Fateful Decisions on the Deepwater Horizon

For all my dismissal of the mainstream media in their coverage of the Macondo disaster, it appears (thanks to Gringo in the comments) that the Wall Street Journal is doing a pretty fine job of it.  This article is probably the most comprehensive and technically accurate account of what happened before the well blowout, and they have achieved something of a scoop by managing to interview not only people who know what they are talking about but those who were actually there.

All the signs are pointing towards corners being cut at the behest of BP representatives to complete work on the well which was already behind schedule and over budget.  I highly recommend reading the article in full, because I am only going to quote certain parts of it here.

Firstly, a brief summary of what they did wrong:

BP, for instance, cut short a procedure involving drilling fluid that is designed to detect gas in the well and remove it before it becomes a problem, according to documents belonging to BP and to the drilling rig’s owner and operator, Transocean Ltd.

BP also skipped a quality test of the cement around the pipe—another buffer against gas—despite what BP now says were signs of problems with the cement job and despite a warning from cement contractor Halliburton Co.

Once gas was rising, the design and procedures BP had chosen for the well likely gave this perilous gas an easier path up and out, say well-control experts. There was little keeping the gas from rushing up to the surface after workers, pushing to finish the job, removed a critical safeguard, the heavy drilling fluid known as “mud.” BP has admitted a possible “fundamental mistake” in concluding that it was safe to proceed with mud removal, according to a memo from two Congressmen released Tuesday night.

This speaks for itself.  Industry best practice and the advice of the specialist contractors were not followed and warnings were ignored with disastrous results.  This is not looking good for BP.

Nor is this:

Some saw indications that managers wanted to wrap up quickly. Kevin Senegal, a subcontractor employee who cleaned tanks, said he was told to be ready to clean two tanks on a coming shift instead of the usual one. “To me it looked like they were trying to rush everything,” he said.

A disagreement broke out on the rig on April 20 over the procedures to be followed. At 11 a.m., workers for the half-dozen contractors working on the rig gathered for a meeting. Douglas Brown, Transocean’s chief mechanic on the rig, testified Wednesday at a hearing in Louisiana that a top BP official had a “skirmish” with top Transocean officials.

The Transocean workers, including offshore installation manager Jimmy Wayne Harrell, disagreed with a decision by BP’s top manager about how to remove drilling mud and replace it with lighter seawater. Mr. Brown said he heard Mr. Harrell say, “I guess that is what we have those pinchers for,” referring to a part of the blowout preventer that would shut off the well in case of an emergency.

BP won the argument, said Mr. Brown, who is a plaintiff in a suit against BP and Transocean. Mr. Harrell declined Journal requests for comment.

Nobody mentioned this argument in their testimonies in front of congress, probably sensibly.  But if this is an accurate description of what happened, we have a situation where the specialist contractors are being overruled by a client.  This situation is as common as seawater in the oil and gas business, but the perogative of the client to do this is very much a double-edged sword: he who makes the final decision must also take the responsibility for what happens, and in this case what happened was an unmitigated disaster.  It will be interesting to see what is made of this argument during the investigation, which will call witnesses to determine who said what and when, as it may be crucial in deciding where the utlimate blame lies.

(Incidentally, I note with interest that Mr Brown has already launched a suit against BP and his employers Transocean.  They don’t give any details on what exactly he is suing them for, but the article identifies another person – one of the ROV operators on the Deepwater Horizon – who is suing both companies for physical injury and mental anguish.  I know the Americans are litigious folk and and I’m sure lawyers were licking their lips with relish within seconds of them hearing a major oil company had had an accident, but isn’t this a bit early for employees to be launching lawsuits?  Or is this some kind of defence against being sued oneself later on?  A bit like the old rugby adage of getting your retaliation in first.)

So who’s going to carry the can for the fateful decisions BP made in defiance of their contractors’ concerns?  Hopefully not this guy:

[A] BP manager overseeing final well tests apparently had scant experience in deep-water drilling. He told investigators he was on the rig to “learn about deep water,” according to notes of an interview with him seen by the Journal.

A little after 5 p.m., to check the well’s integrity and whether gas was seeping in, rig workers did what is called a “negative pressure test.” It was supervised by a BP well-site leader, Robert Kaluza. His experience was largely in land drilling, and he told investigators he was on the rig to “learn about deep water,” according to Coast Guard notes of an interview with him. BP declined to comment on his experience.

Oh dear.  How many times have I heard that before?  An oil company staffer plonked into a senior position, where he must make crucial decisions, in order to gain experience.  This happens far more often than it should, although the degree to which it happens does vary between the companies.  I’ve seen former drilling engineers in charge of the construction of onshore facilities, and reservoir engineers heading the commissioning of major new facilities.  In an environment where career progression is considered paramount (indeed, they deliberately recruit people right out of university who are ruthlessly ambitious, often delusionally so) and seemingly everyone encouraged to aim to be a future CEO, high-flyers are whisked from one unsuitable posting to the next in order to give them the broad experience somebody has told them they need to reach the top.  The situation with Mr Kaluza is somewhat tempered by the fact that he had at least come from a drilling background, albeit on land rigs.  We’re fortunate he didn’t get transferred from Head of Procurement at BP Azerbaijan.  Some oil companies commendably don’t do this, and are happy to leave good, experienced people in the same position for years, ensuring they are paid well and their career advances in line with what they would otherwise have if they were hopping about.  Going onto a site for the first time and finding your construction manager is a grizzled Texan who has held that position since 1981 across three continents and over a dozen major facilities is comforting in a way that a highly intelligent, multi-lingual, well presented, ambitious but utterly inexeperienced oil company prodigy isn’t.

The problem is, I think, a matter of egos.  Like I said, some oil companies deliberately recruit little Napoleans with egos bigger than your average offshore platform.  The interviews and selection process favour the born leaders and weed out the compliant team players, with the result that you have a generation of natural leaders – who have been told since joining that they are the very best, the cream of the crop – and nobody who just wants to settle down to the drudgery of getting the job done.  Which is why half the damned industry is made up of contractors, nobody else wants to do any actual work.  I exaggerate, but not a lot.  Anyway, if you have a bright, young, energetic high-flyer who you want to develop and gain experience in another area, then you put him in charge but you assign him a lieutenant.  And that lieutenant should be a grizzled old dog who has been around the block a dozen times and then some, knows everything and everybody, is as cynical as hell, but just doesn’t have the drive or energy or career desires to lead any more.  The old dog would ensure the young pup stays on the straight and narrow and doesn’t do anything stupid and remains on call should he need to offer advice drawn from his considerable experience.  The oil industry is chock-full of these blokes, and they’re being laid off by the thousand when they should be doing everything they can to keep them.  Instead, the egos of the high-flyers and the management, who are effectively promoting somebody just like themselves, won’t allow him to be told he’s wrong, about to make a stupid mistake, knows sod all, and really needs to start listening and wise up a bit.  All young engineers, myself included (on more than one occasion), have had a slap down like this from some old hand when we’ve stuck our neck out and thought we knew it all.  You feel pretty hurt afterwards, but it’s a vital process in learning what your limitations are and how to respect and listen to those around you.  When it happens, boy do you learn.  Sadly, I sometimes get the impression that some oil company staff are taught that by default they know more than the contractors and everybody else and they should not be cowed into listening to them, hence you find experienced hands being second-guessed and shouted down by some arrogant git who has no idea what he’s talking about, and you find it far more often than is healthy for the industry.

Now I am not saying that this is the case with Mr Kaluza, who incidentally has claimed the fifth amendment.  I know nothing about his character and he might well have been highly sympathetic to his contractors’ concerns but unable to take their advice due to contradictory orders from above.  Indeed, one person who I met in Sakhalin was a high-flyer who was put in an utterly unsuitable senior role in which he had no experience but was one of the most pleasant, charming, and highly-competent people I had the pleasure of meeting: he was simply inexperienced.  In fact, I am probably quite sympathetic towards Mr Kaluza.  He has been knowingly put in a position in which he is not familiar, seemingly without adequate support, and found himself at the centre of the blame for causing the worst oil disaster in decades.  He was not the senior BP man on the rig, and I fervently hope that he will not be hung out to dry over this.  Even if he acted like the most arrogant, jumped-up little Hitler in BP’s arguments with their contractors, it was the BP management who put him in that position in the first place and so it is they who should take the partial responsibility of any mistakes he might have made.

So attention will turn to the senior BP man on the rig, Donald Vidrine.  If Mr Kaluza was inexperienced, Mr Vidrine should have known the job inside out and upside down, and he is therefore responsible for the BP decisions on the rig regardless of who actually made them.  I expect Mr Vidrine to cop an enormous amount of flak for the decisions either he or his subordinates made that day.  But to be honest, I also have a lot of sympathy for Mr Vidrine too.  Whatever mistakes he made in ignoring the advice of his contractors and despite any wrong decisions he might have made, Mr Vidrine did not think “Sod the safety and the environment, I don’t care if there’s an accident, I’m going to do what I want because I’m right and I’m in charge.” Contrary to what much of the media is saying, people in the western oil and gas companies are not that irresponsible, and he would almost certainly have had a valid reason for taking his own course of action before which he would have weighed up various competing factors.  He would have been under enormous pressure to finish the job and move on, the project being behind schedule and over budget.  Every single rig operator and company representative in the world is expected to make decisions under enormous pressure, often with no clear indication as to which is the right way to go.  Almost all decisions at this end of the oil and gas business are a compromise between competing factors.  When there is a shortage of information or conflicting signals, the decision maker must make a judgement call, and this also characterises most decisions in the upstream oil and gas business.

It is easy to make a clear decision to shut down a motor which is running at 1,000rpm when the manufacturer recommends a maximum speed of 900rpm.  This is a decision which does not require any judgement, and a trained monkey can make those.  Now say the motor is driving a pump which is propelling a coolant through a heat exhanger and a warning goes off that the temperature in the heat exchanger is too high.  The correct course of action would be to increase the flow of coolant by increasing the speed of the motor.  But what if something has gone wrong and the motor is already at 900rpm?  Do you risk damaging the motor by running it too fast or the heat exchanger by running it too hot?  That is a judgement call, in which you must weigh up several factors and assess the relative risk of each course of action.  Now that example is for illustrative purposes only and there are a dozen reasons why that situation should not arise and procedures to deal with it even if it does, but anybody at the sharp end of the oil business is expected to make judgement calls of this nature, albeit far more complex.  Being able to make decisions under these circumstances requires a certain type of person, one who is not risk-averse.  You have to be able to shoulder a certain degree of risk and accept personal responsibility for the decisions you make, because you usually don’t have the luxury of time or information to be able to eliminate the inherent risk in your decision.  If you cannot accept that you are taking on a degree of personal risk and responsibility with the decisions you make you have no business being in such a position that you are required to make them.

For although recklessness and irresponsibility have no place in the oil business, there is equally little room in some quarters for those who won’t make a decision.  Indecision can kill a project dead, and at some point somebody has to decide to move on.  Perhaps surprisingly, indecision in the oil business is probably more common than decisive leadership.  Going back to the environment where career progression is considered paramount, people are afraid of making a mistake, of making the wrong decision, so they sit on a problem in the hope that it will resolve itself.  I worked with one chap employed in a position where making big decisions is vital who would email virtually the entire company for their approval and hold umpteen meetings to ensure the risk was spread sufficiently that should anything go wrong his arse would be covered.  Unfortunately, it took up to three weeks for a decision related to $200 of expenditure to get made.  Another chap was so risk-averse he was incapable of making a judgement call.  Although knowledgeable enough on any subject, he would refuse to endorse any decision until he was 100% satisfied that every last objection had been thought of and countered and every imaginable study into the problem had been carried out, completed, and a clear, unambigous conclusion found.  This process would sometimes take months, when one of the old hands could have looked at it for an hour and made a decision there and then.  No old dogs about, y’see.

So, my point is that many of the decisions made in oil and gas are judgement calls, and those who have to make them are expected to shoulder a degree of risk and responsibility.  For this reason they are handsomely rewarded, which is why it is so frustrating when you encounter somebody who won’t make a decision but is happy enough to draw the salary for doing so.  Mr Vidrine would have been perfectly aware of the personal responsibility he was taking on himself in making the decision, and he will have to explain to the investigators the process by which he made his judgement.  If he can convince the investigators that his judgement process was sound and each competing factor was adequately assessed he stands to come out of this all right.  Not exactly smelling of roses, but all right.

Which under the circumstances based on the evidence presented in the article, is going to be a pretty tall order.  You might be forgiven for thinking that there was little judgement required once various warnings started coming in, and it was startlingly obvious what the course of action should have been, and the investigation may well prove that this was the case.  But to establish this they are going to have to look at any operational precedents which might have been set in the weeks, months, and years prior to the accident.  The operational records of BP and Transocean will have to be examined to see if the circumstances prior to the blowout occurred previously and what the subsequent course of action was then.  This is pure speculation on my part, but we might find that several similar warning flags had been raised in times previously and safely ignored.  One of the many dangers in the oil and gas business is doing something wrong several times without consequence, and eventually so many times you get used to doing it that way.  And then one day it catches you out.  Maybe we’ll learn that Mr Vidrine had made similar judgement calls previously that paid off, saved the project a few million each time, and earned him a hearty slap on the back and a Leatherman from his bosses?  If so, it’s going to be hard to put the entire blame on him personally.

And finally, make no bones about it, Mr Vidrine’s job was a damned hard one.  I for one don’t want to see any individual being hung out to dry if he did his job as conscienciously as he could and genuinely thought he was doing the right thing.

That could be me next time.

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7 Responses to Fateful Decisions on the Deepwater Horizon

  1. dearieme says:

    “In an environment where career progression is considered paramount (indeed, they deliberately recruit people right out of university who are ruthlessly ambitious, often delusionally so) and seemingly everyone encouraged to aim to be a future CEO,..”. Alas, alack. In my day, a zillion years ago, BP had the reputation of being the most sensible recruiters, the firm that knew it had to staff all positions in the company, not just the boardroom. One company that recruited only stars was ICI – or should I say the late ICI? Shell was somewhat that way inclined too.

  2. dearieme says:

    P.S. Keep up the good work – the slack-jawed opinionating of people who’ve never had proper jobs drives me up the wall.

  3. TryAgain says:

    An excellent summary on various dynamics on drilling rigs, such as 1) Oil company scorn for contractors (We pay their salary.), 2) The young pup balanced by the grizzled hand, 3) What can go wrong when the young pup has no such balance, 4) Decisions on rigs involve judgment calls made in a timely manner. I am many years from working on rigs, but what you wrote rang a bell with my previous rig experience. Most of the dynamics you describe were around 30 years ago.

    Some differences between decision making then and now: Improved computer technology means that 1)There is more information available for decision making. For example, there have been a number of software attempts to codify practical rig knowledge into expert information systems, with varying degrees of success. 2) With increased ease of communication between rig and home office, there is probably less autonomy in rig decision making today than there used to be. If the decision maker in the home office is a grizzled hand, this may be to the good: sharing the wealth of his experience on more than one rig. If the decision maker in the home office is a bean-counter, Monty Python expressed it best: Say no more. 3) There are fewer grizzled hands around today to balance out the young pups.

    When there is more than one source for an observation, odds increase that the observation was a good one. Here are multiple corroborations of 1) the disagreement between BP and Transocean the day of the explosion (coupled with your citing) and 2) BPs changing of the rig plans.

    From ( May 30) WSJ): BP Revised Permits Before Blast

    On Thursday, Jimmy Wayne Harrell, a Transocean employee who was the rig’s offshore installation manager, said “the drilling program was constantly changing.”
    He testified that BP representatives overseeing the job had repeatedly altered plans in

    What is comical is a response from a BP engineer:

    BP senior drilling engineer Mark Hafle, in testimony on Friday at the same hearings, blamed the multiple well-design corrections on an inexperienced data entry employee who “made some typos” filling out the forms.

    There is more than one mention of the disagreement between BPs Vidrine and Trnasoceans Harrell in the WSJ ( May 15)Crew Argued Over Drilling Plan Before Rig Explosion :

    Michael Williams, a Transocean employee who was chief electronics technician on the rig, said there was “confusion” between those high-ranking officials in an 11 a.m. meeting on the day of the rig blast, according to a sworn statement from Mr. Williams reviewed by The Wall Street Journal. Mr. Williams himself attended the meeting..According to Mr. Williams’s account, Transocean’s rig manager, Jimmy Wayne Harrell, was discussing the plans for the next few hours’ work, including taking out the drilling mud and running a test to make sure gas wasn’t seeping into the well. Mr. Harrell explained in the meeting that he had received the plans from BP.
    Then, according to Mr. Williams’s statement, the top-ranked BP employee assigned to the rig, Donald Vidrine, disagreed and said “that was not the correct procedure.

    This is also further corroboration for the changing BP plans. On the one hand, plans do need to be revised in light of current conditions. I recall one highly paid Amoco ( later became part of BP) consultant making a tactful remark about bright young engineers in the home office writing well plans, which implied such plans had a value commensurate with the the experience of those writing up the plans. On the other hand, are the plans being revised in light of safely completing the well, or in terms of economics?
    It is interesting that Transoceans Harrell, in disagreeing with BPs Vidrine, apparently cited BP documents to disagree with Vidrine. This supports the subsequent article about BPs changing its plans.

    Gringo

  4. AgainAndAgain says:

    An excellent summary on various dynamics on drilling rigs, such as 1) Oil company scorn for contractors (We pay your salary.), 2) The young pup balanced by the grizzled hand, 3) What can go wrong when the young pup has no such balance, 4) Decisions on rigs involve judgment calls made in a timely manner. I am many years from working on rigs, but what you wrote rang a bell with my previous rig experience. Most of the dynamics you describe were around 30 years ago.

    Some differences between decision making then and now: Improved computer technology means that 1) There is more information available for decision making. For example, there have been a number of software attempts to codify practical rig knowledge into expert information systems, with varying degrees of success. 2) With increased ease of communication between rig and home office, there is probably less autonomy in rig decision making today than there used to be. If the decision maker in the home office is a grizzled hand, this may be to the good: sharing the wealth of his experience on more than one rig. If the decision maker in the home office is a bean-counter, Monty Python expressed it best: Say no more. 3) There are fewer grizzled hands around today to balance out the young pups.

    When there is more than one source for an observation, odds increase that the observation was a good one. Here are multiple corroborations of 1) the disagreement between BP and Transocean the day of the explosion (coupled with your citing) and 2) BPs changing of the rig plans.

    From ( May 30) WSJ): BP Revised Permits Before Blast

    On Thursday, Jimmy Wayne Harrell, a Transocean employee who was the rig’s offshore installation manager, said “the drilling program was constantly changing.”
    He testified that BP representatives overseeing the job had repeatedly altered plans in

    What is comical is a response from a BP engineer:

    BP senior drilling engineer Mark Hafle, in testimony on Friday at the same hearings, blamed the multiple well-design corrections on an inexperienced data entry employee who “made some typos” filling out the forms.

    There is more than one mention of the disagreement between BPs Vidrine and Transoceans Harrell in the WSJ ( May 15):Crew Argued Over Drilling Plan Before Rig Explosion :

    Michael Williams, a Transocean employee who was chief electronics technician on the rig, said there was “confusion” between those high-ranking officials in an 11 a.m. meeting on the day of the rig blast, according to a sworn statement from Mr. Williams reviewed by The Wall Street Journal. Mr. Williams himself attended the meeting..According to Mr. Williams’s account, Transocean’s rig manager, Jimmy Wayne Harrell, was discussing the plans for the next few hours’ work, including taking out the drilling mud and running a test to make sure gas wasn’t seeping into the well. Mr. Harrell explained in the meeting that he had received the plans from BP.
    Then, according to Mr. Williams’s statement, the top-ranked BP employee assigned to the rig, Donald Vidrine, disagreed and said “that was not the correct procedure.

    This is also further corroboration for the changing BP plans. On the one hand, plans do need to be revised in light of current conditions. I recall one highly paid Amoco ( later became part of BP) consultant making a tactful remark about bright young engineers in the home office writing well plans, which implied such plans had a value commensurate with the the experience of those writing up the plans. On the other hand, are the plans being revised in light of safely completing the well, or in terms of economics?
    It is interesting that Transoceans Harrell, in disagreeing with BPs Vidrine, apparently cited BP documents to disagree with Vidrine. This supports the subsequent article about BPs changing its plans. My guess is that Vidrine was following the most recent marching orders from onshore, and Harrell pointed out they contradicted previous plans.

    Links left out because your spam filter caught me again.

    The Oil Drum (Node 6493) from May 21, “What caused the Deepwater Horizon disaster?”, also has a good discussion. Not sufficient cement in the well plan is the hypothesis here.

    Gringo

  5. Tim Newman says:

    Hi Gringo,

    Once again, sorry about the spam filter. I’m going to follow the BP line on this and blame the subcontractor. :)

    It is interesting that Transoceans Harrell, in disagreeing with BPs Vidrine, apparently cited BP documents to disagree with Vidrine. This supports the subsequent article about BPs changing its plans.

    Oil companies do this way too often, they follow their own plans as and when it suits. In one job I was at, the QA/QC engineer was put in an impossible situation: the client project management would decide to ignore their own procedures in order to do something more easily, and a week later he would get audited by the client’s QA/QC manager and issued with a tonne of NCRs. The client QA/QC would refuse to tackle the issue of the client PM breaking with procedure, and so they found it easier to hammer the contractor. I remember seeing our QA/QC guy screaming at the client that “This is your own f*cking procedure which is telling you to do it, not me!” Document control procedures in particular usually disappear out of the window as soon as somebdy realises they take time to implement.

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