CERAWeek: Views differ over 'systemic' problem

By OGJ editor
-- Differing perspectives on allegations about “systemic” safety problems in offshore oil and gas work emerged during a session panel session on deepwater operations at the IHS-CERA energy conference in Houston.

William Reilly, co-chairman of the US National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, defended the characterization, which appeared in the commission’s report to President Barack Obama in January an drew criticism from industry groups.

The Apr. 20, 2010, accident, which killed 11 workers, showed the industry lacked the ability to contain a deepwater spill, had provided assurance to the contrary in “pro forma response plans,” and hadn’t modernized spill-cleanup equipment, Reilly said. And the commission report found lapses not only by BP, the well operator, but also by Halliburton, which performed the cement job, and Transocean, which owned the rig.

“There’s plenty of evidence that it was a systemic problem,” said Reilly, a former administrator of the US Environmental Protection Agency who said he has investments in and sits on the boards of oil and gas companies.

Ali Moshiri, president of Chevron Africa & Latin America E&P Co., said the Gulf of Mexico problem “was not a systematic problem. It was an accident that never should have happened.”

Reilly applauded the industry’s rapid development of spill-containment capability through the Marine Well Containment Co. and Helix Well Containment Group and said, “Major obstacles to renewing drilling have been removed.”

Alluding to a strong message in the commission report, he said, “A renewed culture of safety does seem to be emerging.”

Reilly also acknowledged the need for oil and gas from deep water but warned of the consequent “migration toward risk.”

Of the need for development of challenging resources, Moshiri said, “We have to be in the deep water because the era of easy oil is over, and demand continues to grow.”

The Chevron executive said companies apply the best safety and technical standards they can.

“Safety and environmental protection is not a cost,” he said. “It’s part of the value that you create.”

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