BP's Kent Wells questioned about who had final responsibility in drilling work

By Joel Achenbach and David S. Hilzenrath
Washington Post Staff Writers
Thursday, August 26, 2010; 8:12 PM

HOUSTON - Federal investigators on Thursday grilled BP Senior Vice President Kent Wells on the company's history of safety problems in the Gulf of Mexico and demanded more clarity on who at the company is ultimately responsible, and accountable, for drilling operations.

Investigators cited a 2003 letter to Wells from the federal Minerals Management Service that blasted BP for "incomplete planning, poor communication, insufficient knowledge or training, and a lack of effective supervision."

Wells, who has been a prominent company spokesman for the technical response to the Macondo gusher, defended BP's safety culture.

"We don't jeopardize safety for cost," Wells testified.

The investigators for the Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement (the successor agency to MMS), who for four months have been searching for the cause of the April 20 Deepwater Horizon disaster, did not appear convinced.

They asked Wells to read aloud passages from the 2003 MMS letter. At that time, Wells was a BP executive working for the shallow-water drilling operation in the gulf. Two incidents, including a blowout that caused a rig fire, had prompted an internal BP investigation, but MMS wrote that BP had blamed the equipment involved, and the contractor, rather than taking full responsibility.

"This appears to indicate that BP does not regard its required oversight of contractor operations to the level of accountability MMS desires," the letter states. The circumstances of the incidents "have raised questions about the ability of BP to safely conduct drilling operations in the Gulf of Mexico."

Capt. Hung Nguyen, the board's co-chairman, cited the 2003 incidents, a 2005 explosion at a BP facility in Texas City, Tex., that killed 15 workers, and the Deepwater Horizon blowout, and said, "That tells me there's a trend there about the safety culture of BP."

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Wells said the company reformed safety practices after the earlier incidents. Texas City, he said, was "a devastating event for us." . . . In BP, it's had a dramatic impact. We tried very diligently to show there's not a conflict between safety and cost. Never should cost get in the way of doing something safely."

For months the investigators have been concerned that it is unclear who was in charge of the Deepwater Horizon in the days and hours leading up to the April 20 explosion. BP's senior "company man" on board, Ronald Sepulvado, left the rig April 16 to attend blowout-preventer classes and had only a 30-minute overlap with his replacement, Robert Kaluza.

Kaluza, who has been subpoenaed but has invoked his Fifth Amendment right against self-incrimination, had limited experience on the Deepwater Horizon. He was involved in the fateful decision late April 20 to continue to take heavy mud out of the well and replace it with lighter seawater, despite questionable pressure-test results. Sepulvado, meanwhile, has testified that he had turned off his cellphone and did not check e-mail after leaving the rig.

Nguyen asked Wells who has "total awareness and accountability" for safe operations.

Wells said, "We try to have everybody focused on safe operations. . . . We want everybody's head in the game."

Nguyen shot back: "If everybody's in charge, nobody's in charge, is that correct?"

Wells said he disagreed.

Nguyen asked which company owned the rigs that have drilling the two relief wells at the disaster site as part of the emergency response to the Macondo blowout. Wells answered that Transocean owns the rigs. Noting that the same "characters" are doing the relief wells as drilled the Macondo well, Nguyen asked, "Is it because of greater public scrutiny and government oversight that we have not had a blowout with these relief wells?"

"I do not believe that," Wells said.

Asked by Halliburton lawyer Don Godwin whether he considered Halliburton, the contractor for the Macondo well, to be the world's premier well-cementing company, Wells gave a pointedly equivocal response.

"I have had some good experiences with Halliburton and some not-very-good experiences with Halliburton."

Pat Fanning, attorney for Transocean rig official Jimmy Harrell, asked Wells whether the BP witnesses who have appeared before the panel - and who have often expressed ignorance about key events and decisions - had all been told by superiors to "not educate yourself" about the incident so that they would be able to answer "I don't know" when questioned.

"There's no bigger plot. I've been as honest as I can be with this," Wells said.

Wells was followed at the witness table by David Sims, a BP manager who was visiting the rig when the blowout occurred.

Sims was asked about an e-mail saying that a different well casing design, one with an additional barrier to hydrocarbon flow, would cost an additional $7 million to $10 million. Why was cost mentioned, Matthews wanted to know.

"We're a business. We have shareholders. Our job responsibility is to be fiscally responsible. . . . Every decision has some cost factor. Every company that tries to be a company has that. . . . It's not a deciding factor, it's not a major factor, a primary factor. In this case, it's serendipity."

Sims gave testimony and was presented with internal BP documents that added to the controversy surrounding decisions in the endgame of the drilling operation.

Sims said he did not know that reports from Halliburton contained a disclosure about the risk of gas flowing into the well. A Halliburton simulation of the Macondo well two days before the explosion warned of the potential for a severe gas flow problem.

Although a BP witness at an earlier hearing disputed the value of the simulations, Sims was presented with documents showing that BP had been using the reports to guide its decisionmaking.

He also testified that BP could have put the drilling operation on hold while it procured more devices, called centralizers, to center the pipe in the well. Halliburton recommended that BP use 21; the company used six.

Sims was presented with documents showing that BP had at one point favored an alternative to the piping configuration it ultimately used in the final stages of the well's construction. The alternative cost more but offered an extra barrier against a gas leak.

He was also asked about using two particular chemicals in a procedure to flush drilling mud from the well. He said he had never done anything like that before.

The chemicals were not intended for that purpose, but under a quirk in environmental protection requirements, using them in the well could save BP money by allowing it to dump the chemicals in the gulf instead of disposing of the material onshore. Some observers have suggested the mixture might have clogged equipment and fouled a crucial test of the well's integrity.

Sims was also asked to read from documents showing that on the day of the blowout BP revised a written plan for the final work on the well, changing the order of two procedures. An earlier version of the plan called for testing the well's integrity before replacing heavy drilling fluid with lighter seawater in the well. The heavy drilling fluid served as a counterweight against a potential blowout.

The day of the blowout, the BP plan reversed the order, calling for a substitution of seawater before the test.

achenbachj@washpost.com hilzenrathd@washpost.com

Hilzenrath reported from Washington.

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