Pressure to save time, money may have contributed to oil disaster

Cleanup and containment efforts continue at the Gulf of Mexico site of the oil spill following the Deepwater Horizon explosion.
By Steven Mufson
Tuesday, May 25, 2010; 12:37 PM

When it comes to offshore oil drilling, time isn't just money. It's a whole lot of money.

Now, five weeks after the Deepwater Horizon blowout that triggered the oil spill in the Gulf of Mexico, there is mounting attention being paid to whether concerns about money created an atmosphere of haste that -- even more than broken gadgets, buckling cement or faulty plans -- may have led to the disaster.

Even before the Deepwater Horizon drilling rig went down in flames, BP's ill-fated exploration well in the Gulf of Mexico's underwater Mississippi Canyon had been consuming time and burning through money.

BP had been drilling for six months, about twice as long as expected. And it was paying probably around $2 million a day -- half a million dollars a day just to lease the rig, and more for supplies and a bevy of top-drawer contractors such as Halliburton. The company had paid over $5.2 million since January for drilling mud alone, according to a daily drilling report. Industry experts estimate that the total cost was nearing twice the $100 million typical for deepwater wells.

"Poking anything in the deep water, it's above $100 million just for starters and the meter keeps running," said Fadel Gheit, oil analyst with Oppenheimer & Co. "For a tricky well, it could cost $150 million or $200 million."

That price tag and the pressure to save money appear to have weighed heavily on the minds of people on the Deepwater Horizon, according to interviews rig workers have given to congressional investigators and publications including The Washington Post.

"There appears to have been a number of changes in the well plan during its construction," Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-N.M.) said during a May 18 hearing. "These decisions can be driven by cost and the desire to make up lost time in a drilling project."

Industry sources say that BP told three workers from the oil services firm Schlumberger they could go home without doing a key test of the sturdiness of the cement in the hole, something that would have taken several hours; they left the rig 11 hours before the well blew up.

Rig workers and lawmakers have faulted BP for failing to pay enough attention to a spike in pressure in the drill pipe and for neglecting to ask for a second cement plug in the well -- both of which could have been addressed with more time. Instead, rig workers have said, BP pressed ahead with substituting sea water for drilling mud in preparation for closing the well and moving the exploration rig off the site. (A separate platform would be built later to produce the oil.)

BP says Transocean had primary responsibility for the rig's safety. Transocean and other contractors blame decisions by BP.

"People in these jobs are under a lot of pressure to save time and money," said Tadeusz W. Patzek, chairman of the department of petroleum and geosystems engineering at the University of Texas at Austin.

Time worries weren't the exclusive province of BP. In a 2006 trade journal, Transocean and General Electric engineers wrote about how to save time on blowout preventer tests by leaving test valves in place. At a conference in 2009, a Halliburton official spoke about how to get cement to set faster. And in a conference call last August, Transocean's chief executive was grilled by investment analysts to explain how time lost because of rig accidents and blowout preventer problems had cut into profits.

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