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US oil firms ‘unprepared’ for major offshore disaster

BBC NEWS

The chief executives of five major US oil firms are giving evidence

The major oil companies drilling off the US coastline are as unprepared as BP for a major spill, the chairman of a Congressional panel has said.

Exxon-Mobil, Chevron, ConocoPhillips and Shell all have identical response plans to BP, Henry Waxman told the House energy and commerce committee.

BP’s US chief Lamar McKay is to give evidence over the Gulf disaster amid damning accusations BP took shortcuts.

He and other oil bosses will testify about deepwater drilling safety.

Congressmen have suggested in a letter to BP that the company took decisions which raised the risk of a disaster.

US President Barack Obama is due later to make a prime-time TV address to the nation to outline the next steps his administration will take on the spill.

The president has been touring Gulf states affected by the leak, which he has likened to the 9/11 attacks in terms of its impact on future US policies.

Oil has been spewing into the Gulf of Mexico since a drilling rig leased by BP exploded on 20 April with the loss of 11 lives and sank two days later.

The US Coast Guard estimates that about 35,000 barrels of oil are gushing out each day.

A cap placed by BP on the damaged oil well earlier this month is now said to be collecting about 15,000 barrels daily.

Fitch Ratings, one of the three big credit rating agencies, has downgraded BP by six notches, from AA to BBB.

The move means Fitch is less confident of BP’s ability to repay its debts following the huge clean-up and legal costs the company is expected to rack up as a result of the spill.

‘Nightmare well’

Mr McKay is attending the hearing of the House of Representatives committee on energy and environment, along with senior officials from other oil companies. His previous appearance alongside non-oil executives angered President Obama, who called it a “ridiculous spectacle”.

Opening the hearing, committee chairman Henry Waxman took a tough line, declaring that the major oil firms were “no better prepared to deal with a major oil spill than BP”.

He called the firms’ response “cookie-cutter” plans and “paper exercises”, adding: “BP failed miserably when faced with a real leak and one has to wonder whether… [the others] would do any better.”

Echoing the words of former President George W Bush, Mr Waxman said the US was “addicted to oil”.

“This addiction is fouling our beaches, polluting our atmosphere and undermining our national security,” said Mr Waxman.

While the theme of Tuesday’s hearing is deepwater drilling in general, BP chief executive Tony Hayward will face a separate House hearing on Thursday devoted to the Deepwater Horizon disaster.

Mr Waxman and fellow committee member Bart Stupak sent Mr Hayward a letter on Sunday in which they set out technical questions they expect him to answer.

The letter quotes internal communications between BP engineers before the disaster in which the site is described as a “nightmare well”.

‘Carelessness and complacency’

At issue were the choice for the design of the well, preparations for and tests of the cement job, and assurances that the well was properly sealed on the top.

Among other things, BP apparently rejected advice of a sub-contractor, Halliburton, in preparing for a cementing job to close up the well.

BP rejected Halliburton’s recommendation to use 21 centralisers to make sure the casing ran down the centre of the well bore. Instead, BP used six.

In an e-mail on 16 April, a BP official involved in the decisions explained: “It will take 10 hours to install them. I do not like this.”

Later on the same day, another official recognised the risks of proceeding with insufficient centralisers but added: “Who cares, it’s done, end of story, will probably be fine.”

“It appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk,” the congressmen write.

“If this is what happened, BP’s carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig,” they say.

graphic showing respective size of largest oil spills

President Obama has spent two days touring three states affected by the spill, which is threatening wildlife, fisheries and the tourist industry.

He will announce new steps to restore the Gulf Coast ecosystem in his TV address, according to a senior administration official who spoke to the Associated Press news agency on condition of anonymity.

The speech will be delivered from the Oval Office, a setting reserved for the most sombre and important moments in US national life.

BBC NEWS ARTICLE

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