BP: Lessons Learned from an Internal Investigation

Almost six months after the largest oil spill in American history, BP has issued a report for the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement. The report is titled “Deepwater Horizon Containment and Response: Capabilities and Lessons Learned.” The report describes what went down during the Deep Horizon incident and what is being done to ensure an event like that doesn’t happen again. That same week, BP released another report based on findings from the internal investigation at BP that was launched to determine the causes of the explosion and spill.

The thing I like the most about these reports is that BP is taking a step in the right direction and finally sharing information about the April 20th events and the actions taken since then.

Placing the Blame

BP continues to face a lot of scrutiny for the way the company initially responded to the disaster in the Gulf. BP has been criticized for reacting too slowly, being unprepared to deal with the crisis and downplaying the amount of oil leaked into the Gulf. In the report released this morning, BP states that a number of judgment and equipment failures from a number of different parties- including Transocean, Halliburton and BP itself; are to blame for the disaster in the Gulf. The Wall Street Journal article “BP to Take Some, Not All, Blame in Gulf-Spill Report,” discusses the latest report release from BP:

“The report finds BP facing a tricky balancing act. BP risks opening itself up to greater legal liability if it takes a large part of the blame for the disaster, but if it doesn’t do this it will likely be accused of evading responsibility.”

No company wants to serve as an example of what not to do. Just as lessons have been learned from faults at Tyco, Siemens, Xerox and a number of other companies, BP hopes that their findings will lead to new developments in preventing oil spills and related catastrophes. Some say recent efforts and transparency demonstrated by BP is “too little too late”, but I’d like to think of it as “better late then never.” Interestingly enough, after the internal investigation report was released this morning, BP stock went up 2%. In a press release from BP, Chairman of the Board Carl-Henric Svanberg stated:

“I believe this report will be of significant value in helping the overall understanding of how this tragedy occurred. It is of the utmost importance to the Board to ensure that BP learns from this and further enhances the safety of its operations for the future.”

Based on the findings from the investigation, there has been a list of 25 recommendations prepared by BP’s investigation team. The recommendations are designed to prevent similar incidents from occurring in the future, providing guidance in the areas of strengthening assurance on blow-out preventers, well control, pressure-testing for well integrity, emergency systems, cement testing, rig audit and verification and personnel competence.

Here’s a link to download the investigation report in full, as well as watch a video prepared by BP in which the company discusses the investigation findings.

Advancements and Lessons Learned at BP

The “Lessons Learned” document from BP provides companies and industry regulators with planning and response solutions based on the company’s experiences with the oil spill in the Gulf. From preventative measures for avoiding spills to what to do if a spill occurs, BP is sharing the knowledge it has gained to implement safety and process changes. Here’s an overview of the lessons learned according to BP:

1. Collaboration- One single company would never be able to handle all of the challenges presented by the Gulf oil spill. BP has learned that collaboration with government, regulators, the public and countless other stakeholders is mandatory in order to provide the necessary resources and response to the Gulf disaster.

2. Systemization- Systems and procedures require continuous updating to address changing risks. Multiple methods were used when trying to stop the oil leak, providing BP with the challenge of developing a better solution to block the oil. Existing methods were questioned, expanded upon and redesigned to develop a new wave of solutions that allow for faster response and a clearer direction in the event of a disaster.

3. Information- Transparency and communication both internally and externally are essential in addressing public concern. Information assists in stronger decision making, clearing up misconceptions and coordinating activities. Hopefully this lesson is applied throughout the oil industry so that all groups can work together to prevent future disasters.

4. Innovation- In the areas of containment and response, processes and techniques have been redesigned to better prepare BP for future incidents. Using technology, BP has developed ways to implement systems in shorter periods of time. The BP report recognizes the overwhelming unpreparedness of both the company and oil industry in dealing with such a major accident. In the Wall Street Journal article “BP Provides Lessons Learned From Gulf Spill,” the author writes:

“‘It would have been extremely difficult for any one company to address the challenges resulting from Deepwater Horizon alone,’ BP said. Still, the company said, major advances were made in the major response that followed the April 20 blast. For instance, the team charged with containing the oil spill built and installed a subsea manifold system—to help remove hydrocarbons from the leaking wellhead—in just two weeks compared with the 18 to 24 months it usually takes to construct and deploy under normal circumstances.”

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