Category: business

The Wall Street Journal and other media around the world have reported on systemic failures of the global oil industry and government regulators identified by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.  These articles are based on the release of a single chapter, Chapter 4, of the final report due for release on 11 January 2011.

A media release from the Commission includes the following findings from Chapter 4

“The well blew out because a number of separate risk factors, oversights, and outright mistakes combined to overwhelm the safeguards meant to prevent just such an event from happening.  But most of the mistakes and oversights at Macondo can be traced back to a single overarching failure—a failure of management.  Better management by BP, Halliburton, and Transocean would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate, and address them.”

“. . .the Macondo blowout was the product of several individual missteps and oversights by BP, Halliburton, and Transocean, which government regulators lacked the authority, the necessary resources, and the technical expertise to prevent.”

“The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again. Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.”

“What we. . .know is considerable and significant:

1. each of the mistakes made on the rig and onshore by industry and government increased the risk of a well blowout;
2. the cumulative risk that resulted from these decisions and actions was both unreasonably large and avoidable; and
3. the risk of a catastrophic blowout was ultimately realized on April 20 and several of the mistakes were contributing causes of the blowout.”