. they will select a presentation that is most efficient to them for identifying certain anomalies. right? MR. MR.the eighth hour of his shift and seeing any trend here. So the data that we're looking here. GISCLAIR: Right. BARTLIT: Just a second. NOVEMBER 8. MR. BARTLIT: And it's your view that I guess that this is as clear as it could be? MR. we are now no longer looking at it in realtime. Do you agree as the expert here on Sperry Sun data that turning it sideways and stretching it out enables you to see things that might not be as apparent in the original vertical trace? MR. It's no different than watching a ballgame live and seeing a replay. GISCLAIR: -.

the choke and kill pressures. Yes. The question that we've had is which ones. MR. but I'm just curious -. the pump stroke indicators. MR. et cetera. MR. Why would you not have the TO data sent shoreside -. BARTLIT: Mr.some of it appears to be accurate. 2010 59 (Pages 233 to 236) 233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the Sperry Sun data. AMBROSE: -. Gisclair just told us that this drill pipe pressure I've been focusing on came from Transocean.3767 | WWW. so it's not the original points. It would be a simple matter to. AMBROSE: Several of the sensors are Transocean sensors. And we don't -. in the sample rate. GISCLAIR: BP. by telemetry.433.most of the data that is in that Sperry database was transmitted to us realtime from Transocean. BARTLIT: Let me inform the Commission that anybody with a head on their shoulders would say. The standpipe pressure that you see in that Sperry database was actually Transocean's data that was collected in their high-tech system and transmitted to us in realtime and stored in our database. And I think that's the reason why in particular it is sent in to the beach. There is geological information. BLY: I think if you look at the totality of what you use Sperry Sun mudlogging information for. it's just -. and get the Transocean model that's been made and put the zeros and ones in there so the Commission could know whether the -.PLANETDEPOS. And again. Why in the world does Sperry Sun -. We've been told some people don't want to PLANET DEPOS 888.I should have asked this before.and this is one of the big differences -monitors and records things five times a second.but pay extra to have Mr. I had never focused before. do you know? It was interesting. GISCLAIR: Most of the -. and there were a couple of standpipe transducers located around the rig for our MWD service. TO already has data. these are -. And we still do not understand some of the way it's been presented in that it's averaged data. You have that same information. BARTLIT: It's trend data rather than point-by-point data? MR. Some of the data that was not transmitted to us that was a result of our own sensors was the flow-out. exactly what the driller was looking at. we're not exactly certain how it's averaged or represented. MR. So there's a 20 times difference 236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 But the tank volumes. one of the things I know that you wanted to do -MR. but it's from -MR. This is every 5 seconds. the gas. Ambrose. I think the difference you'll find.it's standpipe pressure from Transocean. BARTLIT: Yes. and one of the things when we talked with the NOV. MR. NOVEMBER 8. well control is one part of that. the standipe pressures.you know. Transocean has its data.they said. et cetera. 234 Mr. most of the data was the TO data. BARTLIT: Why don't they just use the TO data. National Oilwell Varco.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. isn't there a way to take the existing data. its own system. so to speak. but it's -. all of that was collected by Transocean sensors and transmitted to Sperry for storage. One thing I've never been sure of -.or was it an analog system? MR. AMBROSE: Again. BARTLIT: I didn't know that. We're using it to the best of our abilities.I'm not implying anything. send that shoreside for your people to look at in your room there. MR. our system -. MR. BARTLIT: Mr. which we now know came in part from Transocean. Bly. regarding animating some of this. and that's one of the reasons why it is different data in that regard. the flow in.Who pays Sperry Sun to keep separate data? BP? MR. GISCLAIR: Actually. maybe you can tell us. Gisclair's group send Sperry Sun data shoreside? MR.COM .the sensors are -.so it's not exactly the same data. Your mudlogger had the zeros and ones that make up -. So there's a lot of things that it's used for. well. It's something we haven't had.We've never received the map that says which particular sensors on these charts were being measured from Transocean sensors. do you know? MR.

2010 60 (Pages 237 to 240) 237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 do it. I don't have any answer. NOVEMBER 8.I mean. Gisclair that some of these on his data are hard to pick up by a driller. AMBROSE: It's possible. I would want my high-tech data to be as valuable as possible. So that might be something we would want to pay more attention to. any -. Mr. BARTLIT: Well.I know you investigated this. Gisclair's data and put it in the software that drove the TO technical high-tech data so we could get some better look as to what your driller was looking at? MR. And we've asked that that be done. I would want to know that. But I think with some more effort we may be able to look at what it -- MR. It's available on the closed-circuit TV. it's possible from an engineering point of view to take Mr. and it was also in the company man's office. Obviously. GISCLAIR: Yes. MR. how many different places on the rig would the TO high-tech data have been displayed? We know it's in the driller's shack. AMBROSE: We do not know at this stage. Mr. and we're still asking that that gets done.if I were you. So. one PLANET DEPOS 888. MR.COM . but if I were the owner of the rig. AMBROSE: Typically this data is important to operators to maintain. I think it's premature to speculate what it may or may not have looked like. We all can see -. The other dilemma with this is that we don't know exactly how the driller would have had it set up that night. we will do within reason. how many different places on the rig that night was this data? How many different screens have this? MR. It was in the toolpusher's office on the drill floor. Any other places on the rig that night? MR.that would be -. its own dedicated channel. historic records of. you guys. Maybe the Commission could lend some weight to yours and my efforts to resolve this problem. BARTLIT: Have you found anybody. BARTLIT: How come? MR. you know.3767 | WWW.433. Others think it's difficult to do. Let's go on to the next -By the way. and we have it because it was sent shoreside. Do you know whether any TO employee at any level looked at the TO high-tech data that night during this period other than the driller in the drill shack? MR. We've run into a few roadblocks. AMBROSE: Until we can recreate the screens. men and women. anything that the Commission can do to back you in that effort. they tend -. AMBROSE: The high-tech data was broadcasted on the closed-circuit television system. MR. you know. obviously. We can only estimate that based on what maybe some other drillers from the rig would have typically done in the same situation. Ambrose. Gisclair. MR. your data. So we historically as an industry have never retained mudlogging-type data for ourselves. Do you think. it's an unfortunate thing that we won't know exactly what it looked like. sir. AMBROSE: No. right? MR. BARTLIT: Now. Do you think -. BARTLIT: Do you know -. It's not my field. MR.and I'm saying this now not MR. Anybody wanting to see the Sperry data would simply just look at the TV specifically. BARTLIT: And your data does not go shoreside? 238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 in a provocative way. MR. BARTLIT: Now. which we're fortunate enough to have. MR. BARTLIT: Well. Do you have any opinion as to whether the TO high-tech system on the rig that night would have presented this kick information in a clearer or more dramatic or vivid format than the Sperry Sun data was presented? Do you have any idea at all? MR. our data stays on the rig.PLANETDEPOS.I think some of us agree with Mr.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. they own that data in some respects. Once we've drilled a rig. GISCLAIR: It would have been the same as the high-tech data. So any TV on the rig and staterooms or in offices would have had the same data available to it. Okay. I think it would be -I think the Commission would agree it would be worthwhile us pursuing this particular issue after this meeting.

MR. you know. MR. I promise. Is that what -. And. I actually saw this Sperry Sun data"? MR. MR. I don't know that I would necessarily call some of those indicators clear. AMBROSE: Under the circumstances that you just outlined. we're stuck with not knowing what was observed. might have. I would say that the indicators observed would have noted -. next point is once the influx was recognized. very dynamic thing. Ambrose. MR. MR. AMBROSE: I think when you look at this particular case. but yes. BARTLIT: Mr. about then. GISCLAIR: Right. we have met with all of you endlessly and we've made lots of changes to make sure we get it accurate. Okay.We're trying to get it right here. that says. You don't say it would have. you say it might have. they either would have allowed them to have responded earlier or might have allowed the crew to respond earlier? Mr. if noticed. let's go on to the next point. MR. I don't agree with the PLANET DEPOS 888. Is it agreed or disagreed that if the Sperry Sun data had been observed by somebody skilled in interpreting the data. Vargo? MR.been noted by an experienced handler. or is that -MR. GISCLAIR: Yes. they would have caused alarm. it was a very. That's the order of magnitude of this event. Gisclair? MR. we believe that there were indications that could have Now. sir. BLY: That's when we believe the first action was taken. and then it was followed by what we estimate to be a jet engine's worth of gas coming out of the rotary. BLY: Yes. and we'll keep doing that. As we said in our report. don't they? I mean. It's speed. My access to rig personnel has been very limited. MR. This particular case. things happen really fast. Bly. Bly? Is that a useful analogy for the Commission? MR. MR. correct? 242 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 been observed on the rig.I think that was at 21:41 when the mud came up was the first time you think it was recognized? MR.the well was allowed to get out of control. would have allowed a rig crew to respond earlier. So it was a very -MR. of course. prevented or delayed the explosion and/or shut in the well. is what I hear. Ambrose. BARTLIT: And if there is a better way to phrase it. BARTLIT: Thank you. was a 550-ton freight train hitting the rig floor. yes. BARTLIT: Clear enough. do you have an opinion on that? MR. BARTLIT: Mr. you have to look -. just to put it in perspective. obviously.433. BARTLIT: And I guess your answer is the same.3767 | WWW. VARGO: Yes. you've got to divert overboard.and. sir. BARTLIT: You mean the whole supply of a jet engine? MR. MR. Let's make the point. if any of you have better ways of phrasing this deal to get it perfect. We know your view. Your people know. "Yes. You saw the information I put up on diverting overboard. AMBROSE: As if a 757 jet engine of gas was coming from the rotary.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. BARTLIT: Do you agree with that. this is your company's document. please. Mr. 2010 61 (Pages 241 to 244) 241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 243 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 single person on the rig that night. just submit them to us and we'll consider them. GISCLAIR: No. BP says -. NOVEMBER 8. again. BARTLIT: So they know that there is a time to move fast.PLANETDEPOS.COM . do you have an opinion on that? MR. MR. if observed. sir. AMBROSE: Yes. BARTLIT: There were several options that might have. everybody knows that in your business. that once gas gets above the BOP. We've run them by everybody. BLY: Once it was allowed to -. Mr. The kick indications were clear enough that. You know. I think you outlined it quite well at the beginning. It says that if there is a rapid expansion of gas in the riser. Mr. I would agree with that. Things happened very quickly. Are your people trained to use the diverter and divert flow overboard under certain conditions? MR.

BLY: Well-site leaders -. instead of just one pair of eyes? People have asked me to ask you that question. Why not have two eyes on this data. Kaluza was on the well that night. that it was happening very quickly and instantly. Everybody in the industry says the same thing. some aren't. BARTLIT: And again. MR. BLY: Yeah. Are they -. multiple years to move into deep water.we said we're going to stick to the report. right? MR.433.but I think in many cases that you do -MR. they're engineers probably. MR. As described in -. And that's what the purpose of the driller in the driller shack is. oversight management of the well. I can't remember exactly. BLY: Yes. These fellows had both been working in offshore and deepwater operations for many years.the panel a little bit -. That's a fairly long period of time in this business. that it's the -a lot of people say the same thing. that's the rule. and I think recognized in the industry and described in the Transocean book. I take it you all agree with that. BARTLIT: Mr.This is really important.Can you tell the panel -. And if I ask a question that you think is unfair and goes beyond that. if they're engineers or not. if the Commission is interested. which Mr. BARTLIT: Was Mr. the rule is that if you -. yes. once it got into the riser and began to move. BARTLIT: You know.PLANETDEPOS. I mean. and that there were indicators for at least 40 minutes before it happened. Now.at each minute as you drill the well or circulate fluids through the well or what have you. BARTLIT: So you had two well-site leaders. it was a very dynamic unloading of the well. MR. It happens through the course of each phase of the drilling operation. BLY: I can give a view. to look at this data as it came in? They're highly experienced.What were they doing at the time? How come they weren't assigned. not everybody. BLY: Both of those gentlemen were on the rig that evening. MR. to me. MR.I don't remember these particular guys. instead of having a MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. I think Kaluza was at least eight or ten. It's not something that we covered explicitly in the report -MR. MR. Gisclair has told us can be hard to interpret. The process of monitoring the well is an active minute-by-minute activity. Why not have them look at the kick information as it comes in? MR. 2010 62 (Pages 245 to 248) 245 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 247 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 characterization. BLY: He was on the rig that night. Vidrine on the well or shoreside? MR. you don't have to answer it. why weren't Mr. 248 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 about the qualifications of people to become a well-site leader for BP? MR. we earlier pointed out and you heard me say repeatedly that the system depended on a person being in the right place at the right time and looking at the right information and drawing the right conclusions.you know. PLANET DEPOS 888. absolutely. it had to displace an entire well bore of mud from the bottom up for it to happen. AMBROSE: Yes. MR. and Vidrine was more than that. the leadership on the rig is providing a broad. isn't an instant.You have two of these experienced people. MR. generally speaking. And I've always said well. BARTLIT: Well. why -. BARTLIT: No.3767 | WWW.the Commissioners a little bit 246 driller for TO being the only person to look at this. BLY: -. they're well trained. Why rely on one person? They're on the rig. Some of them are.COM . BLY: Well. making sure the well is delivered to standard. however. hence the importance of recognizing that it came through the bottom of the well. one of them. you know. NOVEMBER 8. you need someone to be actively looking at each -. MR. BARTLIT: Generally speaking. BARTLIT: Why. Kaluza and -. sir. you're always going to be wrong. I've asked this question. Any time you say everybody. multiple years of experience working up through the ranks. MR. Why not have -. So that. I mean. right? MR.

it will basically reference if you suspect or think that you have gas in your riser. you know. I don't know at what points he was looking at that specific display. MR. His next action was to close the variable bore ram. Clingman have talked for hours about this. BLY: I can a view. BARTLIT: I read all through your manual and I'm impressed by the attention to detail in it. Mr. that night was watching this information? MR. BARTLIT: And Dewey is Dewey Revette who was in the drill shack that night? MR. He was monitoring the rig. MR. I may have missed it. The diverter. MR. BARTLIT: Is it true that.it's impossible to say. You can put up what you want. They can pick the things they want to see. his initial response of closing the annular was the appropriate first normal response. We all want to know what's on there.What do you want the drillers to have in their head about when they dump this stuff overboard and when they use a lesser tactic? MR. that there is -. Ambrose? Do you know that one way or the other? MR. It's sort of almost like a video game. Mr. Who we lost. then you should go overboard.PLANETDEPOS. again.COM . which I was referring to earlier.these screens are different all the time. The manual then goes on to say. like I would -. your jet engine's worth of gas. MR. But at this stage we don't know yet if they had ever switched to the full divert overboard. Ambrose and I and Ms. There is a driller and an AD. They can display them in different ways. if you continue to get flow at that point. MR. And that's what caused the pressure increase from 9:47 onward. AMBROSE: That was a normal first response. We all agree that they did go to the mud-gas separator first. GISCLAIR: He was at his station. This is -. So the question is: Did Dewey suspect or 250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 252 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 hard time all of us. volumes. The drillers can pick different parameters. We've studied the information. but we can't know it. He did that. So I think there are multiple eyes that are looking at it on these critical wells. NOVEMBER 8. Dewey Revette in PLANET DEPOS 888. 2010 63 (Pages 249 to 252) 249 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 251 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. the mud-gas separator is a pretty fragile piece of equipment compared to the diverter in terms of the pressures. BARTLIT: It needs to be made clear to the Commission. Did the crew ever use the diverter to overboard the hydrocarbons. AMBROSE: It can handle a substantial amount of flow. BARTLIT: Do we know if your mudlogger. AMBROSE: That's correct. Okay. Mr. Gisclair. They're very flexible. And that's why we have such a accelerated very rapidly. AMBROSE: What the point would be. as the fluids began to accelerate up the well bore and hit the drill floor. of jet engine fuel coming out? MR. Ambrose is saying that once the mud came up on the floor. which you can now see in the data. MR. AMBROSE: When you go to the manual. would have surpassed what the mud-gas separator could have handled. In our case the mudlogger provides more information. I mean. BARTLIT: So Mr. trying to figure out. there's one of two things that could be the problem. AMBROSE: We don't know for certain yet. but is there a specific instruction given to drillers that if in doubt.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. think that he had gas in his riser? And if you look at the steps that he took that we can now see in the data towards the end of the event. You can put anything you want. MR.3767 | WWW. and we don't get any closer. divert overboard? Anything like that? What is in the -. We lost him. once it started to unfold. it goes back to the speed. And what may have been okay initially on the mud-gas separator quickly. please. But in this case. It could be that either gas is in your riser and expanding or your annular could be leaking and you could still be getting that fluid addition to your riser or your annular. BARTLIT: Like I said today -MR.this event. BARTLIT: Yes.433. MR. like I said today. I think on these fifth generation rigs you do often see two sets of eyes. and in this case there's the Sperry Sun. You can make it look the way you want it to look. MR.

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the shack closed the annular. And they can tell that by looking at pressures. And Mr. Bly agrees with that; is that correct? MR. BLY: We say we believe that was likely the last step. MR. BARTLIT: And then in a little while that wasn't entirely holding, and then he closed one of the pipe rams and closed around it, and that's shown in the pressure. So he took two actions when there were hydrocarbons in the riser, correct? MR. AMBROSE: He took three, because we also know that he diverted. MR. BARTLIT: Overboard? MR. AMBROSE: He diverted to the mud-gas separator, we know. We still have not concluded on did it ever switch to go overboard. MR. BARTLIT: Now, my question is this: If there is mud on the floor, Mr. Revette closes the annular, is it likely, if you have an opinion, that the pressures, the sand, gas, everything coming up was such that you just couldn't get the -- the annular
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what the hook load is. MR. AMBROSE: Hook load is the weight of the drill string that you can measure. The hook load decreased during this period of time where everything started happening fast, fluid started moving quickly. And this particular tool joint, which was positioned we believe originally between the two annulars, the upper and the lower annular, moved upward into the upper annular. And when he closed the annular the -- it's not just the rubber piece, the donut. There are actually some metal fingers that position that and squeeze that closed. The fingers contacted the tool joint and then caused this washing or erosion to occur and allowed flow to continue. MR. BARTLIT: Was the annular here and this is gas rushing past the annular that did this, or is it the other way around? MR. AMBROSE: That's correct, gas and fluid. It would have been moving from left to right on the picture. MR. BARTLIT: So the annular is here. It's closed or part closed but some gases are getting

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wouldn't shut under those conditions? MR. AMBROSE: We've done an extensive look at the recovered riser joint and the pieces of drill pipe that came out of that joint. When you look at the tool joint, I don't -- Can you put up my one slide for the tool joint? We believe that the -- you know, of course it is a lot of force. The flow at that point was quite great. This is what a normal -MR. BARTLIT: This is your slide. MR. AMBROSE: Yeah. This is what a normal tool joint would look like. This is actually one of the recovered pieces. The damage was just from opening it up from the riser. But this gives you a perception of what a normal piece of drill pipe looks like. If you could flip to the next one. The eroded area there that you see in the middle, we believe that this piece was closed in that upper annular of the riser -- of the BOP. And this is what happened when they closed the BOP. The hook load, if you look at that trend -MR. BARTLIT: Please tell the Commission

through it, and these gases and the sands they carry with them are so powerful they just eroded this piece of steel? Is this carbon steel? MR. AMBROSE: It's an S130 -- 135 p.s.i. material, yeah. MR. BARTLIT: Pretty good stuff. MR. AMBROSE: Yeah. This is just several minutes. MR. BARTLIT: This gives us an idea of what a couple minutes of these sands coming up here can do to steel like this. Okay. Let's -- Do you have any more comments on this, Mr. Ambrose? MR. AMBROSE: It just goes back to the speed. Could he have anticipated or did he know? And it's one of the questions we're going to have for a long time, is what was he suspecting was coming at him. He took all the actions that were normal and appropriate. It's just unfortunate that the magnitude of this event, it overcame the equipment. MR. BARTLIT: I'm kind of an ex-engineer. But I was floored when I heard how fast this stuff

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happens. Do you -- do you train your toolpushers and your drillers to appreciate the speed with which things can go south here? MR. AMBROSE: I think that all of our toolpushers that work on deepwater wells understand the magnitude of this. MR. BARTLIT: Let's go back, please, Megan, to our conclusions. One of our conclusions was diverting overboard, as using the diverters, not the mud-gas separator, might have prevented or delayed the explosion. Do you agree with that, Mr. Ambrose, or you just don't know? MR. AMBROSE: I don't know that there is a way you could tell. The magnitude of this event, it was too great. The question is, would the diverter packer, which is another large rubber element right under the rig floor, have withstood the massive amount of mud that was coming at it, and seawater. And then again, the slip joint packer in

pipe -- variable bore pipe ram closed? MR. AMBROSE: That's evidenced by the increase in drill pipe pressure. MR. BARTLIT: You don't think that the shear ram was ever closed? MR. AMBROSE: We do think it was closed but after -- after the explosion by the automatic mode functioning, the AMF emergency system, yes. MR. BARTLIT: Do you think when they -This is probably an unfair question. I'm just curious. Do you think when the BOP comes up and now that these Norwegians are looking at it, will there be enough left of the upper annular, for example, to look at it and figure out what happened? MR. AMBROSE: I can't take a position on it yet. We have not been able to look -- We know that from the pictures that were taken on the back of the Q4000 service vessel when they took pictures looking downward into the BOP, we saw the wash patterns around the blind shear ram that we were expecting would have happened during the event.

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itself is rated to the same level. Would it have withstood it? And we, sitting here today, can't tell you whether or not it would or would not have. It's something we're going to continue to look at it, and when we have conclusions on it, we'll let you know, you know, share it with you. MR. BARTLIT: I take it everybody agrees that the final technical conclusions regarding the BOP should wait to see what the Norwegian company learns about the BOP. MR. AMBROSE: We agree with that. I will share with you that we do believe the BOP worked within its design limits from the evidence that we've seen so far. And we would be happy to share that with you. MR. BARTLIT: So you've done work which indicates that the BOP worked; that is, that the annular closed when it was supposed to close, the upper annular? Is that a yes? MR. AMBROSE: Within its design limits, yes. MR. BARTLIT: Okay. That the variable

MR. BARTLIT: In other words, if the blind shear ram was closed, you would see wash patterns? MR. AMBROSE: Correct. You have to consider that the drill pipe at that point was -- we believe that it failed and severed. So you would have had flowing oil through that five-and-a-half-inch oil pipe at the point in time that the blind shear rams would have closed on it. So it's somewhat like snipping a fire hose with a pair of scissors. When you do that and it's under pressure, it's going to shoot out sideways. And the blind shear rams are not designed for that particular condition. That would have eroded away the rubber seals on the side of the blind shear rams as they were closing. And you saw what it did to metal, so the thought that rubber would have survived that particular case on the blind shear ram under these high flow conditions is unlikely. MR. BARTLIT: Finally, you heard me say, and I worded it in a very specific way, that we had seen no evidence that particular men or groups of men

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were making a decision and consciously had a safety thought focus and a dollar thought focus and chose dollars over safety. We're not talking about process or other things. We're talking about real people making real decisions. Have any of you seen any evidence on the rig that night that anybody made a decision which favored dollars over safety? MR. AMBROSE: No. MR. GISCLAIR: No, sir. MR. VARGO: No, sir. MR. BARTLIT: Okay. That completes my go-around. Sam will now ask some questions. You'll be glad, Mr. Vargo, to talk some more about cement. Let's take a break. Oh, I'm sorry, it's not my prerogative. (Laughter) CO-CHAIR REILLY: You've been quite in charge, Fred. Let's do take a 15-minute break. (Recess taken.) MR. BARTLIT: If the Commission please. CO-CHAIR REILLY: Yes, sir.
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companies, would you publicly support the Commission in giving us the subpoena power we need to clean up some of these areas that I was talking to you guys about in the last hour and a half? Anybody prepared to talk now? MR. BLY: All I can say at this point is that I would have to take that back and discuss it more broadly with BP. MR. BARTLIT: Is it okay with you? MR. AMBROSE: I have to say the same. What I was going to say is I think we've been very open and supportive of your investigation. We will absolutely continue that, and I will take that back and ask. MR. GISCLAIR: Pretty much the same. I've been willing to meet with you as often and in any way that you would like, but I really couldn't answer for my company on that regards. MR. BARTLIT: And I've informed counsel of the Commission's request. And if any of them have a position, we'll listen. Otherwise, we'll -- I sort of expect they're going to say they've got to go back and talk to their clients. I said that my whole life and

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MR. BARTLIT: One last question. There is this little issue of subpoena power. You can tell it's a little bit of a burr under my saddle. And someone said that some legislators didn't want us to have subpoena power because we might be too hard on you guys, or something like that. So somebody at the break had the idea of saying to you three companies -- and I know you can't speak for them. But would you be willing -- It's something may need to think about. Would you be willing, the three -- Halliburton, TO and BP -- would you be willing to tell people in Congress that you support our having subpoena power because it -(Laughter) MR. BARTLIT: Oh, I'm not kidding. Because it will obviously add to get to the bottom of this. We all agreed when we started this that we owe it to those men and their families to get to the bottom of this, and we've got to try to put aside some of our natural trial lawyer advocacy and that kind of thing. So if you can answer now, fine. But if you can't, we would like to know, from the three

did okay by doing it, so... No comments? Thank you. Thanks for your cooperation, gentlemen. MR. GISCLAIR: Thank you. MR. GRIMSLEY: Okay. I would like to take over some of the questioning from Fred now that we're back from the break. Mr. Vargo, I wanted to start with you because you set forth an interesting theory that I don't think that any of us had heard before about the flow path for the hydrocarbons. And I believe -- if we could put up that slide of the long string. I believe you said that it was your view that the hydrocarbons, even before the cement job was set, were already being pumped up as the cement was being pumped down, up this annulus? MR. VARGO: That's correct. MR. GRIMSLEY: Okay. And I think you also said that they then were trapped up here but at some point there was a differential pressure -- there was a

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One other point that I didn't make.you've carried those fluids throughout the cementing operation up the annulus all the way up to the hanger assembly at the end of the cement job.out of the top of the casing. The only way to have the pressure drop while you're displacing at that point is that something is either -. Well. there is no seal assembly up here. MR. But then you have a barrier that's created at that point. VARGO: The casing seal assembly is set after the cementing operation is complete. GRIMSLEY: Okay. at the end of the job. right? MR. MR. and that's correct. we're monitoring pressure on surface. MR. VARGO: No. The seal assembly is not actually set during the time of the cement job -MR. so you don't see the actual trend. before. GRIMSLEY: So why is it.you say that the hydrocarbons are actually being pushed up during the cement job. when you say that the hydrocarbons are actually coming up through the annulus. too. which is completely against the trend analysis that the simulation program anticipates.COM . Immediately after the cementing operation. VARGO: Because you still have pressure from the mud acting down on the -. There's that -. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.acting down on the fluids. Okay? So we're monitoring the actual placement of the cementing operation. VARGO: That's correct.3767 | WWW. MR. MR.i. The flow path is out the top of the -. GRIMSLEY: -. my question is a bit simpler. That's the amount of lift I believe that you indicated and that was indicated to set your seal assembly. NOVEMBER 8. You haven't locked it down. VARGO: That's correct. And I think you or someone else mentioned before that you're expecting to see cement lift at the end of the cementing operation. GRIMSLEY: How long does it take those hydrocarbons to get up that annulus to the seal? MR. What you would expect to see is the pressure increasing. What we noted on the data from the cementing operation is that all through the displacement that the pressure is continuing to decrease. what you see is the pressure actually decreasing to the point where you end up with about 100 p. that number. 2010 67 (Pages 265 to 268) 265 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 267 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 differential pressure that was such that eventually it broke through that seal. You acknowledge -. otherwise the mud has nowhere to go. As you're lifting the cement. you do set the seal assembly.or right across into the BOP. VARGO: Well. You used a marker before to indicate at the beginning of operations in circulating the pump and the cementing operation that that would put the top of the fluids right across the -. MR. it's not. if there is no seal up here during the cement job.PLANETDEPOS. What you've done is you've essentially set the seal assembly on top of the PLANET DEPOS 888.433. GRIMSLEY: Well. is that in the operational placement. But the trend doesn't indicate that you were actually lifting -. VARGO: No.the reason being that you actually need to circulate the mud out this interface while you're cementing. So at the point in time when the cement job is being poured and you say the hydrocarbons are coming up this annulus. is there? MR. if you look at the volume of the displacement and the volume of the cement that you pump. Are you familiar as to when in the process the casing hanger seal assembly is actually set? MR. which I omitted. while it's a valuable BP. And then that's when you go ahead and you 266 268 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 number. there is also the trend that goes along with the actual watching of that displacement of the operation. MR.lifting a lot of cement. GRIMSLEY: Okay. correct? MR. GRIMSLEY: But that's what I'm curious about. VARGO: That's correct. but the hydrocarbons didn't just go straight up through? MR. it's very close to the volume of the annulus.there is less of a restriction in the annulus or something is lighter in the annulus to cause that pressure to continue to drop. And typically what you'll see as you're lifting a heavier fluid in the annulus is that you'll see that pressure gradually increase.s.

Now. sir. And that's when you set your seal assembly. 2010 68 (Pages 269 to 272) 269 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 271 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 casing. GRIMSLEY: And when they're actually sealed inside of the wellhead.as a matter of course of pumping the mud in front of the cementing. MR.s. So your view is that the hydrocarbons had migrated up to right about where the seal was.PLANETDEPOS. correct? MR. MR. MR. GRIMSLEY: -. and immediately after the cementing operation you do set the seal assembly. we've actually brought up from the bottom the casing hanger seal assembly from Macondo -MR. as I understand it. GRIMSLEY: But if my understanding of what you said earlier is correct. VARGO: Yes. that takes your marker from the base of the well and moves that all the way up the annulus to the point of the BOP stack. you then create a higher differential across that seal assembly.could be enough pressure or force to actually act and lift up the seal assembly and then allow the gas that has coalesced at that point to then migrate into the well bore and be there to allow you to circulate it out once you start the swap-out of the drilling fluid to seawater in the riser.the cement job ends? Well. and just as the hydrocarbons got there.hanger seal assembly? I would like to show one of those pictures. yes. MR. MR. NOVEMBER 8. Do you see any damage PLANET DEPOS 888. VARGO: Yes.there's still pressure on there that's holding it back. correct? MR. So something has to -. GRIMSLEY: Okay. When hydrocarbons are moving up like that. GRIMSLEY: Okay. 272 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 on -. VARGO: The whole assembly would have had to have lifted up.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. VARGO: Once you evacuated the mud out of the riser and you've displaced it with seawater.correct? Have you seen the pictures of that casing? MR. GRIMSLEY: So there was sufficient pressure. which is against what we would anticipate seeing. MR. MR. correct? MR. VARGO: I believe there was enough there that it did not allow to migrate up. That's my opinion. GRIMSLEY: -. in your mind. GRIMSLEY: Okay. And right here.COM . That's the only -. the cement and then the displacement. why wouldn't it have been that they moved from the seal assembly? It hadn't been set by the time of the end of the cement job.that's the only relevant data that I can see that explains the data. GRIMSLEY: And then after that point in time. which was enough -. in the riser to actually hold back this 13. those metal-to-metal fittings fit inside of other metal. GRIMSLEY: So if this whole casing hanger seal assembly were to have been lifted up. under your theory. those lips would have had to go past other metal. MR. these two flanges are the metal seals in the casing hanger seal assembly. You didn't have any lost returns throughout the cementing operation but yet you see that pressure drop all throughout the displacement of the cementing operation. will have moved all the way up to right here by the time -MR. VARGO: That's correct. sir. MR.000 pounds of p.i. sir. please. MR. the spacers. I'm curious. GRIMSLEY: So the hydrocarbons. MR. you said that hydrocarbons -MR. MR. I think in the last month or so. VARGO: Yes. VARGO: That's correct.433. That's when the cement job ends. What you've done is -. VARGO: I said that there was pressure 270 the casing hanger seal assembly was set? MR. VARGO: No. VARGO: That's correct as far as I know. you're aware that recently. you said that almost the entire volume of the annulus had been circulated by the time the cement job got to the bottom.3767 | WWW. MR.something has to allow for that pressure to drop throughout the cementing displacement as opposed to the pressure increasing. GRIMSLEY: -. the hydrocarbons exerted so much pressure on the casing hanger seal assembly that it actually lifted it up? MR. correct? MR.

So. VARGO: I'm not aware of that. then we would also have to explain the data that we have that I've just presented with regard to the pressure drop during the displacement of the cementing operation. So I would say that at the end of the day. that that would call into 274 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 276 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that one use of a lead impression tool is to make sure at some point before you set the lockdown sleeve that the casing hanger seal assembly is in the spot that you want it to be.and again this is my opinion -. VARGO: Yes.PLANETDEPOS. two. MR. which is one of the rigs drilling the relief wells. I am. MR.COM . Would you agree. VARGO: Well. NOVEMBER 8. MR.3767 | WWW. VARGO: I'm not -. we're always trying to look at all of the given information that's provided to us. That's what it appeared to be in the ROV pictures.I could see -. GRIMSLEY: What is a lead impression tool? MR. VARGO: A lead impression tool is something that is typically run in the well to get an impression of something that might be looking up to you for fishing operations so you know how to go back in and fish the tool that may be in the hole. 2010 69 (Pages 273 to 276) 273 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 275 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 on the outside of this casing hanger seal assembly to suggest that those lips actually were pushed up past other lips? MR. GRIMSLEY: Okay. and I led our cementing team in BP's office for roughly four weeks while we were dealing with the incident. that the lead impression tool showed that the casing hanger seal assembly was where it was supposed to be. You know. you know. But I do believe that the flow and PLANET DEPOS 888. Again. MR. sir. was the one that actually pulled up the casing hanger seal assembly here? MR. if it turns out that there is additional information.that the initiation of the blowout occurred by the lifting of the seal assembly. Are you familiar with a lead impression tool? MR. GRIMSLEY: And are you aware that the DD2 ran a lead impression tool before it pulled up the casing hanger seal assembly? MR. GRIMSLEY: And are you aware that when that lead impression tool was run. MR. so I can't say it is or it isn't. I was requested question the opinion you have set forth here today about the flow path? MR. VARGO: Let me preface this with this comment. GRIMSLEY: Are you aware that the DD2. that these casing hanger seals are not damaged and. or any incident for that matter. GRIMSLEY: Well. again this is my opinion -. it showed that the casing hanger seal assembly was where it should have been had nothing happened? MR. As a result of the incident.I'm not experienced with that. MR. GRIMSLEY: Okay. one. though. VARGO: Yes. my understanding is by BP management to go into the BP operations Incident Command Center and work with BP and their engineers to help solve the problem that we had. sir. Is that your understanding as to one use of the lead impression tool? MR. VARGO: If that's the case.you could see that the seal assembly had lifted up.433. that all of that information has to be explained as to why the pressure drop occurred during the displacement of the cementing operation and potentially why there isn't a lot of damage here. sir. that's my opinion. Only the time that I spent working with BP in trying to solve the problem. from what I could see -. I'm not an expert on this type of equipment. GRIMSLEY: It looks pretty good to you? And you wouldn't expect it to look like that if in fact it had been lifted up and then dropped back down? MR. The solution has to fit all the information. what has happened afterwards I have not been privy to. VARGO: That I can't say. but it looks pretty good. What I would say is I believe -personally. So there is a lot of information out there that may not have been considered. when we look and we investigate these types of incidents.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. And at the time when we were looking at the wellhead through the ROV. and I was privy to a lot of the information that was going on in there. MR. MR.

GRIMSLEY: Will you agree. and he was asked this question: "Question: Who on the Deepwater Horizon was interpreting the negative test data for the first 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 point. MR. GRIMSLEY: Okay. AMBROSE: Absolutely.COM . Harrell testified before the Joint Investigation Board. GRIMSLEY: Fair enough.433. GRIMSLEY: Because it is the last evaluative test done before the rig is going to move on.PLANETDEPOS. GRIMSLEY: And you would expect that the toolpusher and the driller on the rig floor would actually participate in interpreting the negative pressure test? MR. when you look at the general way this works. MR. though. Mr.3767 | WWW. AMBROSE: Not directly. GRIMSLEY: That's as opposed to the captain who is in charge when the rig is moving from one place to another? MR. right? MR. AMBROSE: Again. NOVEMBER 8. AMBROSE: Yes. AMBROSE: Of course. by the way? MR. And I can understand where opinions or other people's statements may be a little blurred in that respect. MR. AMBROSE: It would have been Jason Anderson in this case. MR. the BOEM. correct? MR. with Daun Winslow's statement that the negative pressure test is an important test? MR. GRIMSLEY: Okay. Who is Jimmy Harrell. I believe you said that you did not think that the rig crew was trained in how to interpret a negative pressure test. MR. I wanted to ask you a question about a conversation you had with Mr. MR. MR. GRIMSLEY: So is the offshore installation manager the person from Transocean highest in charge on the rig during drilling operations? MR. GRIMSLEY: And it is in fact the only test to test the integrity of the cement job at the bottom. I do not believe that our programming covers specifically negative tests. MR. and then the interpretation resides with the operator. Bartlit. MR. Mr. AMBROSE: Or in emergency situations. but the interpretation lies with the operator. MR. MR. MR. AMBROSE: That's correct. GRIMSLEY: So it's important to get it right? MR. AMBROSE: Yes. GRIMSLEY: For Transocean. GRIMSLEY: He's the OIM? What is an OIM? MR. So you would expect that your experienced rig crew would know how to interpret a negative pressure test so that they PLANET DEPOS 888. GRIMSLEY: It lies with BP in this case? MR. the Coast Guard. though. MR. AMBROSE: It is. know how to interpret a negative pressure test? MR. But the interpretation lies with the engineers as the operator." The toolpusher is a member of the rig crew. AMBROSE: He is. GRIMSLEY: Wouldn't the rig crew members on the rig floor that night. We execute the setup of that plan. Ambrose. who was interpreting? "Answer: Usually the company man and the toolpusher up there. right? MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. MR. MR. typical industry practice is the operator provides the plan. I just want to show and second test? "Answer: Who was interpreting the data? "Question: The data for the negative test. GRIMSLEY: Okay. AMBROSE: I would say in their general experience they've done them and they know what to expect from them. AMBROSE: Jimmy Harrell is the OIM. So it's a collaborative effort at some 280 278 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 you a few pieces of testimony and just ask you some questions about it. correct? MR. MR. 2010 70 (Pages 277 to 280) 277 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 279 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that the continual flow occurred up the casing to the crossover points. AMBROSE: Offshore installation manager.

and they wanted to do another one. and I wonder if there was just a clear chain of command as to who was supposed to be conducting this test and interpreting it. Kaluza's and Mr. then. Guide. what was -. 284 282 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 "Question: So the BP person. Mr. So whether or not he was referring to the whole thing or the second one. MR.we had reason to believe there was a phone call back to shore that Mr. BLY: I think that's the right statement from a BP perspective because those are our senior-most people on the rig. the negative pressure test was the only one PLANET DEPOS 888. that BP should have been the person that interpreted this." But does that indicate that at least Mr. "Yes. Bly. one of our concerns is when we look at what happened that night is that there seems to be some finger-pointing. Bartlit had put up from Lee Lambert.it was successful. in 20/20 hindsight. do you agree that of the tests that were performed at Macondo that evening. It was a call then that they then took back to what we thought was BP. they neither agreed or disagreed with the discussion.you know. Harrell. And if you look at testimony from BP's own personnel such as Mr. we have no way of knowing. NOVEMBER 8. we're not sure. Do you agree that the BP well-site leaders 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. They make that call as to when that test is passed as well. GRIMSLEY: Mr. GRIMSLEY: Okay. The negative test is no different than that. That role and the responsibilities are fairly clearly defined. 2010 71 (Pages 281 to 284) 281 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 283 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 weren't relying solely on the skills of the well-site leader who was out there from BP. So there is some discrepancy in that regards that we still have not had clarity on. Guide.PLANETDEPOS. We -. AMBROSE: Again. GRIMSLEY: So I want to come to you. again. this is a question and answer with Mr. I reckoned nothing wrong with doing a second test to confirm." Do you agree with that statement? MR.433. And in this case both parties agreed that it was -. At the end of the day. Harrell that night. Kaluza. you know. Mr. it's -. second test. BLY: As we said in our report. There's been a lot of -. No different than a positive casing test. Well. that interpretation lies with the operator. the interpretation of a negative test resides with the operator. Bly. one of the people who are supposed to determine if the negative test was successful or not." are principally responsible at the end of the day for interpreting the negative pressure test? MR. wouldn't you? MR. There was a question: "And was the negative test that you wanted performed. wanted to do a second test?" "Answer: I didn't say. had concluded that the first negative pressure test was a success? MR. But did they agree or disagree with the conversations. MR. AMBROSE: I'm not certain. he agrees with that. They call the shots as to when tests are passed. I think it was one test. Vidrine's responsibility to determine whether the results of the negative test were satisfactory before moving on from that operation?" "Answer: They were. So Mr. Bly. I want to show you just one more quote from Mr. He was asked: "Was it Mr. MR. AMBROSE: I think that brings up a point. in his judgment. the OIM. Kaluza had gone in to call in the fact that they were actually doing a second test. was that test a successful test in your judgment?" And remember this question is being asked of Mr. that is. the engineers that designed the test need to approve it.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. In our minds after looking at this for several months. MR. Harrell.3767 | WWW. When you look at the testimony that I think Mr. I thought it was. and their engineers.what was clear to us was that both parties were actively involved in the discussions and the attempts to make sure that the test was done correctly and to interpret it.there's been a lot of confusion about first test.COM . GRIMSLEY: Well. whichever one was on tour at the time. really there was nothing moved around. So from the standpoint of who makes the decision that a test has passed.

It's hard for me to know what the guys were thinking. BLY: I couldn't track through every step of the way. and I think it was generally recognized. similar questions to you. Ambrose? MR. stop-the-job philosophy. GRIMSLEY: Is there a similar expectation. If you have any concerns or are uncomfortable. Mr. then anyone can do that. I showed a long animation this morning. AMBROSE: With Transocean in general we have what's called a stop-the-work. that when there were odd-looking anomalies in the data on an important test. It was to be done. Ambrose. written policy saying this is when you need to call back in these types of situations? MR. that it should be elevated up management either on the rig or back to shore? MR. to your consult higher. It seems to me they felt that they had it in good shape and didn't need to 286 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 288 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. GRIMSLEY: But there was no. BLY: Well.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. MR. for -.it's an expectation that if people feel they don't understand what is going on or they need help. So absolutely. that that was the only test that tested the integrity of the cement that night? MR. In fact. AMBROSE: Somewhat the same. Vargo. MR. BLY: We have a -. and I want to make sure it was right. 2010 72 (Pages 285 to 288) 285 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 287 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that tested the integrity of the cement at the bottom of the well? MR. knowledge. Given what you said was an expectation within BP that certain issues should be elevated with a call back to shore. VARGO: Yes. but that doesn't -. AMBROSE: I don't believe there is any policy with regards to negative tests on that. I just couldn't keep up with you. input. That's right. GRIMSLEY: Mr. GRIMSLEY: Okay. there wasn't a standardized way of describing how that was to be done. I think you guys were probably watching. sir. GRIMSLEY: Does BP. MR. There's a lot of detail over that two-and-a-half-hour period. I think Jimmy Harrell demonstrated that when earlier in the day he believed that the negative PLANET DEPOS 888. NOVEMBER 8. or did it have a policy in place prior to this event. you know.I don't know if it's a policy. this particular issue on this negative pressure test should have been called back to shore? MR.COM . we -.I mean. GRIMSLEY: Now. BLY: I didn't catch anything. GRIMSLEY: But nothing jumped out at anybody? I just want to make sure we've got it right. do you agree as well. one of the things that we highlighted in our work and have recommended is that we do have a more formalized or standardized way of doing that test to trigger when someone may need to call back and get additional input. and I couldn't quite tell if it matched with our timeline. and timing. GRIMSLEY: And Mr. as it sounds like there was at BP. GRIMSLEY: Mr. or was there at least at Transocean. where its people on the rig should call back when there are these types of data anomalies during testing? MR. That's -. that they will escalate and call back. MR. so I'll -MR. MR. MR. that aligns with what we said in our report. MR.3767 | WWW. that you're looking for pressure flowback. do you think in line with that expectation. MR. Did you see anything that was incorrect about that animation that we went through showing how the pressures went up and down and the decisions that were made? MR. you know. BLY: For this -MR.433.in particular to the negative tests.as was said earlier. Did Transocean have any policy in place at the time of this event that would have required its men on the rig floor to have elevated concerns that they were having with these data anomalies to higher level management either on the rig or onshore? MR. BLY: Yes. MR. no. Bly. so I couldn't tell if the pressure gauge on your charts were exactly correct or not. so I can't sit here and tell you exactly what we showed in our timeline. BLY: I think -. have a policy in place. GRIMSLEY: The negative test.PLANETDEPOS. It's sort of the behavior that we expect from people. it was quite a lot of detail you showed.

He said stop. I think it does. I would like to put up on the screen the application that BP submitted to the MMS on April 16th setting forth its temporary abandonment procedures in which BP discussed or at least set forth the type of negative pressure test that it expected to perform. either on the rig or onto shore? MR. they may have understood what a negative pressure test was. MR. were people within Transocean at least trained on how to conduct a negative pressure test. within Transocean that you believe should be called in up the ladder. 290 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 292 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Transocean had specific procedures governing how to conduct or interpret a negative pressure test. So my understanding. but I'm not sure if I can answer every question you've got here. Mr. I just want to ask you a question.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. and that they in turn went forward on that recommendation.COM . Mr. AMBROSE: I believe that's correct. and I can't get into the heads of the guys that night to understand what they were thinking or how they interpreted this or looked at the situation.433. MR. then they tend to stop the job and figure out what's going on and elevate that to where it needs to go. BLY: Yes. So it says negative test casing to seawater gradient equivalent. MR. yes. Just in general work experience. GRIMSLEY: And I know Mr.is that the negative pressure test was going to be performed before displacing that 3.000 feet of seawater. AMBROSE: You know. AMBROSE: As before. GRIMSLEY: All right. Bly. the BP's engineers and well-site leaders interpreted it correctly. doing anything to ensure that its crew understands how to conduct and interpret a negative pressure test? MR. to your knowledge. MR. we're still in the course of our investigation.I do not believe specifically a negative pressure test is covered in our training program. That's correct.000 feet before you conduct the negative pressure test.000 feet point on here. we're going to do that. GRIMSLEY: Is this the type of anomaly. MR. AMBROSE: As you know. I can't say. we'll make our report public and then we'll decide how to proceed in the best interest. NOVEMBER 8. was that also correct? MR. Every situation is a little bit different. Is Transocean. What is your understanding of the phrase "seawater gradient equivalent"? MR. GRIMSLEY: As for Transocean. I'm just not sure if I can go through this with you. Mr. my natural reading of that -. Is that or does that describe the negative pressure test that was actually performed on April 20th at Macondo? MR. Mr. Bly said that BP is taking perhaps remedial steps to fix that or to address that possibly in the future. the -. so as soon as we have all of our facts and we conclude on the investigation. earlier in the presentation we pointed out that neither BP nor MR. we said that in our report. GRIMSLEY: Do you know. it does. it's not until PLANET DEPOS 888. The question is just whether Step 1 says that you're actually going to displace mud with seawater down to 3. I'll try. BLY: I don't see the 3. BLY: I don't know if I'm going to be able to have a debate with you about the technical meaning of the steps in this. I mean. MR.PLANETDEPOS. Was that correct as of the time of the event. So any time there is an anomaly that can't be explained or that people are uncomfortable with. That's what I'm missing. MR. 2010 73 (Pages 289 to 292) 289 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 291 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 test was not even going to be conducted. That's been covered in testimony. Ambrose. though. Bly? MR. Negative test casing to seawater gradient equivalent. GRIMSLEY: And in fact. GRIMSLEY: Now.3767 | WWW. BLY: Yeah. Ambrose. Yes. I think there was good faith that a lot of people looked at it. MR. GRIMSLEY: Okay. there's people that work on my team that could. MR. or even what a negative pressure test was as part of their training? MR.and I want you to correct me if I'm wrong -. I want to just walk through this. GRIMSLEY: Okay.

GRIMSLEY: Well. MR. it changes the whole decision-making process. Bly? MR. MR. So it's just based on testimony or discussions with Transocean people.367. yes.If that is the case. That's what I'm saying. is that it was just a discussion that he was supposed to be going down to call.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. BLY: It appears to be. is there's some discussions we've had that Mr. So is this -. MR. So I understand Mr. And if that's the case. And so we have been asking the question. AMBROSE: No. GRIMSLEY: Who were the Transocean people that you had those discussions with? MR. We've done several interviews. that's an open issue in our investigation right now.that Mr. MR. AMBROSE: I could not name them off the top of my head.COM .000 feet of seawater whereas in the permit submitted to MMS on April 16th. that's correct.so the point is they went -on the night of the 20th they went straight to 8. is that a phone call was made. BLY: Oh. I think Mr. BLY: Yes. GRIMSLEY: Now. that spacer was made up of two combined lost circulation materials that were up on the rig floor -. NOVEMBER 8. Kaluza went back to make a call that they were going to do a second negative case. GRIMSLEY: Okay. That's what we've got in our report. Kaluza or Vidrine or anyone else from the BP or other third parties' side. did not happen. MR. Mr. correct? MR. So that's the 8. right? MR. BP has said there is no evidence that there were any such calls back to shore about the negative pressure test. I think there's been some dispute as to whether there were -. AMBROSE: Just in general discussion with a few people on the rig. I think -. They -. so we would have to look back through the notes and I can give you the names. Kaluza had gone down to the office to report back to shore that they were conducting a second negative test. GRIMSLEY: Now. And as I understand it. MR. BLY: Correct. Ambrose. I see. But Mr. MR.3767 | WWW. I understand your question now. is this consistent with the negative pressure test procedure that was actually run on the night of April 20th? MR. Again. BLY: Yes. GRIMSLEY: Whose decision was it to use that material as spacer? PLANET DEPOS 888. AMBROSE: That's what we're raising.367 to do the test. they said we would do the negative test before displacing? MR. did that happen. about 450 barrels.PLANETDEPOS. MR. it seems to be. GRIMSLEY: And that is after the negative pressure test that's described in the first bullet point. So on that basis we've questioned whether significant. this is obviously 294 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 296 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 actually sent to the MMS on April 16th? MR.I asked you about calls back to shore and whether any were actually made during the conduct of the negative pressure test. Ambrose said there were calls back to shore made by BP. So the test performed on April 20th was a bit different from what was or not a phone call was made back to shore at that point for the reason of doing a second negative test. GRIMSLEY: Okay. If this was elevated back to shore. what is the basis for your statement that there were in fact calls by well-site leaders. Bly's position from his report. we have not been able to talk to Mr. "Was a phone call made?" The perception of our people.433. GRIMSLEY: Did any of those Transocean people who you talked with say that they actually witnessed a phone call by Bob Kaluza back to shore? MR. 2010 74 (Pages 293 to 296) 293 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 295 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Step 2 that the drill pipe is run down 3. MR. BP decided to use 400-plus gallons of spacer as part of the displacement procedure during the negative pressure test. It was two pills that were put together. GRIMSLEY: And then did the test after having displaced 3.or not floor but up on the rig. MR. back to shore during the conduct of the negative pressure test? MR. or at least one well-site leader. But you're saying right now you have no direct evidence that any such call was made? MR. BLY: Right.000 feet below sea level. Is that correct.

that's correct.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. NOVEMBER 8. which 10 you outlined very clearly this morning. GRIMSLEY: Do you think it would have advisable. GRIMSLEY: Did. to circulate it out to make sure that they could get a good baseline for the negative pressure test? MR. 1 2 MR. Ambrose. you know. MR. MR. you know. 9 the point of our work was that we -. GRIMSLEY: Do you agree that it most likely would have been good practice or at least helped with the negative pressure test if once the crew had recognized there was a leak below the annular preventer such that spacer was getting down below the BOP. AMBROSE: If you look at -. And our view was that one 17 possible explanation of that was that the spacer could 18 have done it. 15 One possible scenario was that there was 16 blockage in that kill line. that that -. AMBROSE: I don't believe there is any policy for that. I mean. We looked at what the material behaved like when it was combined. it would have made no difference. It still looked like being full of seawater gave a correct result and that it did flow back to the rig. And so we are very interested to understand 13 how could that have happened.433. how could you see that 14 condition. or even M-I SWACO for that matter. that viscous spacer actually leaked into 6 the kill line and may have in fact clogged it. GRIMSLEY: What was your conclusion as to whether it was an appropriate as a spacer? MR.you know. once they realized that the spacer had leaked below the 298 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 300 annular preventer. given what we know now. GRIMSLEY: Is there any policy in place that would have required the Transocean rig crew. BLY: We didn't make that conclusion. I believe that they asked the mud company to look at it and see if it was an appropriate procedure. to have flushed out all that spacer before continuing on with the negative pressure test? MR. 2010 75 (Pages 297 to 300) 297 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 299 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. I don't know.that switch or that assumption that the spacer may not have been a factor was overlooked. is that 7 right? 8 MR. space underneath the BOP was not really a factor for conducting the test so long as the annular had been closed and sealed. your team do any analysis of whether these two materials could be combined and used effectively as a spacer? MR. MR. whether there was spacer or not in the annulus. BLY: I don't know if it was advisable or not. BLY: I can agree with that. It was -. MR. and that that's what then caused the kill line to be heavy. BLY: Yeah. GRIMSLEY: Looking back knowing what we 19 20 know now. BLY: As part of our investigation we went and looked at. to get across the stack and therefore have the opportunity to block the kill line. I think that when you look at the switch that was made to the kill line kind of mid-plan there. do you think it was visible to use a spacer 21 made up of lost circulation material that might clog 22 up one of these lines as a spacer? PLANET DEPOS 888. what is your view as to -. We have not looked companywide to see if we have used loss circulation material before for spacers.PLANETDEPOS. no. BLY: I don't know. had anybody at Transocean utilized these two materials as a spacer before? MR.3767 | WWW. MR. MR. what that material would behave like when it was combined. MR.Well. BLY: I can't remember the specifics of how the decision was made.I suspect that the well-site leaders were involved. GRIMSLEY: Mr. had ever used the combination of these two materials as a spacer before? MR.COM . yes. GRIMSLEY: Do you know if anybody before on that rig or otherwise at BP. was that there 11 was this conflicting information about the 1400 and 12 the zero. MR.If you look at the first setup for the negative test on the drill pipe. yes. you know. not let leaked past the BOP. yes. and it was indeed viscous and. I think if it had been placed above the BOP. GRIMSLEY: And so I think one of your 3 not conclusions but one of your hypothesis as to why 4 there was zero pressure on the kill line is perhaps 5 that spacer. MR. in your investigation. AMBROSE: In general use. to have circulated out that spacer prior to conducting the negative pressure test? MR.

then. if you look back to the 19th when they were displacing the cement. the spacer? Was there a management chain process? Was there a rigorous vetting process? Or was it ad hoc? MR. AMBROSE: What we saw. If the lost circulation material -. GRIMSLEY: And just to put this in context. And just to be fair. GRIMSLEY: Mr. GRIMSLEY: Okay.COM . MR. 422. because I think in our previous meetings before this hearing you suggested that there may have been other problems that were caused by use of this viscous thereafter? MR. what was the process within BP by which the decision was made to utilize this spacer. There was a discussion. what we saw were lower pump efficiencies than what were assumed during the displacement. 2010 76 (Pages 301 to 304) 301 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 303 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 overbalanced or marginally close to balance with the formation with the spacer in the annular space. you know. MR. MR. you know. That's what I remember from our work. Is that right? MR. What I can say is that the data -. and that is that it may have affected the pumps after the spacer had been used during the negative pressure test. 25 barrels of fluid were pumped during the course of pumping out the spacer. That material is. MR. AMBROSE: It looks that it did. correct? MR. these lost circulation materials. it wasn't a thoughtless act. if there are inefficiencies with those mud pumps. NOVEMBER 8. BLY: Yeah. BLY: I'm sorry. it could have affected the pump liners and their efficiency. the cement -. And. I think that's the type of decision where you would look at -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. engineers or folks who made the decision did check with the mud engineers from M-I SWACO who are in charge of those fluids. MR. right? MR.you know. What that means is when you look at the stroke. is that the spacer did lead to some inefficiency in the mud pumps when setting up for the negative test. I simply can't remember the details to your question. tentative.with mud pumps with the same type of spacer." You made the point earlier you need a viscous spacer to separate the oil-based mud and the spacer. one last one about the spacer. there would be a pretty reasonable basis for the people on the rig to make a judgment and say. the estimated number of strokes were very close to what actually happened.PLANETDEPOS.I think they said the plugs. Mr. appropriate for a spacer. later on during other operations you may not have a really good view of the amount of fluids you're actually pumping down into the well and it may confound the ability to see whether there is in fact a kick. let's get it checked with the mud people and test it. We may have covered this in the report. I don't see that as a decision that would have necessarily driven you to a formalized or highly detailed MOC. I'll have to come back to you on that.you know. So our conclusion. BLY: Not necessarily. So that would tell you that your pumps -your mud pumps were running at the expected efficiency. We have not been able to do any tests on -. you call it. AMBROSE: While you're on your mud PLANET DEPOS 888. They thought about it and they asked the right people and decided it was appropriate. GRIMSLEY: So you think the spacer may have affected the pump efficiency of the pumps 302 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 304 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 seawater that you're circulating out. But if you look at the pit data.433. I think that would be within the bounds of what you would expect people on the rig to be able to make. And that likely led.3767 | WWW. they bumped or they landed into the shoe on time.the data showed that. In our analysis of the mud pit data. GRIMSLEY: Okay. "We need a spacer. And you know. and looking at what happened when the spacer was being pumped. MR. approximately 450 barrels of fluid should have been pumped. Bly. the mud pump strokes that it took to pump that fluid down to the bottom of the well. But is that the type of decision that would have been subject to a rigorous management of change process at BP? MR. I want to ask you a question. you know. GRIMSLEY: Now. to the spacer being under-displaced and set up for the negative test. Ambrose.

I don't know what would be typical for this particular detail. So you've got -. MR. April 14th. Bly. asked you some questions about setting the surface cement plug 300 feet deep. including monitoring the well. MR.COM . GRIMSLEY: So as far as you know. But clearly at that time you've got operational barriers. BLY: I agree that the only other permanent barrier is the cement job. closing the BOP stack. GRIMSLEY: And who at BP would make the decision as to whether something was sufficiently risky or to trigger the management of change process? 8.000 feet of seawater and mud below it. Mr. or Fred.433. GRIMSLEY: And do you agree that at this point in time with the BOP open. ultimately leaving 306 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 308 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 report. If it's a minor change that's not felt to change the risk profile. or it would be an informal management change. you would see a management change for that. MR.PLANETDEPOS. was to open the BOP and then begin to displace all of the mud and spacer from the riser.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. MR. Do you recall that part of the presentation? MR. according to the plan. GRIMSLEY: Can we go to the picture of the displacement with only one barrier.But the only mechanical or physical barrier at that point in time is actually the cement job at the bottom of the well? MR. MR. BLY: Yes. and if there is an indication that the well is getting out of balance. Is the temporary abandonment procedure something that's subject to a management of change type process at BP. GRIMSLEY: Do you have data on that issue that you would be willing to share not only with the Commission but with others so that they could study it? MR. that the only other barrier is the cement job at the bottom to flow from the pay zone? MR. GRIMSLEY: Okay. Is it typical for something such as the temporary abandonment procedures to be changing this significantly up in the last week before they're planned to be used? MR. yeah. So this is a version of a slide that I showed earlier during the presentation which shows how the temporary abandonment procedures changed over the last week leading up to the blowout. AMBROSE: We've provided to the Commission. And that is that after the negative pressure test. then you would yes. I didn't -. GRIMSLEY: Could we put up the slide of the temporary abandonment procedures. BLY: This would be a typical type thing that would be worked by the engineering team and the operations team in town. or at least was it before this event? MR.3767 | WWW. then you would say no. NOVEMBER 8. the crew. the volumes would be hard to read. GRIMSLEY: Okay. MR. you'll agree that the procedures did change in terms of what the sequence of steps was going to be that the team had planned at Macondo? MR. Bartlit. We're not 100 percent finished with it. and namely the one that shows the three that are right next to each. MR. did anybody besides just the immediate engineering team have any input into the changes in the temporary abandonment procedure in the last week before the blowout? MR. and I think you had a conversation about that. BLY: I can't speak to that. BLY: That's correct. GRIMSLEY: Okay. but I'll take your word for it that the displays you put up demonstrate that it changed. So Mr. BLY: I don't know. As I said. MR. GRIMSLEY: So would you agree that this design whereby there is not a second mechanical or physical barrier puts a real premium on both the PLANET DEPOS 888. MR. BLY: Yes. I would like to ask you about another aspect of the temporary abandonment procedures that we had identified as being potentially more risky than was necessary. 16th and 20th. BLY: If there was something that was changed that was felt to change the safety profile of the well. it will be made public. MR. 2010 77 (Pages 305 to 308) 305 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 307 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pits. and when we complete our report.I don't remember all the detail we looked at in the MR.

2010 78 (Pages 309 to 312) 309 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 311 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 cement job and the negative pressure test that evaluates it? MR.that is a choice that could be made. GRIMSLEY: Okay. because the cement job at the bottom is the only physical barrier. that would be -. isn't that right? MR. there were critical things that failed: the cement at the bottom. would you agree it's even more important in a temporary abandonment sequence where there is no plan to put another barrier in place before there is displacement of the riser with mud? MR. MR. which is the alternative. the monitoring. BLY: More important than very important? MR. NOVEMBER 8.this particular sequence put a premium on the cement job and the negative pressure test. So you have a chance of having a lower quality cement plug.000 feet of seawater? MR. for instance. you could set a plug in there. no. right? MR. GRIMSLEY: Yeah.COM . MR. I think that's fairly common in the industry. whether -. We talked about 312 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. GRIMSLEY: But by reducing down to only one physical barrier. I believe that's true. BLY: I don't happen to know if they looked at that during the design phase. AMBROSE: Yes. But do you think it also puts -. and the time to activate the BOP. So I think -. absolutely. MR. yes.and these are my words -. MR. GRIMSLEY: And to be fair. is that right? MR. our review. that's fair. as they are on every well. I absolutely agree with that. can lead to contamination issues. GRIMSLEY: Well. BLY: I don't remember all of the evaluations. that people trust cement jobs oftentimes in these situations more where they're done in seawater rather than mud. It's very important. it could have exercised the option to set a mechanical barrier of some sort in mud without having to displace 3. MR. BLY: You're asking me about alternative designs. And the reason for that is when you do that you have a better change of getting a high quality cement plug. BLY: Yeah. is that right? MR. I've been clear about what I thought the controls in place were for this operation. et cetera. GRIMSLEY: Okay. these procedures were perhaps more dependent than others on humans monitoring that test.3767 | WWW. which I can only agree.433. I mean.PLANETDEPOS. but I understand that it's a common engineering choice to set the cement plug in seawater. GRIMSLEY: So if BP was concerned about setting a cement plug in mud as opposed to seawater.I don't know quite how to say I agree with premium. BLY: Can you help me with what you mean by "premium"? MR. you know. MR. as we've outlined in the report. you understand what I meant -. the only way that BOP gets closed is if somebody hits a button. yes. yes. MR. BLY: I don't know how to measure that. Do you know whether in fact the team considered to use mechanical plugs. again. GRIMSLEY: Well. we have heard that as well. again. 310 But isn't it true that there are other types plugs besides cement plugs that one could set as a barrier. GRIMSLEY: Do you know what the reason was that BP chose not to put in the cement plug prior to displacement of the mud from the riser? MR. but all those were very important barriers to have in place on this well. Setting the plug in mud. MR. BLY: Well.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.in my words. Now. GRIMSLEY: Well. If your point is that the negative test is very important to demonstrate the integrity of that seal at the bottom. bridge plugs. and that those are the things that fundamentally failed to allow the initiation to PLANET DEPOS 888. you had said that you didn't think that this was a particularly risky design when all things were considered together. you're going to want to make sure that that's good and tested and proven. BLY: Yes. a bridge plug or some other mechanical barrier? MR.a premium on monitoring up on the rig? Because. So if you want to set a plug in there. BP could have set a cement plug prior to displacing the mud from the riser. that could be set in mud? MR. BLY: Yeah.

GRIMSLEY: Mr. So if that's the point of your question. AMBROSE: So far those that we have talked to. You know. to your knowledge. you have to go back and rethink everything. MR. a physical barrier that doesn't rely on human frailty to protect against any problems down here at the bottom with the cement? MR.433. I can agree with that. 2010 79 (Pages 313 to 316) 313 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 315 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 go through to the accident.PLANETDEPOS. MR. And at some point members of the rig crew understood what the procedures were going to be for going forward that day. AMBROSE: Yes. Sometime -. NOVEMBER 8. had the one on the 14th been run. And in fact. AMBROSE: It would have been in the pre-tour meeting. GRIMSLEY: Well. yes. MR. The ones that we cannot talk to. it may be possible. we don't really understand the logic behind the changes. That April 20th ops note was sent out to the rig.the evolution of the changes. AMBROSE: From what we've seen. MR. that arrived on the rig on the 20th. But the plan that was typed out on the 14th is a much more conventional procedure for doing a displacement. The evolution of those procedures. much different than what they were at the end of the day.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. The plan that was originally outlined that we've seen -. right? MR. voiced any concerns about the PLANET DEPOS 888. if you look at the recommendations that we've made to BP which have been accepted. your folks on the rig knew that morning what the temporary abandonment procedures and the sequence of events were going to be from that ops note. GRIMSLEY: Did anybody. yes. Mr. GRIMSLEY: But as of right now. And I think there's a question of oversight and review of those plans along the way. MR.3767 | WWW. I believe. there was a lot changing. just one last follow-up with you. I don't know what they thought of the plan. yes. And that may include the one you're suggesting. AMBROSE: I believe it was at 10:43 a. you have no evidence that anybody from Transocean. the risks that were changing is one of the questions that we have from our investigation. potentially another barrier for safety in here.we don't have evidence to know when -. We've only seen a typed-out sheet of paper with the plan. GRIMSLEY: Putting aside the spacer. there's clearly things you could focus on in the negative test itself to sort of try to put more protections in here. MR. which added the complexity of doing the displacement before setting a cement plug.and we don't -. Ambrose.to be clear.you know. That was added. when you look at the evolution of the plans. you would go back and say is there ways to put more control barriers in place. MR. do you have any views on the temporary abandonment procedures that were put in place on April 20th? MR. GRIMSLEY: Okay. the consequences would have been MR. You know. I believe that's true. right? MR. GRIMSLEY: So your people on that rig understood what the sequence was going to be? 314 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 316 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I demonstrated in my report which ones failed. However. And yes indeed. AMBROSE: When they received it and they discussed it. ultimately that's where we're going.but the spacer was added into the plan sometime between the 10:43 ops note and the displacement. the ops note did not include the spacer.m. whether or not it was recognized.COM . BLY: In the aftermath of an event like this. no. Ambrose. MR. So it's -. GRIMSLEY: Yeah. It's about multiple things and multiple changes along the way. on that rig or otherwise. from Transocean on the rig that day voice any concerns about the riskiness of those temporary abandonment procedures? MR. Those plans were never seen before the one.this isn't about one thing. correct? MR. Do you think going forward it may make sense to perhaps reconsider whether another barrier should be put in. If you're asking me is it possible in hindsight to go and create more -. then they would have known about it. clearly it was believed there were many protections in place here. and I think it goes to one of the -.

it's not complete? MR. MR. SANKAR: Would you agree. Vargo? MR. that you have isolation in the float shoe. to ascertain if you have isolation. what you're saying is the system of the cement can't really be verified until in some cases 48 hours after the cement job is placed? MR. SANKAR: And Mr. SANKAR: I'm going to suggest that we take a five-minute break to switch equipment. GISCLAIR: I would agree. MR. MR.PLANETDEPOS. Gisclair? MR. to look whether you have returns. SANKAR: It's a better means? MR. sir. There's cement at all these other levels in the higher parts of the casing as well. MR. Ambrose? MR. VARGO: That's correct. SANKAR: Mr. that a primary cement job can never be relied upon until 48 hours after it's done? MR. VARGO: That's my opinion. (Recess taken. MR. MR. hydraulic isolation of the zones of interest. Is that something we can all agree with. VARGO: No. MR. And many of the folks that we talked to in the industry. BLY: I think the final tests are very are important. SANKAR: So the bond log that you're talking about is not a bond log immediately after the 320 318 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 we can get agreement on some of our general points that we made during the course of the overall presentation. obviously placement is getting it there. VARGO: I would agree that you can't conclude a successful cementing operation until you have done all the testing and actually done a bond log. Five minutes. Mr. yes. the cement that we're talking about now is the cement at the very bottom of the well. And you can confirm that with a negative test and also with a bond log. MR. if that's okay with the Commission. AMBROSE: I agree with that. SANKAR: Mr.433. That's one indication. VARGO: Yes. And then eventually when you go back to go back in the production phase to go after the PLANET DEPOS 888. MR. you know. Bly? MR. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 cement job? MR. though. CO-CHAIR REILLY: Yes. I do agree.) MR. when you bleed back the casing. NOVEMBER 8.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. SANKAR: So if I understand you correctly.3767 | WWW. but for now what we are taking about is the final cement job. and he's going to ask some questions about cement. VARGO: It's my opinion that -. Just to reorient you here since we've been talking about a lot of other issues. sir. It's my opinion that you use the data that you have from the cementing operation to ascertain whether you have a successful cementing job. One of those means is to look at the pressure response while you're placing the cement and look at your lift pressure. And I want a ask a few questions to see if MR. 2010 80 (Pages 317 to 320) 317 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 319 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 riskiness of these particular temporary abandonment procedures? MR. what's called the primary cement job. So. yes. The first one is about cementing in general. they all said to us that a primary cement job shouldn't be considered complete until it's been completely tested and pressure tested or otherwise evaluated.It's my opinion that in order -. SANKAR: So your position would be on behalf of Halliburton that even a negative pressure test is not enough and that until you have a cement bond log. SANKAR: So is it Halliburton's view. that in many instances industry operators would wait until at least 48 hours before running that bond log? MR. really. MR. GRIMSLEY: And now I'd like to turn it over to Sam Sankar. then. VARGO: That's correct. Zonal isolation.COM .There's two parts to cementing. There is placement and there is actually isolation. obviously. and I think a bond log is the better means. hydraulic zonal isolation is the other part. SANKAR: So I want to return for a moment and talk about the cement again. Once you're done and complete with the cementing operation. enclose the floats. AMBROSE: I have no specific knowledge of somebody standing up and saying that. no.

aren't aware at the time that they're monitoring this whether the cement job that is being pumped is complex. MR. MR. to have some awareness of the complexity or riskiness of the cement job that's being pumped in a situation where it is providing primary cement and zonal isolation? MR. VARGO: To achieve zonal isolation. as far as waiting time. So that's my opinion.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.3767 | WWW. is there anything that your crew does on the rig to learn about the kind of cement job that is being done while they're there on the rig? MR. typically we're not involved in those 324 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 we had a good indication that we were going to have channeling during the cementing operation and then that was going to cause a problem with zonal isolation. it's probably different on that. SANKAR: I'm referring to situational awareness. MR. SANKAR: But you're suggesting. SANKAR: So is it Halliburton's position. channeling. then. VARGO: Primary cement job. or very similar to that. SANKAR: Primary cement job. high risk or low risk? MR. 2010 81 (Pages 321 to 324) 321 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 323 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 reservoir that you run a bond log. but we would have a general awareness of what was going on. MR. AMBROSE: Are you referring to training or -MR. MR. If you were going to drill out the shoe and drill ahead. MR. BLY: Yes. so our opinion on it. uncommon. that you can't rely on a primary cement job until you have run a cement evaluation log? That you can't rely on a primary cement job as a barrier and -MR. yes. Do you think it would make sense for the drillers. SANKAR: Another point that I think may be of general agreement is about whether this was a complex cement job at Macondo. NOVEMBER 8. that relying on the primary cement job in this well was itself a problem? MR. complex or not. any of those issues. I do want to follow up on that a little bit. then you would run a formation integrity test to test the integrity of the cement as well. AMBROSE: I don't know if we have it in those categories. and I'm not sure that I can respond to that particular question today. which can't be done for at least 48 hours after the job is pumped? MR. And that's not. this means that the drillers. MR. SANKAR: Well. AMBROSE: I somewhat step back to the facts of where we are in the investigation. Mr. We said I think exactly those words in our report. VARGO: I think prior to the operation 322 of our area of expertise.PLANETDEPOS. Bly. I would say. your OIM to be aware of the kind of cement job that is being pumped while they're supervising the drilling monitor screens and other equipment? MR. MR. SANKAR: So if I understand you right. the people who are monitoring the kick detection equipment. MR. it's Halliburton's position that a primary cement jog done by Halliburton can't be relied upon until a cement bond log is done. Are you saying. So we wouldn't have all the details. You know. AMBROSE: I think as far as awareness. Sorry about the metaphor there. then. Ambrose? MR.433. SANKAR: Let me ask a simpler question. that's an interesting point. VARGO: You can't rely on zonal isolation until I think you have run a bond log. SANKAR: Mr. so to speak. SANKAR: So I do want to drill down on this a little bit more. Those are all the ways that you properly ascertain a good cementing operation. that even with all the indicators being good. clearly they would be aware of what was being done. AMBROSE: Cementing is really outside 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 discussions or issues. MR. simple.COM . would you agree that this was a complex cement job for which the accuracy of the placement of the cement was very critical? MR. Mr. then. Ambrose. I think. For the specifics of the cement operation. the guys who are operating and monitoring kick detection equipment. whether or not nitrogen was being injected or not. PLANET DEPOS 888. Is there anything in your policies or manuals that requires your drillers. That's my opinion. what type of job was being done.

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we haven't seen any indication that a kick or any major lost circulation event occurred during the cement job. Whether or not that should be a change in the future I think is something, once we have our complete understanding of the investigation, then we'll decide. MR. SANKAR: That's fair. I should return to the original question, then, with Mr. Vargo and Mr. Gisclair. Do you agree that this was a complex cement job in which the accuracy of the placement was critical? MR. VARGO: I believe the -- I believe that the job was critical for placement. As far as calling it complex, I believe that it's more complex than a conventional cement job that doesn't include nitrogen, but it is a fairly routine operation that we perform on a regular basis in the Gulf of Mexico and in deep water. MR. SANKAR: Now, Mr. Gisclair, I should just say I know you're from Sperry Sun and you're a subsidiary of Halliburton, and I'll assume that unless you raise your hand on these cementing questions, you

during the cement job and concluded that there's no hydrocarbons flowing at that time. MR. SANKAR: And Mr. Ambrose? MR. AMBROSE: Same. MR. BLY: Mr. Vargo? MR. VARGO: I believe there was no flow after the cement job, that's correct. MR. SANKAR: So at the time of the cement job -- and I think this may be an important point for the public to understand. At the time the cement job was complete, that is when the fluids were still in the well, when the mud was in the well bore, everyone here agrees that the well was, as they say, static, it was not flowing, there was no communication with the -- or there was no influx from the reservoir at that point. Is that correct, Mr. Bly? MR. BLY: That's correct. MR. SANKAR: Does anyone disagree that point? One thing that I think we've found in our investigation is that given the posture of the

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would refer that I direct the questions to Mr. Vargo. Is that fair? MR. GISCLAIR: Oh, thank you very much. (Laughter) MR. SANKAR: We'll start with you, Mr. Vargo, on this one. Do you agree that this primary cement job failed to isolate the hydrocarbons in the well? MR. VARGO: I agree. MR. SANKAR: Mr. Ambrose? MR. AMBROSE: Based on our conclusion that flow happened up the casing, yes. MR. SANKAR: And Mr. Bly? MR. BLY: Yes. MR. SANKAR: Now, Mr. Bly, do you agree that the hydrocarbons -- well, I shouldn't hodgeball on you. I think your report says that you believe that the hydrocarbons were not flowing out of the well at the time of the cement job. So at the time that the cement job was complete there was no flow of hydrocarbons; is that correct? MR. BLY: Yes. We analyzed both before and

parties -- and it's understandable at some point, people advocate positions with some amount of certainty, and we as a somewhat neutral posture have had some difficulty in finding the same level of certainty in some of the positions. On cement in particular, one of the problems we face is that this cement down here is a long way. It's a long way down the Macondo well. And now it's been further isolated by more cement in the well itself. So many of the forensic clues that we might have to look at that cement after the fact are going to be hard to reach. So given the fact that we all agree it appears that the primary cement job failed to isolate the hydrocarbons, do you agree that there is no way to be sure beyond any doubt why the cement failed to isolate the hydrocarbons? Mr. Bly? MR. BLY: Beyond a shadow of a doubt is the question? MR. SANKAR: To a certainty. MR. BLY: I suppose it's impossible to know

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to a certainty, yes. MR. SANKAR: Mr. Ambrose? MR. AMBROSE: Again, cementing is outside of Transocean's area of expertise, and we've had very limited amount of data or information on the cement. So it's hard for us to -MR. SANKAR: It's a fair response. It's a fair response. Mr. Vargo? MR. VARGO: I believe the cementing operation did not isolate the hydrocarbon-bearing zone. That was shown in modeling that was done prior to the operation. And I would have no reason to believe that we would have isolation, especially in account of the fact that we had hydrocarbons blowing out from the well. So I believe that there was no isolation of the reservoir. MR. SANKAR: That's an answer to a question, but it's not an answer to my question. My question, of course, was: Is there any way to be sure why the cement didn't do its job? MR. VARGO: Because we did not have the

MR. SANKAR: Is there a way for us now to go down in the well and find out whether that was in fact the case? MR. VARGO: I don't believe there is. They've plugged and abandoned the well. MR. SANKAR: We do have two bits of -- at least that I know of, two bits of forensic evidence that could be analyzed in the coming months. One is rocks. I call them rocks although we're not exactly sure what they are. Materials that landed on the Damon Bankston, the ship that was asked to leave the side of the Deepwater Horizon during the blowout, and some rocks actually landed on the rig -or I'm sorry, landed on the ship, and they are currently in USGS possession. And they're being tested. I'm wondering whether any of you have a position on whether or not the data from those rocks would be instructive, or could be instructive on what happened at the bottom of the well, or whether they're something that's simply irrelevant at this point. Mr. Bly?

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ability to centralize the pipe properly. The hydraulic simulations indicated that we had channeling prior to the operation. So I believe that is reasonable information to indicate that we did not have isolation. MR. SANKAR: Can you be sure about that? MR. VARGO: Now today -It's my opinion, sir. MR. SANKAR: So I'll take that as a no, you can't be sure? MR. VARGO: Do you believe that there was isolation? I mean, I don't believe that there was isolation. MR. SANKAR: I believe we all agree that there was no isolation. My question was whether we can all be sure about why it happened. MR. VARGO: I believe that it's due to the fact that we had pipe laying on the low side of the hole and that a channel was created in which there was a mud channel that was existing in the well, cement channeled up and did not isolate the zone, and that's why you didn't have isolation.

MR. BLY: It's difficult for me to answer. I don't know if I'll have a view on those rocks. MR. SANKAR: All right. I'll just ask Mr. Vargo on this. MR. VARGO: I don't know. I mean, I guess we'll have to analyze it and see what comes back. MR. SANKAR: And how about the one and a half gallons of cement, dry blend cement that remains from the Deepwater Horizon that was sent back to Halliburton's lab just before the blowout and that remains I believe, still in Halliburton custody at this point? MR. VARGO: That's correct, we do have some cement and additives and water that are in our possession and we're waiting for the -MR. SANKAR: Am I correct that it's roughly one and a half gallons or so? MR. VARGO: I believe that's the volume that's remaining. MR. SANKAR: And do you believe that testing that cement could provide any information about what might have happened at the bottom of the

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Macondo well? MR. VARGO: I believe it's my opinion that it could. MR. SANKAR: So there is some value to testing that? MR. VARGO: I think so, yes, sir. MR. SANKAR: Mr. Ambrose, I don't know if you have a view on this. MR. AMBROSE: Again, I defer to the cementing experts on that one. MR. SANKAR: Fair enough. And Mr. Bly? MR. BLY: Well, as we highlight extensively in the report, we looked very hard at this question about cement. And based on what we saw in the early part of our investigation, we had questions about the stability of the cement, the stability of the foam cement. And it's well documented. We did testing and concluded that in all likelihood the cement fundamentally failed; it was unstable. I believe you said this morning that the test done by Chevron on behalf of the Commission came to the same conclusion.

rate of cement flow, things like that? MR. BLY: I don't know who determines rate of cement flow, if that's a Halliburton proposal, BP. I don't know that detail. BP would typically determine -- describe where they wanted the top of the cement to be, yeah. MR. SANKAR: So I guess I take it generally that BP views Halliburton as providing expert services in the cementing process; is that correct? MR. BLY: Yes, sir, particularly when you're dealing with specialized products like foam products. I mean, those are very specialized cementing products. MR. SANKAR: Mr. Vargo, I'm curious about Halliburton's view on the same issues. When an operator like BP hires Halliburton to cement a well, what does Halliburton view its role as being? MR. VARGO: Well, Halliburton is going to provide the cementing services as well as other pressure pumping services on the rig. We're going to provide the designs for cementing the wells. We work

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So I think there's -- it might be useful to do more testing. I think we've got a pretty clear understanding of what happened, though, in that the cement was not stable. MR. SANKAR: I would like to ask a question about the role that -- how BP treats its cementing contractors on these rigs. What, to BP, was Halliburton's role as the cementing contractor at the Deepwater Horizon? MR. BLY: Well, I mean, we -- you know, we hire them as one of the, if not the leading cementing contractor in the world, to provide advice, cementing services, designs and pumping services for these wells, for these deepwater wells. MR. SANKAR: And in BP's view, is the design done by BP and executed by Halliburton? MR. BLY: It's an iterative process. BP provides the details of the well, the well bore, pressures, configurations and things. Halliburton provides the proposed cement designs to go with that. MR. SANKAR: Does BP determine other parameters about the job, including top of cement, the

with -- we work with the operator, the engineer involved. We'll also work with the cementing specialist that's inside BP. And it is a collaborative effort throughout the design and execution phase of the well to determine the best -- the best process and products to use to create zonal isolations. So that's how we work together. MR. SANKAR: Do you recommend the procedures that you're going to use to cement the well? MR. VARGO: We will make recommendations on procedures. Typically BP has the final call on the actual procedures that are used on the execution of the job. MR. SANKAR: So you do provide some advice on the kinds of parameters and kinds of things that should be considered during the course of a cement job; is that correct? MR. VARGO: Yes, sir. MR. SANKAR: Do you ever predict the success of a cement job or do you ever suggest whether

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PLANETDEPOS.you can tell me whether -MR. Bly. I'm curious where the origin of the idea of using foam cement came from on this job. VARGO: Approximately. It seems to us like the cost of this job was nearly $200. right? MR. So you can correct me later if I'm wrong about this. so there's typically a lower cost in cementing those. which I'll represent to you is the page on which the foam cementing costs are outlined. It's not like you're putting one cement out there with one density. what is your view of who recommended the use of foam cement on this 340 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. They propose the best way to do a job like this. The smaller casings. SANKAR: Who recommended nitrogen foam cement on this job? Mr. We have the ability to adjust it. MR. yes. it's probably relatively close to another typical type of cementing operation that's a foam cementing operation at those depths. and I don't know 100 percent for sure. this type of product. you know.for the job? Okay.92. and those are here. MR. SANKAR: I don't mean the individual. So I would say. obviously less volume. a primary cement job like this on Deepwater Horizon cost? MR. Vargo. MR. pore pressure. frac gradient and flow conditions. sir. VARGO: Sure.Yes.000.000.433. So I would assume. but I believe that we did make the recommendation to run this type of system.000 maybe $50. it's adjustable so that if we put the system out there we can adjust the design based on the fracture gradients that we see out there. but under these conditions where you have a close tolerance and pore and fracture gradient where you have the potential of loss returns.COM . MR. VARGO: Right. SANKAR: And mr. you know. That's the first page. 2010 85 (Pages 337 to 340) 337 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 339 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 or not it will achieve zonal isolation? MR. SANKAR: Do you treat different operators differently based on their level of PLANET DEPOS 888. And that's $88. it comes from Halliburton.3767 | WWW. VARGO: That's one of the avenues. SANKAR: -. SANKAR: Approximately $200. and I will confess that I don't know if they're correct. VARGO: I would say that's probably fairly equal to the other type work that we do. you still look to the operator to make the final decision on whether or not your recommendation should be used. $98. MR. yes. the deeper in the wall. SANKAR: -.000? MR. VARGO: That's fine. I'm going to go to the second page. We'll make recommendations and they'll either ask us to continue on or to potentially change that. MR. MR. MR. So on one page here that's one number.they're right. VARGO: I'm not exactly sure who recommended it. BLY: Well. SANKAR: -. job? MR. Is that a high cost foam cement job? MR. I don't know the exact number but I would say about $45.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. do you know? MR. and foam is one of the things they promote as very good for dealing with. what is a cement job like this. SANKAR: So the simulation sounds like the primary vehicle for giving the advice -MR. SANKAR: I do see some higher numbers in here. MR. There's two different types of foam cementing operations that we conduct. I'm just curious. NOVEMBER 8. you know. SANKAR: And you said earlier that when you make a recommendation like this. VARGO: For this particular job. I'll put them up on screen and -MR. we can provide the results of the simulations and give them the -what we believe is. Usually on surface and conductor pipes. BLY: I don't know which individual did.000. which those are very large types of cementing operations. a good reasonable estimation of the success of the primary cementing operation prior to it being done through the simulations that we run. 338 And this is just the revenue that we charge BP. VARGO: We give -. MR. MR.635.

342 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 344 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 stages of the well. MR. serious lost returns. only four were for BP. and that was recommended. I think the design engineer that was working with BP made the assessment that this was the best recommendation. SANKAR: Do you think that would have or should have influenced the level of advice you were giving to them on this job? MR.COM . would you characterize BP as being somewhat inexperienced with the use of foam cement in deep water in the Gulf of Mexico? MR. That's a simple way of explaining the fact that the -. MR. And then we have operators that we work for that have very little cementing experience and we're relied upon for pretty much all of the recommendations. forced to stop drilling earlier than planned. And he worked with the drill team and the cementing specialist to vet out the job and to prepare for it. but that's probably the right number MR. And again.we work for different operators that have varying levels of experience inside their organizations. your team could have assessed in a different way or a better way. BLY: Yeah. BP has cementing specialists. but we can use that for now. And of those 33. Mr. The spreadsheet we looked through and we saw that there were 393 total foam cement jobs that had been done in the period from 2002 to 2010. ExxonMobil does. Bly. And under these conditions. relatively inexperienced in the use of foam cement in deep water? Or at these depths? MR. they obviously have their own lab and cementing specialists. Is that fair? MR.3767 | WWW.Where would you put BP in the spectrum of organizations and their sophistication. So based on this. BLY: Yeah. SANKAR: Can we put up the slide with the situation at the time of the cement job. but if you look here at the 33. Mr. this can all be corrected if I have this wrong. SANKAR: So we asked Halliburton for the data on foam cement jobs they've done in the Gulf of Mexico. What we were trying to communicate here is that there were a number of issues that the crew should have known about at the time of the cement job. I think.only 33 of those were on that final production string in the deepwater -. your report agrees that many of these things were in fact risk factors that. There was low circulating pressure after the conversion. Shell does as well. As you mentioned before. which is the deeper sections. There are a couple of operators that use it in the latter part or the latter for using foam at that depth. MR. The rest were for Shell. would you say. yeah.we're making recommendations based on what we think is the right job for the well. no bottoms up. Again. As I hinted at this PLANET DEPOS 888. VARGO: They're one of the operators that we use foam cementing on. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. this is probably very familiar to you since we spent a lot of time on it this morning. BP was.that there was not a whole lot of room below the casing in an area called the raffle that is used as a way of helping with your cement job. SANKAR: Would you -. And I'm simplifying somewhat. Many of the deepwater operators that we work with use foam cementing in the surface and conductor pipes. They came back with a spreadsheet. Chevron. we had to rely on Halliburton to give us good advice on the nuances of foam.the last string of casing where you're trying to achieve zonal isolation of a hydrocarbon layer. BLY: I don't know if we're inexperienced.433. That sounds like a pretty large number. yes. VARGO: I think we're making -. the 33. We have different -. the difficult drilling conditions.PLANETDEPOS. VARGO: I believe so. specifically with your foam cement in deep water? MR.and again we stand to be corrected in the future -. Bly. as we understand it -. MR. in hindsight at least. 2010 86 (Pages 341 to 344) 341 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 343 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 experience with your services? MR. VARGO: I don't think we treat them differently. and a host of other issues that you've already heard us discuss. SANKAR: So at this point for Macondo. NOVEMBER 8. Yeah. SANKAR: And was Halliburton aware of BP's level of expertise with foam cement in Macondo? MR.

sir. we asked for advice and how would we do that. VARGO: I believe -. your crew was aware of the total amount of volume of cement that would be pumped down the well? MR. You know. I think some of those risk factors are linked to others. SANKAR: Out of all -. I'm not aware of that. that I know that they raised.I believe Mr. sir. SANKAR: Were you aware of the bottoms-up circulation. SANKAR: Did Halliburton ever suggest to BP that it might be difficult to achieve zonal isolation given all these issues? MR. the lack of the bottoms-up circulation? MR. MR. you were aware of the centralizer issue? MR. VARGO: I believe that's correct. I mean. MR.433. MR. These occurred -. SANKAR: So. SANKAR: And in fact the last OptiCem models sent out as late as four days before the job reflected the correct flow rate that would be used on the job. SANKAR: But they were aware at the time that they pumped the job? MR. VARGO: Yes.3767 | WWW.PLANETDEPOS. So the first three suggest that you should be very focused on foam -. I think some of them are contingent on others. MR.in many days. SANKAR: Well. And I MR.you know. MR. SANKAR: Mr.Out of all of the things that they knew about in the cement job? 346 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 348 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 believe that occurred relatively close to the cementing operations. VARGO: Right. the only -. GRIMSLEY: Did your crew raise any of these issues to BP as possible concerns with the cement job? MR. This was a relatively small volume of cement. SANKAR: Besides centralizers. and the reason for that was for cement shortfall on the previous shoe. VARGO: I'm not certain if they did or they did not. MR. sir. VARGO: Yes. I mean. MR. NOVEMBER 8. SANKAR: Were they aware that there was going to be a low cement flow rate? MR. VARGO: Yes.the only issue that you know that they raised was the issue of the low number of centralizers? MR. MR. sir. the difficulty to convert the float equipment. So these didn't occur before -. MR. to your knowledge. so I would say that they were aware of many of these things. did he raise any other issues? PLANET DEPOS 888. SANKAR: Were you aware that they had had difficulty converting the flow equipment? MR. sir. VARGO: Yes. these were occurring on the execution of the cement job. MR. 2010 87 (Pages 345 to 348) 345 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 347 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 morning. Gagliano did indicate to BP that he did not believe they would get zonal isolation due to the fact that the pipe would be decentralized because they weren't going to use the proper number of centralizers. Some of those things occurred right before the cementing operation. is that correct? MR. VARGO: As we came closer to the job.some of these were occurring as the cement job was being -getting ready to be pumped. SANKAR: And. sir. VARGO: Yes. So I simply struggle with the notion of having these be kind of random risks. MR. VARGO: Yes. I can tell you for sure that they raised the centralizer issue. I mean a cement job that's going to work in pore pressure frac gradient environment. VARGO: No. SANKAR: And the cement volume.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. VARGO: Well. MR. MR. I believe the rate at which we were going to displace the job was reduced to ensure that we wouldn't exceed the fracture gradient on placement of the job.COM . I think they're continually discussing all of those things. VARGO: Yes. MR. I think that's exactly what was done here. SANKAR: Do you know if they raised any others? MR. of course. I think the in-house engineer that works with BP. Vargo. Our personnel worked in-house with BP and the drill team. sir. were your team members aware of any of these issues ahead of time during the course of designing the cement job? MR. the low circulating pressure after conversion. MR. MR.

PLANETDEPOS. Mr. SANKAR: So I want to go to the report where we talked about -. sir. right? MR. it will tell you where you have a risk of channeling.that's where the diagram would be. MR. Bly. It's got a lot of technical information. Several of your engineers have explained to me that this portion of the drawing here. yes. SANKAR: Do you believe that Halliburton should have done more to flag the information about channeling and gas flow in this report when they sent it to you? MR.COM . SANKAR: It's the best that was available at the time. Is that channeling? MR. MR. I think you agreed that this was. MR. MR. This is the cover of the report. So yes. I guess I agree with your point.3767 | WWW. am I right? MR. but this is the one that came out right before. VARGO: I believe the fact there was going to be channeling which was increasing the flow potential on the well. as I've learned through the course of this investigation. SANKAR: That's due to the channeling. That's due to the channeling. the best model of cementing that was available to the crew on -. though. VARGO: I believe this is the visual picture that shows the channeling. NOVEMBER 8. what are the indications in this report that you believe should have alerted the BP engineering team that there was a problem? that's where the -. SANKAR: How about this? (Laughter) MR. VARGO: That's correct. Did you give this to me? MR. There is another point in the data that shows where the top of cement is going to be.where Halliburton first modeled the centralizer issue. MR. SANKAR: So there is another part of this report that's been discussed a lot in the press. And it doesn't say anything about channeling on here. VARGO: I don't know. the green material over here indicates that mud will be left in the well bore.is this the best indication PLANET DEPOS 888. Yeah. SANKAR: Mr. VARGO: That's indicating channeling. And where the pipe is not centralized.to your engineering team and to the crew on the rig. that there was no signaling about what was critical in these things.do you agree that it predicts some amount of channeling and 350 MR. And this is about gas flow potential. Right here it says: "Based on analysis of the above-outlined well conditions. this well is considered to have a severe gas flow problem. so I assume you understand this part. SANKAR: So this drawing here. the risk of channeling increases. BLY: What that model will do is.I'm not sure about that. SANKAR: Is this the only indication in this model that there's going to be channeling? MR. MR. BLY: For cement placement. MR. at least at the time. SANKAR: Yeah. In your report. sir. it's a model of cement placement. Is this the -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. And I do this just to orient you that we're all talking about the same report. MR. VARGO: I'm not -. shows channeling. if it's on page 23. MR. 352 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 some amount of gas flow? MR. SANKAR: And it's on page 23. SANKAR: It does predict -. MR. You just have to know that it's the green means channeling here. Vargo. MR. sir. as I have understood in speaking with your engineers.433. BLY: The 18th -." MR. I think what we highlighted in our work was that there were things passing hands. MR. It doesn't say anything about stability or some of the other critical issues that I think you are beginning to surface here. is that right? MR.I don't remember exactly when that report was sent. yes. BLY: I don't -. And I see you nodding your head. 2010 88 (Pages 349 to 352) 349 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 351 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. VARGO: I believe that's just the interpretation of the data.I mean. the actual number footwise where the top of cement is going to be. the number. VARGO: Yeah.

The reason why the gas flow potential. I'm going to bring it up right here. sir. am I right? MR. I believe. SANKAR: You don't think that the pore pressure would have changed the fact the job would have channeled? MR.these are centralizer PLANET DEPOS 888. I understand from the BP report that pore pressure was incorrect.that Halliburton's view is. MR. VARGO: Yes. MR. but not the fact that the job would have channeled. SANKAR: I'm going to show you the centralizer specifications here. VARGO: Yes.that is a factor that plays into the gas flow potential calculation. SANKAR: And this is the best model that was available at the time.6 inches? MR. I know this was given to BP. The pore pressure here is called out as 13. Are you talking about the actual directional profile? MR. sir. sir. VARGO: Problem with the channeling. or your view is that there was a problem with this job because of this modeling. isn't that right? MR. SANKAR: But you routinely do cement jobs that do you have a severe gas flow potential. Actually I'm not. I see that. absolutely. MR.3767 | WWW. sir.197 p. SANKAR: So if this input were changed. no. VARGO: I think that would have changed 356 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 page 18 in this report.I don't know if it was brought up or not. MR. MR. MR. yes. SANKAR: Okay. SANKAR: There's two issues I was going to bring up. MR. MR. VARGO: I don't know. would the gas flow potential.I heard you say earlier that one of the reasons that you are -. MR. Do you have any view as to whether that was actually the correct pore pressure for the job? MR. It's showing a channel. SANKAR: And do you see at the top that the nominal diameter of the centralizers is 8. We know that they are going to be put -. VARGO: I would say we do do jobs that have a severe gas flow potential. SANKAR: It's a red flag? MR. SANKAR: So this in and of itself is not a red flag to you? MR.PLANETDEPOS.s. SANKAR: If it were incorrect. VARGO: I don't have any view whether it was incorrect or correct. VARGO: Oh. SANKAR: Are you aware that -. MR. The first is the pore pressure. SANKAR: I think you -. NOVEMBER 8.at least it's BP's position that that nominal diameter of the centralizers is incorrect and that in fact the centralizers were placed not in these positions at all? MR. VARGO: Yes. VARGO: No. MR. is so severe is because you are bringing cement up higher. so your gas flow potential is going up. MR. MR. and that's one of the reasons we recommend the foam cementing operations. sir. VARGO: That is a -. but I don't know that it was actually pointed out. it's a red flag.COM . Am I right? MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.i. I will say this: At the time of design we don't always know exactly the placement. Do you agree that there were erroneous input data that was used in this model? MR. VARGO: I don't know if -.433. VARGO: I don't think that would change the fact that the job would have channeled. Now. We're going to call out a fairly large section here and hope we will be able to see it. SANKAR: Was it called out anywhere beyond -. MR. MR. VARGO: This is one indication. VARGO: That's very possible. Do you see here that the centralizers are all placed 45 feet apart on this chart? MR.and I'll represent to you this is 354 that mean that this model can't be relied upon as a prediction of channeling? MR. it might change your conclusion about that. 2010 89 (Pages 353 to 356) 353 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 355 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to the BP design crew that there is going to be a channeling problem on this job? MR.

suggests that the nitrogen foam cement pumped down this well was in fact unstable. is your conclusion the same.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. 360 358 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 public. and we can rerun the model. VARGO: I have. Bly mentioned earlier. MR. this slide here shows a three-hour conditioning time. that the engineer probably made in why he put them in that length and distance apart. at least in my opinion. or the last test that was shown to me showed that they had what I think a reasonable engineer would show as a stable system and that they could move forward. SANKAR: I'll take that as a maybe. And I believe towards the end -towards the end when they had slowed down the job. in my opinion. we can go back and we can model it with the exact location of the centralizers. which is to ascertain the volumes of materials that we're going to need out on the rig to perform the jobs. and I believe you showed them up there before. and I would say that an engineer looking at that would assume that that is a stable system and they would go ahead and execute the job. VARGO: The investigation is continuing into this. you put up the information I guess back in February on the initial testing. MR. which is I believe Weatherford. And I'm sure that's the assumption. So initially in the initial stages of testing.COM . sir. VARGO: The engineer is looking at the job placement time. with the exact specifications from Weatherford. which is not Halliburton. VARGO: I don't believe it will fix the fact that the job channeled. as Mr. Halliburton -. SANKAR: I want to talk a little now about the nitrogen foam cement in particular.PLANETDEPOS. And of course. So I can't speak to whether he got that information or not. And I guess one thing that would be valid to point out is that we are designing and we are testing that cement right up until the operation typically.You know. SANKAR: Are you willing to make the results public when do you that modeling? MR. we're doing what we call pilot testing. BP's report.433. so we know that they're going to be put on each joint. so I would assume that it would become and bottom. SANKAR: So I'm going to put up that data chart. I don't -. VARGO: Results that were provided just prior to the execution of the job indicates stability. I know that there was testing done prior to that to the contrary. MR. SANKAR: Have you reviewed all the testing data? MR.we're still working on that. SANKAR: Would you agree at least that correcting incorrect centralizer information diameter and placement might change the results of this model? MR. SANKAR: Who sets the conditioning time for the test? MR. MR. I should say. What I have here -. SANKAR: Is Halliburton planning on rerunning the model with correct input data? MR. MR. 2010 90 (Pages 357 to 360) 357 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 359 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 subs. and I think I have indicated too. But as far as the results that I reviewed prior to the operation. NOVEMBER 8. sir. and as you all indicated. SANKAR: And based on the totality of the testing data. MR. the 1. MR. And I'm sure that that's something. roughly 45 feet.He can get the information from the provider of the centralizers. MR. Vargo. The initial tests that are run. I think that we can do. and the relative length of the joint.3767 | WWW.Mr. until we get the actual cement in that we're going to use. that would indicate. that the foam cement would probably have been stable? MR. And that's probably the engineer that was working on this was the one that chose the three-hour conditioning PLANET DEPOS 888. do you have a position as to whether the foam cement pumped down the well was likely to have been stable? MR. VARGO: I mean. MR. MR. as I mentioned earlier today. VARGO: We can -.8 and 1. that obviously increased the conditioning time. VARGO: Well.8 SG on top 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 So those early tests are going to allow us to order out the proper chemical volumes to have on the rig. and then we will continue to tweak those tests until we get up to the actual operation. MR. And the last test that I showed. that our two goals are placement and zonal isolation. VARGO: Yes.

It may take several tests for us to achieve those results and sometimes they're not all exactly reported. just before that. VARGO: I would say -. then we may not PLANET DEPOS 888. So I don't know why they chose it. VARGO: They probably were then looking at how long it would take them to place a job. compressive strengths. compressive strength. VARGO: I'm not aware of that. MR. Why would somebody use a zero conditioning time if that's the case? MR. SANKAR: If that's true. and that's why they used the three-hour conditioning time. MR. MR. so they reran the test with a two-hour conditioning time.COM .the 17th indicates some stability. They had just gotten on the well. SANKAR: So did they derive the job placement time -. VARGO: I don't know. sir. And that would have been probably a faster displacement rate than that that was actually used based on the tests for April 18th. MR. MR. MR. if you had seen those results.3767 | WWW. At that time I don't think they knew exactly what they were you had gotten this data back from the lab in February. MR. VARGO: At that day -. "I wouldn't run that cement down the well"? MR. So based on those results. I mean. But again. That would be pump time. so they were doing some preliminary tests. One is the pump time. I believe the water concentrations change as well. You are redesigning from the point on the 17th through the 18th of April. I don't think at this point I would choose to run this slurry in the well. let you know that we do a lot of testing on a lot of these cement slurries as we are going through the process. SANKAR: Is there anything in 362 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 364 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 going to do. there are several factors that we consider in testing the cement. 2010 91 (Pages 361 to 364) 361 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 363 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 time. we're going to report the data once we actually know exactly what we're going to do.433. I believe. That's my opinion. So there was a redesign process that did go on from the 17th through the 18th. SANKAR: Was the job placement time changed between April 13th and April 18th? THE WITNESS: I don't know the exact dates but I know that they had slowed down the displacement and that's why they needed the additional amount of time for placement. SANKAR: Why would they choose a different conditioning time for a test in the same time frame when they had no further information on the job? MR. MR. you know. chosen to run that in the well. You change your retarded concentrations. VARGO: It depends. Stability test is another test that we're running.you know. Obviously. SANKAR: So is it your position that if Halliburton's e-mails or documents to suggest that the redesign process considered the instability results from February? MR. So we're doing testing in the background trying to achieve those results. MR.I would say the results from the February 13th would be data that I would not run in the well. So maybe they didn't indicate or request a conditioning time on the slurry. I guess I should also. and some of the other things that we test for. that was early on in the planning stages of the job.I think I'll ask the question differently. Many times we have a target window for a lot of the different parameters that we are asked to achieve. would you have considered redesigning the slurry at that point? MR. at that time on February 17th. sir.PLANETDEPOS. could we -.or the conditioning time from the job placement time? MR. SANKAR: Do you have any sense as why you report one set of data and not another to the operator? MR. you are going to change the slurry. SANKAR: As an engineer at Halliburton. you would have looked at that foam stability data and said. Obviously.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. There is a redesign that does occur. NOVEMBER 8. VARGO: Yes. The 19th -. I would not have. VARGO: If we felt like the data was not valid to what we were doing. SANKAR: Would you agree that both of these February tests produced unstable foam results from the lab? MR.

no. SANKAR: As you know. MR.433.COM . VARGO: I know the 18th test was.I mean. the results -. and it's going to take us four to six hours to place the cement. would of course be 2:15 a.m. that's not something that we would have run in the well. I don't know. 2:15 a. that they began testing this job on April 18th? MR. VARGO: Okay.PLANETDEPOS. VARGO: Not at that time. Well. SANKAR: Would you agree with me that in both cases better foam stability test results were reported than the alternates that were run in the same time frame? MR. this is -MR. VARGO: Actually. MR. VARGO: That's what I understand. MR. So. all of those tests aren't representative of what we were going to actually run in the well based on the job placement time and the conditioning time. sir. So we're going to rerun the test and provide them with the results of what we actually meant to achieve based on their -. the Commission. SANKAR: Was I correct this morning that eventually this April 18th test was reported to BP and eventually this February 17th test was reported to BP? Am I correct about those? MR. the 5959 has indications that you don't have settling but it's not obviously at the design density. from what I understand. The time period for the cement to set up may or may not take that long. I will represent to you that on March 8th this test was sent out. MR. And 48 hours from 2:15 a.I believe we knew the thickening times to place the job. Halliburton has no position on whether or not the April 18th test -MR. VARGO: But then again. and I believe that the stability tests were being run at the time. drew this -. you agree those were when the results were available on the 18th? MR.again. SANKAR: On the April 18th test. VARGO: -. you know. on April the 20th? MR.m. So I don't know exactly the time period that it takes for that stuff to set up.that this task would have taken 48 hours from this point. you know. am I correct? MR.I believe those are part of the results when the results were available on the 18th. with conditioning time. that's not something you would have run in the well. SANKAR: You would agree with me that this test date is correct. MR. So this is the -368 366 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. I think you said that this result right here on April 13th. SANKAR: So Halliburton does not know at this point whether or not it had any past foam stability results at the time it pumped the job? MR. does Halliburton have a position of when that test was available internally? MR. 2010 92 (Pages 365 to 368) 365 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 367 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 report it.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. SANKAR: And just a limited point here. SANKAR: I want to ask you that question again. We run the tests and it only takes three hours to pump off. then that's a test that we're not going to use. VARGO: I don't know if we did or not at that point. SANKAR: This is testimony from PLANET DEPOS 888.it sounds like Halliburton doesn't have a position as to whether we're right or wrong -. VARGO: That's what I -. from the point at which it was poured. That may have been something that -. I know that the test results were posted afterwards. MR.based on their recommendations of their requirements.I should say the investigative staff drew this information from. SANKAR: The April 13 test. MR. VARGO: It doesn't take 48 hours to perform the test. This is where we. Like I said. I don't know exactly when the results were available. SANKAR: Okay. MR. SANKAR: I'm sorry. MR. on 4/18/10.if we're trying to place the cement. what we do is we pour that test up and then the cement has to set up. VARGO: I don't know exactly when that test was available. SANKAR: So standing here on this day. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. if we -MR. that's not something you would have run on the well? MR. MR. NOVEMBER 8. MR.m. MR. There is a lab note here. It's our understanding -. The same with the April 13 test. MR. VARGO: I believe -. VARGO: I mean.3767 | WWW. three hours. SANKAR: All right.

as I said. aspects of the work. VARGO: It would depend. we saw lots of evidence of the engineering team working together.I really don't -. I need to pick up. SANKAR: Do you have any personal view on that. SANKAR: Do you have any indication that this test was pulled any earlier? MR.you'd have to really test it out to really understand 100 percent. MR. if that's 370 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 372 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. SANKAR: Would it be reasonable to think that at that time he was at least thinking about the possibility of nitrogen foam instability? MR. sir." Do you know what he means when he says. Would you agree with me that 48 plus 48 is 96. VARGO: It would have to be tested out. working on aspects of the cement job. I don't know what that means. MR. BLY: Yeah. if BP had had the information in either the February test reports or the April test reports and had reviewed them carefully. mostly to do with placement. Mr.PLANETDEPOS. is that the cement is going to be stable and it's not going to have fundamental problems. VARGO: I don't know. that would be -. I mean. MR. This is the small changes between the amounts of the retarder. Were your engineers concerned about PLANET DEPOS 888. sir.433. Would you agree he says: "We then transfer that cement -. from Halliburton's point of view.our investigation. The presumption. When we looked at our report -. Bly. Gagliano was talking about lab tests. been given notice or had any concerns at all about the stability of the foam cement. BLY: Absolutely not. What we see here is an e-mail from Jesse Gagliano. SANKAR: And Mr. and that would -.that would change everything.I don't know. I don't know when the tests were pulled exactly. I believe.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. SANKAR: And here we see that Mr. whether it's likely to or not? MR. VARGO: Again. I focus on this only to point out the foam stability tests here report 99 lab hours here. MR. you know. BLY: I don't. and he's e-mailing back. Bly. you see here that this Mr. MR. three days before? MR. MR. that this is just before the job. Brian Morel. SANKAR: My apologies.that foam cement slurry into a PVC test specimen cell. Bly. But it can be pulled earlier if you believe you have cement that's set up prior to that. You'd have to -. MR. Would you agree.. Tawney Row. the ECD and things. NOVEMBER 8. SANKAR: Do you believe that any of your engineers on the job at the time were aware of the potential issues with nitrogen foam cement? going to affect the foam stability. would it have allowed Halliburton to pump the cement job? MR.Incidentally.That would probably be the procedure. These indications would say there's fundamental problems with the cement.01 gallons per sack. SANKAR: So we also looked through the e-mails here.8 gallons to 9 gallons in the mix meaningfully affect foam stability? MR. of course. would change in retarder concentration from -. It would be the precursor to literally all 13 of your points on the 13-point slide. MR.. As we looked through the information they were using and the analyses they were doing. Yes.3767 | WWW. It says: "I would prefer the extra pump time with the added risk of having issues with the nitrogen. "I prefer the extra pump time"? MR. BLY: I really -. SANKAR: Fair enough. but no indication that they had. I think we would ask the advice of our lab manager by changing . SANKAR: Mr. This is a table here presented from the National Academies of Engineering. We then seal the top of that cell and we cure the sample in a water bath at a 180 degree temperature for 48 hours. and that's probably the 48-hour test span that we're talking about. they were focused on.COM . BLY: No." MR. 2010 93 (Pages 369 to 372) 369 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 371 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Mr.and I'll shorthand it -. MR. MR. the two tests that were actually reported? MR. yes. VARGO: That would be -.

And that's execution of the design.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.3767 | WWW. because the other things I saw indicated that was the primary complaint. SANKAR: Mr. when we -. MR. There was some questions about timeliness and getting work done on time. I did become aware of some e-mails that were around for the MBI. based on internal engineering practices. they had gotten a positive indication that the cement job had been pumped correctly.those are the criteria that are used on the rig to assess whether it was a successful job or not. Ambrose. but we're still in the process of looking at the cement. Bly.COM . Mr. BLY: From memory. yes. yeah. SANKAR: And Mr. MR.that this had happened before. do you agree with that? MR. the target 374 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 376 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Would you agree. BLY: I would agree that it's important to know if the fundamental properties of the cement you're going to use are sound. Those are the design -. MR. SANKAR: And your report also concluded. Nothing I've seen raised issues about competence. BLY: I would agree with at least not being timely. was. Yeah. obviously did we achieve the density. yes. did we see the plugs bump. density. that's right. BLY: Not that I'm aware of. yes. SANKAR: So would you agree that BP was aware that there might be problems with getting lab results for this cement job back in time? MR. NOVEMBER 8. in this case Jesse Gagliano. SANKAR: What were Halliburton's criteria at the time for determining that it had pumped the job successfully. BLY: Correct. SANKAR: This e-mail sent from Brian Morel to Mark Hafle. more evaluative work? MR. BLY: I'd agree with -. SANKAR: Can we go back to the cement bullets slide. VARGO: At the time of the execution. I think your report concluded that the team on the job used lift pressure and returns to declare that the cement placement was successful. VARGO: From what I understand. that those criteria were insufficient and that a proper risk assessment would have led them to do more work. MR. MR.when we performed the job on the rig. we were critical of the decision to use lift pressure alone as an indication of top of cement. I can PLANET DEPOS 888. Mr. Bly. BLY: Yes. did we pump all the additives associated. Bly. BLY: Yes. the timeliness in particular here is about lab tests. SANKAR: And this is just to clear up some misconceptions that we believe we have seen in the press. GISCLAIR: If you don't mind. You know. SANKAR: And would you agree that it's crucial to have foam stability tests completed before a cement job is pumped? MR.433. sir. There is at least a suggestion from our investigative staff viewpoint that there was a view among the BP engineers at this point that Jesse. MR. Would you agree? MR. which is effectively full returns. Vargo. MR. Correct? MR. MR. as we went through the investigation. AMBROSE: We've studied it. Yeah. Mr. do you have a view on that issue? MR. Vargo? MR.it appeared that they had to push to get results done and that there had been an indication that this -. the Halliburton cementing engineer. And I think that would be a part of it. that this is at least a suggestion that there were concerns among your engineers that the lead Halliburton person on this job was at least not being timely? MR. we said that while it was clear that they had thought through it. I want to close briefly with a discussion about the criteria for evaluating success of the cement job. We -.Our final answer was about three to four barrels loss. quote. MR. 2010 94 (Pages 373 to 376) 373 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 375 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Halliburton's competence at the time that the cement job was about to be pumped? MR.The first two things I agreed with is that they were -. MR. do you believe that they received full returns on this cement job? MR. SANKAR: And again. Mr. not cutting it.PLANETDEPOS. MR. another BP engineer.

that the anomalies were not noticed. NOVEMBER 8. When that happened. fine. Ambrose. even then it would not have been standard industry practice to run a cement bond log at this time? Having clarified the question. VARGO: Typically no. MR. it had a very strange trend. MR. SANKAR: Okay. do you 378 MR. Mr. MR. SANKAR: I'm going to take a two-minute break. At that time we believe they isolated the mud pump downstairs. Do you see that? And then it says. and I noticed something. GISCLAIR: That is one of the areas that the data does reflect certain aspects of the cement job. that at 21:01 to 21:14 there were these anomalies. I'm sorry. The slide you gave me appears. SANKAR: All right. you may remember that happened about 9:21. BARTLIT: Now. This would have been the first time that the kill line would have been opened. "Stop pumping to check anomaly. SANKAR: I think Mr. Is that okay? CO-CHAIR REILLY: All right. you have to go back and live it in the moment. do you have a sense -MR. MR. AMBROSE: No." And it's not 21:41 or 21:40. 2010 95 (Pages 377 to 380) 377 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 379 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 corroborate that. Let's look at your slide. and I want to briefly touch on it. So all the parties here agree that -. and I 380 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 have a view on that? MR. MR. and they could have monitored pressure on the kill line after the negative test.COM . which is four or five minutes ahead of the time that the mud came up on the drill floor. AMBROSE: We do have a different timeline than what you've seen in the BP report. Your slide here says. AMBROSE: I do. Gisclair is demonstrating his client's penchant for cooperation by raising his hand even when not called upon on this case. (Recess taken. GISCLAIR: I don't have a view on that. And Mr.Maybe I should correct the question. doesn't it. MR. And it does not show any significant losses. and over a period of about seven minutes it started to build pressure. MR. Mr.PLANETDEPOS. And I think we said that maybe nobody in the crew noticed an anomaly until 21:40 when the mud came up on the rig floor. Is it common practice in the industry -would it have been common practice in the industry to run a cement evaluation log at this time? Mr. MR. Do you all agree that it would not have been standard industry practice to run a cement bond log at this time. that is to say -. does anybody change their answer? (No response. that your crew -. AMBROSE: Again. BLY: I agree. Do you recall that? MR. do you have a view on that? MR. evaluate anomaly from 21:35 to something like 21:38. a day ago you guys sent me this slide on the end-of-the-well activities. MR. Gisclair.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. SANKAR: Mr.433. isn't that true? MR. BARTLIT: Right. SANKAR: You agree. Bly. Your slide appears to show that your crew recognized an anomaly at 21:35 and then evaluated the anomaly at 21:37 or 21:38.they opened the kill line on the drill floor for the first time. and then they -. and I was sitting here looking at it. It's 21:35. Given all the indicators here.) showed it. SANKAR: Oh. Vargo. MR. As Mr. two-minute break. and that the first steps taken by the crew were at 21:41. I don't think the industry does run a bond log at this time. We talked about that. any experience in that area? MR. maybe three barrels. You prepared it and asked me to show it. We've come back to your areas of expertise. I noticed something sitting here. Ambrose. AMBROSE: When the mud pump pressure relief valve went off. And the issue is this indicates that the kick wasn't noticed until 21:40. BARTLIT: Let's resume.) MR. BARTLIT: Yes.3767 | WWW. Bly mentioned. which would have been PLANET DEPOS 888. MR. MR.I should ask the question better.This is your slide. We all saw this before.

So that trend was correct. NOVEMBER 8. Now. he expected.what may have been happening. The pumps ramp down to a computer-controlled system. MR. and as it hit the BOP it was -. You could stop and the pumps ramp down over a two-minute period. AMBROSE: You know.3767 | WWW. They shut the operation down to check that. you used the word "confusing. And I believe at approximately 9:31. MR. BARTLIT: With all respect. They weren't as close as they should have been. doesn't it? MR. and that had been pushed up into the BOP. particularly right around 9:27. BARTLIT: So something is going on and they see it. There is a statement from one of our personnel that had gone through the drill floor at that time that they were discussing differential pressure. the pumps were off and a steady solid pressure was being shown on the drill pipe. right. 2010 96 (Pages 381 to 384) 381 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 383 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 expected. And so for -. it all goes to the mindset of how were they interpret what was happening. So we figured they were scratching their heads to figure what was happening. This means you had about -before the BP reports the hydrocarbons got in the riser. your guys were discussing a confusing differential pressure situation. And the geometry of the well was such that as the 14-pound mud that was -. If it had hit the BOP then before it got in the riser -. And at two minutes after -roughly two minutes after seeing that. they should have built pressure. Okay. and you say that it didn't come on the drill floor until 21:43. MR." MR. AMBROSE: Well.we know happened between 9:34 -MR. it makes a difference.let's go back. it was changing heights of fluid columns in the well. BARTLIT: So your crew. to this one.433. So that's the anomaly we're talking about there. is discussing this confusing differential pressure between the drill pipe and the kill line.COM . MR. And the pressure. MR. which he shut the operation down at that point and then started ramping mud pumps up again. the anomaly that we're talking about.well. You said it was -.it kept a constant pressure. With months of after that. your guys are seeing things you said were confusing. the actions that he was taking with the mud pumps. Our timeline puts mud on the drill floor a bit later than BP's.When this all started. was falling off as it should have. BARTLIT: 21:43. right in here. there was differential drill pressure seen. he saw the expected reaction on the pressure gauges. If you look at the actions that we knew -. maybe acting as if it was plugged. actually from the time that they started the pumps back up after the sheen test. if you PLANET DEPOS 888. MR. So they stopped the operation to figure out what -. if you hit the BOP -. And so then they stopped. BARTLIT: What time does your timeline put mud on the drill floor? I think BP was 21:40. they were discussing it. And that anomaly happened as the driller was ramping up the mud pumps after the pressure relief valve. again. a sign that fluids are moving. It's a confusing signal. as we believe then they saw a differential pressure between the kill line and the drill pipe. they shut the pumps down to check that anomaly. We don't know. for every action the driller took. there was about 500 barrels of 14-pound mud below the drill pipe. The anomaly was that now that the kill line had been opened. AMBROSE: We're about three minutes 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 concern. So we now see that 21:31 to 38. the influx was coming in.up until 9:27. please. Once he stabilized the rate of the pumps.of course if you hit the BOP before the hydrocarbons get in the riser. why they saw this pressure differential.PLANETDEPOS. in the period 9:34 to 9:38. 32.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. AMBROSE: That's correct. Megan. He saw what he expected on the pressure gauges.for the better part of the -. the differential was causing some 384 382 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 work we've determined that it appears as the kick was coming in. let's -.if you're having a discussion before the hydrocarbons get in the riser about anomalies.

this will be very quick. GRIMSLEY: Okay. AMBROSE: It's hard to say in this particular case with the flow rates that were happening at that point. while everything is still below the BOP. Okay.if the wrong centralizers were out there. 2010 97 (Pages 385 to 388) 385 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 387 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 hit the BOP before it gets in the riser. We're running out of time. BLY: It does. BLY: Correct. to get the correct ones from shore out to the rig? MR. GRIMSLEY: How long would it have taken to run the cement bond log? MR. and I know there was confusion about whether the right centralizers were out on the rig or not. BLY: Ten. BLY: I think we didn't appreciate the importance of the foam stability tests. What I'm saying is that if you -if before the BP report calculates hydrocarbons got in the riser. MR. Now. Yeah. BP sent home the Schlumberger contractors in the morning of April 20th. if your guys that were discussing the anomaly had hit the BOP. It would have taken a day or something. Again.we didn't have the final foam stability tests. Fred? MR. 12 hours. Mr. GRIMSLEY: Yes. my understanding is that the rig was behind schedule with regard to finishing this well. but I'll take your word for it. GRIMSLEY: Is there a reason that BP would not have waited to get those centralizers that they thought were in fact the right centralizers before they ran the final production casing? MR. BARTLIT: It does. BLY: Yes. MR. there was some concern about centralizers. given all of the problems leading up to April 20th. GRIMSLEY: Is there a reason that BP would not have waited to get those foam stability tests before pouring the final cement job? MR. AMBROSE: It could have made a difference. MR. GRIMSLEY: How long would it have taken to -. We can't speculate. NOVEMBER 8. So. AMBROSE: Any time you stop hydrocarbons below a BOP it's better than above. BLY: I think if you look at the information that was available to the team. I couldn't speculate whether or not it would have or would not have closed it 100 percent. GRIMSLEY: Is there a reason that BP would have poured the cement job before it had the final test? MR. But you know it was a final test results before it poured the cement job. that will make a difference. I just noticed this in this report. won't it? MR. GRIMSLEY: Does 45 days behind schedule sound about correct? MR. they were looking at the conventional aspects of cement jobs that are important. back here. BLY: I can't remember. BARTLIT: Thank you. BARTLIT: That wasn't my question. with all due respect. you know. if the Commission please. Bly. four or five minutes before. GRIMSLEY: All right. MR. MR. But I'm not asking you to speculate.PLANETDEPOS. BLY: I believe that's right. MR. MR. MR. Do you recall that? MR. yeah. it might make a difference if you hit the BOP while the hydrocarbons are still underneath the BOP. maybe more than that. It wasn't something we focused on in the report. that BP did not in fact have the 388 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 question I had. It sounds reasonable. CO-CHAIR REILLY: Does that conclude your questions. MR. fair enough. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. Make it five minutes. BARTLIT: I know. MR. That was the only 386 fair bit behind schedule? MR. And we've talked about it with Sam. One question that we had not asked and I meant to ask. MR. MR. MR. is that right? MR. CO-CHAIR REILLY: Thank you. MR. hardening times and things like this.COM . so I don't know. BLY: There could be a range of PLANET DEPOS 888. I think it was analyzed.433. Is that right? MR. is that right? MR. GRIMSLEY: Okay. BLY: Yes. BLY: We had -. GRIMSLEY: Now. right? MR.3767 | WWW.

I think people need to understand that. BARTLIT: We're done. It's been a long day for the audience. the production casing was already being run. and. friends from Halliburton talked about the consequences of not having appropriate security of the pipe could have been corrected in a few hours with substitution of the proper equipment for that which was considered to be inappropriate.COM . CO-CHAIR GRAHAM: Thank you very much. all the information that could contribute to getting to the truth in this issue. most complete. for which we are very appreciative.3767 | WWW. I will say I am concerned. you know. it's normally not done. We've had repeatedly representations of examples of how we can do our job better if we can tell the American people that we've had access to all the people. I'm curious to find out why was this time period so central and why would it not have been appropriate to have deferred until you knew whether the cement was stable. You don't want to sit with an open hole. I want to say that it's unusual to be questioned by relays of lawyers coming back over the same points. So I would hope that tomorrow we might get on to the question of just what was driving for a decision on that particular narrow 24 hours. Chairman. and that is there seemed to be a compulsion to get this rig completed in that April 19th. Senator Graham. BLY: I don't know that off the top of my head. MR. because that imports additional risks. and as a result of that. With my friend Bill Rielly. how long. GRIMSLEY: If the rig crew had recognized there was a problem. with the negative pressure test. you would know you have a problem with your -.this is the best. and I think Sean's last questions were sort of leading to my concern. you know. My fundamental takeaway from this is the enormous complexity and the subtlety of the activity that deepwater drilling constitutes and therefore the necessity to be careful about the temptation to come to a one-size-fits-all reaction to this individual incident. 2010 98 (Pages 389 to 392) 389 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 391 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 reasons. And the issue of channeling. we're going to make one last effort in the next few days to try to get subpoena authority for this Commission so that we can go to the American people in early January and say. independent report of what happened and what we should do about it that is available to the American people with what we know as of today. MR. this -. objective. GRIMSLEY: That's it. when the realization happened. then. MR.once they were in the position they were in. Mr. Every test of the cement up until April 18th had been a failure. And you hadn't gotten the April 18th. But I appreciate your willingness to sit here for the same areas coming at you from different directions. NOVEMBER 8. the Commissioners. GRIMSLEY: So if you know you have a problem with that barrier. The reason that it was done here is because we don't have subpoena power and we're still doing some probing. It wouldn't take very long.Our 390 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 392 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CO-CHAIR REILLY: Thank you. CO-CHAIR REILLY: Senator Graham and I will now make closing comments. the witnesses.PLANETDEPOS. would it take to remediate or fix that problem? MR.with that barrier. or the well site leader.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY. MR. So you do have risk tradeoffs to make once -. a number of things which might have made the outcome of this quite different were deferred or abandoned. One of them. but I think a very full-some day marked with the quality of the presentation by Fred and his colleagues and the candor of the responses by the representatives of the firms. If you realized that the bottom of the shoe wasn't holding. I believe this hearing today has PLANET DEPOS 888. April 20th time period. which was the only one that had an indication that it was defective. Thank you. which seemed to be a major issue -.433. how long would it have taken to actually diagnosis and remediate whatever problem there might have been at the bottom of the well? MR. BLY: I don't know.

our investigative team has significantly advanced our understanding. the negative test failure. I suppose the most obvious reality is we would not have experienced two full months of a gushing well leading to 200 million gallons being spilled. I would say that one of the questions I was asked at the press conference earlier was what can we say to the families who lost loved ones on the rig. I will conclude our conversation today. obviously the challenges were extraordinary. and the apparent failure to activate the diverter. Thank you. your CEOs.m. a one-time event.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.3767 | WWW. We would not have seen Congress underfund the regulatory agency faith. underbalancing. Bob. the consequence of unusual circumstances and extraordinary challenges. the indication of a kick that was apparently missed or ignored. I would myself repeat what Senator Graham said about our hope that we do finally get subpoena power and that whatever loose ends remain. However. I must say. NOVEMBER 8. I think. Well. As I think about the lessons for policy and for the Commission's recommendations.PLANETDEPOS. Tomorrow morning we will look forward. hopefully.and we have to conclude our work by January 11 -. the muds that were removed leading to more pressure in the consistently over the better part of the last 20 years and the consequent failure of the MMS to rise to the challenges posed by technologies that simply became so sophisticated that they scarcely were any match for the people they were regulating. with this experience. Thank you until tomorrow morning. 2010 99 (Pages 393 to 396) 393 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 395 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 contributed to our. I hope that you agree. learned as much to be concerned about as to put at rest some of the questions that we previously raised. If we had not been complacent. and say that I very much hope that as one more indication of good 394 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 396 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 well. the proceedings were adjourned at 5:58 p. I think it's fully consistent with the directions that we have gone together with you and to the fairness and respect that our investigative team has paid to you. we've been looking back today. And I complement them on the thoroughness and the professionalism with which they conducted their work. I will thank the panelists for the presentations that they've made.433. The question I raised in my opening statement was whether there had been a systemic issue here or whether there this was an anomaly. I'm conscious of the fact that what we heard about were apparently a lot of decisions that simply are difficult to explain or just look like they were plain wrong: the cement test failures. it's very difficult for me to conclude that there was not a culture of complacency affecting everything involved with this exercise. When I think about what kinds of recommendations we could make with respect to either industry practice or governmental policy. They are important for the future of the Commission's deliberations. and perhaps we will have a little less negative information. With respect to what we now know and what caused their deaths. (Whereupon. ability to be persuasive on those who have thus far been reticent to give us that authority. particularly as we learn about safety cultures and the kinds of experiences that companies have had in creating them and improving on them and making them exemplary performers. you will go back and get agreement from your leaders. With that. to support subpoena power for us. certainly far beyond where it was when we began this investigation.) PLANET DEPOS 888. it wasn't difficult to be attentive to this gripping presentation which was so well presented. that we can in the time remaining to us -.COM . we're going to have to think long and hard to go beyond some of the more obvious points here. Well.resolve even more of the doubts and uncertainties that continue. the cooperation that the companies have engaged in with us. I think we have significantly -. Thank you all for being most attentive. CO-CHAIR REILLY: Thank you. I think that some of those questions go beyond the purpose of the inquiry today. I think we did resolve quite a number of uncertainties and questions. We.

do hereby certify that the foregoing transcript is a true and correct record of the proceedings. HARMONSON.3767 | WWW. NOVEMBER 8. not related to counsel or the parties hereto. I further certify that I am not of counsel. ________________________ NOTARY PUBLIC IN AND FOR THE DISTRICT OF COLUMBIA PLANET DEPOS 888. 2010 100 (Page 397) 397 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 REPORTER'S CERTIFICATE I. SUBSCRIBED AND SWORN TO under my hand this 11th day of November. 2010.433. JOHN L.PLANETDEPOS.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON MONDAY.COM .the undersigned Registered Professional Reporter and officer before whom the foregoing proceedings were taken. that said proceedings were taken by me stenographically and thereafter reduced to typewriting under my supervision. and not in any way interested in the outcome of this matter.

MEMBER and CHRIS SMITH. DC (202) 582-1234 9:03 a. DAY TWO : Transcript of Proceedings : ---------------------------x Monday.COM . Clemens 370 By Mr. Bromwich 217 Questions from the Commissioners 226 4 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 National oil spill commission meeting held before: SENATOR BOB GRAHAM. MEMBER DONALD BOESCH. NW Washington. Hendricks 372 By Ms.: 5958 Pages: 1 . REILLY. MEMBER TERRY D. Tillerson 245 Questions from the Commissioners 264 Presentation by Mr. GARCIA.387 Reported by: Lee Bursten. 2010 Grand Hyatt Washington 1000 H Street. Odum 276 Questions from the Commissioners 288 Wrap-Up: Fred Bartlit and Richard Sears 308 Closing Remarks by Co-Chair Graham 363 Closing Remarks by Co-Chair Reilly 365 COMMENTS FROM THE PUBLIC By Mr. Lewis 87 Presentation by Mr. Designated Federal Official Pursuant to Notice.PLANETDEPOS. CO-CHAIR WILLIAM K. Gowan 376 By Ms. BEINECKE. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CONTENTS CONTINUED PANEL V Presentation of Mr. Polsenberg 379 By Mr. Gravitz 382 PLANET DEPOS 888. Lewis 48 Questions from the Commissioners 69 PANEL II(b) Presentation by Mr. NOVEMBER 9. MURRAY. Smith 118 Questions from the Commissioners 173 PANEL III Presentation of Dr. CO-CHAIR FRANCES G. Thomas 16 Presentation by Mr. before Lee Bursten.433. Cruickshank 184 Questions from the Commissioners 209 PANEL IV Presentation of Mr. Job No. November 9. MEMBER FRANCES ULMER.m. Bourgoyne 115 Presentation by Dr. Williams 27 Presentation by Mr. Registered Professional Reporter and Notary Public in and for the District of Columbia.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.3767 | WWW. MEMBER CHERRY A. 2010 1 (Pages 1 to 4) 1 3 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NATIONAL COMMISSION ON THE BP DEEPWATER HORIZON OIL SPILL AND OFFSHORE DRILLING ---------------------------x FIFTH MEETING. RPR 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CONTENTS Call to Order 5 Opening Remarks by Co-Chair Reilly 7 Opening Remarks by Co-Chair Graham 11 PANEL II(a) Presentation by Dr.

Chris. and reported that they found no evidence that those flawed decisions were made to save money. And as such.oilspillcommission. Senator Bob Graham and the Honorable William Reilly. and welcome to day two of this fifth meeting on the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling. They just said they weren't prepared to attribute mercenary motives to men who made -. which is www. apparent inattention.who cannot speak for themselves because they are not alive. This morning we'll be hearing from a panel of experts on oil well drilling and operations. followed by a panel on industry safety culture. Please proceed out to the left and up the escalators.gov. 2010 2 (Pages 5 to 8) 5 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 PROCEEDINGS MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. that's www. 6 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 8 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 The President established this bipartisan Commission to determine the root causes of the BP Deepwater Horizon oil disaster and provide recommendations on how we can prevent future accidents offshore and mitigate their impact should they occur. Presentations and examinations yesterday uncovered a suite of bad decisions: failed cement. Before I hand the event over to our two distinguished co-chairs. and Louisiana State University. I referred to a culture of complacency yesterday. Seldovia Marine Services. or misreading of a key indicator that gas was rising toward the rig. And speaking for myself. I'm hereby calling this meeting to order. that was adjudged a success. So that's the procedure in case of emergency. Richard Sears. And I'm also the Deputy Assistant Secretary for Oil and Natural Gas at the United States Department of Energy. Following closing remarks by our two co-chairs. you'll see the exits to my left and your right.COM . Mr.gov. and the senior science and engineering advisor. the fact that each company is responsible for one or more egregiously bad decisions. everybody. CO-CHAIR REILLY: Thank you. Again. My name is Chris Smith. Good morning. I'll be guiding us through a busy day of panels today. There will be a security personnel that will escort you out through the street. Starting at 4:00 we'll be hearing wrap-up comments from the Commission's chief counsel. Management. I would like to familiarize everybody with the safety procedures for this building. there will be public comments made from 5:00 to 5:30. any member of the public who is wishing to make a public comment to this Commission may do so in writing via the Committee's website. featuring panelists from the Bureau of Ocean tests. today's hearing will be held here in this public forum and broadcast live via video feed. We'll break for lunch at 12:30.433. Whatever else we learned and saw yesterday is emphatically not a culture of safety on that rig. Fred Bartlit.PLANETDEPOS. Before we proceed.3767 | WWW. and I am the Designated Federal Official for this Commission. This committee is conducting its work in compliance with the Federal Advisory Committee Act which sets a high standard for openness and transparency. But the story they told is ghastly. and at 1:00 we'll reconvene with two panels on regulation. distraction. we're closing in on the answer to the question I posed at the outset of yesterday's PLANET DEPOS 888. all three companies we heard from displayed it. Chairman. I would like to provide a quick summary of today's agenda. NOVEMBER 9.oilspillcommission. In case of emergency or fire. Our investigator team did not ascribe motive to any of those decisions. One bad call after another. featuring panelists from Bayou Petrophysics. a negative pressure test that failed. We would also like to ask everybody to turn your BlackBerrys or cell phones to vibrate or silent. Regulation & Enforcement. Mr. At this point I would like to hand the floor to our two co-chairmen. premature removal of mud underbalancing the well. Shell Energy Resources. And to me. featuring panelists from Shell Oil Company and from ExxonMobil. They didn't rule out cost. SMITH: Good morning. In addition.

but to the months and years that preceded it. We are aware of what appears to be a rush to completion at the Macondo well. And today we will hear from two whose reputations for safety and environmental protection are 10 CO-CHAIR GRAHAM: Thank you. NOVEMBER 9. The Commission is looking beyond the rig. and that is. Thank you. BP. There's certainly no evidence that they degraded their own mortality. Halliburton. Reilly. the lack of consistent planning for safety. As Co-Chairman Reilly has just said. Nevertheless. and that is whether the Horizon Macondo disaster was a unique event. and polices the laggards. that we might have some new perspectives on what happened at Macondo. today we hope to learn from the leaders and to look forward. I agree with that statement as it relates to those things that occurred on the oil well rig itself.COM . Leaders did not take serious risks seriously enough. as well as the details of intercompany decisions and how those decisions played out and contributed to the ultimate disaster.433. There was in the news reports of yesterday's hearing a statement that I think was stated in too broad a term. The problem here is that there was a culture that did not promote safety. BP has been notoriously challenged on matters of process safety. The statement was that there was no evidence that there were conscious decisions made to trade off safety for profit. Mr. I hope that in the course of this. There were a series of actions which are difficult to explain in this environment. But the future is always influenced by our past experiences. Yesterday we had a very detailed description of the well drilling operation. Other companies may not be so challenged. Transocean. that safety and efficiency reinforce one another. I think the larger question is the one that Co-Chairman Reilly has just focused on. So if yesterday we heard from the laggards. or indicates something larger. Both companies and their safety and risk management systems have received extensive examination by the Commission's staff in meetings I have attended. They will tell us. and that their safety cultures have contributed to their profitability. which has an institute that promotes best practices. This has led us in the Commission to learn from the nuclear industry. We know a safety culture must be led from the top and permeate a company.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. including the perspective of some of those within the industry with the best reputations for an effective safety culture. today we're going to be focusing on the future.3767 | WWW. and Halliburton. And the evidence is that they are in need of top to bottom reform. the result of some special challenges and particular circumstances. did not identify a risk that proved to be failing.PLANETDEPOS. their rigs have been shut down over the summer just like those of other companies because of the performance to which they have not been implicated. Today we will be looking at the same issues as yesterday. and not just to yesterday and what happened on April 20th. almost inexplicable failures in the hours leading up to the disaster. the reality is there were a series of 12 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 exemplary. but from a different perspective. not the past. a systemic problem in the oil and gas industry. and that culture failed. To just select one. the fact that there were three different temporary abandonment plans adopted in the week before the final execution of the plan is illustrative of the fact. yesterday we looked back. and Transocean are major respected companies operating throughout the Gulf. I believe. the performance of BP. and so will we be. and to look at companies which have learned from their own crises and disasters and rose to become standard bearers. reinforces government regulation. what were the motivations that led to various decisions to be made. those men whose lives were going to be in the safety risk equation. 2010 3 (Pages 9 to 12) 9 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 11 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 hearing. I might say one specific issue that I'm going to be interested in is PLANET DEPOS 888. They are very impressive. One must ask where the drive came from that made people determine that they couldn't wait for sound cement or for the right centralizers.

Mr. E. some of which were within a few hours of completion.C. I'll begin the process by asking some questions of the experts that we have. advanced drilling technology implementation engineer. Thomas.PLANETDEPOS. Lewis on precementing issues that you saw some of in the presentation yesterday. GRIMSLEY: Commissioners. on various 16 subjects relating to well design and deepwater 17 drilling issues generally. to please go ahead and ask those questions. With that. associate professor of the department of petroleum engineering at LSU. 20 One in the first morning session. Thomas. Mr. we have Dr. not specifically at Macondo. not only generally but at Macondo. just to give you a preview. which is Panel 2. if you have questions of any of these experts. For this presentation. Steve Lewis. and then finally. MR. Mr. we'll be speaking with one of the experts on kick detection and response. Thomas.C. we will be asking them to comment on other topics at various points during the presentation. Thomas? 2 DR. both generally and at the Macondo well. and Steve Lewis. contemporary abandonment procedures. MR. with 40 years field experience in drilling operations in various places. Seldovia Marine Services. We will 16 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Technology Transfer Laboratory. sir. Mr.such a committed date. we will have a discussion once again with Mr. Again. E. John Rogers Smith. Finally. there will actually be three panel 9 members this morning. Thomas. Mr. While each of the experts is focused on a particular topic. That is just one of the questions which I hope we'll get some additional intelligence upon today. THOMAS: I'm a consulting petrophysicist. director of Louisiana State University. SANKAR: Can you tell us a little PLANET DEPOS 888. There were multiple reasons why it would have seemed prudent to have delayed the final actions until various safety measures. He has 32 years of experience in the field. if I could 8 for a moment. what do you do for a living? DR. I want to start by talking a little bit about deep water and what makes deep water special with Mr. Thomas will be speaking principally to that issue. 3 CO-CHAIR GRAHAM: Do you have an opening 4 statement? 5 PANEL II(a) 6 EXPERTS ON OIL WELL DRILLING AND OPERATIONS 7 MR. Thomas. 12 Just to give you a sense of what the 13 format will be. could have been available for consideration as to the wisdom of moving forward with the next step. Also Mr.433. Just to orient the Commission. And Darryl Bourgoyne.3767 | WWW. THOMAS: Yes. we expect the Commissioners. who is a consulting physicist. 1 Mr. Mr. drilling operations and implementation of well design. We also have Charlie Williams 10 of the Shell company. consulting petrophysicist and owner of Bayou Petrophysics. SANKAR: If it pleases the Commissioners. Mr. experts on oil well drilling and operations. as well as Macondo and 18 the blowout. the topics for discussion today for the first morning session will be deepwater geology and formation issues at Macondo. this morning we're going to hear 14 from five different deepwater and non-deepwater 15 drilling experts in two separate panels. Lewis will be speaking to that issue.COM . 22 also be speaking with some other experts on the negative pressure test. we will turn to the first component of our program today. which includes the 21 individuals Commissioner Graham has just introduced. Charlie Williams is a scientist for well engineering and production technology for Shell. who will be answering 11 questions today.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. well design generally. 19 We will be splitting the panels into two. We can switch over to my slide presentation here. NOVEMBER 9. 2010 4 (Pages 13 to 16) 13 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 15 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 why was the date April 20th so -. Williams I believe will be speaking to that issue. In the second morning session. And unlike yesterday. Petroleum Engineering Research and 14 and we will then have a second panel in the second morning session.

do you know ahead of time what the pore pressure and fracture gradient is going to look like? DR. But that carries with it then rocks that are weaker. DR. THOMAS: The generally accepted boundary line is a thousand feet or more. THOMAS: In the 1980s. Then I went to New Orleans to be a field engineer. SANKAR: So do the numbers then change over the course of drilling the well? DR. THOMAS: I worked as a research petrophysicist. and then went to head office to be a technical advisor to the vice president of technology. then manager of that department.7 pounds per gallon mud equivalent. MR. THOMAS: It certainly provides the ability to have high reservoir energy and therefore high flow rates from the wells. The good thing is that we have high porosity and high permeability. MR. Are there any challenges we face in deep water? DR. and taught petrophysics in both beginning. SANKAR: Speaking of those unique geological opportunities. Is that true in your view? DR.3767 | WWW. by the time they were at their final point. PLANET DEPOS 888. Unique geological opportunities there. MR. MR. MR. I'm wondering if there's anything that comes attendant with those opportunities. being over pressure.PLANETDEPOS. And then I served as the leader of those sections.000 barrels a day to 20. THOMAS: Yes.8 or 1. THOMAS: Yes. SANKAR: Does your experience include deep water experience? DR. MR. it does. from 2. SANKAR: Why did the industry go to the deep water. but that is the generally accepted boundary line? DR. MR. THOMAS: Well. that's where the oil was. SANKAR: I'm going to move and show a slide about the actual pore pressure and fracture gradient at Macondo. THOMAS: We continually have to monitor all the signs that give us the clues as to are we going to be exceeding the fracture gradient or not. SANKAR: And that's the difference between the pore pressure and the fracture gradient. MR. THOMAS: Absolutely.COM . MR. SANKAR: We've heard some suggestions in the media and elsewhere that one of the reasons the industry went to deep water is because of concerns raised by environmentalists in shallow water. THOMAS: Roughly it's an order of magnitude. MR. a well on the shelf? DR. SANKAR: So am I right though that the narrow pore pressure and fracture gradient that you're talking about is some of the same factors that makes it so attractive? DR. I have.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. MR. intermediate. went to head office training. SANKAR: How does that affect your operations at the well? DR. THOMAS: Yes. SANKAR: When you start drilling a well like Macondo. it was about 1. THOMAS: Absolutely not. SANKAR: And how narrow was the window in numerical terms at Macondo? DR. 20 18 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 moving to drill wells in deep water? DR. Have you reviewed this chart or anything about the pore pressure and fracture gradient at Macondo? DR. THOMAS: To put it simply. And we have to stay within that window.000 barrels. they do. MR. SANKAR: Can you give me a sense on order of magnitude level of the difference in production from a deepwater well to a well inside that line. SANKAR: I'm going to put up the slide we showed yesterday showing people what deep water might actually mean. and advanced sessions.433. say. So do you agree generally with this picture of where the boundary of deep water would be in the Gulf of Mexico? Not to be sure about every specific. SANKAR: When did industry start between the pore pressure gradient and the fracture gradient of those rocks. THOMAS: We can only estimate it. and that we end up with a much narrower margin 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. NOVEMBER 9. 2010 5 (Pages 17 to 20) 17 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 19 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 about your experience in the oil industry? DR.

the later process. it is. in general we would like it to be as large as Mother Nature can make it. MR. Not only 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. THOMAS: Well. THOMAS: Yes. They had TD. THOMAS: Basically they were getting very close to not being able to drill any further at all. is having that fix in place. Are lost returns an indication of a narrow pore pressure and fracture gradient? DR. for example. If they set a liner at this stage. they would have to set a liner. SANKAR: So what does having a 1. MR. SANKAR: I don't have a sense and many people don't have a sense of whether that is a small number.433. He was explaining to some of the partners at the well the decision to call total did they use regular lost circulation materials. MR. Is 1. if they wanted to drill any further to their stated TD. those were issues they would have PLANET DEPOS 888. But if we can. 24 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 depth early. they had a stable well for four days.8 pound per gallon differential mean to you in terms of the complexity of the situation? DR. THOMAS: Well. SANKAR: And how did they respond to the lost returns problem here at Macondo? DR. you're doing this but you're never going to be quite where you were before? DR. 2010 6 (Pages 21 to 24) 21 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 am I correct? DR. Bobby Bodek of BP where he talked about a lot of things. is that sufficient to allow you to continue drilling? DR. It was implying that drilling ahead any further would unnecessarily jeopardize the wellbore. What does that mean to you? DR. NOVEMBER 9. MR. Therefore. MR. They had managed to stay within that window. SANKAR: And is that a typical approach or appropriate approach to deal with lost returns? DR. They logged and made several wiper trips in between to remove debris from the well." we're talking about that the reservoir is taking mud. SANKAR: What's the rule of thumb of what you would like to have? DR. SANKAR: We discussed an e-mail yesterday from Mr. SANKAR: So would it be fair to say then that something like a Band-Aid. we are happy to have at least 2 pounds per gallon separating the two. SANKAR: Does it get you back to the original state before you had a fracture or lost returns? DR.COM . it is. MR. then they would not have been able to have the wellbore size to make the producer that they wished to have. and they did that without any incident. THOMAS: Sure. SANKAR: And does that mean. MR. SANKAR: So when you say that the well was stable at this point. THOMAS: Yes. MR. no. THOMAS: As you can see. SANKAR: Another issue we talked about yesterday was lost returns on April 3rd at this well. but they used some very advanced polymer materials to try to plug it. MR. based on your review of the materials? DR. we inject materials to try to plug that up. MR. THOMAS: It is one. Once you have parted the grains.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. And to offset that. SANKAR: But nevertheless.3767 | WWW. SANKAR: Do you have an opinion on whether the well was actually stable after they finished drilling at total depth.8 a small number to you? DR. including cementing and running casings. when we say "lost returns. THOMAS: That is correct. THOMAS: In this case I think he was referring to the fact that they had planned to make this well a producer. yes. THOMAS: In my opinion it was stable. MR. THOMAS: Generally. But they could never ignore the fact that they were in a geological environment that had a very narrow pore pressure/fracture gradient window. does it mean that they had solved their problems and that from then on it would have been okay? DR. MR. then it makes it easier to do it the second time. THOMAS: It's a small number for me.PLANETDEPOS. they had solved that problem of getting down. Yes. that's a good analogy.

MR. MR. and conditions that you have to design for. MR. It's a complex cement job. it does. THOMAS: Yes. 2010 7 (Pages 25 to 28) 25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 27 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to consider in the process. That's unique to deep PLANET DEPOS 888. MR. MR. MR. SANKAR: Is it inevitable when you go to deep water that you're going to have safety of narrow pore pressure and fracture gradient concerns? DR. that's just about the only undrilled acreage that's left.PLANETDEPOS. THOMAS: They would have to pay particular attention that they not exceed the fracture gradient due to the weight of the cement. SANKAR: Is that because of the productivity issues you described earlier. THOMAS: Well. they were. simply because it's the deep water. SANKAR: And on other wells that were drilled safety. It's a challenge to have the technology to do all of that correctly. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. but in general there's unique challenges to deep water. does that necessarily drive you to more complicated well designs as well? DR. but one aspect is.3767 | WWW. so you have currents. MR. what do you do for a living for Shell? MR. and I also do technical projects. Have you evaluated in your professional experience wells that were as complicated as Macondo? DR. Charlie. technical advisor. SANKAR: And given that environment. SANKAR: If people want to go to the Gulf of Mexico to get more oil. because of the geological environment that has put the rocks in that particular location. SANKAR: What is it that made Macondo MR. So you end up with these dynamically positioned or anchored rigs. WILLIAMS: I'm a chief scientist. So it's a unique geological environment.433. WILLIAMS: That's correct. THOMAS: They're going to have to go to deep water. they were able to negotiate these narrow pore pressure and fracture gradient pressures? DR. they would be paramount. and the very high deliverability of these rocks. did you guys also have a similar view about the relative productivity of deepwater wells versus shelf wells? 28 26 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 complicated that was similar to those other wells? DR. I advise on different major projects. SANKAR: And you heard me describe yesterday the cement job. I have. THOMAS: Yes. It's a challenge because you have this long riser. THOMAS: I believe that's so. SANKAR: And is that why they chose in your view to use the lighter foam cement? DR. deep water wells produce more? DR. MR. Thomas. THOMAS: Yes. You can have challenging wells in either environment. WILLIAMS: There's many. THOMAS: Yes. well engineering and production technology. correct? DR. SANKAR: Were they drilled safely? DR.COM . you can certainly do that. SANKAR: At Shell. where do they have to go? DR. THOMAS: Yes. MR. I'm a technical consultant. SANKAR: How does having a narrow pore pressure/fracture gradient window affect the cement job? DR. based on e-mails and reports from BP. I want to turn now to Charlie Williams from Shell. SANKAR: What are some of the other challenges of deep water? MR. THOMAS: Just to repeat myself. MR. SANKAR: And do you consider deep water to be a more challenging drilling environment than shallow water? MR. and also advise on the R&D program. WILLIAMS: In general.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. NOVEMBER 9. Mr. MR. if you pay attention to the drilling. it is. SANKAR: Thank you. SANKAR: And would you agree with Mr. MR. you have water depth. Let me first ask you. MR. THOMAS: Absolutely. it is really the very narrow margin between pore pressure and fracture gradient. MR. WILLIAMS: Yes. and it is a complex wellbore. Thomas's view that narrow pore pressure and fracture gradient is one of the challenges? MR.

Then you'll have on the order of six to ten subsurface people.000 feet or 2. you know. geologists. where you already know a lot about the geology. You don't know as much about the environment. WILLIAMS: Yes. You'll have the people who are going to be operationally on the rig. we brought in the entire rig crew. And they really hone that design over this period we talked about. it's a defined collaborative process. you have to.COM . MR. and start looking at all of the complexities and challenges that we have to deal with in doing various designs. NOVEMBER 9.433. what's the location of the well we're going to drill. simply because you have 10. And so we looked for this maximum. you know.recently I was involved in a review. And they work. WILLIAMS: Well. if you want to do maintenance or repairs. In most wells. anywhere from eight months to as much as. so there's usually six operation staff. MR. it depends whether you're doing an exploration well. As I mentioned. SANKAR: And during the course of that time.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. geophysicists. a year. You have to do all of the work on those remotely with ROVs. MR. all the people who look at what the prospect looks like and actually help determine the location of where you're going to drill. and you have to determine those things in advance versus the development well. WILLIAMS: Yes. cooperative environment. SANKAR: And how long does it take this kind of team to put together a plan to drill a deepwater well? MR. At the end of that process. And then there will be part-time people. SANKAR: And does Shell therefore use different size teams on its deepwater wells than it does on the shallow water wells? MR. WILLIAMS: Well. and they also looked at the well design. So there's many challenges like that that aren't. as well. MR.000 feet of riser to contend with.3767 | WWW. and so we bring in all these technical groups. pull those back out of the water over a considerable distance in the water depth. the team is 32 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. the entire contract rig crew. would it be more optimal to better meet the challenges.in your best practice. is it normal that the design would have changed? MR. when we've PLANET DEPOS 888. 30 20. We'll have a review -. reservoir engineers. you could change the position of the well or you could change other aspects of the design. 2010 8 (Pages 29 to 32) 29 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 water. this mud system we talk about that's so important to have in the well and maintain correctly now exists not only in the well but in the riser. typically in what range of people is Shell employing? MR. And that evolves over that period of time. And then of course you have your blowout preventers on the ocean floor. I would say a typical team with the operating staff would be as much as 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 large. technical people that come in. you know. quite a bit down. And then at different stages in there we have even bigger reviews. But to answer the question. of course. and you have to pull up. SANKAR: How many people technicial professionals work a deepwater well? MR. and see if. total circulating system is different. you'll have a lead drilling engineer. so that will be petrophysical people. WILLIAMS: So typically you'll have the three drilling engineers.PLANETDEPOS. SANKAR: And how does Shell usually or how is -. including the operational people that are going to be involved in drilling the well. WILLIAMS: Again. faced in shallow water or onshore. SANKAR: So for full-time employees. you know. two other drilling engineers. depending on the complexity. what is the process for changing those designs during the course of that process? MR. collaborative. they start out on. So managing mud in the riser and managing that total system. you know. MR. they're involved in claiming the wells also. and certainly at least 15. you know.

there are certain things that you don't know exactly. MR. MR. and this is the formation in which we're drilling? MR.COM . In fact. and then there's a space outside between the inside casing and the next outside casing. WILLIAMS: Yes. the people in the office who did the original approval and the people in our remote operating centers are also consulted and changes are made. There's certain routine operational 34 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 into temporary abandonment. WILLIAMS: Yes. what we call the prognosis. the temperature is higher than it is in the well. WILLIAMS: Correct. like a pressure gradient. you know.PLANETDEPOS. So as these things occur. then it's approved. relatively hot production. it does.433. you have good ways of predicting pore pressure. So we go back and do these approvals the same way that we approve the original design. It's above the cement. the design prog that is used to execute the well.the drill site leader makes those kinds of operational changes. WILLIAMS: And the important feature is that it's sealed at the bottom and sealed at the top. two tenths of a pound up or down. so the heat in the zone you're producing. The well we have. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. because it involves establishing barriers. We'll move the discussion over a little bit to the trapped annulus issue I described yesterday. Then this is the inside of the wellbore. the well drawing we have here. SANKAR: So we discussed a little bit yesterday the prospect of heating this space up. to these designs I assume there are some kinds of changes that are minor. SANKAR: So it's this space right here? 36 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 changes. is that right? MR. SANKAR: How about the well site leader? MR. MR. SANKAR: When you make changes. WILLIAMS: Well. If we make a change to the design basis. that goes through the same approval process as approved in the original prog. but I think it will work for purposes of illustrating. there's a temperature gradient that increases with depth. And it goes through the same kind of consultation. WILLIAMS: Correct. WILLIAMS: Yes. you might change the mud weight. it's bringing up this hot production. in between the two cross sections of pipe. And one of our key design philosophies is maintaining barriers. MR. SANKAR: Would changing the procedures for a temporary abandonment process fall on one side or the other in that spectrum of major-minor? MR. WILLIAMS: Yes. does it show a trapped annulus and a deepwater well? MR. MR. So it heats up this space along with PLANET DEPOS 888. MR. this is the ocean floor here. 2010 9 (Pages 33 to 36) 33 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 35 chosen the design. It's that white space. Do we have the laser pointer somewhere? You can always count on your chief scientist to have a laser pointer. And that includes the barriers that go 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. SANKAR: This is the wellhead.3767 | WWW. Thomas mentioned. You put the well on production. as you're executing the well. WILLIAMS: Correct. which is very simplified drawing. It's a little dim. For instance. And then the heat is transferred to that hot production in all of these tubulars that are on the outside of the well. MR. SANKAR: So you do involve the rig crew then at least sometimes in the design process? MR. As Dr. Those are made by the Shell -. NOVEMBER 9. SANKAR: So it's that white section in there. The temperature and the zone that you're producing. that don't require this kind of process? MR. there are certain operational things that you do. but it may be different as you drill. SANKAR: I want to put up a slide here that I think you gave me. Can you describe just briefly what makes that space heat up when you're producing deepwater well? MR. and then it becomes. this is the mud line. and in particular if it's changes that involve changing the permit. it would be particularly reviewing those kinds of changes. MR.

and you wanted to circulate that out and rekill the annulus or refill the annulus with a control fluid. using a line or a long string? MR. other techniques involve limiting the amount of heat that's transferred. you would put in a compressible material. Other possibilities are putting in insulating fluids in there to limit the heat transfer. The choice is. SANKAR: So any deep well. SANKAR: Going to a different issue. SANKAR: We talked a little yesterday. Are there other methods as well? MR. WILLIAMS: Correct. Are burst disks one of those methods? MR. WILLIAMS: Yes. WILLIAMS: If you had certain kinds of problems on the well where you wanted to circulate out for instance pressure that had gotten in there. MR. functionally. MR. SANKAR: So burst disks are one method 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Do you often have to make that choice. SANKAR: So it would be a hole. SANKAR: So imagining this as the long string. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. SANKAR: And are there any drawbacks to using that kind of approach to managing annular pressure buildup? MR. many factors. WILLIAMS: Correct. you know. We use both long strings and liners and tiebacks. and you want that.3767 | WWW. Whether you have high confidence that you can get a long string to run all the way to the bottom of the hole because you have to install this hanger on the top of the long string. not by the design rating of the casing which was higher than the burst disk.COM . or you could put in compressible material? MR. SANKAR: And why might you want to have a higher pressure in that casing? MR. the pressure in that casing is then limited to the pressure rating of the burst disk. a long string versus a liner. There are certain time dependent things that occur on the bottom hole condition. regardless of whether it's deep water. WILLIAMS: Right. NOVEMBER 9. it depends upon. And some of the considerations are things like how long it would take you to run. I wonder if you can talk a little bit about the choice between using long strings and liners in deep well. And also you can put in different kinds of fluids and materials that have more compressibility than the liquid. WILLIAMS: You know. MR. 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. 2010 10 (Pages 37 to 40) 37 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 39 everything else. because of the seal that's in the wellhead housing. SANKAR: What do they actually do functionally? MR. but in particular it depends on the uniqueness and unique characteristics of a particular well that you're designing for. And the thickness and shape of that disk is designed to fail at a certain pressure and then relieve that pressure into the next outer string. MR. in this casing here? MR. MR. SANKAR: And that's in this space here. you want to get that all the way to the bottom of the hole? PLANET DEPOS 888. then you will be limited by the burst disk. MR. you could be limited by what pressure the burst disk is. One of the complications with using burst disk is that you're limited. So if you needed to have a higher pressure in that casing.433. WILLIAMS: They drill a hole in the tube in the casing. compared to the condition of the well at the bottom of the hole. MR. WILLIAMS: Yes.PLANETDEPOS. One of the very common ones is to use insulated tubing. and into that insert this disk. can potentially have an annular pressure buildup issue? MR. and that would allow the heat to travel with the production and limit the heat transfer into this annulus and thus the pressure buildup. it's a common decision. So the tubing that goes inside this final casing would be insulated. 38 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 of dealing with annular pressure buildup. there's advantages and disadvantages to all of the techniques. What's unique in deep water is your ability to control that pressure. WILLIAMS: Yes. MR. you know. you may have seen about some of the methods for controlling this annular pressure buildup. like all the other design choices you make on the well.

SANKAR: So that sounds like it's an issue about cementing. it really turbulizes the cement. So you do look at that. then has a metallic mandrel inside it that allows you to put cement below it. MR. And sometimes you want to be able to rotate the pipe because of your cement design. about running a packer or a bridge plug. even though it's done both ways. sometimes as many as five plugs. a plug near the bottom. you know through whatever you run in the hole. MR. SANKAR: Speaking of barriers. depending on what you want to isolate. In your view. temporary abandon procedures. NOVEMBER 9. and we would put that close to the bottom of the well. it's going to go through your drill string and your liner when you circulate it. you know. WILLIAMS: Right. It's essentially a version of mixing a down hole. you can put cement above. and what should be in place? MR. It's easier to rotate a liner. WILLIAMS: Typically in wells in deep water. and in certain cases to make the cement more effective. it's easier to cement the liner in than a long string? MR. when you temporarily abandon a well. WILLIAMS: It helps. and then you can close. Are there any other issues about cementing a long string versus cementing a liner? MR. what barriers would you put in place. WILLIAMS: More typical would be three. MR. if it's a situation where you have a tough cementing situation due to the formation. you know. and. If you run a long string or if you run the liner. if you have concerns that you might lose returns or partially lose returns during your cement job. it's another geometry consideration. MR. These are not quite exactly the same. a resin type plug. And just the sizes and spaces affect 42 more straightforward on reestablishing the barriers. The one at the intermediate depth. have three plugs. But. you know. You want the hanger to be in the right place. our procedure would be to have. And it's difficult to rotate a long string. back to your question about the cement. SANKAR: How does rotating the pipe help? MR.the one on the surface would have drillable. Then we always have one at the surface. running the liner is in my view 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 procedure. SANKAR: Does it rely on cement to PLANET DEPOS 888. So it would be a device that has slips on it that bite into the casing and hold it in place. you know. MR. SANKAR: You spoke briefly. WILLIAMS: If you're concerned that you will lose returns or might lose returns when you're cementing. you know. WILLIAMS: I think people can see in the diagrams. I think it's been referred to. So we would normally have in our temporary abandonment 44 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the pressures that you circulate at. And then we put. MR. SANKAR: So you have as many as five plugs? MR. the thing about a liner is that you can reestablish your barrier by putting a mechanical ceiling device or multiple mechanical ceiling devices on top of the liner or squeeze. another one that's at an intermediate depth. if you circulate the cement down. When we say a plug. I want to inform the comissioners on this mechanical plugs and cement plugs. also cement again. which would be forcing cement down through the top of the liner. we normally send a mechanical plug with cement. I want to ask you a little bit about the barriers that you can use during temporary abandonment phases of a well. there's an internal valve. we also have a mechanical device close to -. 2010 11 (Pages 41 to 44) 41 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 43 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR.433. WILLIAMS: The other key thing you look at in making this choice. which would be your other alternative. put that above the liner top. And this procedure is sometimes in my opinion more effective than perforating holes in the pipe. SANKAR: Would you say then in general.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. but for practical purposes it would be similar to what is called a bridge plug.PLANETDEPOS. Would you explain briefly the difference between those? MR. what we call squeeze cementing. if we have a liner top.COM .3767 | WWW. In particular we might want to put that.

you know.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. WILLIAMS: Our common practice on a typical deepwater well. SANKAR: Does it make it easier then to cement this to use the cement plug as well? MR. we heard a lot -maybe you didn't hear a lot yesterday about negative test procedures. SANKAR: Can you place cement plugs in mud? MR. by contrast. it's routinely done on primary cementing. When we come back for the completion and drill out these plugs. That's our design choice. how do you in your view use cement plugs safely in synthetic oil based mud? MR. WILLIAMS: Yes. MR. and then we leave the kill weight mud in the well and the plugs in the well. WILLIAMS: When you're temporarily abandoning a well. You have to worry about or you have to be concerned about spacers. Do you consider a negative test procedure to be an important test of the well? MR. you actually effectively have two.COM .3767 | WWW. SANKAR: Does this mean -. MR. SANKAR: So to explain that. SANKAR: So you're leaving the well overbalanced at the temporary abandonment phase. obviously it's never underbalanced during this entire set of temporary abandonment procedures. Lewis and ask him a few questions. has been retained by the PLANET DEPOS 888. MR. SANKAR: Do you have a view as to whether cement plugs can be placed in synthetic oil based mud? MR. You have a mechanical barrier also as a pressure seal in addition to the cement. to avoid the mixing. we've heard a lot. MR. Where it's placed. but doing things like underbalance testing. WILLIAMS: Yes.PLANETDEPOS. MR. is that correct? MR. WILLIAMS: Yes. we test the plugs. WILLIAMS: If that happened during your temporary abandonment. WILLIAMS: No. WILLIAMS: No. MR. in the synthetic oil based mud. SANKAR: Now. MR. we do later in the 48 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 in seawater? MR. the kill weight mud would keep the well under control. SANKAR: Is it as good as putting them 46 mud in there. All that's done. I'm going to move on now to Mr. Williams was kind enough to come to us from Shell to explain some areas. which is a common operation that's successful. you can routinely do it when you place these plugs. MR. You know. MR. WILLIAMS: It gives you a positive placement of your plug. and similarly. then we do all of our displacement and testing at that point in time. WILLIAMS: Yes. Your top cement is on top of this mechanical device.433. Lewis. what's the effect of having a primary cement job failure? MR. where we drill this single well with a floater. Mr. WILLIAMS: Correct. SANKAR: Thanks. MR. 2010 12 (Pages 45 to 48) 45 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 47 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 achieve the barrier? MR. but he has not reviewed the details of the Macondo well design of the Macondo process. MR. SANKAR: Do you do it on every well before you have the temporary abandonment? MR. sort of back to a different point. MR. Williams. But.if your primary cement job fails in that kind of a situation. All these operations you do. you know exactly where it's placed and exactly the dimensions of it. SANKAR: What's the advantage of leaving the mud in wellbore at the temporary abandonment phase? MR. MR. technical areas in which he's highly experienced. NOVEMBER 9. SANKAR: No? What kind of wells do you not do it on? MR. So we leave it full of kill weight mud and full of the tested loads. WILLIAMS: I do. it's done routinely in both. Mr. Mr. WILLIAMS: You want to have a spacer between the cement. SANKAR: Can you place mechanical plugs in mud? MR. You leave the kill weight mud in there. we do this temporary abandonment. the well is under control just by virtue of the kill weight 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 completion phase.

And the basic philosophy of design as an iterative. SANKAR: Based on your review.PLANETDEPOS. I should say. I've also reviewed the daily drilling 50 MR. SANKAR: And in your view what impact did burst disks have on the function of the well overall? MR. you then have to rethink all of your actions at the lower pressure rating of the burst disk as opposed to the pressure rating of that string casing. Williams here described is similar to many that I've functioned in. LEWIS: Absolutely. is it fair to say that you agree with Charles Williams. Mr. MR. I have some insight into the process. And if nothing goes wrong. because the organization that Mr. SANKAR: And looking specifically at the design choices that they made. LEWIS: Yes. the BP design for this well includes burst disks. that's not a problem. And it eliminates the possibilities of failures at locations such as liner hangers. MR. MR. But if you find yourself in a scenario where you have an unexpected. MR. but primarily in the EDR review. there definately are. specifically with emphasis on their review of the casing design for the original well plan. 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 reports. So yes.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. do you feel familiar with the process of the design of the Macondo well? MR. with special emphasis on the last two weeks. the burst disks essentially derate the pressure. basis of design information that I could find. SANKAR: So could burst disks have an impact on the way that you contain wells if something does go wrong? MR. MR. evaluates the implication of that design on the overall objective of the well. SANKAR: Are you familiar with the concept of a protective casing in deepwater wells? MR. and that basically is the -. I've also reviewed the applications for permit to drill and the applications for modifications that were submitted to the MMS. LEWIS: As Mr. SANKAR: Was there any indication in your review that BP used a protective casing at PLANET DEPOS 888. And I have reviewed the BP incident report. concentrated on the last month of the well. Operationally.COM . 2010 13 (Pages 49 to 52) 49 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 51 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Commission's investigative staff to look at precisely some of these issues. Williams indicated.by design. or suspected even. NOVEMBER 9.3767 | WWW. that there are lots of means of controlling annular pressure buildup in a well like this? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. actually into either annulus that that piece of casing is exposed to. your last string of casing before your production casing would be a long string going from just above your production settlement all the way back to your wellhead without liners hung in that string. what material relevant to the Macondo well design in daily drilling operations have you reviewed? MR. and the internal operations notes that were sent back and forth between the rig and the office in town for those modifications of the plan. LEWIS: I've reviewed the complete sequence of drilling plans that were developed internally for this well. SANKAR: What's the value of that protective casing? MR. continuing through the final plans for the temporary abandonment. burst disks aren't a problem if nothing goes wrong. capacity of that string of casing. LEWIS: I believe you're referring to what I call an intermediate casing. SANKAR: And was burst disks one of the methods that they used to control pressure buildup at Macondo? MR. Lewis. I did that because that is the best access to the design. LEWIS: It gives you a more continuous pressure rating through that interval. LEWIS: Yes. I understand that concept. starting with the plans in 2009 before the Marianas moved off of the well. MR. are consistent within the industry.433. I would say I have an understanding of the design process. ingress of pressure into that annulus. circular process where one comes up with an initial design. LEWIS: I'm very familiar with the documentation of that design. But yes. MR.

rolling into the next element of the complete design cycle that goes back and checks the implications of that design. in this design there is no what we would call a protective casing under that definition.PLANETDEPOS. time and materials. Having reviewed the progress of the Macondo well. SANKAR: We heard Mr. LEWIS: The only operational downside becomes. both the portion of the well that's already been completed and what you had in mind for contingencies for compensating for those unplanned events. There is a requirement for time and materials to accomplish that. MR. LEWIS: The design called for one. no. But you should go through that same design cycle of looking from top to bottom and looking at the entire life cycle of the well.433. MR. SANKAR: Is there any downside to using the kill weight mud approach to overbalance the well as Mr. MR. LEWIS: No. SANKAR: Does having an unplanned event like lost returns. You never bring the well under balance. LEWIS: No. how does that affect your design? 56 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 hydrostatically overbalanced. mechanical and cement plugs that he would typically use in a well. And then each element of that well needs to go through a complete design cycle. LEWIS: Well. MR. a pretty complete engineering process. MR. impose any -make any changes from the way you think the rig crew should be operating in the field? MR. none whatsoever. It cannot flow. NOVEMBER 9. 2010 14 (Pages 53 to 56) 53 55 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Macondo? MR. SANKAR: I want to move over to talk a little bit about well design. considering the implications of those decisions. I asked is there any advantage to leaving the well underbalanced. how much detail do you put into the original initial well design? MR. How many plugs did BP choose to use or plan to use in this well before it abandoned the well? MR. and then the time and materials required to remove those 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. LEWIS: There is no operational downside. SANKAR: Was there any operational downside to adding mechanical plugs or cement plugs as well? MR. MR. SANKAR: So are you suggesting if you have an unplanned event and you have to deal with a contingency. whether it's an exploration well or a production well. MR. MR. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. Williams describe the number of plugs. in that you have the basic laws of physics then controlling that well for you. as opposed to a mechanical device that we have built. MR. MR. Williams described? MR. LEWIS: An unplanned event should PLANET DEPOS 888. So it should be. LEWIS: In my mind there is extreme upside. LEWIS: Yes. That tells you what the basic well should look like.3767 | WWW. SANKAR: Is there any upside to leaving a well underbalanced? MR. but back-checking against the previous design to make sure that those two are compatible. When you in your practice first design a well. SANKAR: I'm trying to clarify. LEWIS: No. MR. You're 54 plugs when one returns to the well. SANKAR: And when you face unplanned events in the course of drilling a well. was BP planning to leave the well overbalanced at the time? MR. once again. they were not.COM . The first thing one needs to define is what the well is going to accomplish. you're functionally redesigning the well from scratch. a deepwater well. they could have. LEWIS: It's my feeling that a well design needs to include as much detail as is technically possible. and my experience is. both on the previous portion and the future portion of the well. and that happens? MR. it implies the necessity to go back and completely reevaluate the design. SANKAR: You also heard Mr. for example. LEWIS: You're redesigning the well from that point forward. Williams describe his practice of leaving wells overbalanced when you're temporarily abandoning them. SANKAR: Could they have used mechanical plugs at this well? MR.

should also broaden your scope of vision to looking towards the future of that well. what would that have helped to do? MR. LEWIS: Absolutely. MR. yes. what in your view are the benefits of this extended design review and reevaluation process? MR. was it adequately detailed? MR. Having reviewed the process of the designs. MR. SANKAR: Again. SANKAR: And if you had additional detail. the 60 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 their efforts. LEWIS: Operational logistics is half at least of drilling a well. PLANET DEPOS 888. SANKAR: And how about operational logistics? MR. and possibly allowed further discussion of options.3767 | WWW. you heard Mr. they included the kind of detail that would have allowed people in the field to think about those assumptions? MR. in your view. you have done anything that would compromise 58 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 production well. focus both the field and the office staff on the difficult and almost marginal nature of what they were attempting to accomplish here. and making sure that they have the right equipment and the right personnel lined up to accomplish those steps. Is that your view of how things should be done? MR. LEWIS: I do not believe they did. LEWIS: The initial design was adequately detailed for an exploration well. LEWIS: The immediate benefit is to guarantee the continued operational efficiency of the well. Williams describe the process of involving the well site leaders and the rig crew in those design discussions. SANKAR: So stepping back to look at Macondo now. having reviewed the initial design of the Macondo well.COM . brought in a heightened level of vigilance. thinking about what the next steps in the procedure are going to be. SANKAR: And that further discussion you talked about. NOVEMBER 9. if from their perspective and experience they're appropriate. 2010 15 (Pages 57 to 60) 57 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 59 reinforce the level of vigilance on the rig and hopefully move people into thinking -. especially in light of the fact that by that point it had become fairly apparent that this well was going to be completed as a 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 subsequent designs that BP did for this well. MR. they had time to do that. was there enough time after BP chose to use the tapered long string to get enough centralizers of the proper kind? MR. And by that I mean you have to have the right equipment and the right people there at the right time to do the job. that the lack of centralizers could have been the result of an inadequate design process? MR. SANKAR: And how about the later design that you saw as they evolved? MR. SANKAR: When you were talking about the initial design and the responses to unplanned events and the nature of the design re-review that you do at that point. MR.433. some of the explanations that I gave. I believe. in your view. MR. MR. rather than focusing you on solving that immediate problem.PLANETDEPOS.looking ahead of the bit. Unplanned events will imply an immediate need to reevaluate your entire logistic and material supply structure. SANKAR: So is it fair to say. that BP didn't run a number of additional centralizers at one point because they believed. MR. based on your comments about the value of design. allowed for proper timing to mobilize equipment and materials. or at least they didn't -. LEWIS: I felt that they were deficient in detail.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. SANKAR: You heard yesterday from some of the discussions. from the other aspects of their interest in the well. You also have the opportunity at that point to bring in everyone else's eyes and see if. LEWIS: At least the result of inadequate communication about that design process. LEWIS: It would have helped. MR. LEWIS: If they had properly managed their materials and acquisition process. MR. It's my feeling that the people executing that plan should understand the basis of the design that came from and be able to suggest an input modification.or believed they didn't have the right centralizers available. So an unplanned event.

the density of your fluids. It will have influence on the other aspects. SANKAR: Can adjusting one of these things influence other things? MR. those definitely should be designed with the same degree of rigor. then known to be a requirement for quite some time. portion of the well that is. MR. SANKAR: You described I think an iterative design process here.433. yes. and B. and then you can adjust the geometry of the wellbore through your design. MR. MR. Absolutely. SANKAR: Now. LEWIS: There are basically three elements you can manipulate to adjust bottom hole pressure.3767 | WWW. MR. LEWIS: Yes. SANKAR: Are there implications for changing those cogs for the eventual value of the cement job at the bottom of the well? MR.PLANETDEPOS. 2010 16 (Pages 61 to 64) 61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 63 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 yes. which controls the frictional pressure that that's producing. SANKAR: So is there anything that would have prevented them from establishing their temporary abandonment procedures earlier in the life of the well? MR. is that correct? MR. that critical. LEWIS: No. there's not. especially of a temporary PLANET DEPOS 888. in the last phase of the Macondo well. what are some of the other things that you consider essential at the end of a well activity to make sure the process goes smoothly? MR. SANKAR: So did you see evidence that BP was thinking at least about some of those things when they dealt with the bottom hole pressures? MR. LEWIS: Yes. MR. MR. SANKAR: And what happens when you -in your view of the design process. they were worried about the lost returns and the pressures at the bottom of the well. LEWIS: A well is actually a pressure vessel. It's an interdependent system. The design function is to control and contain the fluids were attempting to extract. sir. and those three changes I think were all made within a week or so of the blowout. SANKAR: Some of the slides that Sean showed the Commission yesterday discussed three different temporary abandonment procedures that were used at Macondo. SANKAR: In terms of well design. LEWIS: It would have allowed people to give the matter more thought in a less time sensitive environment. And in the process. SANKAR: Do you think it would have helped if they had thought about it earlier? MR. MR. MR. it's critical. Is there any reason in your view not to rerun that model in the last few days before cementing the well? MR. LEWIS: Definitely. A. I'm wondering if you think the iterative design process also applies to procedures that are used to build the well. And if you change one cog in that machine. LEWIS: Actually in my view it's exactly the opposite. you have to consider whether or not it meshes with the others. NOVEMBER 9.COM . In your view. There's very many reasons to redo that design. MR. MR. LEWIS: They should. the speed with which you 62 MR. WILLIAMS: Actually there's evidence that they thought about all those things. is that a lot of changes to be making in the final week? MR. This is a machine. SANKAR: You also heard me talk about the modeling of the cement design that was done. MR. MR. LEWIS: That's absolutely true. and those are the weight of your fluids.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. LEWIS: That's an unusual number of changes to make that close to the execution of a 64 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pump those fluids. is it proper to reevaluate all the things at the same time when you change one of the variables? MR. and the decision not to rerun that model in the very last few days. SANKAR: And more generally. MR. how about temporary abandonment procedures? MR. what are the different ways you can deal with those kinds of bottom hole pressures? MR. LEWIS: Oh. And I think that would have been beneficial. SANKAR: And in particular.

however. failed to cooperate internally in the development and adoption of appropriate best practice. do you consider 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 a well. MR. LEWIS: I'm confident that the industry can meet those risks. An expert in drilling. I also think that we have.COM . increases with the technical difficulty of our operations. MR. But you have to have the commitment to maintaining the mental focus on what you're doing. SANKAR: Have you followed with professional interest the industry's move into deepwater in the Gulf of Mexico? MR. The willingness as a group to define and adhere to best practices will require an acceptance across the industry spectrum of what is an acceptable level of risk. I would. NOVEMBER 9. LEWIS: Yes. near the end of a well? MR. You have to have the commitment to paying attention to the present time as opposed to worrying too much about the future. Where I feel we have been remiss is in our development of capability to respond to failures in that environment in a timely and safe manner. it can occur in any organization that I've been associated with. I have. yes. Mr. I have. LEWIS: Yes. LEWIS: No. thinking about the next job. in fact a somewhat amazing job of being able to move into that environment and correctly. LEWIS: Absolutely.433. Lewis. on the basis of the flow of both that individual well operation and the other wells that the organization is dealing with at the same time. It's a natural thing. And there's also a natural human tendency to look towards the future operation. LEWIS: You have to have. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. LEWIS: It's the way it works sometimes. 66 yourself an expert in deepwater drilling? MR. Williams's discussion there of multiple barriers and. I don't. You need those same resources when you're designing a well. SANKAR: What's your view of the industry's ability to deal with the risks and challenges presented by deep water? MR.3767 | WWW. But the willingness to exchange technical information is limited in that that technical information is a tool to use in our ultimate goal of basically making a profit for the owners. SANKAR: Have you ever worked on a well where you felt the vigilance and focus tapered off at the end of the well process? MR. MR. MR. more so than anything that I know of. 2010 17 (Pages 65 to 68) 65 67 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 abandonment. but in every aspect of the well construction process. It's also an extremely variable thing. You had one example described today of what I consider a very conservative but very appropriate abandonment procedure. SANKAR: What do you have to do as an organization to make sure that you have that level of influence over the end of well procedures? MR. At the end of a well operation. LEWIS: Yes. SANKAR: Have you drilled in deep water? MR. more PLANET DEPOS 888. LEWIS: Yes. Of course it's the one I know.PLANETDEPOS. This is a very. The need for that exchange of information. I feel that the industry has done a very credible job. as an industry. SANKAR: I take it from your earlier comment that you would prefer a higher level of vigilance or at least maintain a high level of vigilance during those end of well procedures? MR. obviously. MR. MR. containment is paramount. SANKAR: Mr. there are many things that need to be done in order to move forward. safely drill and complete 68 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. SANKAR: Is there in your view sometimes a tendency for engineers to move on. and a tendency to lose focus on what we've just accomplished. the resources in terms of manpower available. MR. It seems to me that at the end of a well it's even more important to maintain that vigilance and focus. very competitive industry. MR. SANKAR: Is that just the way it works sometimes? MR. there is. LEWIS: Not really an expert in deepwater drilling. SANKAR: And do you believe the industry has done everything it can to meet those risks? MR.

I have not. You might want to direct it PLANET DEPOS 888. do you think deepwater wells can be drilled safely? MR. Is it your information that relatively shallow wells with formations relatively near the surface also can present just as many problems to manage as the deep ones? DR. NOVEMBER 9.433. state regulations require it. LEWIS: Yes. a very long lasting one in Mexico. THOMAS: Not from a standpoint of pressure so far. CO-CHAIR REILLY: When you train people in industry. SANKAR: What are some of those areas? MR. in deep water. MR. CO-CHAIR REILLY: So there's no such thing as a well situation or a geological situation that poses too large a problem to even attempt to drill? DR. 70 there. yet at the same time is very uniform. say. sir. great concentrations of high pressure oil and gas that they just cannot be controlled when you tap into them? DR. But I can imagine cases where there might be very narrow margins between pore pressure and fracture gradient such that they could not be drilled. some time ago. in Alaska. With that I'll ask the Commission if it has any questions. We do have someone on the panel who has extensive experience in Alaska. SANKAR: I'm sorry to interrupt. Thomas. But you would stop before you got can happen. But I would have to defer to someone who has actually worked that environment. I do know that they have drilled wells successfully there without any incident. And in Norway. I have worked in areas where regulatorily you cannot leave the well underbalanced. LEWIS: Well. SANKAR: If those things are done. THOMAS: Not to my knowledge. CO-CHAIR REILLY: And you would be able to go some distance before you got there. 2010 18 (Pages 69 to 72) 69 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 71 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 importantly. SANKAR: Thank you very much. So I wouldn't expect there to be any problem. CO-CHAIR REILLY: Dr.3767 | WWW. MR. you would not encounter that gradient problem internally right at the mud line. and that was in something like 140-50 feet of water. But I think in the environment that we are in. THOMAS: That is correct. where I have abandoned wells. never leaving the well underbalanced. THOMAS: I'm not prepared to say "any. generally accepted practice or regulation. or at the formation. There are always possible geological complications that if one doesn't pay attention to. for instance. It's not required in our environment in the Gulf of Mexico by either practice. Ixtoc. CO-CHAIR REILLY: So any pressure situation can be managed successfully to extract hydrocarbons? DR. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.PLANETDEPOS. while somewhat hostile. are there reservoirs with such concentrations. I do. so I don't know the environment that they were drilling in. THOMAS: I'm not an expert in Alaska. you're required to leave wells overbalanced there also. then those sorts of things 72 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CO-CHAIR GRAHAM: Chairman Reilly. beginning of the formation? DR. CO-CHAIR REILLY: Do you have any observations or impressions about Alaska and the challenges that are presented there? That's relatively shallow water and relatively high formations and low pressure. THOMAS: I have not reviewed that particular well. THOMAS: Not seen any evidence of any. Are there issues there that you think with respect to drilling are particularly difficult or challenging? DR. We have to work to a higher standard of protection in this environment. CO-CHAIR REILLY: Would you say anything about the formation of this well and the characteristics that it has and how it might compare to non-deepwater environments? We had a spill. Lewis.COM ." But -CO-CHAIR REILLY: You have not seen any -DR. So it's going to take in my mind an evolution of the industry to recognize and uniformly accept that the bar has to be raised here. do you train -MR. the geological environment. Mr.

Perhaps there are others. but Mr. no. it's fairly straightforward. both onshore and offshore. Lewis. Chairman. I found it very useful in putting into perspective some of the things we heard yesterday. the two mysteries that were described. the final being the negative pressure test.3767 | WWW. In fact in many areas of the state. In retrospect. But of all of them. given how important that plan was to the safety of this temporary abandonment? And why else would the rig crew ignore all of these anomalies that should have put them on high alert? MR. from your many years of experience. THOMAS: I'm afraid I'm going to have to defer. one has to sort of ask. NOVEMBER 9. 76 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 about how to recognize a kick in the system. I would like to put before you and ask 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 And I would just ask you. clouding one's ability to adequately assess the risk and put a premium on safety? I mean. Yesterday we heard many things that raised questions that were not directly answered. I've drilled all over the state. Bartlit laid out a dozen things that should have put people on high alert. in that I have worked for BP both as a well site leader and a drilling engineer. And I have read a number of internal communications from both field level to fairly senior management from the last year inside the BP structure with respect to the Macondo well. Mr. Alaskan drilling is not unusually hazardous. do you highlight or establish routine responses or protocols for certain kinds of experiences that they might encounter? Do you teach them. Mr. I can speak both generically to the drilling command and control structure. CO-CHAIR REILLY: No further questions. 2010 19 (Pages 73 to 76) 73 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 75 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to Mr. And I can speak to a certain extent to BP. Ms. which are actually extensive. I do not train people in drilling. MR. were they being driven by a sense of.in the areas which I have drilled. just to cite one example? And I wonder if there are others. LEWIS: We -. Mr. they dominate what goes on in the industry there. ULMER: Thank you to the panel for providing additional insight for us this morning. when you train people in industry. for example. Lewis. CO-CHAIR GRAHAM: Are there other questions? Yes. I direct this question to Mr. Dr. And I've been there and done this in terms of designing drilling and finishing a well. on rigs and doing drilling. Ulmer. what do you think about Alaska drilling. I think I know. but if others on the panel wish to address it. and secondly. PLANET DEPOS 888. So if someone else would like to answer that. Lewis. Williams. The first mystery was why in the world BP changed its temporary abandonment plan three times in the last week. 74 you if you have opinions about them. LEWIS: Operationally.PLANETDEPOS. to get to that heightened sense of concern that they should have had. that's one plausible answer. CO-CHAIR REILLY: Fair enough. It's not particularly tough country. below the BOP. we have to finish this job. one after another after another after another.433. CO-CHAIR REILLY: I want to come back to an issue -. So thank you very much. we're in a hurry. simply because I train in petrophysics.I won't ask you.COM . I am around BP continuously on the north slope of Alaska. we're not -. let's get on with it. that would be fine. Those can be managed through proper program planning and proper development of response technology. why the experienced drilling crew and all of the others who were on this rig did not see the pattern of anomalies. and what implications that had for safety.we're going to do this. I know it's easy in retrospect. I sincerely appreciate it. DR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. The remote environment does imply some constraints. MS. for both of these mysteries. Thomas. which obviously failed but was declared positive. I think they would be more qualified than I would. why else than a sense of let's-get-this-job-over-with would drive people to change the plan at the last minute. But on a subsurface basis. when you train them to drill wells.

it's my belief that that detail was left unattended to. process control breakdown. involvement of the design team and the field team together provides a check and balance against that tendency. while the engineering may have been adequate in those. This was an exploration well with a possible production completion. to not go into high alert. The -." in the last 20 years. twig. As I mentioned.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. And then the final plans and the operations note. In this new -. I have seen internal BP communications at senior management level inquiring as to whether or not the well was going to be done in time. My suspicion is that -. whether or not the rig would be released if time. to not go shut her down. 2010 20 (Pages 77 to 80) 77 79 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Your question as to the changes of the abandonment plan over time. I appreciate your candor. I know that there was pressure on this group of people to get done and move on. accomplish these major steps however you feel you want to. the only explanation I have for that is that it's a detail of the plan that was not necessarily known to be required when they first started the well.well. Sometimes we focus too narrowly on the immediate step and don't step back and look at the complexity of these wells. What was sent to the rig did not include a procedure. And by "in time" in this case. ULMER: Mr. they had commitments to wells. it's not my suspicion. we can only imagine all of the complexities of these things that are happening all at the same time. MS. step after step after step to miss the point. engineering time. The question of why the people in the field did not. And many of those individuals were killed in the incident.that required well work. But the overall impetus to make progress and to in some cases of design and execution choose a route that was quicker. So I can't tell you why they continued. that part of it does come from management. And then other individuals whose positions one would think would require that cognitive process have not been available for answering those questions. none of these guys made a conscious decision that.whether or not that concern at senior management level was verbally communicated down to people in the field. that involved fewer steps. get it done. It was simply. conscious management presence to counter that. the operational details in my mind was totally deficient.I say "new. the rig was needed on those wells to protect the assets of that other lease. probably due to the lack of availability of mental resources. And our natural tendency is to want to be making progress to that end.PLANETDEPOS. Drillers -drillers drill against each other. and the fact that there was no real detail of abandonment in the initial plans.433. I can't tell you that. and then there was what I would have to describe as scrambling to catch up on that design. What I am curious about. That opinion is based largely on the documents that I see. okay. to make progress. regulatory commitments that were required to maintain in one case a viable 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 because it's faster but it's not as safe. Lewis. best driller there is. But the pressure to make progress is actually inherent in the business. to this sequence of questionable events and raised flags is much more difficult to address. And it takes a stated. I cannot say. we have to figure this out. until it became apparent that it was going to happen.3767 | WWW. 78 lease -. I guess for those of us who have never worked on a rig. We want to be the fastest.COM . we're very competitive. and particularly because our Commission's mission is to really think about what we can recommend that will change the PLANET DEPOS 888. As was said. I don't believe they did that. as well as the pressure to get it done. But I can tell you that there is continuous pressure to move forward. NOVEMBER 9. I'm going to do this 80 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 That's totally inadequate in this environment. The only thing I can attribute that to is lack of engineering resources and lack of command and control of the process. we don't know what's going on here.

And it might be interesting to ask those people how they feel about melding that with a regulatory environment that together induces best practices. Boesch. I think that some of the MMS regulations -I'm sorry. Lewis's discussion about 84 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the intent of some of them. I think it also needs to be a performance based. I agree we have to have a regulatory requirement that has some requirements. making sure this well was available as a production well. we need to talk first about increased financing and increased 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 drilling fast. Do you think that would be helpful.COM . I think Chairman Reilly mentioned it. that kind of thing. If we're going to talk about increased regulation. The reality is that they have neither the staff nor the tools nor the financing to do that.433. because I think that. WILLIAMS: I'm just going to add a comment on that. certainly one of the key things is optimally drilling. depending on how you want to play with the input. CO-CHAIR GRAHAM: Mr. Now. you end up having hole problems and lost returns and stuck pipe. the regulation says that the MMS will review your data and see if it's appropriate. ULMER: Thank you. it actually then ultimately affects your efficiency. you're required to leave wells overbalanced. if you try and drill too fast. 2010 21 (Pages 81 to 84) 81 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 83 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 balance between the pressure to get it done and the pressure to do it right and be safe. So I think it has to be a combination of those two things. and the specifics of safety.3767 | WWW. you mentioned that in Alaska and in Norway. either at the industry by way of best practices. not necessarily just the overbalance. But their regulations I feel are inadequately specific both in definition of 82 staffing and increased technical competence of the people who are charged with enforcing these regulations. And there are an innumerable array of assumptions that you can use in that calculation which will drive that number from either total reservoir pressure or total formation fracture pressure to zero. I think that a very important part of today will be this afternoon. MR. LEWIS: Well. when we hear from two of the major companies with respect to their safety cultures. LEWIS: I think there's a balancing point. Now. or by government in terms of regulation that would up the ante on the safety equivalency. I'm still stuck in some of the old terminology here. is I'm trying to think through what it is that could be required. that good performance also is good safety and good safety culture. there has to be this integration of safety culture. but more importantly in their continuous use of qualifications where they say. You have to have the safety culture of performance. So I think it was mentioned earlier. some specific requirements. "or as the operator in their best judgment decides. you know. as you've described. It says you have to bring a casing design and show us what the maximum anticipated surface pressure is. to deliver the kind of safety performance and industry performance that we want. that final decision would not have been made. I'm not even sure I know the acronym for the agency.PLANETDEPOS. And then it never says anything about how you calculate maximum anticipated surface pressure." An example is maximum anticipated surface pressure. BOESCH: Mr. Obviously that must be a regulation that doesn't apply in the Gulf of Mexico. When in the process of drilling this well was it determined that this would be left as a production well? MR. obviously. But as we all know. you indicated that one reason for the change in plans for the temporary abandonment within the last week might have been as a result of the lack of previous attention to converting this well. would not have been PLANET DEPOS 888. And just like Mr. And actually it not only affects the safety. NOVEMBER 9. Lewis. MS. but that kind of additional requirement by government to put additional pressure on the industry to be able to ensure the safety when these wells get closed down? MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR.

This panel may be more technical than the first. your viscosifiers and the base fluid that you want to build that spacer out of all showed available on the rig. because of those requirements. MR. John Smith. which was ten days.COM . you're going to be running in circles trying to find stuff to do it. We'll reconvene at 10:48. Have I adequately covered that 86 was driven by an attempt to simplify a disposal issue that would have been considered a hazardous waste. totally inadequate to achieve the materials to complete the well with.the information was available to make the determination that this would be a production well. this design should have been pretty well in place. please. LEWIS: Yes. first Dr. who is making an encore appearance on our second panel. We're going to be asking these individuals -. MR. to six or eight months or a year on some of these items. (Recess. The apparent shuffling and scrambling was not really necessary. CO-CHAIR GRAHAM: We're now going to take a ten-minute break. in that we are now essentially logging while drilling. as well as Mr. However. is that it was not adequate anticipation of that possibility to accumulate the required material and the equipment. He teaches courses on drilling engineering and operations and well control. to do that in a comprehensive way. A standard procedure is to use a spacer that's about halfway between the fluid you're displacing and the other fluid in terms of density. I believe that there was a fair degree of confidence in their geophysical interpretation that it would be completed. MR. MR. LEWIS: My point there was. He has 20 plus years of experience as an PLANET DEPOS 888. 2010 22 (Pages 85 to 88) 85 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 87 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 finalized until they had evaluated the logging data that was run after they TD'd the well. to a certain extent.3767 | WWW. NOVEMBER 9. is totally inadequate to obtain the materials necessary to achieve this abandonment.) 88 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 point? MR. though. The drilling of that section of the well would have given you your preliminary confirmation of that. And I think I've gotten that from your answer. well before that final week. BOESCH: I think you've responded that it was not until maybe two weeks prior to the incident that the determination was -.take that down. You're talking lead times here of months. MR. Can we go to my computer? We're going to have these individuals testifying about some more technical issues relating to the Macondo well. the point of this is that the amount of time available from that decision point. So I would like to introduce our new panel members. And there was one thing that was thrown into this design at the last minute. Your weighting materials. However.433. BOESCH: Was there material suitable as a spacer that is more regularly -. and that's the use of this excess loss circulation material as a spacer. not only are you going to be rushed with a design.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. He's been on the faculty at LSU since 1998. I would expect there to have been. I may have lost the thrust of your question there. He is an associate professor of petroleum engineering. He'll be talking about some additional issues.a type that is more regularly in use as a spacer available on the rig? MR. and required shoreside transportation and disposal if they had not been used in the manner in which it was used. BOESCH: And what you also said. If you have not designed for them before that point in time.PLANETDEPOS. two weeks from the failure. That decision was a last minute change and PANEL II(b) EXPERTS ON OIL WELL DRILLING AND OPERATIONS MR. and some of the things we heard about yesterday that we didn't have the opportunity to discuss with some of the representatives from the companies. Lewis. yes. possibly weighted. Normally what you would have used is simply a viscosified fluid. GRIMSLEY: We have a couple of additional distinguished experts for our panel. BOESCH: Thank you. LEWIS: There most likely was.

and with a drilling focus. the presentation software we use is Trial Max 6. as we showed yesterday. LEWIS: It's a good start. and when the pressure gets great enough. How you adjust the shear pressure for those is either by adjusting the number or the strength of the pins or changing the size of the orifices at the bottom. He 90 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 through the tube when the casing of the valves is actually running into the hole. GRIMSLEY: All right. So it's an adjustable tool.433. The way to do that. and he's written extensively on. So I would like to start with Mr. I didn't want you to see the e-mails popping up in the bottom corner. But once the casing has actually landed at bottom. then at some point when the pressure gets high enough. is to drop a ball into the tube. What does it mean. the negative pressure test at the Macondo well. So beyond testifying today for this Commission. Back to Professor Smith's bio. which simply means that the valve is held open to its function as a one-way check valve. GRIMSLEY: How is an auto-fill float valve converted? 92 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 instructs courses in well control at LSU. Coast Guard investigation into the BP oil spill. the tube should come through and these valves convert to one-way valves. And as you recall. He is also at LSU. That PLANET DEPOS 888. He spent three years as a well site leader for Chevron in the Gulf of Mexico.PLANETDEPOS. it will actually convert the equipment? MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. Okay. He holds an MS and BS in petroleum engineering degrees from LSU. He has testified and written reports for the joint BOEM/U. But you have to make that decision in advance. both undergraduate and industry courses.S. LEWIS: Actually what you apply is a differential pressure across the hole. He is director of a full scale petroleum engineering laboratory at LSU. during the presentation. Is that about accurate. the larger portion there has shear pins in it that will break at a given stress that's applied by the pressure on it. MR. but each of them has been prepared to focus on one. Professor Smith is also a member of the IADC Well Control Committee. 2010 23 (Pages 89 to 92) 89 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 91 engineer and researcher.3767 | WWW. Lewis and talk a little bit about float equipment. LEWIS: This particular design is simply a differential pressure across that tube. and has been so for the last eight years. and you're at the point where you want to convert the float equipment.and show them if you want to. the float equipment are basically two what are otherwise one-way valves that have what's called an auto-fill tube in them. So that's just to reorient you to understand what float valves and float conversion is. that assembly that is unsheared. while running the casing drops down. so I turned that off. So we're going to be asking these panelists questions on a variety of subjects. And that auto-fill tube allows mud to go 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. You'll recall that yesterday. Fred discussed the troubles that the crew had at the Macondo well actually converting the float equipment. primarily offshore. pressure up. of course. Lewis. to say "float valve conversion"? MR. and then you apply the pressure to that ball. He also has eight years' experience relating to deepwater well control operations and modeling before joining the LSU faculty. MR. LEWIS: Float valve conversion is what you've just described there of converting from auto-fill. among other subjects. MR. He is a member of the IADC Well Control Committee. of putting it together in your assembly. NOVEMBER 9. you want to convert these valves to a one-way valve. GRIMSLEY: So once the float equipment is actually at the bottom. Just so you know. There is a free advertisement for it. he has already testified for the joint investigation panel looking into the oil spill. my description of the float equipment and the float valves? MR. which causes some pins -. this ball which has been seated up here. much of that in the Gulf of Mexico.COM . Mr. Our second new panelist is Darryl Bourgoyne.

no. that's what I was describing. by their data tables provided. GRIMSLEY: Did at any point in time the flow rate at Macondo exceed six barrels per minute? MR. sir. MR. looking at this float equipment. LEWIS: Yes. The pressure at the surface is actually irrelevant. GRIMSLEY: Did the flow rate ever exceed. MR. LEWIS: That would be correct. GRIMSLEY: How does one obtain 600 PSI pressure when you have these holes on the side through which mud can flow? MR. NOVEMBER 9. as I said. GRIMSLEY: 600 PSI is what differential pressure you would expect to convert float equipment that was used at Macondo? MR. MR. at any point in time after the attempted conversion. do you remember that? MR. as I said.COM .3 barrels per minute. MR. that's correct. The equation that they provide also is a basic fluid-dynamics. MR. the float ports. MR.3767 | WWW. MR. LEWIS: The maximum flow rate that I saw in the data from the rig pumps was four barrels per minute. The tool in fact is. GRIMSLEY: So just to make clear. do you have an opinion sitting here today as to whether the float equipment at the Macondo well converted? PLANET DEPOS 888. and the maximum rate achieved that I saw from the cementing record was 4. LEWIS: Not by design. But there are these two additional holes on the side through which mud can flow. friction-loss-through-nozzle type calculation. GRIMSLEY: So at some point when the crew was trying to convert the float equipment.433. LEWIS: Yes. GRIMSLEY: How much differential pressure was necessary to convert the float valves used at Macondo? MR. GRIMSLEY: Could the float equipment have converted with zero barrels a minute through those holes? MR. six barrels per minute? MR. they did. LEWIS: Well. GRIMSLEY: So there would have been zero barrels per minute through those holes? MR. GRIMSLEY: Now. as described and designated. LEWIS: That's correct. it plugs up this 94 flow rate would you have expected would have been necessary at Macondo to convert these float valves from two-way valves to one-way valves? MR. GRIMSLEY: So is the flow rate more important then than the pressure that's actually being asserted by the pump? MR. MR. we saw yesterday they pressured up to 3142 PSI.PLANETDEPOS. GRIMSLEY: Mr. GRIMSLEY: And it was at that point that they reestablished circulation in the system? MR. LEWIS: Subsequent to running the casing. Lewis. LEWIS: No. The mechanism that activates it. LEWIS: This particular tool by the manufacturers. you have to pump mud through those holes at at least 6 gallons per minute if not more to guarantee that you have sheared the pins and therefore converted the valve. 96 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 hole in the bottom. what 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. GRIMSLEY: And then you said afterward. no. MR. MR. when you drop the ball. Until you have flow through those ports. LEWIS: Yes. MR. 2010 24 (Pages 93 to 96) 93 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 95 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 differential pressure is created by flow through the ports there that are above the hole. is that right? MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. And I did those numbers with the mud weight in the hole at the time and calculated right at 600 PSI. this is a Weatherford tool. there is no differential pressure. LEWIS: There would have been none. MR. in the graphical presentation it would have taken between 5 and 700 PSI to convert this valve. LEWIS: A minimum of six barrels per minute. MR. what was the maximum flow rate achieved after the circulation was reestablished? MR. it did not. a flow activated pull-open. is differential pressure. was there any flow in the system at that point? MR. MR. LEWIS: The flow rate is the only thing that's important. GRIMSLEY: When they were trying to convert and pressuring up to 3142 PSI.

GRIMSLEY: So we have two implications that you've described if these float valves are not converted. is it your opinion today that it's more likely than not that the flow equipment did not convert because the flow rate never exceeded six barrels per minute at Macondo? MR. one is it could impact negatively the cement job. LEWIS: The function of this type of float equipment primarily is to isolate the cement once it's been put in place. MR. that element of protective barrier is not achieved. MR. they are no longer a barrier? MR. And if they have not converted. MR. MR. GRIMSLEY: Would that be a concern? MR. MR.433. LEWIS: I would say the preponderance of the evidence would indicate that. They say eight barrels. GRIMSLEY: Have you seen evidence to suggest that BP knew at the time that they would have needed to achieve at least six barrels per minute of flow in order to convert that float equipment? MR. that is that when. right? MR. LEWIS: By the record. MR. GRIMSLEY: Now. There is one possible mechanism that might have allowed it to convert that I can think of. LEWIS: It would allow the cement to U-Tube back in place. GRIMSLEY: What evidence have you seen? MR. GRIMSLEY: Okay. GRIMSLEY: What implications would necessary to convert the flow valves at Macondo. you said that the flow rate never exceeded the six barrels per minute 100 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. And I would be very interested to see the results of that. GRIMSLEY: But just so I understand it. that's correct. I have. NOVEMBER 9. the path was cleared. and circulation was established. it specifically states that the rate required to convert the valves is greater than four barrels a minute by a factor of two.3767 | WWW. What are the implications for the well and the cement job if in fact the float equipment did not convert? 98 there be for the well if these float valves had not converted. BP in their report said that they were doing further investigation into that possibility. yes. LEWIS: That's true. yes. MR. MR. GRIMSLEY: So to the extent these valves being closed might have prevented hydrocarbons from migrating up the center of the casing. The issue is kind of academic in that they do to a certain extent impede flow. which is what the cement job should look like at the end when the plugs have bumped. and preventing it from flowing back into the well due to the hydrostatic column imbalance. MR. GRIMSLEY: What would that mean for the cement job? MR. MR. MR. MR. to allow it to stay static while it's setting up obtaining compressive strength. Is this the drill plan you're talking about? PLANET DEPOS 888. GRIMSLEY: Let's look at this animation here of the cement job. LEWIS: That's correct. LEWIS: There's debate as to whether or not float valves are a mechanical barrier. and that would be the primary risk.PLANETDEPOS. 2010 25 (Pages 97 to 100) 97 99 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. LEWIS: Yes. LEWIS: In the precementing portion of their well completion procedure. under the presumption that the obstruction was below the flow. LEWIS: That would present the opportunity for further contamination of the cement.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. That's consistent with the common industry practice of making sure that you achieve adequate pressure and flow rates to function down the hole. GRIMSLEY: So I'm putting up on the screen a page from BP's April 15th drill plan. it eliminates any argument that these valves are a barrier to flow? MR. and two. when they are not closed. the surge of pressure might have been adequate to give you that much differential. So what are you saying the implication would be if these float valves were open and still had that tube? MR. besides implications for the cement job? MR. LEWIS: It's my opinion that it probably did not.COM . LEWIS: It should be.

2010 26 (Pages 101 to 104) 101 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 103 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. MR. if your floats have failed. MR. MR. GRIMSLEY: Is there any way in your mind to reconcile the fact that in this document is this line number 11. GRIMSLEY: Now.PLANETDEPOS. if the crew or the individuals on the rig. such that it would have sheared at the sorts of flow rates that they ended up using. that's directly related to their desire to maintain equivalent circulating density at the bottom of the hole at 14. MR. GRIMSLEY: If we look down further in the document. to your mud column and inside of the wells above that float. that I see. MR. what action in your opinion should have been taken to either mitigate or remediate the situation? MR. LEWIS: No. the flow rate would have exceeded the six barrels per minute that you had identified earlier? MR. what flow rates are identified down here in regard to actually setting the cement? MR. which says eight barrels per 104 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 equipment to a lower shearing pressure. there is not. LEWIS: Given the equipment that they ran in the well. with these numbers down here. MR. saying circulation rate should be kept below four barrels per minute during the cement job? MR. re-specified this piece of 102 the maximum might actually possibly be. yes. LEWIS: Well. four and two. LEWIS: Yes. during the conversion to the subsequent cement job? MR. GRIMSLEY: Again. it's three barrels a minute. And then you lock that pressure in and you hold it in place while the cement has the opportunity to set. GRIMSLEY: So there's actually additional equipment that would have sheared in a much lower flow rate than eight barrels per minute? MR. MR. LEWIS: I don't know what they felt 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 minute of flow rate is needed to convert the float equipment. GRIMSLEY: Do you have any sense why BP did not want the flow rate to reach six barrels per minute. LEWIS: Not as I understand the piece of equipment that was run. LEWIS: It's the same equipment adjusted to a lower shear pressure. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. the line we've just been discussing which talks about getting the flow rates of eight barrels per minute.COM . A more prudent approach would have been to have redesigned. I do know from the cement OptiCem calculation runs that they completed their design based on four barrels per minute. MR.433. NOVEMBER 9. GRIMSLEY: Would it have been prudent in your mind for the operator to insist that at least at some point during attempting to convert the float equipment. GRIMSLEY: And at those flow rates. is that you apply a little bit of pressure. GRIMSLEY: Do you know what maximum flow rate BP had identified for circulation prior to and during the cement job? MR. is there any evidence that BP ever achieved even six barrels per minute of flow that might have converted the float equipment? MR. much less eight barrels per minute. LEWIS: The standard practice. no. This equipment can be modified. GRIMSLEY: I've highlighted bullet 11. once the narrow pore pressure/fracture gradient had been identified.3767 | WWW. correct? MR. as I said. MR. LEWIS: No. as you can see there. MR. It says right here that BP intended to use at least eight barrels per minute of flow to convert the float equipment. MR. by "a little bit" maybe a few hundred pounds. So I would have to infer from that that it was their belief that four barrels per minute was a maximum possible rate. in this case BP.5 barrels per gallon range. and then we move down to cementing the production casing. had any suspicion that the float valves had not converted. LEWIS: Yes. that's actually a functional requirement. GRIMSLEY: So what you're doing in PLANET DEPOS 888. LEWIS: That's correct. would the float equipment have converted? MR. that's exactly the plan I was talking about. GRIMSLEY: Is that just a mistake of some sort? MR. LEWIS: It strikes me as being a mistake.

MR. so cement could come back up through the valves. would the crew have been able to perform the riser hanger seal assembly test or the positive pressure test during that period of time? MR. make sure they are seated on top of the float. you might be able to do that a bit faster. I had thought of one possible way to manipulate the choke and kill line.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. GRIMSLEY: For instance. and then place your cement. is that correct? MR. MR. and hold that wiper plug in place until your cement is set.PLANETDEPOS. You put enough pressure on to basically bump your plugs. so no longer a barrier to flow up the casing? MR.COM . LEWIS: I believe the answer to that is no.3767 | WWW. GRIMSLEY: And how about taking the other option of just adding more cement? MR. 2010 27 (Pages 105 to 108) 105 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 107 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that situation is you are accounting for the fact that the valves have not closed. LEWIS: That's true. LEWIS: They would have had to delay at least some of those. MR. MR. they did not. LEWIS: That's correct. GRIMSLEY: Now. if there were any question as to whether the float valves converted. in light of the fact that you would have to have tripped the Macondo with a drill string to do that. LEWIS: No.433. would it have been prudent to take the remedial steps that you have identified in order to ensure that there were no problems as a result of an unconverted float valve? MR. sitting here today. But I would have to look in more detail at the hanger assembly itself in order to answer that question. GRIMSLEY: Now. LEWIS: That would have been at least as long also. yes. you believe that the crew and BP would have had to delay those procedures to accommodate the remedial pressure needed to account for an open float valve? MR. then either the placement of a mechanical plug or simply more cement would have been appropriate steps. GRIMSLEY: And how long would it have taken generally to put a mechanical barrier down into the well? MR. GRIMSLEY: Would BP or others on the rig be able to perform other operations while they were applying this downward pressure at the bottom of a hole to hold the system in place? MR. so you're putting a little bit of pressure down in the system to counterbalance any flow back up through those float valves. GRIMSLEY: Did you see any evidence that BP in this situation took that remedial step? MR. and that it would have accomplished. But I would say a minimum of 24 hours. MR. What it is designed to do is to replace the function of the float valve of isolating the cement from pressure vertebration while it's in the process of setting up. GRIMSLEY: Are there any remedial steps that in your opinion should have been taken in order to account for the fact that the float valves may have been opened. It would seem to me that for setting a plug of this nature. MR. you identified a second problem with having the float valves not being converted. pressuring down while the cement is curing. 106 from below. MR. GRIMSLEY: So in your opinion. But I think the answer to that is no. The negative test definitely would have had to have been delayed. LEWIS: That would have made no difference at all to the float valve itself as a barrier. this remedial measure you've already identified. LEWIS: I think that would depend actually on one's intentions for their next steps in PLANET DEPOS 888. correct? MR. your wiper plugs. LEWIS: If that had been identified as a failure. GRIMSLEY: In your mind. LEWIS: I believe that their round tripping time on this rig was about 18 hours each direction. That other problem is the float valves are no longer a barrier to flow of any sort 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. 108 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. yes. would that have solved the problem of an open float valve and a path for flow? MR. LEWIS: They would not be able to conduct any operations below the BOP and other rig operations in the riser or above the BOP that they could have continued with. NOVEMBER 9.

You mentioned the flow check test. And in fact that's the conclusion a pit. One. you said earlier that your opinion sitting here is that it's more likely than not that the float equipment did not convert. GRIMSLEY: Now. they watched it for three minutes. How much pressure test you put on is a function of the design of the casing. And then your completion equipment. that in your mind there were certain remedial and other diagnostic steps that should have been taken? MR. and whether or not the flow completely stops. they got back an amount of fluid that was possibly appropriate for the amount of pressure they had on that well. the guys on the rig that day had their flow chart. Then you release the pressure completely. That was not done.excuse me. in particular the operator that day.COM . yes.433. MR. but you don't think it was sufficient to identify whether the float in fact was sealed. From a purely engineering standpoint it would have been very. MR. It's called check floats.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. then I think it definitely would have been prudent to have done something more with that. LEWIS: Well. They say specifically that we don't feel that was a valid test. You've got some viscosity effects in that fluid. 2010 28 (Pages 109 to 112) 109 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 111 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the abandonment. GRIMSLEY: You said that such a float check was performed here. you let that drill string that you've been pressuring to bleed back to 112 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 a science project to have done that. LEWIS: I believe that's true. and you monitor for both the volume of the flowback. yes. they proceeded. which will be specified there. They did their flowback test on the floats. In light of the fact that their abandonment plan included leaving this well underbalanced. to investigate its actual physical configuration after the well was killed. But given the very low differential pressure between the cement in place and the mud inside the well. the flow chart saying check floats. In the plan it would be written "check floats. NOVEMBER 9. LEWIS: Well. they decided the floats were holding. I don't think there's any information we can gain at this point in time. That's standard procedure. in that the well was abandoned -. But it might have also given us some information to use in enhancing design for future completions. you open the valves. What is a flow check test? MR. proceed. They checked their floats. the time it takes the flowback. both the mud and PLANET DEPOS 888. GRIMSLEY: Can you explain one more time why that is? MR. I have no knowledge of why it was not done. very interesting to me to have run back into that well to TD. there is a lot of reason to question as to whether or not that was a valid test of that float. given what the people on the rig knew. you record the volume. the differential pressure in the safety design was so small that there's a question as to whether or not it really would U-Tube on you. once you have bumped your pumps -. where the people felt that there was not a problem. LEWIS: Actually this is one of those decisions somewhat similar to the negative pressure test evaluation. GRIMSLEY: But as I understand it. two issues there. You let the pressure off. you pressure up the system a little bit with that same pump that you've been pumping cement. GRIMSLEY: I just want to back up a little bit. LEWIS: That is simply. What other information would be helpful to you to determine whether that opinion is in fact correct or not? MR. It would be in a certain sense 110 that BP investigative came to in their analysis. MR. and floats hold.bumped your plugs. You hold that pressure for a certain period of time to guarantee that your well is in fact latent. MR. the well was killed and then plugged before there were any forensics done inside that wellbore. that the floats may not have converted. you watch it for X period of time." Everybody knows you pressure up to whatever it said in the previous step. it's specified in your procedure.PLANETDEPOS. MR. However. MR.3767 | WWW. which I think is a little bit shy.

I completely agree with that. LEWIS: If one is designing such a low differential column. 2010 29 (Pages 113 to 116) 113 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 115 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the cement do take up a little additional gel string. In your opinion. and you have never obtained the design specification for proper functioning of that tool. the investigation team concluded that with the 38 PSI back pressure predicted in the Halliburton April 18th.. GRIMSLEY: Let's put it this way. on the morning of April 20th. MR. I wouldn't think that any other step would be required. if you had taken circulation to the design flow rate without 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 steps. GRIMSLEY: I would like to move on to temporary abandonment procedures. I'm going to focus my questions on Mr. which was sent to the rig and other members of the team at 10:43 a. GRIMSLEY: We heard in the first panel from Mr. Here it was underbalanced. Williams that at Shell they never during the temporary abandonment procedure or do not during the temporary abandonment procedure leave the well underbalanced. And then the well does not necessarily have to be underbalanced when abandoning. It doesn't have to be left underbalanced while placing the cement. Bourgoyne. according to the record that they presented in the Halliburton cement completion report. The last manifestation of those procedures is in this April 20th ops note. 2010 opposite program. Smith. simply watching for three minutes is a little bit low.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. BOURGOYNE: It is unusual." MR.3767 | WWW. Almost any written plan will say a minimum of watching for five minutes. Mr. I would like to put up on the screen the April 20th ops note. "However. Also. Particularly striking is the depth of the cement plug. NOVEMBER 9. less than 12 hours before the blowout. GRIMSLEY: What would your recommendation in the future be as to how one should conduct a float check like this to ensure that in fact the float collars had sealed? MR. you've looked through these 116 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 BP report. Bourgoyne and Dr. BOURGOYNE: Displacing the seawater above the wellhead and doing the negative test. There's been a lot of discussion about how the temporary abandonment procedures changed over the course of the last week within BP. then something is wrong and something needs to be done.PLANETDEPOS. Can you explain a little bit about what you meant by these procedures are unusual. Now. the.COM . it says three minutes there. MR.433. And to get that fluid moving takes a little bit of energy. Whether or not the pressure differential between those two columns was adequate to do that is questionable. GRIMSLEY: So you agree with BP's conclusion that the float check that was performed was inadequate to determine whether in fact the float valves had converted? And I'll read from the 114 problem. They may not have.or is not usually placed so deep. But the point is that they recorded the fact that this was a successful test after three minutes. is this temporary abandonment procedure an unusual one? MR. MR. It didn't have the -. I don't think that would be required or advisable if you had no indication of a problem with your float set. LEWIS: Yes. Also it is unusual to include the negative test with the displacement to combine those two. If you had started circulation. However. The accuracy of report writing in the field of recording these sorts of things is such that they may have watched it for more than three minutes.. MR. and you had an indication that you had float closure in terms of a positive check after that point in time.m. Both of these issues make the results somewhat questionable. I cannot think of just right now a procedure other than an extended flow check and/or possibly simply maintaining pressure on that casing for a few hours until they had the opportunity to have an initial set. in a case like this where you had a sequence of questionable events. Did PLANET DEPOS 888. the back pressure test that was conducted was not a reliable indicator of float tolerance seal. MR. given that the well was going to be so underbalanced? MR.

BOURGOYNE: Well. SMITH: In the manner in which it was 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 absolute sense. MR. 2010 30 (Pages 117 to 120) 117 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 119 the well need to be underbalanced at any point in time during this temporary abandonment procedure? MR. BOURGOYNE: No. SMITH: Because you're creating this pressure differential from outside the well to inside the well before you've confirmed that the well will withstand that pressure differential. The cement could be placed in mud. do you see anything unusual about this particular temporary abandonment procedure. The intention was. it didn't need to be underbalanced. Smith. and before you close the preventer. circulating heavy enough mud to provide that riser margin and to keep the well in an overbalanced condition at all times. do you agree that that is a prudent procedure within the context of these temporary abandonment procedures? DR. MR. and you corrected some calculations.3767 | WWW. the riser had to be filled with 14 pound per gallon mud. GRIMSLEY: Why is that unusual? DR. to have this reduction on pressure inside the well before you close the annual preventers. the displacement of seawater in the annulus back up to the BOP stack resulted in an underbalance relative to the 14 pound per gallon mud before the negative test ever started. GRIMSLEY: So is it fair to say that performing the negative pressure test after having removed 3. the well was overbalanced when it was drilled with 14 pounds per gallon mud. MR. Only for the negative test.reestablish the overbalance? MR. utilizing heavier weight mud to maintain an overbalance. You could achieve that same pressure with a heavier mud that only reaches back to the sea floor. But my understanding now is that removing 3300 feet of mud from below the mud line and replacing it with salt water eliminates 926 PSI of additional downward pressure on the bottom of the PLANET DEPOS 888. MR.000 feet of seawater unnecessarily stresses the well before you've even tested whether the well can handle it? DR. Lewis. even when this riser is full of seawater.COM . GRIMSLEY: We've had some calculations here. LEWIS: I think that the points that Mr. GRIMSLEY: Mr. GRIMSLEY: Why is that? DR. MR. You and I met since then. That is. so that you've got a rapid means of controlling it if it doesn't contain that pressure. NOVEMBER 9.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. You could also take the additional step of. GRIMSLEY: Explain a little more what you mean about that. Bourgoyne brought up there are the same things I would question. SMITH: It's not necessary in the 120 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to reach all the way back to the surface. in this case in the drill pipe. But that 14 pounds per gallon mud had 118 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 conducted and the effect that is not prudent. MR. the first of which is the fact that these temporary abandonment procedures call for displacing 3300 feet of mud below the mud line with seawater. MR. GRIMSLEY: How would you establish the -. and this is from a slide I put up yesterday. SMITH: Because the whole idea of doing the negative test is to establish a fluid column. And so that's the step that's particularly unusual. but not a desirable approach to doing the test. GRIMSLEY: I want to ask about specifically some of the particular steps in here. to provide an overbalance. MR. as a term of art. that preserves an overbalance on the annulus side. at that point it would have been in the riser. And some of that pressure reduction was offset by the fact that there was this heavier spacer. Dr.PLANETDEPOS. It can't be underbalanced at that point. before you even do the negative test. the simplest explanation I can give. and that could have been done in a controlled manner with the BOP already closed and overbalance reestablished. BOURGOYNE: By simply opening the pressure back up or opening the BOPs to put the riser back on the well.433. in your experience? MR. So that essentially puts a riser margin. until you've closed the preventer or closed some other tool that seals off that heavy hydrostatic in the annulus and allows you then to bleed pressure off the drill pipe to reduce pressure in the well only after the BOP is closed. MR.

This is a reduction in pressure below that depth inside the well that's not absolutely required as part of the abandonment procedure. for the cement job at the bottom? DR. SMITH: No. GRIMSLEY: Could a cement plug be set in mud? DR. Bourgoyne. SMITH: No. SMITH: No. in this temporary abandonment procedure. at the sea floor level. even if they wanted to set the cement plug in seawater. was it necessary for BP to remove all -. such as mechanical barriers or bridge plugs? DR. And the point is. NOVEMBER 9. GRIMSLEY: And so was it necessary for BP to put that additional stress on the cement job at the bottom? DR.000 feet. When we move the rig off location and the riser is gone. yes. that 3. yes. GRIMSLEY: Was it necessary to. was it 124 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 in the riser. so there's hydrostatic pressure exerted by the mud in the riser.433. yesterday and today both. What did you mean by that? DR. 2010 31 (Pages 121 to 124) 121 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 123 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 well. MR. sir.COM . SMITH: That's my understanding. SMITH: They could have used a mechanical barrier like a bridge plug. And so whatever mechanisms we use to prepare the well for temporary abandonment.3767 | WWW. sir. I believe in our conversations you said that that introduced an unnecessary amount of risk into the situation. MR. correct? DR. we know that we're going to remove the 14 pound per gallon mud and the hydrostatic it creates inside the well at the level of wellhead.at some point we're going to remove hydrostatic pressure at the wellhead level. MR. sir. GRIMSLEY: Mr. as you calculated it. that mud's no longer there.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. my understanding is that the reason BP wanted to remove that seawater down to 3. SMITH: It means it's required to control a greater stress. as has already been described by Mr. Lewis. sir. MR. SMITH: Well. SMITH: No. but I have not had access to their planning documents. GRIMSLEY: And in this case. when we remove the riser. removing that additional mud below the mud line. removing that additional pressure. and that's going to be gone when you temporarily abandon the well. GRIMSLEY: Have you seen any indication in the documents you've looked that BP considered the possibility of using a mechanical barrier or a bridge plug rather than the surface cement plug that was used? DR.PLANETDEPOS. MR. removes an additional 926 PSI of hydrostatic pressure. Were there other types of plugs that could have been used that would have done just fine in mud. we're going to -. GRIMSLEY: Let's imagine that BP decided it did not want to set cement plugs in mud. I think that's already been stated. The question then is whether and to what extent it makes sense or introduces additional risk to remove additional mud below the mud line. SMITH: Yes. When you're going to move off wells. GRIMSLEY: Does that have any implications. is that your understanding? DR. MR. MR.000 feet of mud and replace it with seawater? DR. GRIMSLEY: So let me get this straight.000 feet was so it could set the cement plug into water. MR. there is a greater pressure differential acting outside the well to inside the well than there otherwise would have 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 necessary to do so in seawater? DR. in any event you're going to be removing the mud that's 122 been. I said it was not an absolutely required level of risk. SMITH: That's right. Is that fair? DR. GRIMSLEY: Was it necessary to actually remove. exerting a downward force on the cement at the bottom and the hydrocarbon pay zone. GRIMSLEY: Now. MR. SMITH: Right. Even if BP had wanted to set the cement plug down here at 3. MR. have you seen any indication that BP considered the possibility of PLANET DEPOS 888. MR. because perhaps cement doesn't do as well in mud.even if -I take that back.

000 feet. the less practical that becomes. MR. But beyond that. Was that required. We would need to check that. It is the only question we have. were there other ways to increase the hydrostatic pressure below the surface of the cement plug to account for the additional underbalance from the displacement above? DR. DR. This is the first one we've gotten. GRIMSLEY: And in fact is it possible that BP could have circulated such heavier weight mud such that there would have been no underbalance whatsoever seen at the bottom of the well? DR. so good. they could e-mail me a question. GRIMSLEY: Now. In any of your experience. SMITH: Yes. Bourgoyne. any of you? MR. SMITH: Yes.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. GRIMSLEY: Okay. GRIMSLEY: How long would it have taken to actually perform that procedure. MR. GRIMSLEY: And even if they wanted to set the cement plug at 3. NOVEMBER 9. MR. one of the reasons I understand that BP chose to set -. SMITH: I really don't have the recent direct knowledge to comment. And I want to be sure that Mr. LEWIS: Actually there is one reference very early on in the initial documents. BOURGOYNE: Not in the top plug for temporary abandonment. 2010 32 (Pages 125 to 128) 125 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 127 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 using a bridge plug or mechanical plug? MR. indicating that a packer type mechanism should be on board for the possible use in an abandonment. Bourgoyne? MR. the decision was made to set the cement plug down at 3. GRIMSLEY: But certainly -. GRIMSLEY: What would have been the process by which BP would have had to have set that heavy weight cement or set that heavy weight mud? situation in which a cement plug was set at 3. BARTLIT: In order to avoid lawyers standing up all over the place and asking questions I told the commissioners. I want to be sure it's asked. GRIMSLEY: Have you ever seen one set so deep with seawater above it. based on what Mr. I think would be what I have to say.well. SMITH: The most straightforward method would have probably been to run the drill string or the work string down to a depth just above the shoe track in order to circulate that heavy mud in place to fill that space in the well below that depth. you know -MR. we worked out a deal with all the lawyers that if there's anything we miss something that we got wrong. GRIMSLEY: Dr.433.000 feet below the mud line. SMITH: Probably somewhere between one and two days. MR. Grimsley has the question.000 feet of mud with seawater was because it wanted 3.3767 | WWW. GRIMSLEY: Now. MR. Lewis? MR. Thank you. SMITH: Yes. MR. Smith? DR.PLANETDEPOS. set it in seawater. in the predrilling instructions.COM . The deeper the plug is set. could they have set the cement plug at a much higher level as part of this temporary DR. GRIMSLEY: Mr. LEWIS: I'm kind of halfway between these two previous answers. putting aside the seawater issue. Lewis has said about the time required for them to trip. MR. MR.to displace this 3. SMITH: No. So far. and maybe a little less than that in that they're already tripping to 8300 feet.000 feet to accommodate the drill string which it would hang off a lockdown PLANET DEPOS 888. have you ever seen a 126 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 128 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 abandonment procedure? DR. MR. but just a surface cement plug set 3. sir. the density of the fluid below the plug could have been increased in the way that Mr. LEWIS: No. SMITH: I can't remember that I've done that calculation. to replace the lighter mud with this heavier weight mud? DR. Bourgoyne has described earlier. MR. but in this case are you saying that BP could have chosen to increase the weight of the mud that was actually down here below the cement plug? DR. MR. below the 8367. it would have been typical to set it closer to the sea floor. We won't disclose public who it is from we want to know. Mr.000 feet below the mud line? Mr.000 feet. Not as a top plug.

GRIMSLEY: Dr. Lewis? MR. Smith. sir. BOURGOYNE: That's reasonable. besides an open BOP during the displacement process? DR. MR. is that your understanding? MR. GRIMSLEY: Was there any requirement that the lockdown sleeve be set last during this procedure? MR. that they needed to set the surface cement plug so deep was because they wanted to set the lockdown sleeve last. Smith? DR. MR. MR. which turns out to have been untested. I saw no evidence that they had considered those other options. SMITH: It's the minimum number of barriers that we would generally accept. Does that sound reasonable to you? MR. Do you agree with that. which was equivalent to 3. is that your understanding? during further operation? MR. have you seen anything like that? MR. GRIMSLEY: The final thing I want to ask about is the fact that at least from our perspective. that's correct. MR. MR. And I think that's the fairest thing to say. It's just a work string.000 feet of drill string? MR. that BP did not want to harm that seal by virtue of having operations going up and down through that lockdown sleeve. GRIMSLEY: And also one of the reasons. that that was the state of affairs as a result of this temporary abandonment sequence? Mr. LEWIS: Yes. So that the 132 130 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. BOURGOYNE: Yes. There are bore protecters specifically designed for that type of purpose.3767 | WWW. GRIMSLEY: Is there any evidence you've seen that BP considered any of those possible ways to protect the lockdown sleeve? MR. BOURGOYNE: Sure. after all. BOURGOYNE: To try to preserve the lockdown sleeve by minimizing the number of trips through it? It's a reasonable thing to consider. and the BOP. no. MR. I do. I mean collars. there was no barrier in place to set that surface cement plug during the period of time in which the riser was being displaced. GRIMSLEY: Dr. assuming they wanted to use the 3. It's the polished bore that they were desiring to protect. Bourgoyne? MR. polished bore receptacle.000 feet of drill string off of a lockdown sleeve to achieve 100. and using the lockdown sleeve for that protective element. GRIMSLEY: Mr. NOVEMBER 9. 2010 33 (Pages 129 to 132) 129 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 131 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 sleeve in order to set that lockdown sleeve. GRIMSLEY: Mr. Lewis. MR. MR. I haven't had access to that. MR. GRIMSLEY: Mr.000 feet of drill string.433. BOURGOYNE: That's correct. what is your view on the advisability of having only one barrier. MR. MR. LEWIS: It's putting all your eggs in one basket.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. BOURGOYNE: Yes. LEWIS: Actually I think we have one technical clarification here. SMITH: Yes. GRIMSLEY: And that's because they wanted 100.COM . but putting one barrier in place. BOURGOYNE: That's my understanding. BOURGOYNE: Yes. MR. GRIMSLEY: What do you mean by that? PLANET DEPOS 888. Lewis. GRIMSLEY: Are there other ways besides hanging 3. putting aside that it was not tested. So no. I wouldn't be concerned with operations that were planned especially before the temporary abandonment. sleeves for instance that you can put in place that would actually protect the lockdown sleeve 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 only barrier was the cement job at the bottom. you can run heavier tubulars or even casing.000 pounds of weight. GRIMSLEY: Can you also put weight on top? MR. MR.000 pounds of weight? MR. GRIMSLEY: We've been told that the concern was that BP didn't want to harm the seal. especially if you use casing on top. BOURGOYNE: None that I'm aware of. MR. There's a seal at the top of the lockdown sleeve. GRIMSLEY: And aren't there other ways. MR. MR.PLANETDEPOS. BOURGOYNE: I haven't reviewed those particular planning records and things like that.

SMITH: Sure. I am aware of that. and you have purposely brought this well significantly underbalanced. GRIMSLEY: Is there any reason that there had to be during these temporary abandonment procedures only that barrier at the bottom? Mr. that you have different options about how you achieve the barriers and the controls that you want. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. setting the first. Are you aware of that? MR. or just how they're going about that. after circulation was reestablished at the 3142 PSI. in the mud to begin with. Actually. do you have a view on that? 134 DR. SMITH: I think there's multiple alternatives that would have achieved a second barrier that could have been considered. and I would be very interested in seeing their results. Lewis. LEWIS: The more science. GRIMSLEY: Why not? DR. sir. SMITH: When they opened the drill string fluid. sir. LEWIS: Yes. MR. LEWIS: I think it's been pretty clearly stated. or if they are modeling that. There's just many different ways to conduct this procedure. MR. Smith. MR. GRIMSLEY: What else could BP have done to ensure that the cement at the bottom was not the only barrier? MR. GRIMSLEY: What data in particular showed there was not well integrity? DR. MR.433. GRIMSLEY: Did BP employ any of those additional options that you just identified? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 kind of an intriguing question. There's only one there. GRIMSLEY: Would it have been. SMITH: No. GRIMSLEY: Okay. And so increasing the mud density. MR. it would continue to blow back rather PLANET DEPOS 888. sir. Smith just said. BOURGOYNE: Most definitely. do you have any additional opinions on that? MR. BOURGOYNE: No. setting the plug in a higher density mud. You're doing a regular engineering design process of trying to get an optimum design where you're trying to balance multiple objectives.3767 | WWW. Smith.PLANETDEPOS. the better. Lewis on the float conversion. is of dubious wisdom. but you would be perfectly willing obviously to consider any test results from the surge testing that BP is performing? MR. NOVEMBER 9. LEWIS: I mean just what Dr. in my point of view. may have created a sufficient flow rate to convert the float equipment. the one question that was handed to me. MR. GRIMSLEY: And all of those would have been in your mind prudent options? DR. MR. GRIMSLEY: In your opinion did the negative well test performed at Macondo establish well integrity? DR. And so you've given your preliminary opinion here today. GRIMSLEY: Dr. Bourgoyne? MR. SMITH: No. MR. have you developed any opinions on the negative pressure test conducted at Macondo? DR. I'm curious as to whether they are physically testing equipment in a mockup. SMITH: Because it was a test that showed there was not well integrity. setting an extra cement plug or an extra mechanical barrier before can you go to the mud way back to cement water. I find that 136 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 DR.COM . BOURGOYNE: It could have put the second cement plug in before removing the mud. MR. 2010 34 (Pages 133 to 136) 133 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 135 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. in fact I referred to it when I said in their report they indicated they were doing that. GRIMSLEY: Mr. prudent to have done so? MR. in your opinion. GRIMSLEY: So the negative pressure test. And there's complications and potentially risks associated with each one that would need to be considered. MR. and this is for Mr. MR. Dr. it's the minimum barrier. GRIMSLEY: I would like to move on to the negative pressure test. and has never been really tested. You're aware that BP is currently doing testing or at least has indicated that it's doing testing to determine whether the surge. MR. And doing that against a single barrier that has been problematic in its creation. SMITH: Yes. There's just lots of options.

because the drill pipe pressure dropped. GRIMSLEY: In your opinion was there any explanation why there would be zero PSI in the kill line and 1400 PSI on the drill pipe? DR. MR. SMITH: Yes. MR. So the records that we have are the indications. the pressure on the kill line dropped. and the potential explanations in the BP report. was that an indication that the well was flowing? DR. there's two explanations.COM . and the drill pipe should have been equal always. And that was seen kind of throughout the 140 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 DR. it provided some barrier to pressure being felt on the kill line. GRIMSLEY: Why not? DR. that the people who were on-site said that fluids were flowing back to the cementing unit. Putting aside the potential effect of the spacer. GRIMSLEY: Is that because there are basically two straws going into the same vessel? DR. repressurizing the system. and that that plugging. MR.PLANETDEPOS. SMITH: The data that's in the Sperry-Sun data records does not reflect that. GRIMSLEY: In your opinion did the data that the men on the rig floor were seeing that evening indicate that the well was in fact flowing? DR. MR. sir. that were supposed to have the same fluid in each straw. sir.better way to say it would be. the pressure had dropped on the -. So that heavier fluid being present reduced the -. had to be broken for the kill line to take the fluid at the pressure it should have. I think that's very unlikely. But given the fact that the pressure was building back up. in my opinion. when they opened the kill line. MR. One is that someone unintentionally closed the valve on the outlet from the BOP to the kill line. SMITH: Yes. NOVEMBER 9. because it did not record fluid going to the cementing unit. what's not in the BP report is that there's this strong evidence that before the negative test ever began. SMITH: Yes.when they opened the valve between the BOP and the kill line. so they could feel pressure in the well through the kill line. The other is that because the fluids in the well below the BOP stack were not what was intended to be there.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. as in the BP report. indicating that there were fluids leaking into the well. In addition. and what was actually there was some mixture of seawater in the 16 pound per gallon spacer. GRIMSLEY: In your opinion. that the 16 pound per gallon spacer was not in fact all displaced above the wellhead. and that when they didn't close the drill string to stop that flow from the drill string. MR. GRIMSLEY: That's what I was going to ask. MR. or excessive gel strength in our language. There's evidence that the kill line was acting like it was partially plugged. I take this from physics. the pressure is on the kill line. sir. It never achieved that. that those fluids could get up into the kill line and potentially cause bridging or plugging in the kill line. 2010 35 (Pages 137 to 140) 137 139 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 than stopping. MR. the pressure built back up. what was intended to be there was seawater.and there's in fact -. should the pressures on the drill pipe and kill line have been equal throughout the test? DR. SMITH: Two straws going into the same vessel. was the negative pressure test conducted properly? 138 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 my opinion there's evidence of that during this period of time when they re-pressured the kill line from the top and pumped into it. But they weren't equal. So there's a -. which would be indicative that there was a seal. SMITH: Because they didn't begin with the conditions they stated they should begin with. GRIMSLEY: Once the rig crew PLANET DEPOS 888. If the test had been ready to conduct as planned.in 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 beginnings of this test.3767 | WWW.433. that there was something on the order of 700 PSI excess hydrostatic pressure measured on the drill pipe that had to be due to heavier fluid being below the wellhead or the BOP stack in the annulus that was supposed to be filled with seawater. sir. given that they are intending to monitor the kill line. GRIMSLEY: Okay. SMITH: No.

it was not. have you developed any opinions on the negative pressure tests performed at Macondo? MR. MR. SMITH: Yes. BOURGOYNE: Do you want me to answer that? MR. BOURGOYNE: Yes. yes. to have circulated -. 144 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. MR. MR. we've talked about earlier. I don't. GRIMSLEY: Do you have anything to add? MR. LEWIS: I would expect the town engineering team to outline the steps of that procedure. GRIMSLEY: Do you agree with the opinions that Professor Smith just gave? MR. Smith. get the system back to being filled with seawater. Bourgoyne. SMITH: That's right. LEWIS: Yes. MR. Mr. correct? DR. GRIMSLEY: Was that done here? DR. GRIMSLEY: Okay. what in your opinion would have been the prudent course of action for the crew and well site leaders to have taken? DR. GRIMSLEY: So you agree that this test was a failure and that it was not conducted properly. 142 MR. MR. DR. it would be the engineers with the operating company. do you think. GRIMSLEY: Dr. but my guess would be not more than a couple of hours. it did not. LEWIS: No. that is correct. you've testified previously about your analysis of the negative pressure test. MR. SMITH: I haven't done any calculations on that. without the effect of the spacer? DR. I have. GRIMSLEY: Okay. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 although that procedure was very brief. MR. do you have an opinion? MR.PLANETDEPOS. GRIMSLEY: Did the negative pressure at Macondo establish well integrity? MR. If people want access to instant analysis of negative pressure tests. SMITH: That the engineers that were responsible for the operating company to design that procedure. BOURGOYNE: Yes. GRIMSLEY: How long would it have taken. sir. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. Lewis. So I'm not going to go over that testimony again. NOVEMBER 9. MR. And I want to talk just a little bit about the procedure. what is your view? DR. GRIMSLEY: Why don't we start with you. BOURGOYNE: Yes. Mr. MR. SMITH: Yes. Bourgoyne. Whose responsibility in your experience is it on a rig to design the negative pressure test procedure? MR. 2010 36 (Pages 141 to 144) 141 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 143 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 recognized that there was a spacer that had leaked down below the annular preventer. SMITH: No. DR. it was not.COM . Lewis. as was the original intent. MR. GRIMSLEY: You've actually written a report on that as well. MR. BOURGOYNE: No. GRIMSLEY: Mr. GRIMSLEY: So it is the operating PLANET DEPOS 888. of that spacer and to put the system back in a position where you could conduct the negative pressure test reliably. GRIMSLEY: Now. MR. BOURGOYNE: It demonstrated the well could flow. LEWIS: It showed the well was capable of flowing. MR. have you developed any opinions on the negative pressure test? MR. I would suggest they consult his testimony from the joint investigation hearings before the BOEM and Coast Guard.433. SMITH: To have circulated that heavy spacer out.to have flushed out the system. essentially.3767 | WWW. LEWIS: No. I do. that's correct. It was not conducted in compliance with its written procedure. and that it showed in fact that the well was flowing? MR. sir. MR. GRIMSLEY: Did in fact the data obtained during the negative pressure test show that the well was flowing? MR. GRIMSLEY: Mr. MR. GRIMSLEY: Your testimony on this is at least publicly available. GRIMSLEY: In your opinion was the negative pressure test conducted properly? MR.

SMITH: I would certainly have expected that there would have been a calculation of what pressure to expect to have trapped at the beginning of the test that's not present here. MR. Some limited procedures on how to conduct it. a sufficiently detailed negative test procedure to be giving to the rig crew? DR. BOURGOYNE: That's correct. to develop the negative pressure test procedures for the crews on the rig? MR. GRIMSLEY: Do you have any additional views as to what other steps you believe the operator should. BOURGOYNE: Yes. close 146 DR. SMITH: No. MR. On the limited procedures on how to conduct it. BOURGOYNE: The. MR. It might be something to get started on the process. And in general. so the rig crew can actually evaluate if the test was going as planned. have you seen any more detailed procedure that was provided by the operator to the rig crew? DR. at least as you understand it within the industry. primary thing would be what you would expect a successful test to look like.it doesn't contain the detail. And I would have expected there to be some statement of what to do if the test was not successful. the expected bleed back volumes. GRIMSLEY: Dr. what's your view as to the adequacy of the procedure set forth in this ops note regarding the negative test? MR. displace the seawater from there to above the wellhead. there's a certain amount of residual pressure that's left in the system at that point. no. GRIMSLEY: Mr. once the crew has displaced the mud to above the BOP. It's a pressure that the rig crew can't measure. MR. have you seen any? MR. PLANET DEPOS 888. my own practice." we talked a little about this yesterday. NOVEMBER 9.433. provide to the rig crew as to how to perform and interpret the negative pressure test? MR. there would have been additional details about volumes to pump and steps that could be taken in monitoring a more detailed criteria for whether the test was successful. as you finalize your procedure. Also do those calculations like Dr. sir. And of course the rig crew had some responsibility to report back. MR.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. Smith was outlining. it was definitely the engineer working for the operator who designs and is responsible for it. BOURGOYNE: Right. to seek input. I want to go back to the ops note from April 20th. Lewis. is that right? MR.PLANETDEPOS. MR. perhaps how long to wait. MR. BOURGOYNE: Yes. my experience. GRIMSLEY: When you say "bleed back volumes. BOURGOYNE: Okay. BOURGOYNE: Definitely I haven't seen anything on how to interpret it. LEWIS: Nothing more detailed. with seawater in the kill line. Smith. you know. But it's not -. MR. MR. GRIMSLEY: So that's about it for the procedure? MR. Is that the procedure you've been talking about? MR. BOURGOYNE: It's definitely not a 148 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 annular and do a negative test. GRIMSLEY: Okay. SMITH: I've seen less detailed procedures. MR. But yes. But this is the most detailed. GRIMSLEY: It says right here. GRIMSLEY: Have you seen in your investigation in this matter any detailed procedures as to how to conduct or interpret the negative pressure test here at Macondo? MR. MR. The kinds of things that then the rig personnel might check. run into hole. GRIMSLEY: What additional type of detail would you expect to be included in a procedure describing how to perform and interpret a negative pressure test? final procedure to send out to the rig.3767 | WWW. 2010 37 (Pages 145 to 148) 145 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 147 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 company that is responsible. at least going forward. Smith. GRIMSLEY: Mr. but it is not that pressure.COM . GRIMSLEY: Is this in your opinion. There is a pressure here. Bourgoyne. that's it. but the kind of calculation that in general the people on the rig are not expected to be able to do or are not trained to do. I have seen that. Dr.

PLANETDEPOS. SMITH: I did a cursory search. yes. 152 150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 compressibility. SMITH: That's my interpretation. you looked in to see whether there were any regulations or extant industry standards prior to this event governing how 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 You must maintain sufficient hydrostatic pressure or take other suitable precautions to compensate for the reduction in pressure and to maintain a safe and controlled well condition. BOURGOYNE: The crew has to bleed off that compressible volume to reduce the pressure. MR. if you start to get back a significant within-the-measure-of-an-error-volume greater than that.COM . GRIMSLEY: And what did you find? DR. I understand that as part of your investigation into the negative pressure test at Macondo. It says -. SMITH: Certainly that apply to the Gulf of Mexico Federal waters. sir.433. BOURGOYNE: You can definitely estimate it. GRIMSLEY: Why would it be useful to know that information before conducting the negative pressure test? MR. GRIMSLEY: Did you find a regulation that even required negative pressure testing to be performed during a temporary abandonment phase? DR. is that correct? DR. And I searched carefully. beforehand. GRIMSLEY: What did you find with regard to any regulations that might be out there? DR. MR." So logically the negative test is a way to. there would only be compressibility in the well to bleed off. 2010 38 (Pages 149 to 152) 149 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 151 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. MR. there's a requirement in the Code of Federal Regulations.measuring how much you've bled back. MR. there's no regulations that I found. that's right. prove that the well will withstand that reduction of pressure as a means to satisfy this requirement. GRIMSLEY: Have you seen any indication as to whether those calculations were done at Macondo prior to the negative pressure test? MR. that volume would actually represent perhaps an inflow into the well. There aren't any here on this document. MR. SMITH: Actually there is. The primary error in the estimate would be determining how much -.this relates to a temporary abandonment or an abandonment. the crew wants to bleed off that pressure by releasing any extra fluid onto -up at the rig. GRIMSLEY: And so before starting the negative pressure test. MR. If you don't mind I'll just read it. that indicates that there's additional fluid in the wellbore that is not accounted for by to perform or conduct a negative pressure test. correct? MR.3767 | WWW. do you have anything to add as to what procedures should be included along with the description of the negative pressure test? MR. If the well is indeed sealed. But that can be accounted for. GRIMSLEY: Did you also look to see whether there were any industry standard guidelines or procedures out there as to how to conduct or perform a negative pressure test? DR. GRIMSLEY: So is there some regulation that the Deepwater Horizon would have violated had they decided to forego the negative pressure test altogether? DR. GRIMSLEY: Mr. Lewis. SMITH: That's right.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. NOVEMBER 9. MR. LEWIS: No. MR. So yes. yes. GRIMSLEY: Professor Smith. sir. SMITH: Not explicitly. if you will. GRIMSLEY: There's a way to actually calculate how much fluid one would expect to get back when bleeding off that residual pressure? MR. I think it's been adequately covered. MR. BOURGOYNE: Well. It says. BOURGOYNE: I haven't seen any indications. GRIMSLEY: So if one does not perform a negative pressure test or performs one and it's a failure. MR. MR. "Before removing the marine riser you must displace the riser with seawater. then the regulation you've just read would not be satisfied? DR. SMITH: I could not find any standards PLANET DEPOS 888.

This procedure is really important in deepwater wells where you're removing the riser. GRIMSLEY: Do you have any sense as to why. MR. SMITH: I think the regulation that I read is the regulation that would require the operator to. had concluded that this was a failed negative pressure test. then you now have to design a correction to that problem. if they were going to remove the hydrostatic overbalance. in deep water. or to undertake what could be a substantial and lengthy diagnostic and remediation process.m. GRIMSLEY: And Mr. is that right? DR. that night. MR. is that right? DR. MR. GRIMSLEY: There were regulations certainly on deepwater drilling. sir. and that the only practical.kind of have some official weight. SMITH: A logical first step would have been to circulate the seawater out and regain hydrostatic control. Eventually once you've done the test. to maybe several days. which we all have said we believe had been their thought. to do something to prove that the well was safe to do that. you as well? MR. MR. MR. PLANET DEPOS 888. And so that begins to be a very intense process that I haven't thought through those steps. MR. you're removing. SMITH: Something between 24 hours absolute minimum to tripping the hole and setting one of these mechanical plugs like a bridge plug near the bottom of the well. anything that would be -. aren't there? DR. SMITH: That's correct. GRIMSLEY: So let's imagine that here the rig crew and well site leaders had decided there might be a problem with cement at the bottom. responsible approach to doing that would be to do a negative test. SMITH: For sure. all of that mud in the riser when you pick up and leave. GRIMSLEY: Mr. as was done with the BOP close. with regard to what all have acknowledged is a very important test at the end of the life of a well. 2010 39 (Pages 153 to 156) 153 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 155 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 or guidelines or recommended practices.3767 | WWW. sign off on it. unless you've taken these kinds of preemptive measures that we've discussed at length.COM . That would have allowed them to open the BOP and go back and work in a normal fashion. What steps would the crew that had been on the rig have needed to take to diagnose what the problem was and potentially remediate the situation? DR. to verify that the well will hold back that external pressure that you're going to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 long of a procedure would it have been to remediate the cement failure at the bottom? Roughly. GRIMSLEY: So it's in those impose on it. MR. Bourgoyne. GRIMSLEY: So at 8:00 p. DR. BOURGOYNE: It is. no matter what. GRIMSLEY: Just to get that straight. SMITH: Yes. so you're removing the hydrostatic pressure that existed in the mud and the riser. when you're leaving and temporarily abandoning a well. MR. GRIMSLEY: Let's assume hypothetically that the men on the rig that night at 8:00 p. there were no regulations or industry standards? DR. if they were going to do a more thorough remedial cementing. the choices were either a good negative pressure test. defined where the problem is. How 156 154 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 circumstances where you're most likely to severely underbalance a well during a temporary abandonment procedure. to remove that hydrostatic pressure in a controlled system. those are the basic steps that would be required. NOVEMBER 9. is that right? DR. Lewis. But it's not something that's common for land operations or shelf operations when we're working with a surface wellhead. MR.PLANETDEPOS. MR. is that consistent with your understanding of what steps need to be taken? MR. LEWIS: Yes. GRIMSLEY: Do you have any sense as to why those regulations didn't account for this particular procedure? DR.433.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.m. SMITH: That's right. Then the next step would have been to try to diagnose where was this leak occurring so that we can define a way to go back and correct that. SMITH: I think this is because this is a relatively rare procedure to apply.

I would echo and maybe even expand upon Mr. Those were very. If I didn't understand what was happening.433. the company man was God. Mr. LEWIS: I've not seen a written procedure in any of the companies that I've worked for as a well site leader that's so specific. I learned early on that discretion is the better part of valor. what is your experience with regard to whether to call back onto shore when anomalous data readings like this are encountered? MR. GRIMSLEY: Were there any policies in place at Chevron that instructs well site leaders when to call back to shore when they might when they might be seeing these anomalous situations? MR. Mr. I've also worked in organizations where the well site leader was left a significant degree of personal discretion. It was more of a. as a company man at Chevron. so that it's now required for your well site leader to communicate with more people. you know. We have evolved to an operational environment that is so complex and has technological 160 158 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 inkling of a problem versus nailing down that you really did have a problem. both for myself. MR. Bourgoyne. So there is a large amount of interpersonal relationship that goes into the willingness to go pick up the phone. NOVEMBER 9. The personalities are personalities. everyone on the rig. seek help. But you want a culture in which people are encouraged to call back to shore if there's an odd or anomalous reading or something one doesn't quite understand. BOURGOYNE: Most definitely. volumes. different engineer. probably in the process of getting the anomalous data. I would say it was more of a culpable thing. however. GRIMSLEY: Even if there's not a specific policy in place -. was ask for help. Lewis. as to whether you call back with an office engineering staff. that varied as to who you were working for. would you have called that back to shore? MR. yeah. BOURGOYNE: I don't recall any policy. like if we take this case with the negative test. in that regard? MR. 2010 40 (Pages 157 to 160) 157 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 159 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. I'm having a problem. Bourgoyne's statements there about the relationship between the rig site personnel and the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 elements in it that are beyond the ability of one man to be completely cognizant of. call in much earlier to seek advice on perhaps there's another approach or something that I'm not seeing. pressures. GRIMSLEY: Now. more frequently.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.COM . MR. you know. I would seek counsel. do you have confidence in your knowledge. How does one in a company create a culture whereby the instinct is in those situations to call back onshore? What has been your experience. And the engineer at shore is tasked to provide that. and if I didn't understand something. MR. GRIMSLEY: Mr. though. and even circulate seawater around before calling in to actually say that.3767 | WWW. I've worked for companies where basically the well site leader was instructed to do absolutely nothing that wasn't already included in that well plan. I guess the burden is somewhat on the company rep to recognize when something is anomalous. when you see weird negative pressure test readings. Lewis. Or you might have in another -for another. made a call back. in your experience.PLANETDEPOS.and I agree it would be odd if there was one that said. PLANET DEPOS 888. procedural steps. As a well site leader. very complete well plans. if you had seen anomalous data like was seen that night during the negative pressure test. and possibly even at an earlier level in the evolution of events than has historically traditionally been the case. on a more informal level. But there was definitely no policy or prohibition to it. call. exactly as has been described here. LEWIS: That sort of culture would have to start with the mandate from the top. But it would be something that would have to be nurtured by primarily the interface between your engineering management and your operation management in town. and he was supposed to know everything that went on all the time. The old days. Sometimes. and the benefit of the company I was working for. the best possible thing I could do. with. you might have tried to do the test twice.

because I know that's an important issue. But they definitely are the people who are going to be managing the installation 162 I've found. But I could see the potential for this don't-communicate-unless-you-absolutely-have-to. since working for Chevron. Another thing that would engender that communication would be.COM . and be nurtured throughout the process off drilling the well. Organizations that are smaller than that. It was very educational. you know. you have to know your limitations. even if there are repercussions to call them back. Bourgoyne. And I know Mr.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. to calculate the loads on a string of casing. to explore why it wouldn't work. I've worked on a lot of really good situations. Bourgoyne. this feeling that that's somebody I can rely on for counsel. GRIMSLEY: What about your experience. So that culture is -. It's much easier for them to go. 3:00 in the morning. or you have to be absolutely confident in your position before you go out on a limb and actually offer an opinion or an idea. Instituting it company-wide can be a great challenge. If you're that person who has to make the call. They may not have the technical skills to run an engineering program. If you will. So it can be either really good or really bad. If those two or three people decide to make that environment or create that type of environment. And.433. those drilling supervisors -. it must be done. by the way. you know.as I said. Charlie. And that sort of communication would start there. umm. rig PLANET DEPOS 888. If you have these people together in a room in the designing process.PLANETDEPOS. how are people typically trained. I don't know Charlie. Bourgoyne and Dr. should I call him? That sort of decision can actually play in here. and how -. that it really is a matter of those in a supervisory position showing interest. NOVEMBER 9. I know that as a junior company man. the involvement of that field operational group. There's two or three supervisory positions there. both of you teach well control at LSU. as opposed to. drillers. exposing my ignorance. if you will. 2010 41 (Pages 161 to 164) 161 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 163 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 And the BP organization. never any really bad. and also fully exploring ideas that are brought to them. that's a BP term. nurturing a culture in which people will be calling back to shore or involving other people in the discussion when these odd types of things are encountered? MR. And it's actually somewhat easier in those contexts to have these conversations. BOURGOYNE: I guess I don't have a real good formal way to institute such a thing. if I approached or was included in some planning. it's a very small group. GRIMSLEY: I want to switch and just ask a couple of questions about well control and kick monitoring. I need your help. Mr. but it also led to this interpersonal relationship. Smith. if it was a tough call to make. that came to us courtesy of BP -. MR.have them involved in the initial design and planning process. and I had an idea that perhaps didn't work or wouldn't work or was a brainstorming idea. if you will."well site leaders" is the new term. or something that I was concerned about bringing up. as was indicated might be the practice at another major company here earlier today. Mr. It's that personal in some cases. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 appreciate that I'm learning or I'm confused and I need a hand. that personally was my strongest motivator.you know. I guess also a deep feeling of responsibility is a big driver. you will find that the engineering and operations people are the same group. It's actually pretty simple on a rig. I've worked as a supervisor. in seeking advice from somebody who might not 164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 of that casing. MR. be built into the system. they've actually got a separate group for engineering and a separate group for operation of the well. has to start at the top. They should be involved from the very beginning. They're the people who are going to be confirming that they have the right equipment on location. But they interface very closely.3767 | WWW.

I'm not aware of any.3767 | WWW.or five-day course.433. There are simulations included.what I would characterize as routine well control operations. is familiar with rig operations. worked their way up through the ranks to driller. There's quite a few positions before achieving driller.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. it is considerably different than detecting a 20-barrel kick and having 45 minutes to hours before that type of event would ever occur. that PLANET DEPOS 888.to five-day well control course. But it has been focused on. Most of the simulations I've been involved with are what we could characterize -."panicked" isn't the right word. BOURGOYNE: Well. MR. At LSU we have a full scale well facility. and designed for different purposes. GRIMSLEY: One thing that just jumped out at me. MR. if you will. you may never have a well control incident. And by far the most common are. But it's on the order of years. But as far as some regulatory requirement to become a driller. it does. does that come from completion of this well control course? MR. BOURGOYNE: They typically go to a course. BOURGOYNE: Yes. not just a few weeks in that position. they're routine. if you will. BOURGOYNE: I definitely think an increase in training should be considered. to be a driller? MR. you said a three. but to demonstrate competency and an understanding of the procedures. And those can evolve into a blowout. lecture materials. because they're custom-built things. on this early phase. when reestablishing control is not near as -nearly as -. if you will. Is that sufficient for somebody to 166 converted to a system where each operator adopts or is in charge of this well control training system. MR. GRIMSLEY: Do you think it would make sense going forward to increase the training that individuals receive on how to deal with emergency situations like what we've seen now at the Macondo well? MR. BOURGOYNE: To be a driller? Just the well control cards. GRIMSLEY: What type of certification requirement is there. Well control incidents are relatively rare in operational terms. And I don't recall the requirements on experience for one curriculum particular well cap. you may call it -. we actually do exercises on. So I would say they're not real high stress well control scenarios that are necessarily simulated. that is. MR.PLANETDEPOS. And the well cap has kind of become a standard. and then even simulations. GRIMSLEY: Now. has. It's very difficult to set up a simulator. That course presupposes that that person has some on-the-job training. I think it would probably be much more effective if drills were regularly conducted along these lines on the rigs that were doing the operations with the crews. BOURGOYNE: Not to be a driller. And there the emphasis is on detecting kicks early and dealing with them. to simulate a specific rig.they're not necessarily minor.COM . at least here in the Gulf. but they're controllable. They're not frequent. when it's much easier to correct and there's much less risk involved if you detect it early. GRIMSLEY: The well control card. So there are both classroom. particularly with a set of disaster scenarios. in how to monitor for kicks and conduct well control? MR. testing. if you will. And we've velocities. MR. 2010 42 (Pages 165 to 168) 165 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 167 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 crew. and then correcting it. NOVEMBER 9. the only one I'm aware of that there may be internal policies within companies. most of the focus is on detecting a problem very early. in the life of a well. if any. that type of thing. because rigs are very unique. MR. if you will. three. I would suggest that there may be a standard set of disaster drills. you had mentioned that well control courses you teach tend to focus on the typical situations during the life of the well where there's drilling going on. but when mud is flowing out of the riser at jet engine 168 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 then go out and be a driller on a rig? MR.

if you will. you have not seen regularly drills performed on rigs or even in classes to deal with these emergency type situations where somebody's faced with gas coming out of the riser and whether to hit that button? MR. 172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 instrumentation. and at that point in time. GRIMSLEY: One last thing on 170 verification much quicker. I guess. I put in one barrel and got 40 barrels back at one point early in the progression. is this a serious problem. did I get one barrel out or did I get 1. And that individual. they were taking seawater from one source. The system was actually designed to monitor for kicks in those routine situations. I'm confused. it's very difficult in realtime to determine. you know. GRIMSLEY: One last question. with current displays and algorithms. BOURGOYNE: For routine operations. and display it. If there's anomalous readings. Whether it's attainable -. you can stop circulating and do a flow check.3767 | WWW. Tracking -you have to keep track of where fluid is going on the rig. if you will. much higher.COM . there's not a lot of simultaneous operations. if you will. 2010 43 (Pages 169 to 172) 169 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 171 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 would need to be conducted prior to beginning operations or immediately after beginning operations. for instance these routine kicks that I've described to you where the active system or the pit system is very controlled. like whether to divert overboard or to a mud-gas separator. if you will. that would be an advantage. are there recommendations PLANET DEPOS 888. the spacer was actually sent overboard from the rig. Actually put together a simulation that they had to take those and act those actions in sequence and make very rapid decisions.433. Some system that can do that analysis that was done in the report in realtime would be very advantageous. if they expect the well can flow. I think you would find there's lots of rig crews that. They're very adequate in my mind. they will take that backup 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 another human brain doing the same analysis would be beneficial. GRIMSLEY: But in your understanding and currently in the industry. well by well basis. much more detailed than is currently done. for which they were designed. In your opinion. MR. I put in one barrel. and then taking a return from the well back to another pit. NOVEMBER 9. among many different systems. when it was sent overboard. if there's something suspicious. I've never seen any drills or exercises like that. that system might even be an informal way to say hey.5 barrels out? I think the report that BP put together demonstrates that it could have been. Perhaps transmitting the data back to shore and being monitored by somebody else. a flow-out sensor was bypassed. it's covered kind of in the terms of the Transocean model manual. MR. or perhaps on some other frequency determination. especially if the communication's in realtime and consistent. MR. it's talked about. And then of course it would have to be vetted. Do you have any views as to the nature of instrumentation and displays on rigs and what way they might be improved? MR. and the decision has to be made immediately to be successful.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. yes. just on instrumentation and sensors.there's a lot of logic that would have to be built into it.PLANETDEPOS. And then it might even have another benefit in that I always do things better if I think somebody's watching over my shoulder and will catch my mistakes. BOURGOYNE: You know. There's been some discussion here about how at some point during the displacement of the riser. or on a well. And there's always the backup of. would be a much more effective step. in this particular case they were pumping from one thing. yes. So discussion. There's been a lot of discussion on whether the data that the driller or others on the rig is seeing is in this very modern age sufficient for those individuals to be able to actually identify kicks in the well and to do so early enough to take action. My suggestion would be another set of eyes. you can talk to the rig and actually build a realtime record of the operations.

the company man would be the one who. quote unquote. 176 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 responsible for making the decision to move forward or not after a test.as a matter of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. It's the operating company that's responsible for the design and execution of the well. is the one responsible for signing off on the test results such that the crew can then go on to the next phase of operation? MR. TO. BOURGOYNE: The rig crew would definitely be advised and have an opportunity to evaluate it independently.the wording again? MR. let's go forward? CO-CHAIR REILLY: Would the person who answers the question repeat it too. or someone else can. the company man would have had the first step. MR. we would ask -. The test is run. what in your experience. Commissioners. the operator. The Sperry-Sun was not in line. GRIMSLEY: Mr. You can ask it. But there's no written policy. not monitor flow rate out at any time. MR. and for almost any pressure test of any well component. in your experience having worked on these rigs. GRIMSLEY: How about you. SMITH: For this kind of thing. we request that you inquire of this panel what entity is 174 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 fact. and then of course getting the consent back from whoever was in charge of that well.433.if you want to boil it down to one person. would have called in and discussed that with the engineer in the offices. GRIMSLEY: What about the rig crew? MR. To be accurate with your question. Whose responsibility was it to say. it was actually a company that BP has absorbed. The well site leader is the operating company's representative on location. whoever. I would think that a rig crew would be interested. having worked on these rigs. MR.PLANETDEPOS. But as far as that -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. but if somebody had a question. or the operator drilling with the engineer's consent would be involved in that signing off. MR.one question while you were out. either graphically or PLANET DEPOS 888. Smith? DR. MR. You would take your test results. I didn't want a free for all. CO-CHAIR REILLY: Why don't you. who or what entity. But I can't conceive of not consulting with the rig crew. BARTLIT: The question is. LEWIS: That's consistent with my experience. the person responsible for the rig. We just don't have a record of whether it was functioning or not or any indication from it. MR. the drilling engineer is expecting me to consult back to the office. We have another one. my experience. the question is. signed off on it. GRIMSLEY: So.3767 | WWW. BOURGOYNE: So the question was what the entity for -. BOURGOYNE: I would say. In other words. (inaudible). Mr. MR. the culture that I worked in. But I can't conceive of signing off on one without consulting with -. who is the one that's generally signing off on this thing? DR. at least the tool pusher. Transocean is responsible for that vessel and the lives on board. but just in your experience. with that. After all. 2010 44 (Pages 173 to 176) 173 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 175 you would make as to whether and to what extent it's a good idea to have sensors that are bypassed during critical periods of the well? MR. it is the well site supervisor. Quality control and confirmation is one of his primary responsibilities. but there was a flow sensor on the discharge. Lewis? MR. SMITH: I think it's just crystal clear that legally the operator has the responsibility. we all know what happened. GRIMSLEY: My understanding of the question is. The actual decision to go ahead on a test of any great significance would normally be discussed with the engineering staff in town. BOURGOYNE: It's not a good idea to not measure flow rate out.COM . because Fred wasn't miked. BARTLIT: Before we start. I would just like to open up the floor to any questions that you have. Transocean actually did have a sensor in place. NOVEMBER 9. GRIMSLEY: And I understand that answer certainly.

If there would have been. what do you think? But it's -. boy.PLANETDEPOS. would have called back to the driller. What percentage of them would have that? And if they did not have that. you know. for Shell. GRIMSLEY: Any questions from the Commission? CO-CHAIR GRAHAM: Co-Chairman Reilly. So it wasn't like there was a lot of graphical interface needed. would that decision be PLANET DEPOS 888. It wasn't necessarily a room that you called in. Because he's the one -.that second. The well site supervisor is responsible to make sure the well is secure. or the engineer would go. yeah. we could have faxed back reports. most likely. or is that information confined to one person specifically. to call in and describe the problems you were having.that immediate -. regulation? MR. It was just the way it was done there. CO-CHAIR REILLY: Some companies make a lot of stop work capability and say that everybody has it. they would be transmitted to town. It was 24 hours. most likely by doing a flow check. There's always somebody on call. typically? MR. shutting down. It's more like. BOURGOYNE: Just about anybody involved with the rig operations. even if it required pausing operations. 2010 45 (Pages 177 to 180) 177 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 179 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 digitally. how frequently a stop work happens? It never happened in my experience. we're having a well control event. They were up to date on the operations. CO-CHAIR REILLY: One last quick one. possibly. and when it is. If it is a well control event. the drillers are informed. The engineer would look at them and go. I suppose not all do. 178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 180 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. particularly if it was significant to the success of the well or the safety of the well. is it likely there would have been. who would then do what? Go on to his computer and look at the same data? How is that all done? the engineer goes into the office. or somebody who assisted if that person is not available. what's going on on the rig. yes. it will be the person who primarily designed the well. But if you're evaluating something. and informed him. that looks flaky. Say. Usually you had a well plan available. you know. Is it always clear that there is someone to call back to? I know that some of the companies have -I've been in one. And if it is an event. we would address it.or he or she has the most information about current -. So I wouldn't consider a well control event a stop work. I agree. The decision to use a diverter. if there were others who might have detected or noticed the gauge that indicated a kick.you know. have rooms where people monitor full-time each rig. you want to act quickly and shut in the well to reestablish control. that interaction happens anytime.3767 | WWW. It almost doesn't fall into that category. And that person also has the ability to react. You've said that it makes sense to call back when you are uncertain or see information that you don't understand. So that kind of prolonged discussion. how much information is likely to be available to how many people. I definitely did read the procedure when I was working as a company man that said that. NOVEMBER 9. presumably.COM . CO-CHAIR REILLY: I have a related question on that. an understanding of something that may have indicated a well control event. but of concern to them.definitely on-site.433. It seemed like it was never that formal. in fact. that had. whatever activities are going on does not present an imminent threat. MR. you would be getting someone at home. that person evaluates whether it's a real kick event. If it was something of significance. BOURGOYNE: I'm not aware of any Federal law or even written company procedure. it didn't necessarily have to be of concern to me. day or night. the first call on that is the operator's representative. if you will. CO-CHAIR REILLY: Is it company procedure? Is it Federal law.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. I guess I would be interested to know how often that is exercised. If somebody brought something to my attention that was of concern to them. BOURGOYNE: In my experience it's usually one person that's assigned -.

would have been one that had been reviewed jointly between the drilling supervisor at the well site. CO-CHAIR GRAHAM: Okay. Now we're going to turn to the government. if it remained at the engineering level and not gone up to some supervisory level. that's one person. or would more than one person have the power to do that or be consulted or not? MR. We've spent a great deal of time hearing from industry and inquiring into industry practices. The environments that we've worked in. that it did fail. And to begin with. would that have been a -. BOURGOYNE: It wouldn't have been a rig site decision. and that is responsibility for decisionmaking. That decision. SMITH: Same thing. are those comments consistent with your experience? MR. and then second. Walter Cruickshank. But the driller is the one it's focused on. as the panel that preceeded you. (Recess. NOVEMBER 9. It would have been a decision that would have always involved a discussion with somebody who had been involved in designing the procedure and doing the -. to partner in regulation. Lewis. I think that relates to what we've been talking about. CO-CHAIR REILLY: Thank you. We will recess until 1:30. SMITH: If that had typically been a responsibility of someone in the engineering team. And then the organizations I've been with in the last several years.) PANEL III REGULATION OF OFFSHORE DRILLING CO-CHAIR REILLY: May I ask you all to please take your seats. I'm going to mention a few decisions that we've talked about this morning. CO-CHAIR GRAHAM: Any other questions? Gentlemen. DR.000 feet. MR. or to make the decision as to. CO-CHAIR REILLY: That's the driller? MR. the decision to set the surface plug at 3. We're going to begin the afternoon with a discussion of regulation. SMITH: Well. BOURGOYNE: That's the driller.you know. the engineers who were responsible for the well would have laid out that plan. failure of that magnitude would have been immediately taken up the chain to drilling manager level at the very lowest. make the decision? Or would it go higher up in the organizational structure? 182 DR.you know. Dr. and it may or may not have been reviewed at a higher level of management within the operating company. LEWIS: Yes. it's consistent with my experience. BOURGOYNE: Others can act if they see the event. CO-CHAIR GRAHAM: Mr. But it would have been reviewed by an engineer. this has been an extremely informative and helpful discussion. CO-CHAIR GRAHAM: I have a question that is similar to the ones Bill has just asked. Another of the shift from mud to salt water. particularly given the implications that it had. first. because it has to be done quickly. who is the Deputy Director of Bureau of Ocean Energy PLANET DEPOS 888. to determine what the proper plugging method was for a temporary abandonment. but presumably -.where would that decision have been made in the chain of command? MR. doing the calculations for designing the procedure within the operating company.PLANETDEPOS. 2010 46 (Pages 181 to 184) 181 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 183 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 exercised by one person. DR. that decision would have not been a decision that was solely made at the rig. I appreciate your candor and contribution that you've made to the public understanding of what happened in this tragic event.3767 | WWW. CO-CHAIR GRAHAM: The options to utilize after the negative pressure test failed. BOURGOYNE: All the policies I'm familiar with. but in a different context.433. what to do about it. It very well might. the design engineers. that information of a 184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 For instance. which had the effect of reducing the pressure.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. if not above that. Thank you very much. And at what level of the organization would the driller on the rig make this decision? Would someone back at the home office notify the situation.COM .

that's correct. MR. Mr. how many are engineers? DR. SANKAR: And about what is the budget of the salary for employees down here at the New Orleans district? DR. I'm going to start by talking a little bit about the New Orleans office.3 million. MR. MR.3767 | WWW. is down here under the deputy regional supervisor for district operations.433. Is it your understanding that that was the office that had jurisdiction over the Macondo well? DR. CRUICKSHANK: Roughly half. DR. Cruickshank. a little less. SANKAR: Do you have a sense about how many applications for permits to drill the New Orleans office would field in the course of last year? DR. CRUICKSHANK: There's about two dozen people working in the different offices. MR. MR. 35 percent of the Gulf of Mexico. MR. and some field engineers. MR. I don't know the precise number. It's a little hard to read. CRUICKSHANK: Yes. Let me switch over to my feed here. About how much of that office PLANET DEPOS 888.COM . CRUICKSHANK: It's a large number. SANKAR: When a permit comes in to drill a well like Macondo. I understand. district office in New Orleans. MR. It is $2. SANKAR: Hang on one second here. SANKAR: Of those. Mr. MR. CRUICKSHANK: That's correct. SANKAR: And about how much of that is engineer salaries? DR. MR. and a dozen or so inspectors. I believe. but I believe that the number of rigs prior to Macondo was on the order of 30. MR.Dr. CRUICKSHANK: I believe there's on the order of seven engineers. the New Orleans office does have on the order of 25 to 30 percent of all the permits that come in at the Gulf of Mexico. it would be reviewed by the drilling engineer. and the regional supervisor with the field operation. Cruickshank -. I will now turn it over to our deputy counsel. CRUICKSHANK: If it's an application for a permit to drill a well. But again. from whom we are looking forward to a presentation. which is the particular kind of engineer to review that permit? DR. if I'm right.3 million? DR. that would be correct. MR. And then the New Orleans district office.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. SANKAR: Good afternoon. Here's the organizational chart for the Gulf of Mexico region here. production engineer. drilling engineer. CRUICKSHANK: Yes.PLANETDEPOS. SANKAR: Does that functionally mean that it's that drilling engineer in the New Orleans office through whom that work is being channeled? DR. SANKAR: So about a million of that is engineers' salaries. CRUICKSHANK: It depends on the type of permit that comes in for the applications for 186 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 188 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 So about -. SANKAR: So. SANKAR: Yes. SANKAR: Most of the drilling permits would be handled by that drilling engineer? DR. remind me of the total number. There's the permits to drill and the applications for sidetrack. CRUICKSHANK: I don't know the exact number off the top of my head. NOVEMBER 9. I'm sorry. CRUICKSHANK: The district office? MR. I'm going to ask you a few questions today about the regulatory structure that was in place at the time of the Macondo incident. 2010 47 (Pages 185 to 188) 185 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 187 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Management Regulation & Enforcement. CRUICKSHANK: There are. an eight-year veteran of the agency. CRUICKSHANK: The total salaries for that district office in fiscal year 2010 is about $2. But there are other sorts of permits that come in that might be handled by some of the other engineers. Sambhav Sankar.do you have any idea about how many rigs of any kind that office is called upon to regulate and supervise? DR. Cruickshank. MR. SANKAR: Are there different kinds of engineers in the office? DR. SANKAR: About how many people work in that office? DR.

When your drilling engineer looks at this kind of chart.000. CRUICKSHANK: Not that I'm aware of. though. Having said that. they preferred to submit written answers. MR. Cruickshank has agreed very graciously on his part to speak to some of the specific permitting issues at the Macondo well. the cost of paying your engineers is a relatively small fraction compared to the cost of helicopters? DR. I'm trained as a mineral economist and have worked at the Department of the Interior for 25 years. MR.PLANETDEPOS. Is there ever a case when you get one of these submitted where those lines aren't actually in the middle? DR. Are you familiar at all with this particular chart? DR. NOVEMBER 9. mostly in policy jobs. SANKAR: You've heard some of the -maybe you've heard some of the experts we talked about describe this pore pressure gradient chart here as a crucial piece of data telling you how you should be drilling this well.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. is about 28 pages with all the attachments. CRUICKSHANK: I don't know you would need to ask the engineers.COM .5 million. MR. it costs about $2.433. Cruickshank? DR. what is he looking for on this chart. what I hope by now will be a familiar sort of chart for you. SANKAR: Is there any reason. It doesn't say Macondo anywhere on this. I should have given you a chance to clarify that at the outset. this is a pore pressure gradient chart for the Macondo well. This is a pore pressure/fracture gradient chart. and they would be looking to make sure that the well design was going to stay within that interval. You can see here. this is a narrow pore pressure/fracture gradient window.I'm sorry. 2010 48 (Pages 189 to 192) 189 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 191 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 is spent on helicopter travel during the course of the year? DR. the mud program. CRUICKSHANK: My understanding. is from a management perspective. CRUICKSHANK: The helicopter budget is more than half the entire budget for the district office. SANKAR: I apologize. MR. but it is in fact the first APD for the Macondo well. But given the stress of the situation. do you know? DR. SANKAR: Now. that they would say.3767 | WWW. Have you seen these sorts of charts before. CRUICKSHANK: About $3. SANKAR: So this dashed line in the middle here which represents the casing program and 190 192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I am going to put up the very first permit for the Macondo well. SANKAR: Does the engineer actually check to see whether this is a particularly narrow pore pressure/fracture gradient window at all? DR. My job has largely been one on policy and management issues. I'm going to turn to one of the pages for this. we spoke with two individuals who were more directly involved in the permitting of the Macondo well. the well program schematic that was attached to the very same application for permission PLANET DEPOS 888. SANKAR: So it's a relatively small fraction of the cost of helicopter travel -. and maybe some special requirements would apply for this kind of a well? DR. or permit application. should say. CRUICKSHANK: I just want to take a moment to let the Commission know about my background. And it describes where you are. I should tell the Commission. CRUICKSHANK: I'm aware with what it is. I'll show you. So this is what an application for a permit to drill actually looks like. I'm going to skip ahead to one of the last pages. The whole thing. MR. rather than that of an engineer or someone who has worked in field operations. Mr. well. he should be forgiven on those points. you want to keep that there. They very graciously cooperated by providing written answers. And Mr. MR. I've been deputy director of the Bureau since 2002. CRUICKSHANK: They would look at the data that comes in. he's making sure that you're keeping the pressures in between the pore pressure and the fracture gradient. MR. So my familiarity with these sorts of issues. If he's unfamiliar with some of those issues. MR. SANKAR: I'm going to put up the schematic now.

I have to do this again. SANKAR: I'm also going to show you -let's see if I can get it here. I'm going to discuss a few of them with you. MR. But it doesn't require that you use a long string or a liner. with -. that an operator would choose not to submit a full casing program with an APB at this point? DR. MR. MR. Is there any reason. no. I'm want to turn it into a producing well. SANKAR: So the engineer wouldn't have sorry. they look at the entire schematic. showing casing ending before the total depth of the well. only as much as you needed to have approved at that time? DR. CRUICKSHANK: Again. I'm going to start with one that generally speaks to the purpose of the cement in the well. SANKAR: Would it surprise you to know the internal BP designs at this point included a full casing program that would have gone down to a production well? DR. showing a long string production casing.420. NOVEMBER 9. Would you agree that this shows that it's an exploration well rather than a production well? DR. MR. Is it your understanding that the inspector -.COM . he could raise the issue.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. CRUICKSHANK: Yes. MR.000 feet. CRUICKSHANK: Yes. So you would wait until you were far enough along to make that decision before you submitted that additional information. You see here that there is -.433. Are there any MMS regulations allowing or disallowing the long string production casing design? DR. I'm going to skip ahead now to another later application.3767 | WWW. is going to be drilled to 20. MR. SANKAR: Several of those regulations cover cementing in particular. but there's no casing all the way down to 20. CRUICKSHANK: I would expect if they had definite plans on how to drill out the well. Instead. if there was something in the well design that he felt was inappropriate. CRUICKSHANK: Nothing specific. until you've confirmed whether or not you have a dry hole or potential commercial discovery. says that cement has to properly control formation pressures and fluids. it says. These are well-designed to meet standards. It again shows a similar schematic here. MR. CRUICKSHANK: Yes. and has to prevent the direct or indirect release of fluids from any stratum through the wellbore into PLANET DEPOS 888. SANKAR: This also shows the now-famous long string in place here. SANKAR: Is there any MMS regulation that covers whether there should be a burst disk in the well? DR. MR. and showing that this was at least planned as a possible producer well.PLANETDEPOS. So this regulation. MR. would you agree? DR. do you think. SANKAR: I can show you and show the Commission what BP -. CRUICKSHANK: My understanding is when you have an exploration well. CRUICKSHANK: He would have a basis.I think you would agree is for an exploration type well. SANKAR: You would permit it in stages. On this well there are indications about rupture disks and burst disks in here. you wouldn't be making a final decision about whether you would be putting in production casing or not. SANKAR: So this is the original application for permission to drill submitted back in May of 2009.or I should say the engineer who reviewed this would have considered the rupture disk and burst disk in the course his review? DR.000 feet. from a general perspective. SANKAR: Are you familiar at all with some of the regulations contained within 30 CFR 250? DR. 2010 49 (Pages 193 to 196) 193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 195 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to drill. and if you like I can put them up on the screen as necessary. submitted sometime later. they would have submitted with the permit. CRUICKSHANK: There's nothing specific about burst disks.the well. it terminates a little earlier than that. CRUICKSHANK: You would not necessarily come in with the design for the production casing before you knew it was a well you 194 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 196 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 a basis to say it was okay or not okay? DR. This is a contemporary drawing from BP's internal documents from prior to this time frame. which is 30 CFR 250. not from an engineering one.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 regulation for the safety of the cement program of the well? DR. SANKAR: I'm going to turn now to the final -. It says. which unfortunately is necessary. to our knowledge. a number of things. CRUICKSHANK: Okay. I'll put two pages of it up side by side.COM . or at least as we know right now there were no lost returns? DR. NOVEMBER 9. is the full description as we understand it of the cementing program of the Macondo well. mud type of hole. Is this something that a drilling engineer can determine. and I would imagine there would have been some violations that may have gone along with those incidents. yes. SANKAR: So would you agree it's hard. I apologize. Would you agree this is an important 198 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 200 regulation. we understand that this is describing the cementing program at the Macondo well. So it talks about the diameters of the casing. which is 150 cubic feet.3767 | WWW. if you have indication. there have been incidents in the past related to cementing. is that something that an operator can know ahead of time while pumping a cement job? DR. MR. MR. SANKAR: So would a positive pressure test do the trick on a pressure tested casing? DR. 250 -. MR. And this bottom area right here. it talks about the ratings of the casing. SANKAR: And even if there are some of these indications. SANKAR: And are you also aware that there were no lost returns at the Macondo job.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. this is another regulation about cementing. it would be a complete satisfaction of the regulation to do -. SANKAR: Has anyone to your knowledge ever violated this regulation or been cited for violating this regulation? DR. CRUICKSHANK: Right. MR. CRUICKSHANK: I don't have training in engineering. or a failure of equipment. This is the regulation that specifies you have to cement the annular space at least 500 feet above the casing shoe and about 500 feet above the uppermost hydrocarbon-bearing zone. run a cement bond log. if an operator has indication of an inadequate cement job such as lost returns. 2010 50 (Pages 197 to 200) 197 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 199 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 offshore waters. which extends over to that one couple of words on the next page. or use a combination of these techniques. CRUICKSHANK: In terms of the front end of the design. and call out a small thing here. CRUICKSHANK: Yes. CRUICKSHANK: I've certainly heard some discussion of that. SANKAR: Moving ahead now to another this is a hard regulation for MMS to actually enforce at the time of the cementing job? DR. the size of the hole.actually I want to show you one more regulation. MR. CRUICKSHANK: Yes. But they are supposed to be able to come up with the design of the well and cementing program and determine whether or not it's adequate to meet this test.PLANETDEPOS. MR. SANKAR: You're just not aware of any -DR. Are you aware now that the cement job at Macondo failed? DR.CFR 250. you should pressure test the casing to run a temperature survey. CRUICKSHANK: Not to my knowledge. Having reviewed this. CRUICKSHANK: Under our regulations. Under our regulations as they existed in April. So this.428. whether these requirements will be met by looking at an APD? DR. I don't know if you've reviewed this document in detail. you know. MR. the only indication we can find of any discussion of cement is the volume of cement. MR. cement challenge. I'm not aware of any violations there. SANKAR: Cement channeling.to pressure test the casing? DR. but I will represent to you that this is the only place that I've seen on this where PLANET DEPOS 888. MR. These are things you wouldn't know until you're actually doing the cementing job. CRUICKSHANK: I don't know. MR.433. yes. But. SANKAR: So I'm going to turn now again to the APD.

MR. 2010 51 (Pages 201 to 204) 201 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 203 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 it talks about cement. which we have now incorporated into our regulations as of last month.was there anything in in this APD that you know of that discussed the flow rate of the cement. CRUICKSHANK: I wasn't aware of that. Some of our engineers participated in that committee. It is required under the regulations now. SANKAR: Did MMS know whether BP was planning on using any centralizers at this well? DR. CRUICKSHANK: Yes. MR. Here we go.focusing too much on BP's application to modify its temporary abandonment procedures at the well. of course. CRUICKSHANK: That's right. SANKAR: So now I'm focusing on BP's application to -. NOVEMBER 9. CRUICKSHANK: I was aware they used more than was in the application. MR. CRUICKSHANK: Again. SANKAR: How about the type of cement. and it turned out in many ways to be crucial to the final safety of the well. CRUICKSHANK: I don't know. failures. CRUICKSHANK: There was nothing in the regulations that required them at that time to tell us. Were there any regulations that required laboratory testing of cement before before its use in a well? DR. MR. SANKAR: Was there any move to react to that by increasing the amount of cementing regulations? DR. CRUICKSHANK: That is -. SANKAR: Are there any -. I don't believe that was required at the time of this application. MR. how fast it was going to be pumping out the well? DR. It resulted in the publication of Recommended Practice 65 part 2 in May of this year. These are the procedures that we discussed that changed quite frequently. works out to roughly 26 barrels of cement in volume.433. hopefully drilling engineer might have flagged there was a low amount of cement in the well. if you do the math. I apologize. SANKAR: And are you aware that even BP agreed that 60 barrels of cement was a very small amount of cement pumping down that well at that point? DR. MR. and discussed the need for some better standards around that. CRUICKSHANK: Not at the time of these applications. SANKAR: Are there any MMS regulations or were there any MMS regulations -. Do you have any idea whether that's a low amount of cement for cementing a production casing? DR. SANKAR: This certainly suggests that in the APD it says 150. given the requirements of cement in the casing? DR. I'm actually showing you the wrong page of this. But my question is. CRUICKSHANK: The reaction to that was. CRUICKSHANK: No. SANKAR: No indication whether they were going to use nitrogen foam cement? DR. CRUICKSHANK: No. is there any requirement about the type of cement used? DR. MR.certainly the 202 MR. As a result. MR. SANKAR: Are there any regulations that require information about centralizers or require their use? DR.PLANETDEPOS.I apologize for using the old acronym from the time.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. American Petroleum Institute formed a committee under a standard setting role to develop standards for cementing. SANKAR: Are you aware they actually pumped 60 barrels of cement down the well? DR. I won't ask you to agree. SANKAR: That wasn't in place.3767 | WWW. MMS at the time spoke with industry about the fact that a disproportionate number of loss of control incidents were relating to cementing 204 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 drilling engineer would have seen that number during his review. DR. 150 cubic feet of cement. There are now. MR. CRUICKSHANK: I don't know whether the drilling engineer knew about that at the time. This is the attachment to that first page PLANET DEPOS 888. SANKAR: Are you aware that there was a 2007 MMS study that identified the cementing failures as one of the leading causes of blowouts? DR. MR. MR. at the time of the Macondo.COM .

that there was any bias.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. MR. I believe the negative test was up here. SANKAR: Lockdown sleeve. It says it's for minimizing the chance of damaging the LDS sealing area for future completion operations. SANKAR: I want to actually close with just a few questions about the ethics of your inspectors. safest technology. part of the procedure. And if it's not. Again. do you know what "the LDS sealing area" refers to? DR. Here it talks about setting a 300-foot plug.and even the well monitoring program appears to be before the plug was set? DR. CRUICKSHANK: What the engineer would have looked at is whether they felt. or undue influence of these people. You must for example use the best available and safest drilling technology to monitor and evaluate well conditions and minimize the potential for the well to flow or kick. CRUICKSHANK: It could. SANKAR: What do you think prompted the engineer or what would have prompted an engineer to grant this departure? DR. I did speak with the engineer at this point earlier. MR. NOVEMBER 9. PLANET DEPOS 888. whether that would satisfactorily plug the well or not. the regulation here generally says.433.COM . corruption. You must take necessary precautions to keep wells under control at all times. the safest technology. What is MMS's view of what best available and safest technology means? DR. I don't think our regulations necessarily specify what best available and safest technology is all of the time. having interviewed the engineer who worked on this project. they wanted to test the plug significantly lower than the regulations otherwise require? DR.3767 | WWW. Mr. and he did say he was relying on the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the regulations for best available. none at all. SANKAR: So he was relying on a negative test of the plug? DR. as we discussed. MR. CRUICKSHANK: It's the lockdown mechanism. We found none of that at the level of the line employees who were doing this. CRUICKSHANK: I can't speak to the depth of knowledge on lockdown sleeves. under the negative test to inform whether or not it would be appropriate to have the surface plug set at that depth. vary depending on the depth of the water or the well that's being drilled? DR. In this particular case. SANKAR: Does that test available. we found absolutely no indication. CRUICKSHANK: Yes. I believe it refers to the technology that's economically feasible and that would protect the environment. 2010 52 (Pages 205 to 208) 205 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 207 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 that shows the particular procedure that we've been focusing on. Would you agree the negative test procedure appears to be -. for putting the service plug was to do some tests of that plug. MR. It's worth noting to the Commission that. MR. trying to do them well under the circumstances. MR. then they would have revisited where that surface plug needs to be set.PLANETDEPOS. This is a regulation about well control. These were people doing their jobs. And it discusses the reasons why. what must I do to keep wells under control. and in particular there's a few phrases in here I would like to focus on. SANKAR: Would you have expected one of your drilling engineers to understand the normal course of lockdown sleeve setting procedures? DR. Cruickshank. CRUICKSHANK: That's what it looks like. SANKAR: I want to look at one more regulation now. It talks about setting it quite deep. CRUICKSHANK: There's a definition in 208 206 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 description given of what they wanted to do. I mean. MR. MR. So is it fair to say that what BP was saying here was that because of the lockdown sleeve operations. SANKAR: I don't mean to quarrel. the engineer was relying on the negative pressure test that was going to be done as part of this procedure to determine whether or not that plug was going to do its job. the supervisor. as I understand it. and the depth of the plug. CRUICKSHANK: Yes. the plug was afterwards in the procedure.

Mr. But they are new requirements. Would you agree? DR. CRUICKSHANK: I think it's really had a negative effect. CO-CHAIR REILLY: There's a concern in the industry that although many of the industries will be able to comply with the new regulations that have been proposed and in fact are being implemented. My understanding is that over the years PLANET DEPOS 888. Cruickshank. Garcia? MR. on trying to design our processes to be able to deal with those. I'll ask you to direct your questions to Mr. CRUICKSHANK: I have no reason to believe so. CO-CHAIR REILLY: The Commissioners agree with you on that. and we are focusing on resources. Birnbaum has testified before the Commission to 210 resources. there would be an increase in staff to deal with operations in those new areas. And I don't think we should expect to see processing return to exactly what it was a year ago. The process is different than it was a year ago. it's just I think very frustrating and demoralizing picture to have painted publicly. CO-CHAIR REILLY: Do you think you have adequate staff and resources to carry out your responsibilities in the areas you're presently responsible for? DR. and you can submit information for the record if you feel you need to supplement your answers. We do a lot of things we would have liked to do in a non-resource-constrained world. 2010 53 (Pages 209 to 212) 209 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 211 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Do you have any reason to believe. Mr. Do you have any response to them? DR. but I think longer term this is one of the reasons we see a need for additional resources in the Bureau. If we had more 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 properly so. which we can do for a while. we are requiring new information. CO-CHAIR REILLY: Dr.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.3767 | WWW. that the agency itself will have difficulty responding to the permits and making the judgments on the certification of equipment and the rest in the near term without delaying development further with a kind of de facto moratorium consequence in the Gulf. Dr. Nevertheless. GARCIA: Thank you. Cruickshank.COM . And perhaps we can weigh in on that issue as well. There have been a lot of stories. CRUICKSHANK: As a bureau and a department. Ms. environmental science.she considered they had adequate resources to cause her to support that. so I'll ask you to be as concise as you can. CRUICKSHANK: There is no de facto moratorium. NOVEMBER 9.PLANETDEPOS. SANKAR: What impact have the accusations of improper influence and bias on the part of your Gulf of Mexico region folks had on morale of those folks down there? DR. the steps we're taking to try and address the workload issues right now involve moving folks from other offices. there were ethical lapses in anyone else beyond the two or three individuals we spoke with in the New Orleans district office? DR. recognizing that if the program moved into new areas. CRUICKSHANK: I think at the time that was certainly what we believed. You have no doubt heard some of those concerns. so that we can have a more permanent fix to this. SANKAR: With that. And for a set of professional engineers and other staff that have taken their job very seriously for a long time. MR. We feel that we've been doing a more complete job. there are a number of additional things we would like to do. MR. we are seeking substantially more resources to beef up our inspection functions and our engineering functions. We have moved resources around to try and address the workload issues that come with the new permitting requirements. and perhaps we can have action that can help establish your sense of the kind of resources you do need. Cruickshank. we don't have a lot of time. and 212 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the effect that she fully supported the expansion of offshore oil and gas leasing areas proposed by President Obama with the agency that she had essentially -. Cruickshank. a lot of public attention on that possibility.433.

not that I'm aware of. But certainly I don't think there is a regulatory regime you can possibly design that could eliminate the possibility of there being these sorts of incidents. recognizing that the investigative report on that incident has not been released yet. CRUICKSHANK: Well. 2010 54 (Pages 213 to 216) 213 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the agency has attempted to add a requirement for proactive risk management. their role is not to babysit the operators. It lasted for over two months.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. GARCIA: Let me read a quote from the Wall Street Journal and get your reaction. CRUICKSHANK: I don't know that one can ever say you can prevent a blowout through these MR. This is from the May 7th. whether it's going to be around functional areas or whether we're going to do more cross training. We do some risk basis in our inspection program.3767 | WWW. Was there any information transfer between regulators or within the industry as to the circumstances of that blowout? DR. GARCIA: So there's been no attempt to enhance the safety regulations over the last several years? DR. GARCIA: And are you aware of any sharing of information within the industry? DR. so we don't have all the information. But there has been some discussion between the safety regulators in the two countries. MR. which is key to another MMS duty. CRUICKSHANK: That's part of what we're looking at." Do you think that quote accurately reflected the political expectations at the time. The agency's primary task during inspections is to verify how much oil is being pumped. MR. he said. maximizing payments the government receives for oil and gas rights from energy producers. CRUICKSHANK: There have been a number of changes in our safety regulations over the years. Why is that? And has industry supported those efforts? DR. Beyond that. GARCIA: We've heard over the last day and a half about the unique challenges that deepwater drilling presents.433. said the agency does conduct spot inspections of oil rigs and checks operators' compliance for safety procedures. is there anything that the agency's engineers and inspectors could have done. And are you planning on developing specialists in areas like deepwater drilling? DR. GARCIA: But are you looking at that specific issue? DR. CRUICKSHANK: There's been some between the regulators. GARCIA: Based on what you know now. There is some risk basis in the safety and environmental management system that was put forward. given the authority under the regulations. At this point I don't think we've reached a conclusion exactly how we're going to structure. NOVEMBER 9. 214 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 216 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 mechanisms. MR. PLANET DEPOS 888. but has not been successful. Was there -. GARCIA: Let me ask you about an event that occurred a year ago. These are issues that are under discussion. GARCIA: You are looking at that. We're still waiting for the root cause analyses to understand exactly what happened here. who as Assistant Secretary of the Interior oversaw MMS from 2006 to 2009. MR.COM .and very similar to the circumstances that we saw with Macondo. I'm not sure of anything specific. 2010 edition. However. Okay. yes. MR. And I'm quoting. CRUICKSHANK: I'm not sure specifically what you're referring to. how we're going to structure. There was a blowout in Australian waters. MR.PLANETDEPOS. we are taking a look at organizational issues right now as part of the reorganization of the Bureau concerning all sorts of issues like that. "Steven Allred. Do you think there should be a specialist office within the agency that oversees this drilling? DR. CRUICKSHANK: We're still considering our options under the reorganization. in fact has repeatedly tried that. to prevent or limit the blowout? DR. We certainly want to make sure that our staff is overseeing the operations and the personnel requests to have the expertise -MR. CRUICKSHANK: Within the industry.

and certifications of compliance. the Bureau of Ocean Energy Management. Those are the primary job of the inspectors when they go out in the field. the most recent of which was issued yesterday. BROMWICH: Yes. I have a brief statement I would like to share with you. at the agency? DR. We have developed a recusal policy to deal with real and apparent conflicts of interest. Cruickshank. GARCIA: Thank you. which will no longer be used to approve deepwater drilling projects. Mr.433. Since then. a pleasure to see you here again. MR. But let me walk through them very quickly. We've issued for the first time guidance for what's called "idle iron. Bromwich. we aggressively pursue a reform agenda that's designed to substantially raise the standards of safety for industry and accountability for my agency. We've begun a full review of categorical exclusions. Certainly one of the tasks of inspectors is to look at the meters that measure production. This Commission and my agency. Dr. I can barely see you from here. that is. but not necessarily a formal approval process. but also our external investigations and our enforcement efforts. As you know. CRUICKSHANK: I do not. and other distinguished Commissioners. Do you have any opening remarks? MR. But we consider that to be a secondary inspection. And they are I think in many respects familiar to the Commission. MR. 218 But I'm delighted to be able to take this opportunity to continue our discussions. CRUICKSHANK: There's a variety of systems out there. As you know. CO-CHAIR REILLY: Other questions from the Commission? Thank you. Second. 2010 55 (Pages 217 to 220) 217 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 219 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 prior to the blowout. GARCIA: How did the regulatory approach of MMS compare with other foreign regulators? DR. access to containment capabilities. which is to reform the way that offshore drilling and gas production is conducted and regulated in U. Third. PANEL IV PLANS FOR REGULATION CO-CHAIR REILLY: Mr. thank you for inviting me again. And their direction to me was both sweeping and clear. MR. to review the agency from the top to the bottom and make the changes necessary to give the American people confidence that drilling in our oceans will be conducted in a safe and environmentally responsible way. production facilities.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. both about the changes we've already made and our future plans for drilling on the nation's outer continental shelf. we've issued various notices to lessees clarifying what we expect from companies relating to worst case discharges.PLANETDEPOS. this is my third appearance before the Commission. we launched an aggressive and far-reaching reorganization of the former MMS.3767 | WWW. perhaps challenge them. NOVEMBER 9. CRUICKSHANK: I don't know. share the same goal. although this is at a greater remove. waters. and decide whether to accept or object. we formed an investigations and review unit that steps up our internal investigations. ongoing and will continue for some time. Regulation & Enforcement." requiring companies PLANET DEPOS 888. First. in late June the President and Secretary Salazar asked me to become the nation's chief regulator of offshore development. safety inspections. But I think what we see in a lot of the other countries is they have a performance-based system of regulation where they have less in the way of prescriptive requirements and put more of the responsibility on the company to meet goals for having safe operations. Co-Chairs Reilly and Graham.S.COM . they get the submissions from the companies and will review them. First of all. The prior inspections have to do with inspecting the drilling rigs. These reforms are 220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Rather than approving permits as we do. I do. GARCIA: Why do you think he said that? DR. Chairman.

BOP certifications. That has to be addressed in new tools and training for government personnel.000 non-producing wells and dismantling approximately 650. And those challenges can't be minimized. And so there are some questions that have come up and that we need to address. to put it starkly. I believe some if not all of you have actually gone on rigs and platforms. You talked about this a little bit with Dr. There is a substantial technological gap between industry and the people who oversee it. and in many ways they are engineering marvels to be sure. as you know. the changes and reforms that we have pursued and we continue to pursue will not be realized. the so-called SEMS rule. enhances rules relating to casing. and to ensure compliance with environmental standards.3767 | WWW.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. even though the agency's personnel tried very hard to do so. 2010 56 (Pages 221 to 224) 221 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 223 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to set permanent plugs on approximately 3.PLANETDEPOS. that the agency for decades was starved for resources and was not able to review drilling operations. and spill response. we've pursued these changes while managing hundreds of loyal and committed public servants. Now. namely the people at my agency. and who. cementing. I've been asked by the President and the Secretary to fix these problems. What features should the next generation of blowout preventers have? What types of sensors and safety monitor devices should be installed as a matter of course on drilling rigs? What kinds of electronic and metering systems should be required in order to get realtime and important data both to the companies who operate the rigs and to the regulators who oversee them? PLANET DEPOS 888.COM . Funding and resources for the management and regulation of offshore energy development. there are great challenges that face the country with respect to offshore oil and gas Commission. and other matters. subsea blowout containment. We've developed and published an interim final rule that.433. conduct inspections. Now. and enforce environmental standards adequately. It's clear. I'm deeply concerned that without the resources we requested. 224 222 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 drilling. issues that we confront every day and are the context for your work as well as for our reform agenda: First. and I've seen statements from Members of this 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Third. require a substantial infusion of resources to accomplish. There is a tremendous opportunity here and a desperate need for technological development offshore. But that will. and at the same time expediting the prompt processing of permits for drilling operations in both deep and shallow water. NOVEMBER 9. there is a grave need for innovation and technological development with respect to the safety of drilling operations. the hiring of personnel to review drilling permits to inspect rigs and platforms to monitor drilling activities. many of whom have been with the agency for 20 years or more. the justification for which could not be more compelling. providing appropriate funding. have been deeply and profoundly shaken by the unrelenting and in many ways unfair criticism that they've received. This balance is critical and must be topmost in our minds as we impose and enforce regulations and make structural and process changes as we reform my agency. We've developed and published a rule requiring oil and gas operators to develop for the first time their own safety and environmental management programs. it's fair to say. Cruickshank. And we've begun new environmental analyses both in the Gulf of Mexico and in the Arctic. because they are substantial and they are difficult. through a crisis the likes of which none of them had ever experienced before. Second. Let me summarize briefly several of the most significant challenges that I see for the development and regulation of oil and gas resources. to achieve the appropriate balance between ensuring that new safety environment standards are strictly adhered to by industry. Yet the technological development that relates to safety has lagged behind the development of the rigs themselves. We have requested substantial resources from Congress.

and increasingly holding industry to performance standards that we'll develop. Just to tick through them.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. and encouraged you to consider that as a way to supplement your regulatory effort and raise the bar within industry by defining best practice and working closely with the regulators to bring up the game. As you know. But is there the possibility and the potential for a self-regulating mechanism to exist that would enhance the regulatory system that we currently have and to increase oversight? I think there is that possibility. also possibly taking some of the resource load off.433. and NGOs to spur the development of technology to help address these and many other questions. and I look forward to the recommendations. That's a good statement and a fine record of energetic policy reforms. We are thinking very hard and we continue to think very hard about our safety and environmental regulatory regime. And one is that oil and gas has been historically extremely competitive. and we will continue to consider it. I truly look forward to working with the Commission. Fourth. the resource potential there is substantial. we must develop a strategy for offshore energy development in the Arctic. development of necessary infrastructure. I know your Do you have an opinion on it? MR. which is obviously the system we currently have. We certainly want to be helpful to you in the task that you have set. And my sense is that the kind of information that would be handled in the oil and gas industry if one company inspected another or PLANET DEPOS 888. BROMWICH: We have considered it. and I would look forward to exploring it.PLANETDEPOS. and last but certainly not least. I don't think it can be an immediate substitute for the current system we have now. Finally. 226 work is coming to a close. protecting sensitive Arctic habitats and marine mammals on which many people depend for subsistence.COM . industry. they are weather conditions. Therefore. NOVEMBER 9. But the challenges for industry and for our agency to develop practical and effective solutions will continue. and we are considering all of them. the department recently announced -Secretary Salazar announced last week the creation of an institute called the Ocean Energy Safety Institute that we hope will draw on the resources and thinking of government. and I hope to some extent within industry. as we've done already. And I want to thank the Commission for its work. Director Bromwich. CO-CHAIR REILLY: Thank you. 2010 57 (Pages 225 to 228) 225 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 227 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 How will versatile and effective subsea blowout containment equipment be designed and be built? Now.3767 | WWW. I think your questions and your suggestions have stimulated thinking within our agency. I raised the question of the experience of the nuclear industry and the Institute for Nuclear Power Operations. academia. These are all terribly important issues. Then too. I do think we need to be realistic about differences that exist between the oil and gas industry on the one hand and the nuclear industry on the other. Final word. employing realistic and effective spill response resources. but the Arctic environment presents a broad range of and challenges for responsible oil and gas development. It is clear to me that we will require a combination of enhancing our prescriptive regulations. I look forward to its report. the model that we adopt has to be consistent with the existing relationships between government and private sector. But those must be appropriate for the reality and scale of the United States' current offshore oil and gas industry in our economy. This Commission is in a unique position to collect and analyze information relating to these issues and to draw upon a broad range of expertise and perspective. Have you had a chance to consider that? 228 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 We can't simply import foreign models into our current model. When you first appeared some four months ago in New Orleans. we need to optimize a safety and environmental compliance regime for offshore operations.

S. NOVEMBER 9. Why couldn't a system like that be utilized between the agency and the industry. I don't know whether it's ever been considered before. substantial opposition from industry to raising the fees.COM .we want entrepreneurial. I don't know whether it's been previously explored or not. How would you see the new entity that you described giving government some greater ability to at least stay competitive in terms of its ability to provide effective regulatory standards and enforcement of those standards in a rapidly changing technical environment? MR. entrepreneurial. 2010 58 (Pages 229 to 232) 229 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 participated in inspections of another. My questions are going to largely follow the comments that you have just made. But it certainly is a way to go forward and to get 232 230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 You stated that one of your priorities was appropriate funding to carry out your responsibilities. But it is in recognition of a very significant deficit that exists between the PLANET DEPOS 888. and there was 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 additional monies from the industry that has use of public lands. R&D. Bromwich. There was a significant proposed increase in inspections fees. and I'm sure you're not suggesting. BROMWICH: It's an interesting suggestion. I think Secretary Salazar made the announcement last week because he wanted to get the reaction both of industry. the funds that you pay for the permit end up going to finance the inspector. My understanding is that was a significant element of what the administration was proposing to get us. on behalf of the U. Senator Graham. But I don't think. I would be intrigued and interested in pursuing it. CO-CHAIR GRAHAM: Another of your priorities is innovation. In many areas in which private business is going to be inspected by government. So far it's not been incredibly positive. and if so what the reasons were for not going forward with it. rather than relying on appropriated taxpayer funds to support the inspection function? MR. But to the extent that we are banking on or hoping that an enhancement of fees will help to fund the needed augmentations to our resources. If you take out a building permit. BROMWICH: I think we don't have a fully developed proposal yet. aggressive private sector entities. that one can simply take one model and import it into a very different industry with a very different structure. etc. BROMWICH: It's a very good question. there are fees or other means by which that inspection service is funded. and that is. who is supposed to be sure that the building is built to code and standards of safety. far larger number of participants in the oil and gas industry in the deepwater drilling and the shallow water aspects of the industry than there are in the nuclear industry. all of this drilling is done on public lands subject to lease arrangements. aggressive private sector entities to move the economy forward. people's own land? MR. I also think there are larger. Why couldn't you include in the lease a fee that would be sufficient to cover the cost of inspecting the activities that the lessee is going to undertake on you.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.PLANETDEPOS. there would be issues about technical and proprietary and confidential information that companies may be reluctant to share with one another. the tenant. the academic world. Mr. It seems to me it's a constant challenge for government to stay current. CO-CHAIR REILLY: Thank you. CO-CHAIR GRAHAM: There would be a potential alternative approach. relative to offshore drilling. Senator Graham? CO-CHAIR GRAHAM: Thank you very much. and NGOs. My recollection is that the reaction on Capitol Hill was decidedly mixed.3767 | WWW. That's not a surprising reaction.433. 100 million additional dollars in fiscal year 2011. I think we need to see what the reaction is going to be. So I think we have to look at those differences square in the face and try to figure out whether there are aspects of the INPO model that can be adapted to the oil and gas field. Bill. much less ahead of. And that's -.

you start to create I think an unmanageable environment where things will begin to break down across agency lines. and so we will get the benefits of people in industry who are involved in R&D programs who can share that information with the government which will allow us to enhance the way we go about regulating offshore oil and gas. and the technological know-how and research and development capacity that exists in the government. I think that's preferable to moving some of our functions to OSHA or anyplace else. I think that coordination and collaboration problems. and to put them in a larger number of hands. Are there some changes that would match responsibility with skill sets more effectively? One of those that's been suggested. and then why you think your agency. if the alternative were that this should be placed in the hands of OSHA as onshore worker safety is. So I think we're really talking about two different but important things. BROMWICH: I am always concerned about proposals that further diffuse responsibility for one set of activities. is to try to develop that capacity in government so that we can stay more abreast of the industry than we have in the past. of various engineering schools in the southwest.433.PLANETDEPOS. and I dealt with the chairs of petroleum engineering schools in Louisiana and Texas. a recruitment tour. So I would be concerned that if we not only have our agency involved in a significant number of offshore drilling regulatory function but 236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I went on a tour. in this case offshore drilling.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. a couple of weeks ago. it is. but I think we can do that job adequately. what would be your reaction to that and comments as to maybe why it should continue to stay in your hands? MR. We are at a severe handicap. when you go across cabinet agencies or cabinet departments. then you add OSHA. but then also that that knowledge in R&D gets shared with the government so that the regulator is better equipped to do its job.COM . But I'm also concerned about something else which relates to the level of R&D that exists within industry. which is still very much in an outline form. NOVEMBER 9. BROMWICH: Yes. CO-CHAIR GRAHAM: A couple of final questions. I've actually had meetings with the Assistant Secretary for OSHA and look forward to continued meetings with him and his staff to learn what we can about being more effective regulators of safety on offshore drilling rigs and platforms. Is that continuing to be one of your responsibilities? MR. as they guide them into deeper and deeper water. 2010 59 (Pages 233 to 236) 233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 technical knowledge that exists in the industry. One is to make sure that drilling safety R&D goes on at an adequate level within the industry. based on its actual performance. And they expressed great concern about the level of R&D in the private sector into drilling and drilling safety. 234 offshore riggings. So the proposal. has delivered at an PLANET DEPOS 888.3767 | WWW. which were not on your list. in terms of the know-how that exists as people drill in deeper and deeper water. tend to be far greater than they are within a cabinet department. I think we are capable of enhancing our current capabilities. currently the OSHA responsibility for worker safety is technically vested in the Coast Guard for the Coast Guard as well. One of the things that we are probably going to be talking about is a governmental restructuring. and have always been. But it's my understanding that by memorandum of understanding. the Coast Guard transferred that to MMS. We're hopeful that one of the things that may happen is that we will create this institute and we will get the circulation of personnel. I don't believe that we ought to sort of loop components in and out willy-nilly. CO-CHAIR GRAHAM: Could you possibly supplement your comments today with an analysis of what you think should be the criteria to evaluate the effectiveness of workers' safety in an offshore environment. CO-CHAIR GRAHAM: What would be. And I know you're not suggesting that is the case.

we're designing it for this case. But certainly. nice to see you again. they weren't that prescriptive. Bromwich. BROMWICH: Sure. I think Deepwater Horizon has not only been a wake-up call to my agency. That rule was in the works for a year before Deepwater Horizon. and. you've been talking about the prescriptive regulatory model. It appeared that in each operation it's pretty much. best operations. where much of the most important and frequently dangerous activity is actually then in 238 regulate that. We obviously have an industrial model that we had no role in shaping.what do you see as the role of your agency in more effectively overseeing these multiple multi-corporate relationships which constitute the actual team that goes out onto those rigs to execute their responsibility? MR. So I think our recognition that this is an issue and that we can do better predates Deepwater Horizon. and that is the consequences of having an industrial model which is built upon a lead company. Co-Chairman Reilly. in many respects. over the four months that I've been in this job. How do you -. and a more cooperative approach certainly than we've heard about earlier today. which is that we have just within the last two months put out I think a landmark new rule. with your dealings with industry.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.3767 | WWW. BROMWICH: I can barely see you. This morning in the testimony we've been looking at MMS's regulations. We've had BP. I also want to remind you what I'm sure you know. CO-CHAIR GRAHAM: My final question relates to what we've been hearing in the last day and a half. had a lot of meetings with a lot of companies that tell me that they've really taken to heart what happened with Deepwater Horizon. CO-CHAIR REILLY: Commissioner Beinecke? MS.COM . if it does appear that the involvement of multiple companies seems to be a barrier to effective regulation. CO-CHAIR GRAHAM: Thank you. we can do that. So I'll be looking with interest at what you conclude in your report as well as what the other investigations conclude. Halliburton. BEINECKE: Thank you. because it is highly competitive and very protective. BROMWICH: Unfortunately I haven't had a chance to listen to the evidence that you've had presented to you over the last day and a half. since the Macondo blowout. BEINECKE: If you could elaborate a little more.433. And I think we will make that work. in some cases laying the blame off on each other for particular circumstances. to determine whether we need to do things differently given the number of players that are involved in a particular project. they were very general. and I realize they've changed. MR. doesn't have sort 240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the hands of a third or even a fourth parties. But we clearly have to effectively of uniform standards either. I don't know whether that's an issue that's been focused on in the past. Mr. sitting exactly where you're sitting. but it's been a wake-up call to the industry as well. Transocean. in recognition that a more holistic approach to workplace and drilling safety needed to be conducted. and they are redoubling their efforts to improve their safety programs. So -. And that's a rule that will be effective in October of '11. safety and environmental management systems rule. you know. PLANET DEPOS 888. meaning we will begin doing inspections and rules to ensure compliance. MS. we will see what we can do to clarify what our expectations are with respect to each of the players who participate in a particular operation. BROMWICH: Well. And I've certainly. with the deep expertise in a company.and in the interests of moving towards more of a combination of the two. but it's nice to see you over there. and having a culture of sharing best standards. learn from doing. 2010 60 (Pages 237 to 240) 237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 acceptable level against those criteria? MR. and the industry. MR. I'm just curious as to whether. NOVEMBER 9.PLANETDEPOS. you found a receptivity towards moving to more of a safety case model. and looking more at a safety case model.

I think. and we have additional discussions that are going to be held in the very near future. I have been told by executives with companies who operate both in countries where there is more of a safety case regime that it is very risky to quickly move from one to the other. that in fact chaos would ensue if we flipped over to a safety case model any quicker than over a three. I think what we're going to try to do is to move towards more of a hybrid model over time. MS. And we'll try to provide that as quickly PLANET DEPOS 888. from UK. and identified four different areas that you were looking at. and he actually didn't want to go through that again.PLANETDEPOS. gaps in equipment and the location of equipment. And this afternoon I'm meeting with one of them again. 2010 61 (Pages 241 to 244) 241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 243 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I don't know whether over the long term there will be substantial changes and enhancements to companies' safety programs. with that learning in mind. we're talking about operations on a completely different scale in those countries than from what we have here. BROMWICH: I can tell you that -. I think if you ask the company representatives. We've gotten many comments into the Commission on the challenges in the Arctic. Can you just talk a little bit about what timeline you're under to complete the reviews that you identified and over what period of time you will be making decisions relative to the Arctic? MR. I think it depends on what their own experience has been. BEINECKE: Thank you. response gaps. I think people understand that there is a desire for and a need for clarity.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. So I think there are things we can learn from them. if not apples and oranges. aren't they? MR. Now. if they have participated in the systems in those other countries. whether companies prefer the safety case system or the prescriptive regulations. And it became starkly clear to me that they face very different and. MR. But we have to be mindful that the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 transferring the experience in one place was that easy. less significant challenges than we do.I won't name him. etc. and the traditional historical way of doing business here. moving from one system to the other. And I think there are many 242 industry structure here. There are many fewer participants in the industry. BEINECKE: So you would assume that they would have had experience in both cases. There are many fewer rigs and platforms than exist here. And I met with my counterparts from Canada.. NOVEMBER 9. they are. BROMWICH: Yes. And we'll have to evaluate whether there are other performance-based standards that we feel comfortable creating in order to build more of a hybrid system. they would be prepared to participate in a somewhat different system here.3767 | WWW. is very different from the way it's been conducted anyplace else.those were the words of one executive who made it fairly clear that he didn't think 244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 differences that exist between the various countries that use more of a safety case model than this one. So that was -. but an executive from one of the major companies who had experience in the UK said that he went through three to four years of chaos there. you made the statement that you were looking much more carefully at the Arctic. research gaps. and particularly the different gaps. We've had meetings in the Department of the Interior very recently. frankly. my very purpose in meeting with those regulators was to see what we could learn from them.433. It's a far less competitive industry in those countries.COM . And so I think we really are talking. to my mind. I think that our SEMS rule is a first and important step in that direction. About two weeks ago I had the occasion to meet with my foreign counterparts at the international regulators forum in Vancouver. BEINECKE: Although many of the same companies that are operating here are also operating there. On another point. That's true. etc. BROMWICH: It's going to be in the very near future.to five-year period. MS. and from Norway. from Australia. I can't tell. MS.

The answer is ultimately found in a company's culture. the unwritten standards and norms that shape mindsets. NOVEMBER 9. This country as well as the global energy industry will benefit from a full understanding of the causes of the Deepwater Horizon incident. 2006.PLANETDEPOS. He has a long and distinguished history within the oil industry and with his company. the areas that are so vast. BROMWICH: Thank you very much. Are you contemplating narrowing the scale from area-wide to more defined areas with more analysis of particular resources of those -. 248 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 we can play a constructive and helpful role in your success. It's a pleasure to welcome you here. and we look forward to your presentation. The answer is not found only in written rules. at every level. it has been fascinating for me to watch the evolution of this company. BEINECKE: One of the issues that we've been looking at is the scale of the area-wide leases. a value that shapes decisionmaking all the time. given my experiences with the Prince William Sound/Exxon Valdez experience in 1989. And I will begin by introducing Mr. It's very much a front burner issue that's currently under discussion. marine. which is to assure all our nation's energy facilities are operated at the highest standards of safety. that energy companies must make safety a top priority. standards. I am confident that the Commission's findings will help advance our goal. So I am grateful for the chance to come before the Commission today to share ExxonMobile's approach to safety. MR. A company's priorities can and do evolve over time. But this is not a back burner issue for us. depending on business conditions and other factors. America's oil and natural gas resources are the foundation of our nation's economy and our standard of living. Tillerson. BROMWICH: I have not yet been involved in discussions of that kind.433. 2010 62 (Pages 245 to 248) 245 247 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 as we can. TILLERSON: Thank you for the opportunity to be with you today. CO-CHAIR REILLY: Other questions for Director Bromwich? We appreciate very much your appearing here and wish you very well in your work. particularly in an area such as the Arctic. The commitment to safety therefore should not be a priority but a value. (Recess. We are very pleased to have here now Rex Tillerson and Marvin Odum for this afternoon's panel. to see the kinds of initiatives it has taken and the safety culture it has created. and upheld above all other considerations.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. CO-CHAIR REILLY: We will take a break until 3:00. While these are important and necessary. MS. Thanks to all of you. and risk management. and in the eyes of most observers is effective at observing. who assumed his current position as Chief Executive Officer of ExxonMobil on January 1st. MS. is the gold standard in the eyes of a lot 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Many would say. and behaviors.3767 | WWW.COM . they alone are not enough. ecological resources in those areas? MR. And it is essential that we ensure the safe production of these resources. reinforced at every turn. But we may well have them in the near future. But so far in my four months here I have not been involved in those discussions. Mr. Tillerson. attitudes.) PANEL V INDUSTRY SAFETY CULTURE CO-CHAIR REILLY: We will resume. which as Fred Bartlit commented yesterday. and procedures. and hope 246 of people for safety and environment.I mean. I've been asked today to explain how ExxonMobil approaches these PLANET DEPOS 888. BEINECKE: Thank you. operational integrity. Every company desires safe operations. But I believe that a commitment to safety must run much deeper than simply being a priority. especially now. But the challenge is to translate this desire into action. From my point of view. MR. Companies must develop a culture in which the value of safety is embedded in every level of the workforce.

or an offshore platform anywhere in the world and immediately be on the same page as the local employees and contractors regarding safety practices and expectations. ExxonMobil monitors. Its structure and standards are shared and communicated the world over. safely. emergency preparedness. OIMS guides the activities of each of ExxonMobil's more than 80. trained our employees in safety procedures. But we have found that when everyone in the workplace speaks the same language of safety. for this progress to be achieved. Through OIMS.PLANETDEPOS. thorough inquiries into accidents and incidents. and the environment the center of everything we do. 2010 63 (Pages 249 to 252) 249 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 251 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 critically important areas of systems and culture when it comes to safe operations and risk management.COM . systematic view of this aspect of our business that we have today. construction and maintenance of facilities. That's not to say that prior to Valdez we did not take safety seriously. assessment of performance. The goal was to wholly reorganize the company to make safety of people. We began by creating a framework that puts our safety commitment into action. everyone can work collaboratively. Experts and consultants do provide a valuable service. You have to craft it yourself. employees and contractors alike. and measures all aspects of our safety performance. we worked to meet or exceed safety standards. Not every company has this expectation. PLANET DEPOS 888. Today that framework is called the Operations Integrity Management System.000 employees as well as our third party contractors around the world. Some date the evolution of ExxonMobile's safety culture back to 1989 Valdez oil spill. And as I said before. as our safety credo at the time stated. We expect our contractors to be as knowledgeable and conversant with our OIMS processes as our own employees. to be of one mind when it comes to safety and risk management. change must come from the inside out. But we have made significant progress.3767 | WWW. And we're not there. It was the beginning of a long journey for our company. and we have learned. NOVEMBER 9. and tracked certain measures that its culture. But we did not have the comprehensive. And so in the early 1990s ExxonMobil's management undertook what I considered to be a visionary approach. And as risks changed and energy technologies evolved. its impetus had to come from within the company.433. We know that we cannot rest or waver from the goal of driving accidents and incidents to zero. But for an organization to change processes at all levels. ExxonMobil had been in business for more than 100 years. it can be hard to describe briefly. management of change. the contractors that we work with are embedded within our OIMS processes as well. Safety would come first. Valdez was a low point in our history. And we had always taken steps to maintain safe operations. period. design. One of the greatest benefits of OIMS is that it has enabled ExxonMobil. a lab. we were proud of our safety record. Over time it has become embedded into everyday work 250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 252 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 measured our success. We believed. and. We could not have government impose a safety culture on us or hire someone to do it for us. OIMS is a rigorous 11-point set of elements designed to identify hazards and manage risks.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. that all accidents and injuries are preventible. or OIMS for short. benchmarks. But it also served as a catalyst. of course. Like many companies. including management leadership and accountability. a turning point which prompted our management to completely reevaluate how ExxonMobil understands and manages risk. I can visit a refinery. It was a traumatic event with consequences for all involved. and effectively. Its framework covers all aspects of safety. You cannot buy a culture of safety off the shelf. Because OIMS is multi-facetted. So we began. And I should make it very clear this is a journey that we have not completed. a large organization that operates across diverse cultures and geographies. not the outside in. Here are the basics. facilities. And I want to stress.

NOVEMBER 9. and demonstrating stewardship. they're reinforced. Our goal is not just to analyze safety incidents after they happen. we saw the culture start to change. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A culture of compliance alone can lead to complacency. and through channels both formal and informal. And that is why the first element of OIMS is management leadership and accountability. and analyze the safety approach in that activity. For a culture's safety to flourish. the knowledge employees gain by participating in these audits is taken home to their jobs and spread throughout the organization. In an industry such as ours. While ExxonMobil and other energy companies use a lot of equipment. And it's true. continuous improvement is essential.3767 | WWW. As chairman and chief executive. And yet OIMS by itself is only one part of the equation.COM . Therefore safety leadership at ExxonMobil comes not just from supervisors and managers but from employees and contractors. to create a culture where employees are not only meeting safety procedures. and the results became evident in improved performance. Developing a culture of safety therefore is not an event. you can't manage. teaching others. everything from steel pipe to supercomputers. if you can't measure. ExxonMobil strives to create a working environment in which safe behaviors are internalized. To get where we need to be on safety. but to identify risk and risky behaviors before they lead to a safety incident. And that is why ExxonMobil measures and analyses its safety performance. the more frequently we test. We record not just our injuries. cross-regional teams drawn from all over our global organization. More broadly. building structure. all the time. The culture of safety starts with leadership. Even the best safety framework should be viewed as a work in progress. 256 254 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Also. but we record our near misses and our close calls. ExxonMobil's goal is not simply to have employees comply with safety procedures. ExxonMobil managers are expected to lead the OIMS process by demonstrating a visible commitment to safety and operations integrity. But management alone cannot and should not drive the entire culture. By instilling the value of safety in our employees from the first day of hire. We seek to go beyond compliance. 2010 64 (Pages 253 to 256) 253 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 255 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 You may have heard the phrase. The more elements of risk to be managed in an activity. For ExxonMobil. all the way down to every business level. but they are challenging them so they can be improved where needed. because leadership drives behavior and behavior drives culture. Once that framework became embedded in our organization. I do not want anyone to think inside or outside our company that pride in our safety systems means we relax our commitment. that journey began more than 20 years ago. the need to manage risk never ends. I know that a commitment to safety and operation with integrity begins with me and the rest of ExxonMobil's management team. In this way all employees are responsible for each other's safety. OIMS requires us to audit the health of the overall safety approach in all of our operating environments on a regular basis. Even the best safety systems are not fully effective unless they exist as part of a broader culture of safety within the people of the organization. Importantly. this allowed us to move from PLANET DEPOS 888.PLANETDEPOS. but a journey. these audits at ExxonMobil are performed not only by trained safety personnel but by cross-functional. safety leadership is a significant part of how a manager's overall performance is evaluated. when we put our global safety framework in place. which operates 24 hours a day around the world.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. The exact opposite is true. In turn. Leaders influence culture by setting expectations. measure. it is people who bring this equipment to life. In addition. And people's behavior is heavily influenced by their culture.433. and they're rewarded. it must be embedded throughout the organization.

the technology that has enabled our industry to reach the oil and gas found in deepwater fields is one of the most significant PLANET DEPOS 888. and degree of accountability required to improve 260 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 done. Well. It is also in a company's self-interest." to describe our safety objectives. Part of that transformation is recognizing that every employee's job involves some degree of risk management. a phrase which sometimes we associate with an act of selflessness. Over the years I have seen people at all levels understand that our safety systems are put in place for them. which leads me to my next point: upholding the high standards of safety and operational integrity is not just the right thing to do. We often use the phrase at ExxonMobil.PLANETDEPOS.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. and the change is managed. Some observers of our company question this. Such an approach is not only in the interest of employees and resource owners. but clearly is also in the interests of our shareholders. a culture of safety and operational integrity has been established that can be sustained. They say it can't be done. We seek to learn from others. And for this reason ExxonMobil shares its best practices within our industry and across other industries. well-established processes embedded in OIMS have enabled ExxonMobil to pursue challenging new resources and new development projects with the confidence that we will do so safely and responsibly. We have operating units today that have gone years without a reportable injury. that we continually improve our own performance. The rigor. But most importantly. When an organization reaches the point where everyone owns the system and believes in it.3767 | WWW. but it bears repeating. These very deliberate. Our challenge is to sustain their performance where it has been achieved and to replicate and grow that record of performance across the organization. because it makes for more competent. we recognize the changed conditions and we actively identify the new or changed risk. it is clear who owns the management of change. typically through either technological safety performance are the same qualities that produce successful business results. Safety is not proprietary. I know this Commission has heard a lot about the importance of deepwater energy supplies. scientists. by looking to best practices in other organizations. That is why OIMS extends even to administrative locations. even those employees who work in office settings. at that point. It is by constantly learning and analyzing.433. it can be 258 solutions or operating changes in response to the potential risk. and it enters the hearts and minds of the people at the organization and becomes a very part of who we are. As a result. management of change is a key component of our OIMS system. discipline. only then. Considering that many of ExxonMobil's energy projects can span decades achieving the goal of a self-supporting sustaining energy culture means we must be flexible and adaptable to changes in the operating environment. more productive employees and organizations.COM . and whether there were any lessons for ExxonMobil's operations. NOVEMBER 9. and by examining incidents and near misses in our own. Our management of change processes are designed to ensure that with any change in our business or operations. "Nobody Gets Hurt. 2010 65 (Pages 257 to 260) 257 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 259 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 implementing the system to improving it. that they are about protecting them and their co-workers and the public. and safety experts to study the technological and organizational factors that may have led to that disaster. And we apply our discipline processes for managing the risk and their potential consequences. and not about catching people doing things wrong. I have no doubt that every single employee shares this goal. That's when ExxonMobil's culture was really transformed. and the subsequent risk management in every employee and contractor is important to that process. After the 2003 Columbia space shuttle explosion. ExxonMobil assembled a team of engineers. operationally and fiscally. Risks are addressed.

That is why ExxonMobil is leading a multi-company effort. Our employees operate some of the world's most complex technologies and some of the world's harshest environments. we must come to grips with this disaster so we can never see its like again. As Chairman Reilly said at this Commission's first meeting back in July. and operations integrity assessment PLANET DEPOS 888. In addition. a culture of safety has to be born within the organization. have instituted new requirements regarding inspection and certification 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 percent success rate in this endeavor. I want to return to OIMS. constructed. well casing designs. can lay claim to a 100 264 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I spoke earlier about risk management being a constant challenge. to build a new rapid response well containment system in the Gulf of Mexico. Neither can we miss the opportunity to improve safety in the Gulf of Mexico. and cementing procedures. it has to be committed from day one. including my own. How we continue to progress technologically while dealing with significant risk is that advancing human progress does not mean avoiding risk. all of which are fundamental to safe and responsibility operations at ExxonMobil. will enable the Gulf region and the entire country to continue to develop our nation's energy resources with confidence. it will have been a double tragedy. It means managing risk by identifying it.433. We're sometimes criticized for being too cautious. For the sake of our energy security and the economic growth and jobs that depend on the product of these supplies.COM . But you can't start until you stop -. Second. I mentioned that there are 11 elements. and tested containment technology and equipment to be deployed within 24 hours of a deepwater spill in the Gulf. the bookends of OIMS. But the first and last elements. And yet meeting the world's growing demand for energy involves a high degree of risk. I believe that these steps. is unprecedented in our industry. in addition to the inspections performed on all deepwater rigs in the months following the Deepwater Horizon incident. make no mistake: creating a strong. we simply cannot afford to turn our backs on this resource. You have to make it yourself. Along with Brazil and West Africa.PLANETDEPOS. You cannot buy culture. 262 of blowout preventers.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.until you start. today makes up 15 percent of all non-OPEC production. however remote. taking steps to mitigate it. and you're never going to finish. ExxonMobil and other operators in the Gulf of Mexico. Deepwater production. which did not exist prior to 1989. In 2008 there was more oil and gas discovered in deepwater than in onshore and shallow water combined. These are management leadership and accountability. there are three points that I hope the Commission will consider in its deliberations. along with my colleague today. In concluding. of a deepwater well blowout. Well. If an organization is truly going to overhaul its approach to safety. Yet that remains our clear goal. sustainable safety culture is a long process. NOVEMBER 9. No company. involving a $1 billion additional commitment from the four sponsor companies. are the most critical. By the year 2030 it will grow to nearly 20 percent. Finally. The spill did expose that our nation and the energy industry could have been better prepared for the possibility. ExxonMobil believes that incidents like the Deepwater Horizon spill should not happen if industry best practices are followed. The Macondo blowout cost 11 lives and billions of dollars in economic and environmental damage. First. In closing. It will provide pre-engineered. 2010 66 (Pages 261 to 264) 261 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 263 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 energy security developments of the last 20 years. This system. If we don't learn lessons from this disaster. in conjunction with the Department of Interior. I would like to share this thought: ExxonMobil is sometimes viewed as a cautious company. the Gulf of Mexico is one of the most important deepwater provinces in the world.3767 | WWW.

Maybe they were just part of that process of us learning and part of the process of our organization learning how to do this.COM . And evolving to that realization. And so that was I think an important recognition early on. if you would. So I think that was an important learning later on. is going to cause a problem for us. In some of the early days there were some 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 enormous credit to the leadership of the corporation at that time was the recognition that you weren't going to go out and bring a consultant in to do this.3767 | WWW. up to the time of the Valdez incident. MR. Being an engineering and science-based company. I would like to ask you a couple of questions that go fundamentally to the issue of whether or not your approach to safety can be replicated by other companies. The problems were inside. And that has been something that has continued to evolve with time. it's reviewed and updated again. to take a very systems and process approach. if it's overseen. They don't tell you anything about how to prevent those problems. and Shell's and Chevron's. NOVEMBER 9. but that it would be an ever-greening process. there were a lot of -. So it's a never-ending process. Tillerson. about just what exactly you did and whether you made false starts in terms of how we went about understanding accountability and responsibility in particular in terms of who actually -. And this system has been through three updates since it was first created. And the traditional measures that are used to measure that effectiveness certainly led us to believe we were. And that's in fact what was undertaken. we thought we were pretty effective. and they own the risk for those around them.I think there were a lot of missteps.433. And go into a little detail.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. And we're the only ones that could really understand them and address them if we were going to make transformative change. 2010 67 (Pages 265 to 268) 265 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 267 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 and improvement. CO-CHAIR REILLY: Commission staff has spent several hours studying your OIMS system. how fast you were able to raise the game and go beyond compliance and get best practices. But we have now evolved and arrived at the point where. And I would be interested if you would describe your cold eyes inspections and some of the practical and specific things that are part of daily life in the company. throughout the organization. it was natural then. and ask you to look back at the period before and then the period after the Exxon Valdez tanker spill. Without leadership by example. no system is sustainable. Mr. and without thoughtful. and that the only way we manage those are by integrating all of the elements of risk so that no one element. that the problem -.the problems were ours. As I said. as we set about to understand how do we really want to change the way we manage risk. everyone understands they own it. honest. Meeting the world's growing demand for energy safely and with minimal impact on the environment is one of our biggest.who actually owns which piece of the system in the process. or learning. Our nation and our world continues to face challenges. PLANET DEPOS 888. They own the risk that surrounds their personal activities. TILLERSON: Well. And then just the relentless stick-to-it-iveness and recognition that we had to get on with it. But I think clearly the thing that I give 268 266 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 any false steps. Examining the causes of the Deepwater Horizon incident will help advance our progress toward this goal.PLANETDEPOS. What we have come to understand is the traditional metrics are all lagging indicators. and it is reviewed now every five years. as I indicated in my prepared remarks. All they really told you about is the problems you have had. ExxonMobil strongly supports your inquiry and remains committed to supporting the cause of safety within our company and beyond. if I can say that. and objective self-assessment. Thank you. we've been at this 20 years now. CO-CHAIR REILLY: Thank you. and what you think that may mean for others in the industry that aspire to do likewise.

And the external assessment is comprised of people who have particular expertise in those types of operations that they're going to examine. new technologies being introduced. we have looked at INPO. depending on what the risk profile of the business unit is. They test the effectiveness of that through various means. And then they steward the closure of those gaps. 2010 68 (Pages 269 to 272) 269 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 271 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. so they operated in a different type of environment. There are distinct differences between the nature of the 272 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 up-line through the management team as well for closure.you know. Whether it's refineries or drilling rigs or producing platforms or office environments. how do you assess where the companies are operating at certain levels of competency. and they certainly are well behind where they should be. Have you had a chance to consider whether that kind of initiative could be valuable in the industry as a whole in order to -. we've looked at responsible care from the chemical industry. they go back and share what they've seen in similar operating units elsewhere. TILLERSON: There are two aspects of that assessment that I mentioned as one of the elements. evolving all the time. it strengthens the system and ensures that it is dynamic and evolving. The assessments are. They give the unit an overall assessment. one. We've looked at a number of other models. There are internal assessments. But that rarely if ever happens. so there's little proprietary involved in those sites.433. Because those teams that are on those assessments. there's really multiple values.3767 | WWW. to protect against someone else causing your rigs to be shut down for their misbehavior? MR. And they aim not just at compliance but at best practice definition. That's what they try to do for the whole industry. they're fixed sites. you know." as part of the API Joint Industry Task Force. and they report out on gaps they've identified. And so what we are evaluating within the industry is how can we capture the best elements of that. TILLERSON: Well. CO-CHAIR REILLY: What you describe within your own company has a lot in common with the nuclear industry's Institute for Nuclear Power Operations. But also that is how we share the learning and best practices globally. Most of the technology is well-known. make it responsive to the fact that in our PLANET DEPOS 888. if a unit gives a poor assessment because the gaps are huge.COM . But every three to five years. where the operating unit looks at its own processes and makes judgments about how effective they are. assessments are not about finding people that are doing things wrong. I suppose.in order really. when I say "we. They provide a grade. then we have to deal with the nuclear power industry and the oil and gas industry. Most of them are regulated utilities. different environments. And they are generally comprised of people from all over the world who then come in and undertake an exhaustive review of that unit's implementation of OIMS. And so I think we look at the principles around INPO in terms of how do you share best practices.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. as opposed to our industry. from your point of view more than anything. just through their own self-assessment. which is moving to different locations. Again. As I mentioned. how do we continue the improvement process. Then those gaps are stewarded 270 local management. the facilities are -. and in particular deepwater. They work with the regulator. And it is that assessment process that is really crucial to the improvement process. There's a lot of similarities. all those are assessed on a routine basis. there will be an external assessment. And I think there are elements of all of those that are useful for us as an industry to consider. NOVEMBER 9. And we like the elements of that. The nuclear power industry. Now. They do testing of how effective they are. and recognizing changes within that operating unit. Their conditions don't change significantly around those sites. and then they identify gaps that need to be closed.PLANETDEPOS. the real value of that.

I think the elements of self-regulation. pushing the envelopes ever further. that they at least recognize when there is a risk of exposure. I see a risk. It's one that the industry is actively engaged in seeing if they can't construct something similar that would meet our objectives yet protect everybody's competitive interests as well. it is a significant challenge for the regulator to have people at competency levels commensurate with where the industry is technologically. it can supplement the expertise of the regulator and relieve them somewhat of this burden. And human beings have to make decisions. We in the industry are very competitively hiring the very best and brightest people out there. though. at the end of day you can give people procedures.PLANETDEPOS. CO-CHAIR REILLY: Do you have an opinion about how to address what has been a real disparity between the sophistication technologically of the industry. they have to take actions in response to events.3767 | WWW. They are part of risk management system. So you can't go into the academic world and find it. But as was evident in my remarks. which a lot of people kind of draw back when you use that term. and what we really want to do is provide systems and processes and frameworks for them to do that. yet still share the best practices around safety and operating practice? So I think that -.you know. specialization level. we want a competent regulator. the number of people who are actually charged with regulating that industry? Do you have a sense of how one should 274 human beings. And so it's a difficult challenge for the regulator to have people who have that same level of competency. I think it is realistic. And that's just the nature of the technology evolution that has been underway now for quite some time. which seems to us as very often one that leaves them ill-equipped to understand a lot of the new technologies.COM . why do people fail to act. how are you addressing that? And that's enormously important to us as an industry. In my view. They are part of redundancy in the system that can test. MR. versus both the expertise level. particularly as it's gotten into very deep water. and resources. to provide some help in training people within the regulatory agencies to a level of understanding. 2010 69 (Pages 273 to 276) 273 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 275 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 industry there is a lot of management of change going on all the time. and that may not be necessary.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. we accommodate the fact that it is in the company's self-interest to improve in this area. And why -. TILLERSON: Well. and have been proven effective even here. So they don't have to be capable necessarily of designing PLANET DEPOS 888.I think the approach is one that's important. but I think elements of self-regulation have been proven effective in other parts of the world.433. But they need to be capable enough to say. and it's going to require engineers and geoscientists to really be able to achieve a level of understanding. So I think that to the extent that when we structure the approach. that's the baffling challenge that all of us who work in this part of risk management struggle with all the time. you can give them tools.one possible advantage of something like INPO. How do we protect the proprietary aspects of what each of our companies do. it's not clear how it's being managed. and are at least able to ask the questions of how is that risk being addressed. The stepouts. why do people make poor decisions. are all happening inside our industry. NOVEMBER 9. And most of the technologies are being developed within our industry. They may not be capable of formulating the precise response. And we pay them so they'll come work for us. because the academic world's a few 276 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 deal -. and say to us. And we invest a lot in their training after they come work for us. but it's in the hands of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 years behind us. And that involves getting at the culture of human behavior. you can give them all kinds of technological capability. are the risks being managed. As to the regulator.

which I did just ten days ago. safety. has eight elements. intervening when it feels wrong. And these are the do's and the don't's covering activities with the highest potential risk. Our approach also requires that our drilling contractors develop a safety case to demonstrate major risks are properly managed. no one company can claim to have all the answers. and an effective management change process. I do appreciate the opportunity to speak to you today and tell you a little bit about safety and Shell. Thank you. you've given a lot to the Commission. and know by name many of your colleagues. we would welcome them. Now. At Shell we believe in relentlessly pursuing no harm to people and no significant incidents. The safety case in deepwater drilling shows how we identify and assess the hazards on a rig. MR. or HSE management system. audits. CO-CHAIR REILLY: Mr. and certainly we don't make that claim. and we have examples to demonstrate this is true. ODUM: Very good.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. and I invite you to make your presentation. to firmly believe that it is possible to work without incident. long experienced with Shell. We expect everyone who works for us. At Shell we have 12 lifesaving rules. Our health. hazards management. and a focus on leadership and culture. established operating envelopes that are not to be exceeded. how we establish the barriers to prevent and control those PLANET DEPOS 888. such as well and facility design standards. Tillerson. and respecting people. We appreciate very much your being here today.3767 | WWW.PLANETDEPOS. 2010 70 (Pages 277 to 280) 277 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 279 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 all the elements of the deepwater drill program. Personal safety systems are fairly easy to track through mechanisms such as incident rates and participation in processes such as job and safety analysis. this provides a clear statement about the culture we 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 disabling safety and critical equipment. and appreciate very much that we've had the opportunity to sit down and look at your resources both in New Orleans. Now.433. and environment management system. For example. We support this by expecting three overarching behaviors: complying with the rules. getting proper authorization before 280 278 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 We're very pleased to have you here. Mr. Our employees and contractors must comply with these rules. and our neighbors. In my comments today I'll address how we manage safety through a combination of rigorous systems and the culture required to make those systems effective. If you have thoughts for us as we complete the last phase of our work. among these elements are defined procedures. or protecting yourself against falls when working at heights. Chairman Reilly and Chairman Graham. But I hope these remarks are useful to you. and those focused on process safety for ensuring the safety and integrity of our operations and our assets. Failure to do so is a choice not to work for Shell. each with a specific role in ensure that HSE risks are identified and managed. both employees and contractors. maintenance and inspection intervals for safety-critical equipment. Now. We call that journey Gold Zero. the environment. aim to build. We would like to continue to keep the conversation open. MR.COM . Boesch. along with Senator Graham and Mr. A personal safety system includes clear and firm rules. NOVEMBER 9. CO-CHAIR REILLY: Thank you. We're going to make sure the risk has been addressed by asking the right questions. to get an understanding of your own safety system. clear responsibilities and competencies for critical staff. and of course all the Members of the Commission. Odum. This has been very helpful. But they do have to have significant technical competency to recognize that there is a risk exposure in this operation. This has been fundamental to reducing accidents. Safety systems essentially fall into two categories: those designed to protect the personal safety of our employees and contractors. We've had Richard Sears. Process safety is also managed through a variety of tools. TILLERSON: My pleasure.

and leadership.433. An example: at Shell our pressure control manual requires at least two barriers in place at all times to control each hazard. as it turned out. the entire team was recognized for the proper response. notifying the control room. they instead decided to partially shut in this producing platform.PLANETDEPOS. Every employee and contractor in the Shell site has the right and the obligation to intervene and stop work if it feels unsafe. The safety case is owned by the drilling contractor. The problem wasn't significant. Therefore the work was stopped and we installed a second redundant mechanical barrier before proceeding with the job. The systems. Leaders must visibly and tangibly engage in promoting and recognizing safe behaviors. to create and sustain a culture. Later we found the additional inspections would have indeed avoided the need for a shut-in. and culture must all work together. and it is audited at regular intervals while the rig is under contract to us. The case also includes bridging documents to our own HSE management system.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. Audits are another key part of the story. 2010 71 (Pages 281 to 284) 281 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 283 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 hazards. NOVEMBER 9. Further. This is actually the first element of the Shell's HSE management system. Core values do not. processes. Nonetheless the operator quickly followed the protocol of getting out of the area. and initiating emergency shutdown procedures. Still. but it is closely reviewed by Shell before we place the contractor at the company. comparing us to the world's PLANET DEPOS 888. compliance. to drive our commitment of no harm to people. seen and felt in every aspect of the organization. and we reward those who do it. the environment. how we assign the critical activities needed to maintain the integrity of these barriers.3767 | WWW.COM . We ensure everyone knows about it. While the operators could have simply run followup inspections to confirm the initial finding. It's a key part of our job planning. they do create a safety culture at the rig level. Defined rules such as these are clearly important. The second example occurred just a few days ago at Perdido. Building a safety culture starts with leadership. The staff involved made the right decision. They're among hundreds of recognitions we see every year of employees and contractors who intervened or stopped work in potentially unsafe situations. Through these drilling contractor works closely with Shell as the operator to ensure the well plan and operations procedures are understood by both parties and provide assurance that top hazards and risks are properly managed. but that wasn't the point. providing critical information about whether we are doing what we say we do in the areas of operations. Last year. 284 282 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 mechanical barrier that did not pass our tests. An operator noticed a small gas leak around the production separator. And these are not isolated examples. It is assured in practice before the rig operations begin. But I believe that an organization with all the right systems and tools in place to manage or reduce risk to people and process will fall short if it does not have a culture for safety. and it was resolved without incident. Priorities can change with the business environment. and it works. to clearly communicate to all employees and contractors that safety is not a priority but a core value. it guides the rigs and crews in risk management and ensures staff competency. our newest deepwater production asset in the Gulf of Mexico. DuPont administered its safety and culture survey in our drilling organization. and they received a Gold Zero Hero award as a result. we found a secondary At Shell. Our British platform in the Gulf of Mexico was shut in after an anomaly was noted in a vessel integrity inspection. or assets. In 2009. while abandoning a well in deepwater. especially for those that may be new to a rig. I'll offer two recent examples. While most interventions involve stopping an individual work desk as opposed to an entire facility shutdown. intervention or the stop work rule is another overarching principle. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 The leak was too small to be picked up by the gas detectors.

It's almost four years and many millions of hours worked. 200 miles offshore. Crucially. The mindset must be one of always seeking feedback and identifying gaps. with no lost time incidents to personnel. PLANET DEPOS 888. NOVEMBER 9. It is essential that they continue 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 this project went from its initial design on paper all the way through to construction. we received feedback that the structure of our systems and our tools tended to be too complicated. It holds numerous records and is a premier example of offshore innovation and technology.000 feet of water. we must strive for a process that goes beyond simple compliance and achieves a strong safety culture. improvement areas were identified. we've seen an improvement in our safety and environmental performance at Shell as a result of the systems and the culture that I've discussed. and I welcome any questions. the Department of Interior has begun to bolster its workforce as it seeks to implement several rigorous regulatory changes intended to prevent the occurrence of another Macondo. The project was started up in 2010.PLANETDEPOS. At the end of the day. and well-funded regulator that can keep pace with and augment industry's technical expertise.433. and Rex mentioned that earlier. However.3767 | WWW. While we ranked world class overall. I'll share one final example from my recent experience: Shell's Perdido spar in the ultra-deepwater in the Gulf of Mexico. This has been most visible in recent months as both industry and government have taken steps to enhance the capability and performance in three tiers: prevention. this demonstrates that it can be done. and the startup of production. and you cannot put a price on the value of the safety culture. For example. Audits such as these are an important part of not only compliance but also continuous improvement. I do believe we are seeing this way of thinking take hold in the industry today. and it helps Shell staff and contractors carry this belief to all of our operations. and no environmental incidents. And we hope that everyone that operates in the Gulf of Mexico will now ultimately be involved in that system to improve our preparedness in the Gulf. to drilling of the wells. subsea containment. You're aware of the marine well containment company formed. and the companies involved. This is in 8.COM . There is no room for complacency. This journey never ends. and spill response. not by any stretch. A competent and nimble regulator will be able to establish and enforce the rules of the road to assure safety without stifling innovation and commercial success. I am most proud of the fact that 288 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 program. An industry safety initiative with independent third party auditing that can bring about real change. 2010 72 (Pages 285 to 288) 285 287 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 best across a range of industries. Although the limited program will occur in shallow water with low formation pressures. For example. the installation of the facilities. or contractors. Thank you for the opportunity to share these thoughts. and it points to a path forward. to Shell. The industry needs a robust. an operation will not be the safest it can be unless the people doing the work share the same beliefs and behaviors about safety. So yes. Most importantly. You don't fix safety. Moving forward. As a result we've condensed the key points for each of our most critical well site safety systems.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. our spill response assets will now have enhanced containment capability. But we clearly do not claim victory. expertly staffed. we at Shell have applied Macondo learning in realtime in our Alaska 286 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 to improve. We see this being repeated around the world. with the ultimate goal of ensuring safety is built into every aspect of the way we do work. Industry members have also created a task force which is evaluating programs in the chemical and nuclear industries to identify best practices for a suitable program for deepwater drilling completion.

So it is -. but if there's something significant to be learned on drilling operations.S. both within your company and then across companies. In the industry it would seem to me that one place to start might be with the individual employee. that's not going to be very good for my career advancement. people don't pay much attention to it. and to the many courtesies that Shell has extended to us. We have been very much benefitted by your assistance. to share information on incidents. and therefore there was not an advancement of the understanding of risk and how to respond to it. if I do this and cost the company a lot of money because they're shutting down production.there are many mechanisms to do this. particularly in our visits to New Orleans and the Gulf. Are there other aspects to the way in which you have dealt with what would appear to many to be the reticence of employees to PLANET DEPOS 888. and we want them to know it today. where you have defences backing up defences. ODUM: Thank you. the employees' reaction might be. if you learn something very significant and you want immediate action. Odum. than they are off the coast of Africa or somewhere else in the world. best practices across the world. around the world. backing up other defences. Those are implemented immediately. NOVEMBER 9. who has been an outstanding addition to our team. because in some companies. They go out across the company.S. well. ODUM: I will. because it's like an alarm. We've organized ourselves in a way that we always look at this business globally. CO-CHAIR GRAHAM: Thank you. And it was his sense that there had not been much learning transferred from the Australian incident to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 examples. incidents.433. And so we have a system of what we call alerts. and those always meet or exceed the regulatory standards in any of the countries where we operate. but not necessarily quickly enough. one of its main obligations is to share 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 alert of all the applicable people then to cause immediate change.PLANETDEPOS. this will come in the form of an 292 290 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 U. learnings. You mentioned that you have recognized employees who come forward. I was impressed with what you said in your prepared remarks about the employees who were willing to shut down the production rig if they suspected that something seriously bad was going on. MR. and I'll do it in the context of drilling. but my comments apply to all aspects of our business. new learning? Earlier today we had the deputy director of the former MMS talk about an incident in Australia which he suggested was quite close to what then happened here in the Gulf on April the 20th. again.COM . Reilly in our appreciation for Mr. Let me also join Mr. When it comes to a particular incident. So when we think of deepwater drilling. But what we have in that organization then because of that design is a connected organization worldwide. And if something registers. Mr. firms. Could you comment as to that level of international cooperation on safety? MR. we have a deepwater drilling set of standards for the company that are no different in the U. let's say something particularly notable happens. and even deepwater drilling. this same set of standards across the world. Sears.3767 | WWW. and they always result in. the process I just described of having a global group and having that be incorporated across the globe. and we keep this to the few very significant events. CO-CHAIR GRAHAM: You are one of the great international corporations of the world and do business in almost every significant oil production region. 2010 73 (Pages 289 to 292) 289 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 291 CO-CHAIR REILLY: Senator Graham. for example. but this is one. it happens quickly because of that organization. for example. They're the Shell global standards. best practices. global drilling group. This drilling group.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. I would think that's a difficult culture to develop. it's going off all the time. What is your process. CO-CHAIR GRAHAM: I would like to talk about what in military terms is referred to as a layer of defense.

that's through saying it loudly and saying it in ways that have real impact. So we do need this from everyone. There's a tremendous amount of interaction as they're putting the safety case together. and really do make a difference. so we both have a very good understanding of that. So roles are extremely important. ODUM: It's a great question. because we found over time that is actually the most effective way to make people really understand and believe this.3767 | WWW. The way we use that is. as well as the company. to really make people believe and understand. We take that one step further. we do remove them from our operation. is once these critical elements and hazards are identified. which is at a single site. as we're talking about a drilling type operation. again. And those stories get around. They have to understand our well plans. And so they put that together initially. As strong as Shell's individual culture is to safety. and then integrate all of that into a common safety culture at the site? MR. and Halliburton out on Deepwater Horizon. they may be following the contractor's protocol or the Shell protocol. and bring them up to that same level. If we see somebody who can't convert to that kind of culture. And the other reason I spent so much time on it is. 294 parties with which you are doing business." because there's more than one way to get there. that's an expensive process. particularly contractors that come in and work for us as a company and who want to make sure they're working there the next day. So there are other avenues. Now. 2010 74 (Pages 293 to 296) 293 295 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 be actively and proactively engaged in safety? MR. and that is we take a safety case approach. which is why I spent so much time on it in my prepared remarks.COM . multiple contractors and subcontractors. Let me describe what that means to me when I say "a safety case approach. and make sure they're clear on what we want. ODUM: I think it's a critical topic. and I think I can hear that in your question. We work that then in an iterative approach with them.433. and they do that for Shell. I'll just describe one of the tools which has a strong cultural element that we use to get there. they have to understand exactly what the Shell standards are. then it's not working. Transocean.this is what we look for to validate the system. it's not the natural bias necessarily of people to act this way. as they build that. how do you convey that to the multiple 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 in place and they're effective. It's important that somebody like me or somebody in my organization actually take a trip out there. So there are a number of ways that we try to have that impact. So we really do have to go the extra lengths. It needs to be clear because a contractor on its own may have their own protocol. particularly. And then the obligation is to ensure that the barriers and mitigations for each of those risks are 296 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 It takes time and a lot of money to get that back up and running in a very safe fashion. NOVEMBER 9. is it absolutely clear who does what in all these potentially risky or hazardous situations. But that's the main one we've been able to to have an impact. are all engaged in accomplishing the mission. And that's from a lot of repetition.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. CO-CHAIR GRAHAM: Another layer is the way in which this business typically does its business. It's only an effective system -. So in a certain situation. recognize that person in front of other individuals. this is what we want you to do. the mitigations are identified.PLANETDEPOS. I focused on the recognition part. and having those clear is critical. So PLANET DEPOS 888. And actually I think it begins with understanding that if a contractor on our site doesn't have exactly what we're looking for from the Shell people. When someone on a rig pushes that button and shuts down a rig. a safety case in this case would rely on the contractor initially to identify all of the potential major hazards associated with the rig and drilling operations. We heard a day and a half of BP.

CO-CHAIR GRAHAM: In that discussion with those three and particularly between BP and Halliburton. what your role is. say do you 298 MR. the kind of thing you would see on the Shell site on a day to day basis is. that in this case may have played a fundamental role in the ultimate explosion? 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR.if I understand your question. I think -.COM .3767 | WWW. Just to keep it very brief. do you know what to do in certain situations.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. The way that would work is. your company. the person that I hold responsible. that's my interpretation. This is all part of the multi-layers that you talked about to prevent an accident. if anything. ODUM: Well. which are the hazards you're most directly related to. The elements of that that stand out for me is that having this safety initiative up and running and having it look different for the industry means there's a commitment there from the members of this.surrounded the cement pore at the bottom of the well. let me try to relate it to the area of who's responsible for those type activities on a rig in Shell as I see it. I didn't have the opportunity to hear all the comments and testimony around that. these sort of changes take time. How would you. as Rex said. and what it has meant to safety in the nuclear power industry. everything you just mentioned. the way I described that hazard mitigation. these changes don't happen overnight. NOVEMBER 9. for myself to go visit a platform. you don't do a piece of work on a rig without having a job safety analysis and what we call a permit to work. How would you assess the current status of industrywide safety practices in the deepwater drilling enterprise. I'll use myself. that are applicable from INPO and from Responsible Care and other elements. I think particularly the safety initiative the industry is now working on together.I appreciate your putting some time frame on it. Basically. that says we're committing to a certain set of principles around operating at the highest level of safety. we ensure that the contractor is able to relay that back to the safety case. around sharing best practices. or in a drilling operation. I think keeping it live like that is actually the most critical element to make sure it works. I think that what we can expect to see over time is that it will make a difference. But let me -. how are we taking that safety case. as I came in a little earlier this afternoon. that it starts with the thinking of what. CO-CHAIR GRAHAM: Another layer in the layered defense is the industrywide commitment to a safety culture. Well. There was some disagreement as to who knew what about the laboratory samples of the concrete that was going to be poured. one of the most glaring instances was -.433. It wouldn't be unusual for anybody in our organization. Mr. around continuous PLANET DEPOS 888. and making sure that the Shell and the contractor crews in that location are applying that on a day to day basis. There were questions about the testing that was done after the pore about who was supposed to interpret it and how would you evaluate the results of that interpretation. be that a Shell person or a contractor. responsible for all of those others. 2010 75 (Pages 297 to 300) 297 299 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 clarifying all this ahead of time is critical to that. And that flows all the way through the work they do on a day to bay basis. that we through this safety case development hold responsible explicitly. Reilly has been particularly interested in the example of INPO. go to an individual. these will be largely industry members. we have a joint task force type approach to developing something where it is. ODUM: Well. because I heard it in somebody's earlier testimony. Then I think what you would see. and what do you think in five years the industry might strive to accomplish within itself? 300 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 understand what the safety case is. have dealt with a specific incident like that. are the major hazards. building on the best things that we can take away. is the Shell person in charge.PLANETDEPOS.

using avenues like I talked about with the API standards committees. I think the goal is around -. how do you see API's future position relative to the industry as funder or regulator? MR. You know. Michael Bromwich. is there needs to be actually more collaboration between the regulator and the industry around setting those standards. it has to begin with a well funded and supported regulatory agency. I mean. I'm 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 CO-CHAIR GRAHAM: On your second point about the industry being willing to financially contribute towards more effective regulation. in terms of how should the Federal government organize itself to be an effective overseer of this industry and protect -.3767 | WWW. by the way.having an effective and strong regulator are the right goals to have. and the technical design. We need to leverage that piece of capability. I think is unmatched anywhere in the world.S. So I see that as a step up from where we are today necessarily. and that that had been opposed by industry. ODUM: A couple of things that I would like to say about that. I use the deepwater example. where there can be regulatory -. Whether or not $100 million or -. These are not necessarily in priority order.whether or not -. including your international experience. that the support has always been there to do what it needs to do. So I think that's an important element in all of this. but in terms of how we're doing. CO-CHAIR GRAHAM: And finally. what is the right number. again. Mr. can cause real change. when we look at the system in the U. So I would see something like this directly tied into that standard-setting process. I'm not feeling like now is the PLANET DEPOS 888. 2010 76 (Pages 301 to 304) 301 303 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 improvement. you know.is the right number. will lead to improvements. but I think it has to start.is that an accurate reflection of industry's position vis-à-vis funding of the new BOHM. I think really stepping up the game in those areas and getting very serious about this element of collaboration is a key piece of that. One of the points I want to make is that API as an industry body.there's already a system to regulatory participation. as some of this was unfolding over the last couple of months. and if not.PLANETDEPOS. is a new and different piece that I think. Do you see industry -. said earlier this afternoon that the President had recommended I believe $100 million in additional funding for his agency. What recommendations would you have from your experience. recommended practices. because it's important that we're all operating at that level. 304 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 participation by the regulator and others in setting those standards. do we really have effective safety management systems.in the protection of the safety of our people and the safety of the environment. And I don't think that's always been the case. You know. ODUM: I think -. this interaction between the regulatory body and the industry is a concern. I think the idea that this would involve third party auditing and independent assessments of how operators in the Gulf of Mexico are doing. that already has an avenue for 302 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 not sure the funding has always been there. which already. And I understand where that point was coming from. I don't know that I have a strong view on that. NOVEMBER 9. But I think what we actually mean and what we see in other parts of the world may be even better than what we see here. the role of government in this layered defense on safe practices. as I said in my prepared comments.a couple of aspects. and what do you think the role of industry should be in its relationship with that government entity or entities? MR.COM . and either not adopted or adopted in a substantially smaller amount. and I think it probably needs to be taken more seriously and emphasized a little more.. the technical standards elements of API.433. the current head of BOHM [sic].NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. I think being sure that we leverage that capability in this safety initiative is absolutely critical and. I did actually hear a fair amount of conversation that said.

Most of the examples I've used around stop work. CO-CHAIR GRAHAM: I thank you for that answer. it's part of why I've used the examples that I've used in here. NOVEMBER 9. I'm reminded that a lot of oil company executives retire at 60. there's a very strong stream of resources that come from the industry to the government that I think part of that should be directed towards supporting agencies like the BOEM. but what we find is. spending more money to drill well in a particular way because it adds the safety margin that you need is absolutely the right decision. And he has said he's doing recruiting at engineering schools. to be fairly blunt. CO-CHAIR GRAHAM: So you don't see funds that the safety commitments and records that you have achieved have also in your views made both your companies more profitable and successful. I have a final question. but as I look at health. for the very important statements.first of all I want to say I think Rex said this extremely well. That's one reason they're so respected by the people whose reactor practices they inspect and evaluate. but a contributor to the acheivement of those goals? MR. ODUM: Absolutely. I think it then goes into some of the comments you heard earlier. through the bonus payments. but it was the right thing to do. Surely that should be the funding source for the regulator. And INPO uses people who have been in the nuclear industry. I think. CO-CHAIR REILLY: Thank you. making a profit for its shareholders. strong. That's a message I think that's powerful and that needs to be heard. we cannot be a sustainable. even if it's a more expensive item as a single element. you know. 2010 77 (Pages 305 to 308) 305 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 307 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 right time to. I think. I'm still getting used to the change. which is. overall international competitiveness.3767 | WWW. with respect to both. a company with the discipline to perform well in each of those areas almost naturally performs better in virtually every aspect of being a business. because it's such a big picture. the regulators. period. It is BOEM.433. for example. profitable company. were things that cost us more money than it maybe would have necessarily needed to cost us.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. and environmental aspects of our business. I know to my core that without being very strong in each of those. ODUM: I think -. As I think about the challenges facing the industry and the government.COM . And as I reflect on Director Bromwich's challenges and think about what the nuclear industry did after Three Mile Island. both of you. I think one cannot emphasize enough that you have made clear 308 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 towards its shareholders. Some have said that the commitment to a safety culture is contrary to corporate responsibilities such as profitability 306 for all those layers of safety as being a diversion away from your other corporate goals. And I think that's the first place where we need to look. And it demonstrates what we want people doing.who are well fixed in retirement and can join the PLANET DEPOS 888. who actually run reactors. I do think the funding should come from the Federal government. they're large.PLANETDEPOS. And it strikes me that you might encourage some of your own graduates to -. we as a company see them as completely interrelated and completely part of the foundation for building a successful company. How do you see safety affecting those other corporate objectives? MR. safety. what we find. and you represented those views very well. through the royalty structures that we already paid on these activities. So I see them. So. It's part of -while I'm not sure it was quite that conscious in my thinking at the time. not only do you have to perform well at each of those areas. and also thank you for correcting that acronym. I mean. So I know to my core that that is critical. to say what's the best funding mechanism for that. That's one reason we wanted to invite you here today. and that relates to the safety culture and other goals of the industry and Shell specifically. and it's the kind of thing that would prevent a significant and expensive accident sometime in the future.

as to the pros and cons of a rule saying let's never temporarily abandon a well underbalanced.PLANETDEPOS. or any experts that are watching this on television. driving it to earth. MR. boring in on these guys. he had the feeling maybe the rig had been heading to another area to keep from losing the lease. But also we collect the comments of our whole team of people. We have more facts than Mr. I think that Fred Bartlit has the last word today. I was intrigued by Shell Oil saying they never. 310 So was there anything that was causing all the decisionmakers on that rig and back onshore to make judgments that -. The fact is. underbalanced when they temporarily abandon it. I particularly -. As you can imagine. We are all over that particular issue. Richard and I.COM . MR. there was a question. and if we will have. while Richard is getting squared away. I think. sir.four-week Federal District Court trial. That didn't happen. we sit up at night saying. except for Senator Graham's and my closing statements. let's call time out here until we get this matter resolved before we go further. Mr. There's one thing.3767 | WWW. We were surprised to hear him say it. and we've had a team of very smart. BARTLIT: Yes. frankly. So the next thing I want to say is that we have -.I want to make clear we have welcomed comments on all of the information that we've developed in the last two days. because we're really going to have to do that.and maybe the panel might feel the same way. and thank you for the cooperation we've had from both your companies. We've been all over it. There's a lot of information. But we're pursuing it. Many thanks to both of you for being here today. CO-CHAIR GRAHAM: Maybe I'm being the one that's been asking that question. but he said maybe there was a rush. That just seems like something we should invite comments on.increase knowledge and then make wiser judgments. it does not appear to us that there was a rush to get to another lease. PLANET DEPOS 888. to keep pace with the evolving technology and the oil industry in deep water. We -. I told one of my partners. we produced more information yesterday than would normally come out in a four-month -. NOVEMBER 9. Mr. how could this have happened. what we're going to do now is that Richard Sears and I are going to discuss some overarching sort of safety type considerations that we have observed during the three or four months of very detailed work on this.I don't remember the words he used. We welcome comments. I need to correct. the panel has been very interested in why get out of there on the 20th. we have a lot of information on it which we can provide. never leave a well 312 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 It turns out we have more information than Mr. but rather to try to get this thing wrapped up on the 20th of April? MR. what could we have done. I think that's something we need to stay away from. People have asked that. So far we don't have an answer to that.as it stands today. BARTLIT: As somebody with two great-grandchildren. CO-CHAIR GRAHAM: There was a whole series of events which a prudent person might easily have said. We want the Commission to have the benefit of these late night discussions with all the young men and women you've met and with our staff. we can report before our final report. I wouldn't get diverted as to a specific and what may be an erroneous suggestion as to why it happened. But we're all over it. it happened. we've pursued it. if that's all right with the Commission. dedicated young men and women boring into this. 2010 78 (Pages 309 to 312) 309 311 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 enterprise to try to bring up the game. Lewis does on that. Just so the panel knows. Now.433. We are not safety experts. Lewis said today that -. I don't like the idea of retiring at 60 very well. getting all the answers we can.not to defer -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. And so we would welcome comments from the industry and from anybody in the audience. BARTLIT: That is such an important and obvious point. Lewis said. Lewis had. gee.

how do these casings work. if you would. What is this stuff. Richard. Data. Now. it's geographically a 316 314 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 me. I'm trying to reflect my own and I think the Commission staff's instincts about things. MR.it's what we use when we set the stage for this one.COM . CO-CHAIR REILLY: I'll ask you to make 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 remote operation. raise concerns.PLANETDEPOS. this is Macondo sitting in Mississippi Canyon Block 252. I'm going to be pulling together things you've heard the last two days. SEARS: You haven't seen the last of copies of these conclusions for us. He's been a great -. and then give us some examples? MR.3767 | WWW. comments from other members. and again. Geologists and geophysicists are interested in having a hole in the ground that accesses resources that in this case are 18. as a well. We've gone to dinner. just ask. you know. And we thank him for it. Nobody could have done what Richard has done. it's 5.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. For example. is way down here. wherever the rig is in the deepwater Gulf of Mexico. Mr. summarize the discussions we've had. and it's important. And Fred. SEARS: Also. from a resource perspective. is a visiting scientist at MIT. back to the assumption. So things that are being done out there are being done remotely. we have to be in an environment where concerns are raised. we've culled these down. It's not a dot.and I'm going to use it to make an important point. We talk about drilling. everything. So that's what we're going to do. Let me start by saying. as is even more important than that. Here's Macondo. NOVEMBER 9. which I can do with my laser by pointing there. Exxon.000 feet below the surface. We do not claim to be somebody who would be teaching graduate level safety. MR.000 feet of water. however good. BARTLIT: Yes. So we start with this one: the idea that there's a lot of data. if you go to the next slide. can you sort of hold forth on that a little bit. somewhere along the Gulf coast. they come from all of our discussions. He's traveled all over the Gulf with us.433. a platform on the surface of the ocean. And we think about the assumptions that are being made. BARTLIT: What we're going to do is. two physics degrees from Stanford. to the point PLANET DEPOS 888. He has educated us on things we didn't know. if you ever kind of want to know in what space I am. But we do have some common sense. and all of these deepwater wells are like that. Shell of course. is questioned. The companies that are operating in the deepwater Gulf of Mexico are headquartered in New Orleans. I hate to say that. and what we've learned and the judgments we've made. and double-check assumptions. now we're going to go over. Individuals should be trained to repeatedly question data. MR. has been the leader of our technical work. Macondo. So let's turn to number 1. because one of our jobs is just to look at the spectrum of things and give you advice from everything we know. He has achieved cooperation by all the major -. Geologists and geophysicists aren't interesting in drilling. sir. Geographically. vice president deepwater services.Chevron. my own experience and ideas. It's going to be a mix of facts and testimony and thoughts and ideas. 2010 79 (Pages 313 to 316) 313 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 315 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 for what they're worth. If there was an indispensable team member here -. And remember what Macondo is.I'll miss him. 30 years at Shell. We began -. go to the first slide. And this is what's constructed in order to do that. Now.a lot of people in our team could do what Sean and I and Sam do. has been retired for 18 months. We've turned to him every day. MR. implicit and explicit. at least we think we do. but I'll miss him. as we go through these examples and conclusions. SEARS: I will do that. geographically. Everything that matters from a science perspective. We start the animation. oftentimes in Houston. Richard Sears. and the stuff that we're really interested in is right down there. which really just -. So.

less than 7 inches in diameter. And at the end of the day they decided the rig standpipe pressure gauge was incorrect. They're important assumptions. Again. The next slide. What we haven't seen is. BARTLIT: Again. that we're in a world here where there's a lot of data.go back one. SEARS: There are a couple of more examples.we're not even thinking about cause now. you can put things down. Richard? MR. accepting that from one person on the rig if that conversation took place. The next slide. check assumptions. question. the circulating pressure was lower than imagined that it should be. how do you do that. But maybe.COM . And the data that we have and the presumptions that we make and the conclusions that we draw about what's happening down here are full of assumptions. BARTLIT: We say here. please. So it suggests there wasn't a lot of debate and discussion. Odum and Mr. 318 its accuracy and the data that went into this assumption and what other possibilities -MR. And this is a world that I have described many times as one of selective and partial knowledge. in the next slide. But a lot of the data is very indirect data. from one of the BP well site team members. how do you get 1400 PSI. the purpose of these is not to -. and particularly when an operation is going on down this hole. we don't know what they actually did discuss and talked about. Again. that they were told there was a bladder effect.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. and 320 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 And there's a lot of instruments down there to measure what's going on. Did anyone say anything or disagree with Mr. SEARS: We have no knowledge whether they did or not. a couple of examples. the industry is able to do and make happen a lot of things. not accept propositions like this. At the bottom it's about 7 inches -. There we are. you can rotate them clockwise or counterclockwise. again. This is a very complex engineered system in a very complex natural system. but just to bring a few of the points that we've seen from the previous few days.000 feet long. which we don't know. and this was something we showed earlier -. we don't know if a bladder effect exists or not. has anybody there ever heard of the bladder effect. And we don't know everything about it. I was impressed. We've seen some of the ingenious kit that they've designed to do it. SEARS: And what we do know from testimony at the joint hearings. Anderson's explanation? I don't recall anything disagreeing or agreeing with his explanation. BARTLIT: Did they put a new gauge on? MR. BP claims. and you can pump fluids. Again. it's 18.433. But the point is. was there a long and healthy debate about that gauge and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Transocean disagrees. we don't know what actual conversations went on concerning the bladder effect. What we've seen is this memo. And everybody involved in these operations has to be attuned to questioning those assumptions and thinking about what's actually happening. Tillerson are pretty far down the road on that to us. We're serving to illustrate to the Commission our proposition that you've got to question. the model that it should be. you can pull things up. MR. what would it look like? PLANET DEPOS 888. That's what you can do. And in doing that. Richard? MR. 2010 80 (Pages 317 to 320) 317 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 319 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 at the beginning. we heard a discussion of the bladder effect. This is the point we keep trying to make here. And it sounded like Mr. it's rife with assumptions. Well.3767 | WWW. Maybe somebody should call shoreside when you've got 1400 pounds on the drill pipe and say. And the next slide I think -MR. And this was after the float equipment had thought had been converted and the pressure was lower. Now. The degree of freedom you have from the surface is. NOVEMBER 9. This is a comment from one of the BP team members.PLANETDEPOS. And it could have been an interesting discussion. maybe it ought to be questioned. not to pick on or hammer anybody about things. People have to get that through their heads.

as we've learned under these circumstances. because. And at least that's the kind of questioning that leads to ultimately. Tillerson and Mr. What can you tell us about that? culture. and also from the five experts we had here today. I think. you don't have to displace. It's a matter of leadership and setting the right tone from the top.and you've seen the equipment. the valves closed. saying this is unusual. as you just said. can we get 100.433. The tube might have dropped. better solutions and a better path forward. here in the same case. People apparently set cement in mud. we don't have evidence that that 322 MR. Here is a picture that we drew up for the float collar conversion. The surface plug. well. You heard Mr. let's do the math. because there's a retaining ring in there that failed. everybody. Let's go to number 2. And we'll see more examples of that as we go through this list. 2010 81 (Pages 321 to 324) 321 323 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 MR. many others. There needed to be a discussion there as to what's wrong with setting cement in mud. what can you tell us about -. SEARS: Yes. A lot of discussion and testimony here from various hearings. It's about company 324 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 kind of healthy debate was taken on. that the making sure that happens is not just saying. okay. One final example. The ball might have popped out of the bottom. We don't like to set cement in mud. it's very unusual. let's think about it. NOVEMBER 9. even seemingly minor ones. SEARS: Well. The important point is there's no evidence that all of the assumptions that went into -. surface cement plug being set 8300 feet below sea level.000 pounds. I'm not going to judge how risky it was. just before the pressure dropped from 3142 PSI down to a few hundred PSI. What could be causing that? What are the various reasons that could be happening? Why is it happening? And this is really important. And again. I heard a lot of experts say they thought it was pretty risky. And two examples that we saw here particularly yesterday and spent quite a lot of time on.000 feet below the sea bed. we don't know what happened. Richard. BARTLIT: There was a fundamental proposition. in terms of making sure that the people involved have the technical skills to know what it is they should be thinking about and how things develop in this environment of deep water. when junk flew PLANET DEPOS 888. Yes. particularly those that are recognized as anomalous. We heard examples. and we go around in circles. the tube. It's about behaviors. minor anomalies have a way in this environment of magnifying and becoming major problems very quickly.3767 | WWW. need to be investigated.and Richard is giving the views of our entire team. MR. that's the kind of discussion and debate that leads to fundamentally better solutions. Odum talk about how you accomplish that and how hard it is. When the pressure dropped. Just before it happened we're pretty sure that the tube -. about questioning assumptions in a constructive way. BARTLIT: What's the math? MR. and they need to be understood. of looking at assumptions. It's a matter of training. Now. we don't know why it happened. a little over 3. But I heard somebody else say. And it's about developing within the company instinctual behaviors around these two points.PLANETDEPOS. do it. and considering the consequences of various things. If you set it in mud. in this world. Or perhaps the flow was never great enough to convert it.is there a better way to set that lockdown ring. and varying degrees of feeling today and yesterday about how risky it is.COM . Greater attention should be paid to the magnitude of consequences of all anomalies. It looks like some of these assumptions were accepted without digging deeper into the artichoke. were up in the valves. they need to be discussed. any anomaly. maybe not necessarily so. because we believe they might have had some consequences for this well. as we've had bull sessions about this into the evening. and mud started circulating. the ball. We don't know. minor anomalies can become major problems in a short order.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.

okay. was that 1400 326 what that could mean. And we don't know nearly enough about the natural system.433. and we're going to have an explosion on this rig within an hour and a half. BARTLIT: And tying us into our proposition.I guess you don't have to be a safety expert to reach some of these conclusions. this is a process that plays out over years. I don't think they sat there and said. there was -. So we're dealing with big scales. I doubt that. well. As we'll see.COM . PLANET DEPOS 888. MR. And there wasn't apparently a healthy discussion of what else might have happened down hole and what the consequences of that might have been. What is a deepwater well? A deepwater well is a very complex engineered system embedded in a very complex natural system.PLANETDEPOS. in the success case. it just established circulation. let's move on. and the pressure test was declared successful. production of oil and gas. And it seems. long time frames. okay. I mean. Personnel cannot ignore anomalies after believing they have addressed them. well.3767 | WWW. and even with the comment I brought up in the previous point. they realized that that may mean that the cement job is kaput. MR. And it is really impressive. there was agreement that this test was successful. Certainly if you back up to the geophysical work that led to making the maps. forget about it and go on to the next issue. It can be a year or more. So when I say we have to teach people more about anomalies. a lot of fluids were bled off from various places. So what can you tell us about that. the gauge is wrong. and it was a negative pressure test. which in deepwater environments can last for decades.we all believe there was a tendency here to say.I've been all over these rigs. a successful negative pressure test in this situation would look like this. we've got that behind us. And you've seen over two days a lot of the engineering complexity that has been developed by the industry in order to do this. that there was agreement of those in position to have seen the data and worked with the data on the rig that night. Individual risk factors cannot be considered in isolation. We also heard today from the experts here this morning how long a time period it is that goes into developing a deepwater drilling plan and the number of skills and disciplines that go into it. There were a lot of tests done. let's move on. but as an overall matrix. But here's a case that when this happened. a lot of pressure measurements taken. let's look at our next sort of overarching -. complex scales. the circulating pressure is a little bit low. And it has always been a fun business to work in. Okay. zero on the kill line. In the situation at Macondo. we don't know. that led to buying the lease. They just didn't. We saw that perhaps in the previous two examples. gauges in various places. And then we saw one other example. They're wonderful people. 2010 82 (Pages 325 to 328) 325 327 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 out of the bottom of the reamer chute. about which we don't know nearly enough. if the Commissioners please. It was an anomaly. They didn't explain it. And ultimately this is heading towards.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. please. and what might actually be reasonable pressure in that circumstance. But the bottom line is. that greater attention has to be paid to every single anomaly. And it was a long period of time. that led to then programming the well and developing the plan. And then the drilling of the well. I've met these guys. All of that has been dealt with in the business of deep water. SEARS: I'll start with something I said a few minutes ago. okay. without realizing that maybe that wasn't fully resolved before. Richard. about 340 PSI or something like that. they work like crazy. NOVEMBER 9. I don't think these guys -. three hours. they have families. I wonder if when people saw that. the flow is finally converted. And even complex engineering systems can behave in 328 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 pounds per square inch on the drill pipe. maybe this rig will be on fire in two hours. They did not clearly appreciate seemingly unpredictable ways. based on all of the data that we have.

and again saw 1400 PSI. I think I know what their answers would be. From 21:38. mud begins to overflow on the rig floor. Tillerson and Mr. at the time of the negative test. BARTLIT: Let me stop for a second. We don't have a transcript of what Mr. What I do remember thinking when I heard this yesterday was. was the negative test put on the shelf. I'll give you a good example. or about the time hydrocarbons are in the riser. It's part of the system. the time of the first explosion. And the point of this is that you cannot extract an individual item from that system and look at it. the negative test 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 riser and is expanding because of decreasing pressure. we've passed the negative test. and now this comes off the shelf. fine. But 2.nobody's thinking about the negative test. MR. please. No matter how smart you are. 2010 83 (Pages 329 to 332) 329 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 331 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 All along there. MR. MR. MR. that just a few minutes later. they bled off some pressure.000 foot riser. Odum. wait. that's half the volume. and it has to be thought of as part of a system. NOVEMBER 9. more than half the volume of the 5. Richard. And just a few minutes later. by BP's calculation that they've put out in their post-incident report. BP calculates 2. that I think listening to Mr. This is something we heard yesterday. the TO crew again saw the anomaly. And that is what that influx. Now. I'm looking at BP's calculations from their reports. to three minutes later. And the complexity and a systematic thinking of the risks and all of the components of risk need to be considered. So before hydrocarbons are in the riser. it's exactly that. you deal with it. and if we get it wrong. BP's calculations report a thousand barrel gain.000 barrels is the entire volume of the 5. we don't know where that all went. they had seen that and sorta-kinda resolved it. And there are a couple of more points.433. holy cats. right 330 also saw 1400 pounds per square inch difference between the drill pipe and the kill line. here we are. It's come up in the 332 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 in here.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. you resolve it. MR. That's the point. And you can't get away with it.000 barrel gain. about the time that hydrocarbons are entering the riser. but to basically deal with it almost from scratch. in the next slide. wait. SEARS: When mud came up. so this is our best recollection. MR.000 foot riser plus about half the volume of the production casing. Richard. what about the -. And I'm wondering. A thousand barrels. Here's the last two hours before the explosion. Ambrose said yesterday.PLANETDEPOS. not go back and say. Should the crew have known that 1400 maybe was reservoir pressure. Here we are. Yesterday. when hydrocarbons first enter the riser. something anomalous. So let's pick up from there. If we look at the PLANET DEPOS 888. the crew on the rig notices something. Ambrose said that sometime in this period. of course we'll correct it. that there is -. I think the next slide -. I'll just state. And I remember earlier. Now. a very complicated system. But then you can't put it on the shelf never to be considered again. 21:49. But yesterday Mr. And you can see what happens next in this timeline. 20:31 to 21:40. the difference in pressure between the drill pipe and the kill line of about 1400 pounds per square inch.yes. you're developing a system.3767 | WWW. now we understand what happened back there. BARTLIT: There's a difference between the parties as to when it came up.if I remember hearing it correctly. they considered what could this be. has now turned into. SEARS: Indeed. SEARS: Well.COM . And they looked at it. seemingly minor. and when another event happens. they stopped. This is how fast something anomalous turns into something rather serious. BARTLIT: A million questions come up from this. that's good. that they were seeing reservoir pressure up at the surface? Should the significance of that number have been clear? That's why we say that there's a tendency to put an issue behind people and then go on. I don't remember hearing what it was resolved as.

each of these have an impact on the cement job. And you can't just willy-nilly say. who cares its done end of story. maybe we ought to see what's going on down there. in my thinking. BARTLIT: And it's -. And these together. whether the list is seven items long or 13 doesn't much matter." "Probably be fine"? It was the only barrier that existed when the well was underbalanced. MR. SEARS: And this point was raised also PLANET DEPOS 888. 2010 84 (Pages 333 to 336) 333 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 335 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 next slide. maybe somebody should have said. All of these. but we should keep reevaluating the premises. You start seeing 1400. MR. It could be five. aha. What's cumulative is the risk regime that they're operating in. let's go back. Maybe that centralization issue was more of an issue than we thought it was. Next. people with knowledge of cementing should have been thinking about in terms of each of these.3767 | WWW. the integrity of the cement job. again. Again. and the people on the rig thought it would probably be fine. negative pressure test. 336 334 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 another of these becomes an issue that somebody should be thinking of. The next slide. Frankly. MR. rational response to this notion of all of these centralizers that might move around or come off as they're put on this drill pipe that's being run in the hole. We had a dispute with Halliburton. That's the specific point we're trying to make. again. NOVEMBER 9. Richard? MR. There's an awareness in the mind of this good engineer that they might have to repair it. We highlighted. maybe 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 But in my case. SEARS: Okay. we can argue a lot about is this list three items long or six or seven or 11 or 13. The physical impact of these isn't what aggregates and isn't what is cumulative. I don't care how many it is. No.433. Maybe we shouldn't have just put this behind us. And it is changing. well. Take centralization. put all those centralizers on and ignore what you might do in terms of adding risk. heighten awareness as to what comes next.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. "probably be fine." By the way.again. Some thought that had been resolved. okay. the robustness. we had a lot of runs. However you want to aggregate or disaggregate them.PLANETDEPOS. It was these slides that we showed yesterday. BARTLIT: Let me go back. Let me just take one in particular. as one after another after somebody should have said. there's a tendency to say. maybe we ought to stop. MR. perhaps not a big deal. it's left by a smart engineer. that should. You can add these together in complicated ways. what I'm going to focus on here is. These items and these concepts should have heightened awareness of the importance of that negative pressure test and caused people to think a lot.COM . BARTLIT: I have a bad habit of trying to be very specific and not general. What comes next is part of the test. even several alone. and the next line is about centralization.the complexities of the cement job and where it was leading them. Now. we said. that would confirm the quality. But maybe when they started seeing 1400 on the drill line. this should have been at the beginning of the story." Squeezing of course is repairing it. I'm going to be the first to say that the risk environment here is very complex. go back. MR. the industry faces these every day and has developed methods for dealing with them. on the drill pipe in the negative pressure test. and that's fine. Others might disagree. "I would rather have to squeeze than get stuck above the wellhead. any one alone. potential impact on the cement job. it's a list we put up yesterday of what we described as the situation at the time of the cement job on April 19th. The point is that there was a lot happening that people with knowledge of the system. we should have squeezed it and stopped it. that's behind us. that is a perfectly reasonable. SEARS: Well. Now. "I would rather have to squeeze. as we've put it. This should have been at the beginning of the story of more discussion of how -.

And it may have actually -. They say.433. gee. they looked at the geology. And it was a slide where it was a long e-mail.Mr. these guys have killed themselves to get it right. let's call this TD. And Richard is going to go through the manual.I can't say. we're talking here about systems thinking. Tillerson said he learned from that other experience. I've never actually done it. I read the Transocean handbook cover to cover. where a lot of data is brought together from the past looking into the future. we saw one slide. And the decision is made. NOVEMBER 9. but maybe. and you may remember it or just take my word for it. but we want to give our observations on what we saw about what somebody reading it. So we compliment TO for doing that. There ought to be greater focus and training in how to respond to low frequency. that it's okay to cut the drill pump. BARTLIT: Let's go on to our next point. that letter is an excellent example of systems thinking. and we excerpted. but I was thinking about it as we were preparing this. and we looked at it again. I've never done it. This is specifically speaking of some aspects of the cement job. number 4. There was a slide from a member of the BP staff. it's all there. we've gone all around the industry. we're going to have to stop here. A formal risk assessment would have at least elevated the level of discussion and thinking about the cement job and the implications for going forward. it can be too complicated. I don't know. high risk events. and I know Mr. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 situation. but also its future purpose as a producing oil and gas well. a formal risk assessment might have enabled the Macondo team to identify further mitigation options. of many. And when you're dealing with events. Tillerson -. And when somebody does a job like TO did on their manual. That slide. I thought. this is a brilliant document. Or they say. and I do want to add. Now. I thought when I read it. And they made a very sound -. They thought carefully about the risks of going forward. we said. Odum said today it could be too complicated.PLANETDEPOS. 2010 85 (Pages 337 to 340) 337 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 339 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 in BP's post-incident report. And now what we're going to do is. how often have you triggered the blindshear ram and actually cut through the drill pipe. when you're in a tough 340 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 yesterday. and we showed this I believe yesterday. But as we read it as normal people. it was in the deck 338 That is a good example of systems thinking.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY.it was all there. would they be PLANET DEPOS 888. but it might actually have had more impact than just whether to run the cement evaluation log.COM . I want to say.what looked to me a very sound decision to. we can't go on without jeopardizing this well. gee. Yes. how do you know it's bad enough to act fast? That's my way of saying that there has to be more emphasis. how often do you actually go overboard with your diverter with these things happening? People say. And I don't have this on a slide. I'll repeat the slide to you. As we look at this next slide.000 feet. and the line I believe is. It's a good example in this well. where individuals on the engineering team looked at what was happening. the risks not only to that well and what had been done so far. Richard and I were talking last night. it's okay to bump overboard this stuff. And I gave it to Richard. they looked at the well as it had been constructed to that point.3767 | WWW. It might have also had something to do with just the kind of thinking that was going on. And this is not by way of criticism. we don't want to take them down for it. Every possible aspect of the kinds of things you can face were there. in my mind. it seemed like there were -. So it gets to be kind of a big deal. So what we want to do is learn. Both Mr. MR. highlighted one line out of it where he was highlighting two parts. Billy Bodek I think was his name. we've said to everybody. why they had decided to call TD at this well at 18 three instead of the original program depth of 20.

and how quickly they have to act. So all of these things have to be instinctual for the drilling staff. BARTLIT: And if you never do something. That's the point. we talked to thousands of years of experience. platform installation managers. it gets to be the exception. But this highlights the complexity of the business they're operating in. But this is something we observed that maybe there's not -. MR. That means they have to be trained in it. And it's not like the simulations that go on in the airline industry with pilots handling events.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. SEARS: And the important point here. Tillerson. Richard? You have another point. All of this -. and it says. the sense of urgency. and it tells you they thought a lot about the circumstances that they operate in and in some of the specific environments. But when you never. I don't know if you want to say if in doubt cut the drill pipe. and this really references the talks from Mr. there might be room for improving how people on rigs are trained to recognize this. closing annulars. And the next chart -MR. This is a section on kick detection. once gas enters the riser. But it is very good. 342 in a few slides previously how quickly things happen once gas enters into the riser. BARTLIT: Again. So there might be room. MR.3767 | WWW. And how do you train people to have a state of mind that they're alert to these things happening fast? That's not my job. I have to say to TO. SEARS: And this is the manual.433. And Fred read it. and it's comprehensive. okay? MR.what the driller needs to do. I'm going to say that the drilling staff are probably very well trained. that's not my business. You probably wait maybe sometimes too long. we do not know about the specific training that's given in addition to the manual. it probably is instinctual for them. I'm just going to say. BARTLIT: This is not meant to be a thorough-going analysis of every page. what the staff on the rig needs to do in order to shut in the well and manage gas once it's in the -MR. There's a lot of things that go on that make up the consequence of events. the shut-in procedures for the well. hanging off pipe. In this manual there is 15 or 16 pages PLANET DEPOS 888. this is a potentially serious situation. this is very good. there are a lot of actions on this chart from watching flows. so I felt shamed into reading it myself. 2010 86 (Pages 341 to 344) 341 343 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 able to know how to -. a couple of pages from the manual. ever do something. they don't have time to refer to this chart. Odum and Mr. bad. What do I do next? It has to be a habit for them. and it's viewed as the be-all and end-all. SEARS: And this is not meant -. and specifically how to manage gas once it enters the riser. Now. MR. SEARS: The next slide. and it tells you a lot. MR. We talked earlier today about the ability to simulate these things.this is one of these terrible slides where the person talking says you don't have to read everything on it. at least in the paperwork. And in their mind. or operated the emergency disconnect system because of a well control problem. And really. NOVEMBER 9. What we see is a lot of boxes. from our experts and all that. from drill sites. rigs. because of course you can't. Because again.COM . used a blindshear ram to cut drill pipes. We looked at the manual and we imagined ourselves as somebody on a rig that's been handed the manual.hasn't been created. I never thought when I started life as a geophysicist I would read a well control handbook. you go through this sequence.and you saw 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 all of that how many times people have actually diverted flow overboard. because once it gets in the riser. you can count on one hand from 344 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 We've already said many times. We have no idea about that. when you get a kick. I'll blow up a couple of -one sentence on the left there. you better move. So Transocean in their wisdom and experience has put together the picture here of how -. closing Blanchard ramps.PLANETDEPOS. But it's supposed to be illustrative of some things we observed.it was bad enough to act fast.

this is true for water based mud as well as for oil based mud. high risk events. pressure continues to rise. flipped around and expanded so you can see these trends. And then the next few pages go on to give the very detailed instructions of how to circulate gas out of the mud column and the riser using the mud-gas separator. It's sort of the four minutes or three minutes in the middle. And we heard that. it's probably all very good. the bad behavior is actually pretty reasonable and consistent with all of the actions going on on the rig. 2010 87 (Pages 345 to 348) 345 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 347 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 specific to deep water environment. By the way. Pump's off. turned sideways so you can see 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the second pressure rise. thinking the right thought. as even more diagnostic of an influx into the well. very important.it's not really six minutes. the diverter must be closed and the flow diverted overboard. is also a pretty reasonable behavior of pressure. it's a period of about six minutes.Mr. SEARS: I think that really describes it well. and if we take 348 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 techniques probably save lives. and then he looked away to do another task.4. before mud is coming out on the deck of the rig. And these 346 it better. The very next sentence says.3767 | WWW. And by the way. Now. where the right person with the right knowledge has to be looking at the data at the right time. none of it -. I'm maybe making an unfair interpretation. because deep water environment has its own unique characteristics.PLANETDEPOS. This is the Sperry-Sun data. That's probably a reasonable thing to be doing. except that in this case it might have made PLANET DEPOS 888. But I think there's probably room here for helping the drillers make some of these decisions. maybe that's a symptom of something that needs to be addressed. I'm going to suggest that it might be a little less clear to the operating personnel that -.12. maybe the driller looked at the first part of this for a minute and it looked okay.COM . we don't have a transcript. at any time if there's a rapid expansion of gas in the riser. Ambrose yesterday -. the starting point on this. NOVEMBER 9. so this is my memory of this -. if at any time there's rapid expansion of gas in the riser. and the pumps were turned off.and again. it clearly says -and this is consistent with what we heard yesterday.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. well. which is on the very next page. So here we have a situation where -. minute. and then went off to line up pumps for the next activity. It did overwhelm that system. you might have looked at it. Mr. he doesn't know that. maybe if the culture of the company is that somebody might think the driller would look at this line and turn away and do something else. In this particular case. And from this manual. We've discussed drill pipe pressure increasing with constant pump rate.433. It's very clear. BARTLIT: Let's look at the next slide in that regard. It's complex. But the point is that it seems there's a possibility. And also. Now. saw it was behaving as expected.now. again. the last minute. People will remember this. It's very. minute and a half or so. we think that there may be one of these low frequency. MR. as in figure 8.in helping them understand when an event is bad enough to be called bad. And we've had conversations with explosion experts from other oil companies who have said it might have made a difference. Because what we saw in Macondo is they did go to the mud-gas separator. and how to manage a kick in a deep water environment. And as the comment was. it might be nice to know that. But I will say it would stay very clear were it not for the very next sentence. for the first minute and a half or so. minute and a half. Nobody knows what happened. Ambrose said something like. Maybe it's not enough. An alternate system is using the mud-gas separator to remove gas from the mud. given various actions that were going on on the rig as pumps were being turned back on. it would stay very clear -. it might have delayed the explosion for at least a short period of time to have immediately taken that gas flow not to the mud-gas separator.it's probably right. but overboard. And you know the well is underbalanced. MR.

PLANETDEPOS. That's how operations happen. So you can't distinguish beforehand what is truly risky. BARTLIT: A classic example was the PLANET DEPOS 888.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. they're less vigilant. 2010 88 (Pages 349 to 352) 349 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 351 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 the difference between seeing something serious that was happening down the well and not seeing it. fine. And our judgment is that there's a body of evidence that suggests that the end of well. low risk operation. they wouldn't have known that. MR. and therefore I don't ever have to worry about getting into an automobile accident. Richard. in -. But here you've partitioned data and partitioned risk as if they are truly independent. I think of this as if I could distinguish between risky and really and truly routine.don't go back in the slides. There need to be better models for how to share information. those risks never go away. there didn't seem to be a lot of rigor around how this end of well -. once the negative pressure test had been passed. this was one of the the conversation today about monitoring flow. absolutely insists that the contractors and all their personnel are on the same page. well. I'm only going to drive my car if I'm doing routine things. and it leads down a path which makes no sense. And there didn't appear to be. not risky things. not others. so that possibly some possibly critical data isn't available to the right person at the right time and maybe isn't being shared. In fact all of these events.COM .433. Well. MR. Accidents happen. accidents happen during routine operations. NOVEMBER 9. Then. the cementer wouldn't necessarily have known about a well planning decision that was made months earlier to manage trapped annular pressure. it was perceived to be a very routine. because the flow out was going through the cement unit. at our sixth point. MR. based on the changes that were going on and how this evolved over time. MR.most all the time there's a lot going on. because people take their eye off the ball. And they're not truly independent. You take this by extension. but think back to the list of all of those situations during the cement job. not partition this data into. which I guess by definition is not risky. I think that the first Commission meeting hearings here in Washington. because the risks are cumulative. as we work on this case. SEARS: There's a lot that goes on on these rigs. When we look at the list -. gee. We heard in some of 352 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 specifically. That's perfectly reasonable. You manage them carefully so that you keep them under control. BARTLIT: Let's turn to number 6. fundamentally dangerous. Tillerson today describe how Exxon insists. This is dangerous.these end of well processes were managed. A few are known to all parties. Failure to develop or adopt clear procedures for crucial end of the well activities. well. because there's not an awareness that it needs to be shared. It's kind of nutty. negative pressure test passed. it might be reasonable to look at them and say. BARTLIT: Now let's look. Some of those are known to one party. It's a fundamentally risky environment. less careful. SEARS: We talked a lot about this. well. D. And a lot of those aspects of the nature of the cement job. But here again is partitioning of data. As that well delivery manager said to you. Let's elaborate on that. please. there's a lot of information that is shared. And as I listened to Mr. all of these actions on these deepwater rigs are fundamentally risky. In my own life. which meant the job had been done. this is part of the cement job. that drove it home to me. MR. you had a well delivery manager from a major operator tell you 350 most important problems. please. And there's a lot of information that needs to be shared.. it's into the temporary abandonment procedure. Most of the list is known to one party. To me.3767 | WWW. Wouldn't understand it anyway. No reason to tell the cementer about trapped annular pressure. Poor communication between operator and subcontractors deprived otherwise capable personnel of information necessary to recognize and address risks. That's fine.C.

we knew there would not be isolation of hydrocarbons reported. from BP's incident report. BARTLIT: Yesterday we heard Mr. Talk about a failure of PLANET DEPOS 888. some of the parameters at least that go into this. MR. you have stacked up a number of parameters which frankly won't matter. Again. was never shared with the operator. SEARS: And in the next slide is a statement or two. and they were underbalancing the well. MR. a very impressive man. but I believe the answer was from the cementing expert. 2010 89 (Pages 353 to 356) 353 355 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 centralizer issue. stop. it wouldn't have mattered. look us in the eye and say. in the discussion at this table. small pump rate. and then asked. SEARS: In fact yesterday. because they thought that the wrong centralizers had been delivered. Now. And the centralizers are an important aspect of that. to me. Sam developed this story very carefully to draw out the parameters. Flow rate is an important aspect to that. They could have gone down a deck. it wouldn't have mattered if I put the right data in. And you can read it. At Exxon or Shell you would expect there to be a collaboration with the contractors and the people on the rig. small volume. Now. That's actually a very important insight. well. now we're calling shoreside. had Shell and -. made a mistake in identifying the centralizers. you've heard all the evidence.3767 | WWW. This comment here. There is going to be channeling in the cement job. The centralizers are made by Weatherford. Bottom hole pressure is an important aspect of that. are these the right centralizers? They didn't do that. we're calling the cops.433. whether it's the long string length. The Weatherford man was a little concerned. in the conversation. but to me. there would have still been severe gas influx. Vargo of Halliburton. And while these primary cement jobs can be 356 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 report that they didn't put the extra 15 centralizers on that the Halliburton model had recommended. we believed there would be channeling in our Halliburton cement job. knocked on his door and said. the question was about the OptiCem model that Halliburton runs for the operator to model the risk of gas influx into the well. if I had the right pressure. BARTLIT: BP candidly admitted in its 354 centralizers in the right place.. where BP was actually going to run them on that long string casing. And to me. you would expect the guy to raise holy hell. whether it's the pressure at the bottom hole fracture. I'm afraid. called shoreside. And what he shared with us.PLANETDEPOS.and I'm not kissing you guys' butts. technical BP staff.COM . you don't have the right team developed if somebody doesn't say. the industry has tools to fix that. whatever they all may be. There was a Weatherford man on the rig that night. that you have stacked up a bunch of parameters. But there was no communication between the man on the rig that understood it and the BP engineers who apparently. There still would have been channeling. six of them. with the right accurate flow rates. senior Halliburton staff. if I put the problematic. I bet my bottom dollar. a lot of instinctual knowledge about cement and pumping cement jobs in this situation. we knew. technical Halliburton staff. MR. But. We heard from somebody who has a lot of experience. This is going to be a very difficult cement job to get right. once evaluated and repaired. but it really speaks to the quality of interaction between senior BP staff.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. NOVEMBER 9. that if the cement guys absolutely believed that the hydrocarbon zone was not sealed off. MR. cementing is a very safe and reliable operation. was that model rerun with the right bottom hole parameters. and there would not be isolation of hydrocarbons. a ruckus. was data being shared. What I heard him say was. He said. whether it's the fact this is foam cement. you can dispute about how it was pointed out or not. according to BT. where they were actually going to be. with the number of centralizers. and they're good at fixing it.. we don't have a transcript. if I have it right. There still would have been the risk of severe gas influx.

it didn't happen that way. And it's sad. MR. BARTLIT: If the Commission will indulge me for about five minutes. I find it's one thing to say. There are a lot of people that need to be engaged in changing what needs to be changed.the companies involved each had data. BARTLIT: Megan. the nature.and this is not an April 20th event. MR. we all heard the arguments about who did what to who and when.between Halliburton supervisory personnel and the Macondo well team in the design of the Macondo well job. SEARS: No.I'm taking a page out of your 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 certainly hours. for whatever reason. If we go back -. 2010 90 (Pages 357 to 360) 357 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 359 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 communication. Here it was all very polite. SEARS: And no expectation apparently that this is something that needed to be shared.well. please. there's a clear statement from BP saying it didn't work as well as it should have. The report states that -. responsibilities on the rig. clearly muddled lines of authority within BP and between BP and its contractors. we don't know all the reasons. the complexity of the geologic environment. It really builds on this list. And that's PLANET DEPOS 888. MR. weeks. they were each responsible for operations. I believe this disaster could have been prevented. So in retrospect. complicated business.PLANETDEPOS. SEARS: Or was it the previous slide? It might have been the previous slide. I'm going to echo some of that. closing statements yesterday and opening statements today. never get in an argument with people who buy ink by the barrel. months -. MR. MR. Some smart person told me when I was a young man.433. again. MR. you know.to me this is a very significant list. I'll read it.oh. And in the Chairs' opening statements. and in what the expectations were for making decisions and sharing information and sharing the basis of those decisions. It's a very exciting. BARTLIT: Finally. it was confusing to us about where responsibilities lay. you made some very strong comments. But the operator is getting expert advice from a number of other people. I want to finish -. partitioning of data. And for whatever reason. I think it's important. I don't know all the reasons.3767 | WWW. and sharing the advice and the basis for that advice is rather important. And Richard. It is very complicated.I do want to make an important statement. we've learned quite a lot. if I may. They each had data. I don't know how to do all of that well. they need to be managed. We've learned about what happened. Fred. I think we have seen that. complex nature of the operations. That finishes that segment. it doesn't. BARTLIT: Thank you. And if data had been shared differently. huge opportunity. It says quite a lot. there were muddled. I want to make one more effort to get across to the press the point I made yesterday. Finally. Richard. It is in the report. we heard a lot of it in our own interviews with various companies' staff. last point. I don't pretend to know how all of this can be made better. BP's post-job report. MR. MR. the operator is responsible. this is something that it built over 360 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 of authority between BP and the contractors. And there were muddled lines 358 book. SEARS: There was a lot of that. That opportunity carries risks. if not days. And I think there is a comment from. What I believe I have seen and I believe our team has seen for the last four months is that leading up to April 20th -.COM . and if operations had been carried out differently. Unaware of the extent if any that Halliburton supervised or provided technical support to Halliburton in-house cementing engineer on the Macondo well site and the investigation team was unaware of any direct engagement between BP -. there we are. And it was clearly confusing to -. But again. And what we've done over the last four months. This is a very -.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. well. actually. but for a number of reasons stemming from the complexity of the well. NOVEMBER 9.

This is a relatively modest observation. decreased risk. We've got some information. "Commission says BP didn't ever do anything for money. I say never get in an argument with guys that buy ink by the barrel. individuals.3767 | WWW. can be very valuable. So please. the industry writ large. we have asked BP. these guys did not sit there and say. If the Commission wants to put up that slide. and the decision was made in a way that saved time. we can do it. The Commission asked us to do it. CO-CHAIR REILLY: Thank you. Thank you. NOVEMBER 9. 364 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 series of decisions that were always made in a way that would save time. We've got a list of those. like any court. We are continuing to and we have steadily investigated the extent to which there were a series of decisions at Macondo that. we will look forward to having the written summary to make reference to that. CO-CHAIR GRAHAM: Thank you. We've been working on it all along. we've been working on it. This is our preliminary conclusion number 13. Fred.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. it was a choice of ways to make the decision. and then the relationships between the industry and the government. but cost them more time and money. Thank you for drawing it all together. And as I mentioned. looking at them. You've asked me to do it. and Halliburton to provide us with examples of the decisions they made that increased safety. Do you want to put it up there? CO-CHAIR REILLY: I don't think so. individual corporations. saved time or money and may have increased risks for safety. I'm not trying to lecture. 2010 91 (Pages 361 to 364) 361 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 363 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 you guys in the press. The challenge that we have now as the Commission is to take these conclusions drawn from actual experience and convert them into policy recommendations. and I'll talk to you until the cows come home. that's going to include decisions as to at which component of the multiple entities that are part of this. The list shows there are occasions where a decision was made. Among other things. it's a work in progress. TO. We don't want to put up a long list when we haven't gotten all the information on ways they might have spent more money to increase safety. and then drawing judgments from those actual experiences. well. All I said is that the men on the rig I'm going to turn now to Senator Graham for closing comments. The fact is.PLANETDEPOS." I never said that. Richard. but that's not the point. and to those of you who have had the tenacity to stick it out and absorb this information. I think what we have learned among other things is that learning by going to actual experiences. It's in process now. If there is a long 362 that night. can draw inferences from that. we have seen no evidence of any decision in which a person or a group of people put safety on one side of the scale and money on the other side and consciously in their head chose money over safety.433. And now you buy zeros and ones for nothing. A bunch of newspapers said. I could show it if you wanted to. We're waiting for more. I wish to extend my thanks. guys. okay? I said yesterday at least eight times. Thank you. that is very important distinction and seems one that we ought to be able to get straight. Let me try one more time. if we don't even actually include it verbatim in the report. We know that under these circumstances time can be money.COM . MR. So succintly here at the end. So my point is not that this issue is resolved. conglomerates of entities that are operating at the same site. we have a list. Bill. the Commission. BARTLIT: Okay. Inferences can be drawn from that information by the Commission. fine. That issue is still open. Now. So I'm going to try one more time. and I'm sure on behalf of all the Commissioners. we'll blow up the rig but we'll make the guys in London some money. to all those who have participated over the last couple of days. to which PLANET DEPOS 888. Please try to get it straight this time. We want to be sure we do a balanced job. I'm just saying there is a distinction. They've got until November 19th to give us whatever additional examples they have.

PLANETDEPOS.3767 | WWW.COM .a great contribution to the public's understanding of that event. If this business operated as a vertically integrated one. particularly of those companies who are not exemplars. which I totally agree we must help him do. to me now is more -. The fundamental obligation and expectation of this Commission was to determine what happened. based on my own experience.the expressions we have heard about the intention to have third party audits and to begin to take some of the lessons from Responsible Care and some other industry 368 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 again.and I really wonder how Director Bromwich is going to fulfill his commitments and his expectations. I would simply say that I would echo the expressions of thanks to Fred. I think the present climate with respect to the availability. Of the seven judgments that we've just heard. That I hope will -. NOVEMBER 9.especially given the role of the three companies. is going to be a critical area for our final report. I thank Fred and his team for the outstanding job that they've done in surfacing this information. 2010 92 (Pages 365 to 368) 365 367 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 one of those do we assign these various judgments that have been made. And I think we have made a great deal -. Odum particularly say that he very much hopes that those resources that will be required to raise the game among the inspectors and the engineers at BOEM are provided. the likelihood of public resources -. And I'm looking forward to what they drew from the exposure to this discussion that we've had yesterday and today. Mr. a much more systemic problem than I had believed. very active throughout the Gulf. I think the question that I had mentioned this morning of whether or not this was a unique event or suggested a systemic problem. Tillerson and Mr. respected companies. that we know exists at Chevron or Amoco Phillips. We are soon going to hear from some members of the public. He said that they should probably come PLANET DEPOS 888. The government challenge I think is really serious.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. I hope that will result in the kind of strong and independent organization that actually seriously polices activities and does in fact define best practice and call people out when they don't exemplify it. may have different objectives that they are seeking to accomplish. And I believe that the fact that so many of them came into that category reinforces what we heard earlier from Mr. who do not have the kind of safety culture that we heard described by Mr. And that's why I press so hard on the need for some kind of industry entity which can raise the game. 366 hours ago. Odum. Sears for his many ways in which he has been a valuable contributor to our effort. But I think it's been a valuable couple of days. what the proximate cause was on the rig on April 20th. that this issue of how to achieve safety when you have entities that aren't under the same leadership. Sam. and four of them to this interplay between multiple entities at the same physical site. the serious companies do in fact require competent regulators. and Richard. I have seen the loose ends. it would be a much simpler process than the reality of what we do face. and from the nuclear industry. or maybe more. I think it is actually true. including INPO. Sean. and that being the case. Odum. CO-CHAIR REILLY: Thank you. a lot more comprehensive and compelling now than it was 24 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 initiatives. And maybe they will. It is the way in which this business operates. It would be very helpful if the industry itself cooperated in that enterprise. may not have the same culture of safety. I think it's a lot clearer. Thank you very much. and one or two other places. I've assigned one to individual behavior. several of them. And we heard Mr. and the decisions that we know now were so egregiously wrong. and pretty much who made them. the indeterminate kinds of effects and decisions. requires a systemic solution. Bob. and the specific mistakes that were made. two to individual corporate behavior.433. suggest to me that it is a systemic problem. And more than anyplace else.

And somebody's pointing at something. Gowan. We come back on the 2nd and 3rd of December in a deliberating session. and thousands of jobs have been lost across all the Gulf states. We have to hope that that lesson is compelling to the rest. which is having a job loss effect as well. Louisiana. I suppose.000 oil wells in the Gulf that have been drilled safely.) COMMENTS FROM THE PUBLIC MR. Some of the best successes achieved in American industry have occurred after they have gone face to face with possible bankruptcy or with a major recall or an accident. And safety has been shown to be possible. We have no short term goals. We sold a successful rental business and refinanced our home to open this business.000 strong. and we will try to see through the haze here. You calculate your competition. But a moratorium I believe is not an answer. I would like to thank -. your cost. 372 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 of the United States.3767 | WWW. CLEMENS: My name is Thomas Clemens. Polsenberg. and that the companies that are exemplars of a safety culture can help reform those which are not. The three PLANET DEPOS 888. NOVEMBER 9. It's only temporary. If things are not changed dramatically and quickly. until this matter is resolved. What the community decides will set the tone for the future disasters and how they are handled in the future. I'm aware. Ms. Clemens (phonetic) and Mr. This is a hugely successful industry. And I would ask Mr. Oil rigs have been drilling for decades. And not issuing permits is our main concern. and to the success 370 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 industry of 70. To make it worse was a moratorium. And we'll certainly do our part to recommend how that might be done. I guess I would just say that I think that transforming a culture does require leadership. Opening a business for us was a very calculated risk.COM . Gravitz to be prepared to come up. and provide an example to suggest that there is really hope here.PLANETDEPOS. absolutely vital to the economy. We are surrounded by the oil and gas 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 The one thing that we did not calculate was the Federal government shutting down an entire industry and effectively shutting down our business. Our business income has decreased 54 percent because of the moratorium. (Recess. Our goals. especially in the rules and regulations that were already in place. More rigs have left the Gulf. We had a couple of employees that we laid off. But there is nothing like a crisis to focus the mind and to compel reform. and then come back. First we'll take a five-minute break. So we're going to take five minutes now. And we look forward to listening to your comments. and I guess sit up on that dais there. Ms. and Mr. Hendricks (phonetic). That means more job loss and more percentage of our business being decreased. It is my understanding there's 50. We've concluded several times that it did seem to us totally irrational that a program which last year produced $18 billion has to go hat in hand to raise money for environmental studies and the like.433. 2010 93 (Pages 369 to 372) 369 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 371 from lease revenues or tariffs. in even the largest and most successful companies. The business is our future. My wife Melissa and I own a OCM in Broussard. And now the Federal government is not issuing drilling permits. And I think we can make a case for that. Finally.this oil spill was a tragedy. no long term goals. There are so many things in fact that you have to calculate. visionary goals for the future has been just shattered. the industry being slow. they'll probably be laid off again. So one has to hope that that will be the experience drawn from this tragedy. this encounter. And historically it's one of the safest industries America has produced. Thank you all for spending these two days with us. And we took very calculated decisions in opening our business.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. until January. and long and consistent priority. Many small businesses are affected. Currently we just brought them back at a reduced wage. That's something that I don't know of any business owner can calculate.

Thank you for coming from Louisiana to make this statement. And the question that came up in my mind as I had looked at it was why people didn't connect the dots. And I would ask revising in the issuing and drilling permits. and sort of crept back in twenty years later that caused the accident. PLANET DEPOS 888. the Piper Alpha incident. our hope is you find the facts of the matter of this entire incident is isolated. And one of the factors that you can suffer for is moral hazard. for coming from Sarasota for that presentation. sir.3767 | WWW. to take back with you is. And I think that's one of the things that may be going on in this case. And one factor that might be contributing to it and making it worse is some of the contracting. And she said it was echoes of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 doesn't happen. NOVEMBER 9. One is a historical viewpoint. the technical skills. basically private information that some people have and you want it to be shared and to be factored into a decision. because my job matters. And yet they didn't get motivated to do the analysis to unmask these risks and trigger some actions that might have prevented this accident. HENDRICKS: Fortunately Fred Bartlit made a lot of my points in his remarks recently. And we looked at TMI. I believe that the industry is safe and will be safer from this incident. professional experience. MS. Essentially the same problems that had -they had identified in the Challenger investigation and thought they had fixed. 2010 94 (Pages 373 to 376) 373 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 375 points I would like the Commission to see.S. I think you might want to think about trying to put some limitations on that sort of contracting. Ms. Gowan from Washington. It's not a whole industry. and essentially the lack of communication. We had the great resources. the Three Mile Island incident. contracts between some of the major service contractors. Mr. Hendricks? MR. backed up by R&D 374 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Challenger. in looking at some other relevant risk events that happened. the contractors. BP in this case provided full indemnification of contractors even if they -. Thank you. Thank you. so I'm not going to go into details. I think the other perspective that's helpful here is information in economics. In sort of looking at that question. a lot of it revolves around incentives and information and how they play into decisions. one of the world's largest international organizations focused solely on ocean conservation.COM . Tillerson mentioned that as one of the examples that they looked at. CO-CHAIR REILLY: Thank you. GOWAN: I'm speaking on behalf of Oceana. perhaps Sally Ride put it best. Mr. As I understand it. But basically I was going to say that the last few days have dramatized the complexity. One of the things that you can glean if you look at the recent work that's been going on in economics of the last 20 years or so. you get suboptimal results. I tried to approach it from a couple of different viewpoints. that was a member of the accident investigation board for the Columbia disaster. the series of events that led to this tragic event. Mr. because it takes away a lot of the incentives that you would want subcontractors to have. If you look at the two space shuttle accidents. Interestingly enough. And if incentives aren't in place to make that happen.if their work was in error and caused damages. She was the first woman astronaut for the U. and some other energy incidents. And there were things like differences between the government officials and NASA facilities. CO-CHAIR REILLY: Thank you.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. And the engineers were unable to make their points clearly enough to get investigations done. it 376 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 departments and labs and computer models and knowledgeable management systems.433.PLANETDEPOS. Hendricks. But probably the most interesting one from the point of view of illuminating this event I think might be the loss of the two space shuttles.

The facts show us that offshore drilling is an increasingly dirty and dangerous business. Each step in the process provides countless opportunities for human and technical error. Our mission is to unite and empower people to restore the natural resources of the Gulf for future generations. The laundry list of hazards we've learned about over the past two days would never have been elucidated were it not for this disaster. It is unconscionable that in the case of the Deepwater Horizon. Ms. I'll make brief remarks.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. Gowan. is irrelevant. and we cannot wait for the next accident to find out what the risks are. But it's imperative that it also recommend a ban on new drilling. they ignored the results of the negative pressure test. The list goes on. We heard that BP ignored the results of the cement test. 2010 95 (Pages 377 to 380) 377 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 379 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 I thank you for the opportunity to speak again this afternoon. many of which cannot be identified until it's too late. the statement is in direct contrast with much of the evidence that was presented. Choosing profits other safety may not have been discussed explicitly. and I would like to ask if I can submit a written six-page testimony into the record. MS. both to the environment and to human life. Polsenberg. Second. Transocean did not spend the necessary money needed to train its crew how to drilling projects. And thank you all for your work and the work of your staff. PLANET DEPOS 888. and that the best course of action is to prohibit further offshore drilling. Gulf Restoration Network. If the best confidence we can have in a company's ability to prevent blowouts and other accidents is described in such terms. It is impossible to safeguard or legislate against that which we don't understand. it's clear this is not an industry we can trust with our natural assets. NOVEMBER 9. MS. who have always been open and clearly dedicated to this work.PLANETDEPOS." and "subjective" were all used to describe the tests on the integrity of offshore oil and gas wells. Based on the information presented in the last two days. Thank you. Training costs were not sufficient in numerous areas and prevented crews from interpreting critical tests.COM . and they made a series of equally bad decisions throughout the abandonment process.433. POLSENBERG: Thank you. That's the only way to prevent this disaster from happening again. Nor was there investment in sufficient contingency plans for what to do when signs such as mud coming onto the decks suggested that soon gas would follow. or GRN. yet there was no one on the rig capable of interpreting the alarming data. Whether this is a case of greed or a case of negligence. one that is not going to be made safe by a new set of standards." "limitations. leading up to the disaster. Ms. CO-CHAIR REILLY: Thank you. The Commission should make recommendations on ways to better regulate existing offshore 380 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 have drawn the conclusion that there was no conscious decision to sacrifice safety concerns to save money. and each of these are examples of how companies shortchange safety in ways that also happen to cut costs. the standard tests did succeed in alerting operators there were serious problems with the well." "anything but clear. CO-CHAIR REILLY: Please do. I would like to make the following points. First. POLSENBERG: Thank you. including the evaluation of the cement." "course estimate. which demonstrate that offshore drilling is inherently dangerous. while the Commission staff seem to 378 interpret the critical negative pressure test. but it clearly happened systematically. we warn that even when testing is successful. or both. there is a huge amount of uncertainty as to whether or not the well is actually safe. from New Orleans. Words like "imperfect. I am Johanna Polsenberg with the Gulf Restoration Network.3767 | WWW. GRN is a 15-year-old environmental organization exclusively focused on the health of the Gulf of Mexico.

First. A Gulf RCAC with an annual budget roughly equivalent to a few days' expenses on a single drilling rig would provide proven pathway to improving spill prevention and response. recreational. about a four to one ratio. NOVEMBER 9. When I studied the issue using only jobs and dollars of business in coastal counties. our concern remains that the industry will continue to push the margins. and the government will continue to lag in its oversight and regulation. Our written testimony goes into detail on these points. GRAVITZ: Thank you for bearing through a very long day. 2010 96 (Pages 381 to 384) 381 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 383 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 For our entire history. First. tourism and fishing account for a $200 billion per year industry. A Gulf Regional Citizens Advisory Council would provide citizens the ability to monitor and to call into question potentially problematic decisions and approaches.COM . I will say at the outset. And despite today's headlines. So just in dollars and cents terms. After the Exxon Valdez spill. once the BP Horizon disaster began. sustainable. the oil industry lacks sufficient vigilance.433.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. Why I do say this? I have four reasons for saying this.PLANETDEPOS. but not the future that you've all worked so hard and is your staff has worked so hard to improve. and are fully prepared to respond to a worst case scenario. and only tourism and fishing. Regional Citizen Advisory Councils were formed for both the Prince William Sound and the Cook Inlet. our oceans in dollars and cents are worth more for the sustainable activities like tourism and fishing. particularly the investigative staff. not more and 384 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 A mechanism is needed to ensure that the government and the industry remain vigilant of all the risks and potential repercussions associated with oil and gas development. Mr. it became painfully obvious that neither BP nor the Federal agencies were prepared for a blowout of this magnitude. I was very impressed with the work that this Commission has done. And second. CO-CHAIR REILLY: Thank you very much. than they are for the oil and gas that lie beneath them.3767 | WWW. Second reason. Thank you very much. and have resulted in improved environmental safeguards and substantially safer and more reliable performance of petroleum operations. While a lot was undoubtedly learned during the spill. You really got to the bottom of a lot of issues without the formal legal powers to do so. because I believe that the legitimate future for offshore drilling is less and less and in fewer and fewer places. the oil industry. 4. concerns that were refuted by both the industry and the government. and the government. the Federal agency in charge failed to exercise needed oversight and enforcement of existing laws and regulations. Gravitz from Environment America. renewable activities that we do today are worth much more than exploration for oil and gas offshore. The oil and gas that lie offshore those areas might be worth 50 billion or $55 billion per year. I'm here to talk about the future of offshore drilling. And they were wrong. what I discovered is that outside of the Gulf of Mexico. These councils significantly increased both trust and communication among citizens. from Washington. commercial fishing. MR. and using government data. I'll try to make my remarks brief. Gulf communities face significant continued risks from oil and gas operations. and you've communicated them beautifully and very clearly to the lay people among us. it is clear there is a willingness to cut corners and reduce costs. in purely economic terms. 382 allow representatives of groups disproportionately impacted by energy production a proper say in its conduct. GRN has expressed concerns that there was a potential for major spills and blowouts. The GRN takes the position that there are two causes of the BP Horizon disaster. there is a huge potential PLANET DEPOS 888. and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 more in additional places. In terms of response.1 million people work in those jobs every day in those coastal counties alone.

So in closing. Thanks to all of you. just to give you an idea of the vast scale. CO-CHAIR REILLY: Thank you. With that. A recent study showed there were about a thousand gigawatts of offshore wind available just in shallow water. want to leave with us. what I would say is the risks are great. Thank you all very much. The government estimates that there are 12 to 13 billion 386 CERTIFICATE OF SHORTHAND REPORTER-NOTARY PUBLIC I. 2010. Lee Bursten. My commission expires June 30. related to. 2014. and that I am neither counsel for. in its outcome. I think we're prepared to conclude. Third reason. but the Europeans have. if you just look at the Atlantic coast. that said proceedings were taken by me stenographically and thereafter reduced to typewriting under my direction. and in the ocean.PLANETDEPOS. A gigawatt by comparison is about two average sized power plants. the officer before whom the foregoing proceedings were taken.COM .3767 | WWW. So you can see there's a huge potential for electricity generation. that could be used to power our cars. financial or otherwise. one that we have not explored. I have hereunto set my hand and affixed my notarial seal this 11th day of November. That's probably about eight or nine months' worth of our annual consumption.433. ________________________ NOTARY PUBLIC IN AND FOR THE DISTRICT OF COLUMBIA 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 barrels of oil off the Atlantic and Pacific shores. materials you have. and make sure that our staff gets them. And it's renewable.the risks are great from offshore drilling. For example. nor employed by any of the parties to this case and have no interest. do hereby certify that the foregoing transcript is a true and correct record of the proceedings.) PLANET DEPOS 888. but I believe you should recommend that offshore drilling should not be spread to coasts where it is not currently occurring.NATIONAL OIL SPILL COMMISSION MEETING CONDUCTED ON TUESDAY. very close to our shores. certainly not by an order of magnitude. Gravitz. I know it's not in your sort of brief from the President. NOVEMBER 9. IN WITNESS WHEREOF.m. there is really so little oil and gas off most of the lower 48 states. You could power twice as many cars with electricity generated offshore in the Atlantic than you could with the oil and gas that's likely to be found there. less than a hundred feet deep off all of our coasts. there is more offshore electricity in wind electricity available than all the oil and gas. It's hard to imagine improving the safety by more than a couple of factors. We will accept whatever papers. the benefits -. Therefore I would humbly make a recommendation to this committee. 2010 97 (Pages 385 to 387) 385 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 387 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 for renewable energy development in the oceans. Mr. (The proceedings were adjourned at 5:43 p. Thank you.