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Gulf of Mexico oil spill: Transocean silent as BP bears the brunt of anger

Sunday Telegraph

As BP bears the brunt of anger over the Gulf of Mexico oil slick, drilling company Transocean is staying out of the spotlight.

By Philip Sherwell, US Editor
Published: 7:46PM BST 05 Jun 2010


They are not the usual images of a buttoned-down oil industry executive honouring employees at a corporate gathering. But in the video posted on the Transocean website, Steven Newman performs an impressive Bollywood dance routine accompanied by four scantily-clad women.

The American chief executive of the world’s biggest offshore oil drilling company was fulfilling a pledge to demonstrate his dance moves if the company’s Indian division achieved top safety award targets.

Mr Newman and Transocean have very different safety concerns now. The firm owned operated the doomed Deepwater Horizon rig that was blown apart in April while drilling a well for BP, killing 11 workers and unleashing the disastrous Gulf of Mexico oil spill.

As a result, Mr Newman seems to have lost the taste for the spotlight that he in displayed in Mumbai last year. Instead, he and his company have maintained a notably low profile, even as oil this weekend reaches the white sand beaches of Florida and grim images of seabirds coated in crude dominate front pages.

Their absence is in stark contrast to the spectacular vilification of British firm BP and its chief executive Tony Hayward, who has become public enemy number one for both Washington and the wider American public.

In his latest broadside, President Barack Obama on Friday night scolded BP for spending $50 million on a television advertising campaign in which the energy giant apologised for the oil slick and explained its role in the clean-up process. He claimed the company should not be spending money on a PR offensive while allegedly “nickel-and-diming” (shortchanging) locals hit by the spill.

Yet while lambasting BP for even seeking to defend its reputation, Mr Obama has showed no apparent interest in directing similar wrath at Transocean – fuelling suggestions that as a foreign company, BP is simply a convenient whipping boy and a politically easier target.

“Transocean has done a very good job of hunkering down and keeping quiet while BP takes the flak,” said a US oil industry source. “BP is clearly the ‘responsible party’ for the response under American law. But this was Transocean equipment and workers and at some stage they are going to have to answer questions about their role.”

Because it leased the rig, drew up the plans for the well and owned the oil, BP is the “responsible party” under American legislation for the leak, containment and clean-up.

But as Transocean was the rig’s owner and operator, its role is also under scrutiny. Both the criminal investigation by the Department of Justice and forthcoming civil compensation cases will examine the firm’s actions – yet its name is rarely mentioned by US politicians or media.

Mr Hayward has certainly made several verbal blunders, most notably when he said last week that “I’d like my life back”. He rapidly apologised for an off-the-cuff remark that provoked fury in the light of the 11 lives lost in the explosion and thousands of livelihoods endangered by the spill.

The 53-year-old Briton has become one of the most recognisable faces on US television screens and the focus for an anti-British backlash as oil pours into the Gulf despite repeated attempts to plug the leak.

Mr Newman has avoided the media, other than being briefly forced into the spotlight for an awkward appearance before a congressional hearing in Washington. Yet the Transocean company magazine Beacon features an interview with him in its latest edition under the headline ‘Ready to Roll’.

“I love this business,” he says. Asked to describe himself in three words, he chooses: “Perfectionist. Demanding. Ambitious.” He also discloses that at the time he was reading ‘How The Mighty Fall’ (a book outlining why some companies go into decline and others avoid that fall).

In the interview, Mr Newman emphasised the importance of safety but also the company’s “can-do” principle of challenging the boundaries of nature though innovation and new technology.

Transocean – corporate motto: “we’re never out of our depth” – is an industry behemoth which employs 18,000 people in 30 countries, but is based in the landlocked canton of Zug, Switzerland, for tax purposes.

The firm declined to make an executive available for interview, but issued a corporate declaration about safety when contacted by The Sunday Telegraph.

“Transocean’s first commitment is the safety of its people,” a spokesman said. “Recognition by government agencies and industry peers over the years attest to the positive impact of Transocean’s safety programmes.”

The investigations into the Deepwater Horizon disaster are focusing on two crucial failures – what caused the initial explosion and why the blow-out preventer (BOP) device did not then block-off the well, preventing the leak.

The role of the BOP, which is supposed to operate automatically, has been at the centre of the finger-pointing between BP and Transocean after the accident. Problems have since been reported with two BOPs on Transocean drillships operating off India.

Transocean also come under fire from lawyers representing fishing and tourist businesses hit by the spill and the Department of Justice for seeking to use an 1851 law to restrict its liability for economic damages to $26.7 million.

“It’s just ridiculous and outrageous,” said Stuart Smith, a New Orleans lawyer representing the Gulf Oil Disaster Recovery Group, an umbrella organisation, who argues that the Oil Pollution Act of 1990 supersedes the old law.

By contrast, BP said that it will not seek the protection of a cap of $75 million on economic damages offered by the 1990 Oil Pollution Act, although Gulf state officials have sharply criticised the speed of pay-outs by the company.

Meanwhile, on the floor of the Gulf of Mexico, a cap installed last week over the gushing well was funnelling some oil 5,000 ft up to boats at the surface.

Thad Allen, the retired coastguard commandant heading the federal response, said that the device had captured 6,000 barrels in its first 24 hours in position – equivalent to between a third and a half of the 12,000-19,0000 barrels escaping daily.

The containment rate is expected to increase as engineers slowly close vents in the cap, raising the hopes that BP is finally making significant progress in its efforts to stem the leak.

But yesterday, in his weekly presidential radio address, Obama maintained his forceful tone toward BP, saying: “We will make sure they pay every single dime owed to the people along the Gulf coast.”

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