Outsourcing explosions – a BP speciality?

23 Apr 2010 admin

The explosion on a BP rig off Louisiana on Wednesday will remind Americans of BP’s atrocious safety record. Eleven workers are missing and almost certainly dead, with seventeen injured after the “Deepwater Horizon” drilling rig blew up while drilling a deep well in the Gulf of Mexico. BP CEO Tony Hayward promised change when he took over in 2007, but this is all too reminiscent of the Texas City disaster in 2005 that killed 15. That refinery fire was widely seen as a result of BP’s irresponsible cutbacks during the last 90s and early 2000s under previous CEO John Browne – trying to repeatedly cut operation costs by 10%.

After the oil price collapsed in 2008, BP (along with most other oil majors) committed to major savings, cutting staff by 1000s. Only two months ago Hayward announced that drilling operations would become “more efficient”. We asked a BP manager in Tbilisi (Georgia) last year whether these cuts would affect operations – he assured us that safety would be protected, as most cuts were being passed on to external contractors.

Yet in the world of oil majors, many (if not most) people on the ground are employed by external contractors, doing the dirty work. The semi-submersible drilling rig that exploded in the Gulf of Mexico belonged to Transocean; only six out of 126 workers on board were direct employees of BP. Transocean must have come under pressure to make savings and drill the wells for less cash. Was the explosion the outcome of BP’s desires to protect profits at the expense of worker safety?

The rig sank as oil continued to flow from the newly drilled well. Apparently, “the plan was to use a remotely operated vehicle to “hot stab into the blowout preventer” and stem the source of the fire, although it was unknown when that might happen.” Taking “hot stab” at it doesn’t sound like the chances of success are great. Given BP’s record so far, fishermen in the southern states might want to push BP to act fast, or we might have a repetition of the Timor Sea spill off Australia that continued for months last fall.

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