Posts Tagged ‘Transocean’

December 22, 2011, 11:33 AM EST

By Joe Carroll and Juan Pablo Spinetto

Dec. 22 (Bloomberg) — Chevron Corp., the operator of the Brazilian offshore well that triggered oil leaks, and rig owner Transocean Ltd. will defend executives threatened with criminal indictments in the South American nation.

Chevron learned that Brazil’s federal police intend to indict employees involved in the drilling that led to the Nov. 7 leaks from seafloor fissures near the $3.6 billion Frade development, Kurt Glaubitz, a spokesman for the San Ramon, California-based company, said in a statement late yesterday. Transocean, in a separate statement late yesterday, said it will “vigorously defend the company and its collaborators.”

Chevron, the second-largest U.S. energy company by market value, has been fined 50 million reais ($26.9 million) and ordered to halt all drilling and crude production off Brazil’s coast after discovering the leaks last month. Chevron estimated the volume of the seeps at 3,000 barrels during the eight days it took for the company to locate and halt the leaks.

Chevron and other offshore oil explorers are facing increased scrutiny of their drilling practices in the wake of BP Plc’s 2010 blowout of a well in the Gulf of Mexico that killed 11 workers and led to the worst U.S. offshore crude spill.

In Brazil, the concerns have been compounded as the coastal city Rio de Janeiro prepares to host the 2014 World Cup and the Olympic Games two years later. Chevron’s Frade oil field is about 230 miles (370 kilometers) northeast of Rio in a region of the Atlantic Ocean known as the Campos Basin.

Employees Indicted

Chevron underestimated the amount of pressure at an oil deposit it was exploring, and crude leaked from the reservoir for about eight days, George Buck, president of Chevron’s Brazilian subsidiary, said on Nov. 20. Buck was among 17 Chevron and Transocean employees targeted for indictments, the Folha de S. Paulo newspaper reported yesterday. Glaubitz declined to identify the employees targeted for indictment. George wasn’t available to comment, the spokesman said.

Anthony Dovkants, a spokesman for Vernier, Switzerland- based Transocean, said in an e-mailed statement that the allegations were without merit.

Chevron rose 47 cents to $105.90 at 10:30 a.m. in New York trading. Transocean rose 1.3 percent to $40.39.

BP has booked more than $40 billion in losses related to last year’s Gulf disaster that sank Transocean’s Deepwater Horizon rig and spilled an estimated 4.9 million barrels of crude. The London-based oil producer also faces hundreds of lawsuits by fishermen, hoteliers and property owners in coastal areas where crude washed ashore.

Other Oil Spills

ConocoPhillips, the third-largest U.S. oil company, said yesterday it’s taking responsibility for two oil spills in China’s Bohai Bay in June and is setting up compensation funds to support environmental research and affected communities.

Royal Dutch Shell Plc, Europe’s largest oil company, shut its 200,000 barrel-a-day Bonga field off Nigeria after a leak during a tanker loading caused what may be the country’s worst offshore spill in more than a decade. The Bonga deep-water discovery produces almost 10 percent of Nigeria’s crude.

Exxon Mobil Corp. of Irving, Texas, is the biggest U.S. energy company by market value.

–Editors: Jasmina Kelemen, Tina Davis

To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net

SOURCE ARTICLE

(Reuters) – A barrage of court claims pitting BP Plc against its partners in the Gulf of Mexico oil spill could lay the groundwork for billions of dollars in settlements to spread the costs of the disaster.

BP has sued Transocean Ltd, Halliburton Co and Cameron International Corp, in one of the biggest legal moves since last year’s blowout. It is seeking up to the full cost of the disaster — estimated at $42 billion — plus costs, interest and punitive damages from each of the companies that helped it drill the doomed well.

So far, BP has met the cost of the clean-up effort alone and is paying compensatory damages to fishermen, property owners and others in the Gulf area affected by the spill.

“To my knowledge, Transocean, Cameron and Halliburton haven’t paid a nickel to victims or for the cleanup,” David A. Logan, dean of Roger Williams University School of Law in Bristol, Rhode Island, said on Thursday.

“These suits are intended to spread liability, but they’re also part of a larger public relations effort for BP,” he said. “BP wants to remind the world they weren’t the only corporation that was a key player in this cascade of bad events that led to a remarkably bad outcome.”

The lawsuits, filed Wednesday in U.S. District Court in New Orleans, come one year after the Deepwater Horizon rig blast killed 11 workers and created an environmental disaster. Wednesday was the deadline for companies connected to the spill to file claims against each other.

Transocean owned and operated the rig. Cameron was the maker of the blowout preventer, the so-called fail-safe device that neglected to automatically shut down the well. Halliburton handled the cementing work on the well.

Legal experts say they had anticipated BP filing the cases but predicted they would not ultimately go to trial.

“I expected that before this was over, they would all be suing one another,” said Edward F. Sherman, a professor at Tulane University Law School. “Ultimately the parties will probably divide up responsibility and reach a settlement.”

A settlement reached among several companies could allow BP to recoup some or all of the money it is spending to compensate victims, run cleanup efforts and provide support to Gulf state governments.

James Roy, a lead attorney for plaintiffs suing BP, said he thinks BP will ultimately shoulder most of the disaster’s cost.

“I don’t think these suits change the economy of who pays for the damages,” he said. “BP, in our opinion, is the primary target defendant.”

Meanwhile, BP has been sued by its partners in the well, Anadarko Petroleum Corp and Japan’s Mitsui. That lawsuit challenged BP’s demands that they contribute to the cost of the clean-up effort.

Transocean shares in Switzerland closed down 2.2 percent, while in New York BP shares gained 0.3 percent. Halliburton shares were up 1.6 percent and Cameron slipped 0.6 percent.

FRAUD ALLEGATION

In court papers, BP said Halliburton concealed critical information that could have prevented the disaster.

“Halliburton’s improper conduct, errors and omissions, including fraud and concealment, caused and/or contributed to the Deepwater Horizon incident,” BP said in the lawsuit.

Halliburton, which said it would “vigorously defend” itself against the claims, sued BP in Texas state court Tuesday accusing BP of failing to accept responsibility for the disaster, as called for in its contract.

“The plain and unequivocal language of the contract requires BP to defend and indemnify (Halliburton) from virtually all claims arising out of the blowout,” Halliburton said in its lawsuit.

Service providers’ contracts with operators usually provide indemnities against any environmental damage that may result from their work. This could limit BP’s opportunities to recoup cash from Transocean or Halliburton.

In January, Halliburton disputed a U.S. presidential commission’s characterization of its cementing work on the blown-out well, saying that the report omitted key facts.

Since the outset of the disaster, BP has sought to blame its contractors, namely Transocean. The presidential investigation into the report did criticize these companies, but directed most of its criticism at BP.

BP was widely criticized for trying to shift blame onto Transocean during the crisis. President Barack Obama called the mudslinging among the companies a “ridiculous spectacle.”

The latest legal claims were filed as part of the multi-district litigation in New Orleans that includes hundreds of oil spill-related lawsuits against BP. A federal judge has set February 2012 as a trial date.

Separately, BP set up a $20 billion victims’ compensation claims fund called the Gulf Coast Claims Facility run by attorney and mediator Kenneth Feinberg.

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon”, U.S. District Court, Eastern District of Louisiana, No. 2:10-md-02179.

(Additional reporting by Sakthi Prasad in Bangalore and Matt Daily in New York; Editing by Mike Nesbit, Maureen Bavdek, Tim Dobbyn and Bernard Orr)

SOURCE ARTICLE

BY BILL CAMPBELL (RETIRED HSE GROUP AUDITOR, ROYAL DUTCH SHELL GROUP)

It should come as no surprise to the readers of this web site that BP plan to sue the owner and operator of the Deepwater Horizon Transocean.  In my opinion they will be successful in so doing.

Lost in the mass hysteria of the time, including the emotional and disproportionate reactions of the US President who saw himself in the firing line, it appeared to be universally ignored that BP were after all, in  matters related to the drilling of the well, the client, with Transocean, the Contractor.

In simple terms that we all can understand.  If for example your regional government asks a competent agent to design and build a bridge for them, and the bridge falls down due to construction flaws, all this resulting in multiple fatalities, then the client does not appear in Court, but the contractor does.  It was the Contractor who was accountable in Law for the design and construction of the bridge, not the client.

BP and Shell et al many moons ago gave up the resources they had both in assets and people to competently drill wells deep or shallow, on land or offshore.  Using the jargon of the time, drilling wells was no longer seen as a core skill anymore, and subsequently, such work was farmed out to others such as Transocean who had the assets and competency to do such work.

So BP argue that “But for Transocean’s improper conduct, errors, omissions, and violations of maritime law, there would not have been any blowout of the exploratory well,”  “Nor, but for Transocean’s misconduct, would there have been any explosion and fire on the Deepwater Horizon, or any deaths and personal injuries, or an oil spill in the Gulf of Mexico.”

Do they have a case? Consider just 6 salient points in their favour in making an argument against Transocean.

Although there was a BP representative on board Deepwater Horizon , Transocean was responsible for the integrity testing of the well.  A failed negative pressure test being accepted as a good test was at least a shared culpability between Transocean and BP.

After the failed negative pressure test, and at a crucial period of time when the drilling mud was being replaced by seawater thus lightening the hydrostatic column, Transocean allowed mud to be exported to the support vessel thus masking the gains and losses from the active mud tanks. This amounted to gross negligence because the mistake made over the negative pressure test could have been highlighted during this safety critical activity by the mud engineer observing increasing returns from the well.

So ingress from the formation into the well went undetected over a significant period of time until mud started to spew onto the drill floor.  But this rig and its crew had experienced a number of drill kicks in the proceeding months and had thus much forewarning that his type of event could happen.  Surely therefore, it would be reasonable to expect that with an impending emergency in the form of a blowout the crew would have rehearsed what to do until it was ingrained.  But apparently their emergency procedures were inadequate.  And in any case, despite the well being aligned to the blowout surge diverter, as it should have been, they manually diverted the flow to the mud treatment skid, a decision that proved fatal because it allowed gas to migrate all over the vessel.

For many months before the disaster their were problems with the well resulting in on occasion mass ingress of gas in such volumes as to create a flammable atmosphere on the rig.  Despite this, the general platform alarm warning workers of a gas releases was muted in the accommodation. Given that drill kicks were occurring on the rig you would have expected that the emergency procedures and automatic gas detection systems would have been in perfect condition – but they were not.

The gas alarms were just that, as per their design no automatic executive action was taken by these detection system to isolate areas where sources of ignition were present and since the first gas was detected on the fateful day some 9 minutes passed before the explosion.  During this period no one took any manual action to isolate potential sources of ignition.

The Captain, the person who was charged with the health and safety of all on board, and his immediate support, were unfamiliar with the fire and gas alarms, these alarms were accepted on the bridge, but no one took any command and control of the situation.  Subsequently the explosion took place when gas entered No 3 Engine room many minutes after the first gas alarm had sounded.  With the explosion all hope of recovery of the situation was gone.

Bill Campbell

AFP – BP has filed a lawsuit against rig operator Transocean for $40 billion in damages over the Gulf of Mexico oil spill, in a legal fightback by the group a year after the disaster.

The British firm, the target of blame during the crisis, filed suit against Swiss-based Transocean on Wednesday, the one-year anniversary of the start of the biggest maritime oil spill in history, and also against oil services giant Halliburton and parts manufacturer Cameron.

Transocean operated the Deepwater Horizon rig which was hit by an explosion on April 20, 2010, killing 11 workers and sparking the environmental disaster.

At one point during the crisis, the future of BP as a group appeared to be at risk from the potential long-term costs.

“But for Transocean’s improper conduct, errors, omissions, and violations of maritime law, there would not have been any blowout of the exploratory well,” a court filing from BP argued.

“Nor, but for Transocean’s misconduct, would there have been any explosion and fire on the Deepwater Horizon, or any deaths and personal injuries, or an oil spill in the Gulf of Mexico.”

The documents, filed in a New Orleans court, added that BP was seeking “at least $40 billion (27 billion euros, £24 billion) in damages and contribution from Transocean.”

Solemn ceremonies took place in the US on Wednesday a year on from the start of the environmental catastrophe.

It took 87 days to cap the well, by which time 4.9 million barrels (206 million gallons) of oil had gushed out of the well deep below the surface of the Gulf.

In a separate statement, BP said it had “filed suit against Halliburton in order to hold the company accountable for its critical role in the Deepwater Horizon accident.”

Halliburton mixed the cement that cemented the blown-out well in the accident.

BP said that Halliburton had not provided it with the results of failed cement tests and company employees “missed critical signals that hydrocarbons were flowing into the wellbore.”

On Cameron, BP said it that was suing the parts manufacturer over its design of the blowout preventer on the Macondo well.

“BP has sued Cameron for its faulty design and manufacture of the blowout preventer (BOP), and its negligence in the maintenance and modification of the BOP,” said BP.

It was “a critical safety device that failed to prevent the blowout of the Macondo well,” added the energy giant.

SOURCE ARTICLE

FROM A FORMER SHELL NORTH SEA PLATFORM OIM

You may be interested in this article from today’s Aberdeen Press and Journal

http://www.pressandjournal.co.uk/Article.aspx/2214497

For many years now we have heard the phrase “we are committed to safety”  What exactly does this mean?  Is it to pacify the readers of various media reports or do the Companies who utter such statements really understand the meaning they infer.  Perhaps we can revisit what these statements mean,  maybe not what the dictionary defines!

Commit
Commitment
Committed

Time for Regulators world wide to take off the gloves and put an end to the continued application of the blind eye approach to Big Oil and hit them hard where it hurts, in the pocket.  Perhaps a few prosecutions of Company Directors would end this nonsense for ever.

Posting on Shell Blog by “retired shellee” on Jun 6th, 2010 at 8:43 am

Seeing Steven Newman performing a bollywood dance does not bode very well for Transocean. Nearly 15 years ago the CMD of Shell danced the Macarena and soon after RDS went into mortal decline. Chiefs of large corporations must remain focussed and not become sun kings surrounded with sycophants. They do represent their corporations in words and actions. Dancing the macarena or making bollywood moves has nothing to do with the core business of either company!

Posting on Shell Blog by “Nutshell” on Jun 6th, 2010 at 8:23 pm

You are so right, retired shellee. I too remember this period well.

Some bright spark (with a reputation to create for himself in HR) decided that all he needed to do was to persuade the CMD (especially Cor Herkstroter) of their lack of ‘leadership skills’ that he saw and envied in corporate America.

And so arrived LEAP (Leadership And Performance) to transform the financial performance of the Group. The only winners in this stupid exercise were ex GE sychophant Noel Tichy and his S&P 500 boff Larry Selden from the University of Columbia, who were flown in at huge expense on Concorde to London and Amsterdam to evangelise (almost literally) about their ideas on how to create shareholder value US style

I am ashamed to say that, at the time, we were all taken in by this bullshit and went along with the CMD’s show. Not only did we dance the Macarena (led by some brainless but suddenly important and motivating secretary) but we were even ‘bussed’ to some women’s refuge in down and out London to behave like some New York Pastor to listen to others’ woes and offer our guidance and advice on how to deal with their problems. What a joke!

So, if you are looking for a point at which RDS began to lose the plot in terms of understanding and nurturing its core skills, then this must be it – and if you are reading this and still working in HR in Shell, then you have a huge legacy of self-indulgent and destructive behaviour to answer for.

Shame on you!

RELATED ARTICLE: A song and dance at Shell: Astonishing revelations by a Shell Insider

The Great Leader: “SPACE, VISION AND STRATEGY”: Sir Philip Watts, Shell Chairman who once donned a space suit at a CMD presentation in Maastricht. Watts was forced to resign in 2004 after the Shell securities fraud when he and other senior Shell execs engaged in lies and cover-up about the volume of Shell’s proven hydrocarbon reserves.