BP warned of rig fault ten years ago

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article7114087.ece

The Sunday Times
May 2, 2010
BP warned of rig fault ten years ago
Danny Fortson

BP faces fresh questions over the cause of the Gulf of Mexico oil spill after it emerged that problems with the type of equipment that led to the disaster were first reported a decade ago.

In June 2000, the oil giant issued a "notice of default" to Transocean, the operator of the rig that blew up last month. The dispute was over problems with a blowout preventer, a set of iron slabs that should close out-of-control wells. It failed on the Gulf of Mexico rig, triggering the explosion and oil spill.

Transocean acknowledged at the time that the preventer did "not work exactly right". The rig in question, the Discover Enterprise, was unable to operate for extended periods while the problem was fixed.

The preventer was made by Hydril, now owned by GE's oil and gas arm, and Cameron International, a Houston company. Cameron also made the preventer on the Deepwater Horizon, the rig that exploded. Its preventer was fitted at about the same time BP was complaining of problems with its sister vessel.

BP's past problems with the preventer emerged as a giant oil slick, fed by the uncapped well, began lapping the coast of Louisiana, threatening to create America's worst environmental disaster since the Exxon Valdez oil spill in 1989.

The US Coast Guard estimated that it is releasing 5,000 barrels of oil a day into the sea - though some experts claim it may be flowing at fives times that rate.

Fears were growing this weekend that the well head could fall apart, potentially unleashing an unresticted flow into the ocean.

Tony Hayward, BP's chief executive, flew to Houston today to manage the worsening crisis. More than $23billion (£15billion) has been wiped off BP's market value amid growing worries over the costs of the clean-up. Estimates range from $3billion to $12billion. Hayward pledged to pay all "legitimate" claims arising from the spill.

Louisiana, Alabama, Mississippi and Florida have all declared states of emergency as winds pushed the slick toward sensitive marshlands and fishing areas.

President Barack Obama issued a moratorium on new drilling until the cause of the disaster was determined. He also ordered the Department of Defense to use cargo planes to spray chemical dispersant.

The government, BP and Transocean have all launched investigations. These are focused primarily on the preventer that did not shut, allowing a torrent of high-pressure oil and gas to shoot up through the rig floor and cause the explosion. BP has sent a small fleet of submersible robots to the well, 5,000ft down, to try to activate the preventer, but they have been unsuccessful.

A Cameron spokesman said that this was the first time one of its preventors had failed to stop a blowout.