Management failure key to Deepwater blowout, report says

Better management of oil industry-related companies BP, Halliburton and Transocean could have almost certainly prevented an underwater oil rig blowout last year that led to the largest ever U.S. oil spill, a presidential panel concluded in its final report.

The National Oil Spill Commission released an advance chapter from an upcoming full report on Thursday with results of an investigation into the incident that killed 11 workers, caused injury to others and spilled more than 4 million gallons of oil from the well in the Gulf of Mexico known as Macondo.

Reasons for the blowout include separate risk factors, oversights, and outright mistakes, Commission Co-Chair William Reilly said.

But most of the mistakes and oversights at Macondo can be traced back to a single overarching failure - a failure of management, he said.

Better management would have improved the ability to identify risks, make evaluation, communicate and address the problems, he added.

I reluctantly conclude we have a system-wide problem with the oil industry since both Transocean and Halliburton serve the offshore industry in virtually every ocean, he added.

A commitment to safety first, and government regulators with greater capacity and the will to demand high standards, would likely have helped prevent the disaster, said co-chair Bob Graham.

[T[he root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur, Graham said.

The risk of a disaster was both unreasonably large and avoidable, the report concluded.

Among the more specific problems pointed out in the report were issues with late-stage well design and cementing; mistakes in judging results of a key pressure test; unnecessarily removing thick drilling mud that would have prevented oil and gases from entering the well which caused the blowout; and failure of the blowout preventer to close off the well.

The report notes that many of the decisions made by the three companies saved them time and money.