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Ex-BP CEO Chooses Sea Protection Forum to Talk About Spill

Posted: 04/05/2012 12:58

BP should have done more to prevent the Gulf of Mexico oil spill two years ago but the company's complacency was not unique in the industry, former CEO Tony Hayward said this week in his most public comments yet about the disaster.

Hayward chose to talk about the disaster, the worst offshore spill in U.S. history in which 11 men died, at a marine-protection conference in Istanbul.

He warned that Istanbul, a UNESCO World Heritage site with a population of some 15 million people, could see a similar disaster unless it stems the flow of oil tankers through its Bosporus Strait. Some 150 million tonnes of crude and petroleum products transit the narrow, winding waterway each year.

Nearly 5 million barrels of crude spewed into the Gulf of Mexico between April and September 2010 after BP's Macondo well blew out, causing explosions on board the Deepwater Horizon drilling rig, which was licensed to BP by Transocean.

The oil super-major launched a $15 billion emergency response, the biggest ever in corporate history, Hayward said. It hired nearly 50,000 people and deployed 10,000 vessels, "more than took part in the Normandy landing," he said, likening it to the sacrifice made by more than 200,000 allied soldiers in World War Two.

In another clumsy water reference, Hayward described the disaster as a "black swan": a low-probability high-impact risk that could have been avoided if all systems had been working and monitored properly.

"What happened that day was a tragic and avoidable industrial accident," he admitted but added: "If the blowout preventer had not failed, the events of April 2010 would have remained a personal tragedy and an industrial accident, but would not have caused an environmental and social disaster."

Blaming the rig's blowout preventer -- a valve used to seal and control oil wells -- would appear to pass some of the buck. London-based BP sued Cameron International Corp, which made the blowout preventer, in April 2011 for negligence. BP and its partners Transocean and Halliburton, the oilfield services contractor, have quarreled in public and in the courtroom over who was responsible for the spill. Halliburton is suing BP, claiming it withheld vital information about subsurface conditions.

A White House commission in January 2011 said BP, Transocean and Halliburton made a series of cost-cutting decisions that ultimately contributed to the blaze and oil spill. On Tuesday, the same U.S. administration granted BP permission to construct three rigs in the Gulf of Mexico at a projected cost of £2.5 billion.

"Unfortunately human behaviour works like this ... you learn from your mistakes," Hayward said. "We were wrong but our complacency was not unique. The industry had lulled itself into a false sense of security, thanks to 20 years of drilling in deep water without a serious accident."

These were Hayward's first public comments about the spill since leaving BP in October 2010, his publicist said. By the time he left BP, Hayward had already handed over day-to-day management of the crisis amid criticism for his handling of the crisis, including a comment that he would like his life back.

He was also berated in the press after he was photographed yacht racing while the oil still gushed. "South Park" witheringly lampooned him.

Hayward invoked the media scrutiny during his speech. "We had no equipment to contain and stop the oil on the seabed," he said. "No such equipment existed. We found ourselves having to design and build it -- improvising, as it were, on prime-time television."

An avid sailor and diver, Hayward, 55, gave his speech at a conference to discuss ways to protect the Black Sea and the Sea of Marmara, both ravaged by industrial pollution.

Nearly 150 million tonnes of crude and petroleum products transit through Istanbul's Bosporus Strait each year. The narrow, winding straits invite disaster.

Hayward seems to have bounced back. Late last year, with partners he formed the London-listed Genel Energy after they paid £1.3 billion for Genel Enerji, a Turkish company focused on exploration and production in the semi-autonomous Kurdistan region of Iraq. He is now CEO.

His new colleague -- Genel Energy president Mehmet Sepil - has also courted controversy. Sepil was slapped with the biggest fine ever (£1 million) by the Financial Standards Authority, the British regulator, for insider trading during Genel Enerji's failed merger with Heritage Oil in 2009. The Kurdish Energy Minister Ahsti Hawrami, kingmaker of operators in Kurdistan and a friend of Sepil and Hayward, is also accused by the FSA for insider trading the same company.

Hayward received a bonus pay out from Genel Energy of £11 on the second anniversary of the disaster. And greater riches could be on the horizon as Genel considers offshore exploration in the eastern Mediterranean. Will Hayward bring lessons learned from the Gulf of Mexico with him?

 

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