Deepwater Horizon COMMUNICATION AND FAILURE WITHIN BP

Deepwater HorizonCOMMUNICATION AND FAILURE WITHIN BPAnnie Dai Jonathan Pearson Boiar Qin Victoria Wong Jason Zeng

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Did you know…?

Deepwater Horizon left 11 men dead and spilled millions of barrels of oil into the Gulf of Mexico—the worst oil spill of all time.

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BP has had 3 CEOs in the last decade

John Browne Tony Hayward Bob Dudley1989-2007 2007-2010 2010-???

Wall of Shame

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All levels of BP were responsible for disasterCEOMisguided safety regulationsNo accountability for accidents

ManagersNarrow, profit-oriented mindsetInformation loss and corruptionBad decisions on project changes

Engineers and OperatorsFailure to interpret dataLack of communication with managers

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A HISTORY OF RISKY BEHAVIOR

Background

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For bigger oil deposits and greater profits…

… oil companies move further offshore and deeper into the ocean.

Depth increase in oil wells from 1940 to 2010

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BP finds success in the Gulf of Mexico…

BP drilling sites in the Gulf

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BP disregards safety and proper protocol

Texas City Refinery, 2005 Alaska Oil Spill, 2006

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LACK OF ACCOUNTABILITY

The CEO

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Personnel safety vs. Process safety

“[We will] renew our commitment to safety.“

(2000)

“[There will be] no stone left unturned [in the Texas City investigation]“

(2005)

John Browne, CEO 1989-2007

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“[We will focus] like a laser [on safety]”

Tony Hayward, CEO 2007-2010

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Hayward’s testimony to Congress

“It’s an accident stillunder investigation.No one is yetaccountable.This could happento any oil companyin the industry.”

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Hayward’s Prioritieshttp://www.youtube.com/watch?v=EIA_sL4cSlo

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Tony Hayward faces public backlash

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Change in CEO; no change in attitude

“If you put aside this Macondo, 2009 was the best year we’d had, and 2010 was also heading in that direction.”

Bob Dudley, CEO 2010-???

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INFORMATION LOSS AND CORRUPTION

The Managers

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BP commissioned Halliburton for cement expertise

Cement samples

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Halliburton BP

February

March 8th

April 13th

April 18th-20th

Severe Failure

Failure

Failure

Success!

?

Success!

April 26th

April 20th –BP pours cement

“Tweaks” Parameters

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BP is behind schedule

First Macondo oil rig overturns

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Centralizers ensure even cementing

“One Piece” model “Slip On” model

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Poorly Cemented Well

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Centralizers ensure even cementing

“One Piece” model “Slip On” model

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15 missing centralizers

“…who cares, it’s done, end of story, [we] will probably be fine and we’ll get a good cement job.”

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Underwater view of the well

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FAILURE TO INTERPRET DATA

The Engineers and Operators

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First Negative Pressure Test

Uneven pressures before test

Ideal pressure with open valve

Actual test: uneven pressure with open valve

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Second Negative Pressure Test

Manual Pressure Bleed

Unknown Pressure Build-up

Manual bleed lowers pressure Pressure builds up almost immediately

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Third Negative Pressure Test

Manual pressure bleed

on kill line

Pressure inside pump remains

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“Bladder Effect”

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Response from BP manager Mike,

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Regards, Pat

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UNCERTAINTY

Assumption: Successful Negative Pressure Test!

Fear? Ignorance?Misinterpreted Data?Lack of Feedback

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KicksDrill pipe pressure log shows that when the pump (black) was off the pressure inside the well (red) increased

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FINAL THOUGHTS

Conclusions

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BP engineer recalling the Deepwater Horizon disaster

"―[a]t the end of the well sometimes they think about speeding up. This may be because everybody goes to the mindset that we‘re through, this job is done...everything‘s going to be okay."

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ConclusionsAll CompaniesDon’t just fire the CEO after disasterInvestigate internal communications

ManagementSustainability before profitFacilitate open communication

EngineersTake responsibility for your workBe honest about your limitsFocus on doing the job correctly

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Questions?