BP 2010 Annual Report Download - page 36

Businessreview
GulfofMexicooilspill
Incident summary
On20April2010,followingawellblowoutintheGulfofMexico,an
explosionandreoccurredonthesemi-submersiblerigDeepwaterHorizon
andon22Aprilthevesselsank.Tragically,11peoplelosttheirlivesand17
otherswereinjured.Hydrocarbonscontinuedtoowfromthereservoir
andupthroughthecasingandtheblowoutpreventer(BOP)for87days,
causingaverysignicantoilspill.
TheDeepwaterHorizonrigwasoperatedbyTransoceanHoldings
LLCandwasdrillingtheMacondoexplorationwell.Thewellformspartof
theMississippiCanyonBlock252(MC252)lease,inrespectofwhichBP
Exploration&ProductionInc.wasthenamedpartyandoperatorwitha
65%workinginterest.Thewellwasinawaterdepthof5,000feetand
43nauticalmilesfromshore.
BPtackledtheleakatitssourceinmultiple,parallelways,which
overtimeincluded:attemptingtotcapsonthewell,usingcontainment
systemstopipeoiltovesselsonthesurface,sealingthewellthrougha
static-killprocedureanddrillingreliefwells.BPrecognizedearlyinthe
incidentthatdrillingreliefwellsconstitutedtheultimatemeanstosealand
isolatethewellpermanentlyandstoptheowofoilandgas.Tworelief
wellsweredrilled,therstofwhichwasstartedon2May;thesecondwas
startedon16Mayasacontingency.
On15July,BPsuccessfullyshutintheMacondowellandthen
commencedastatic-killprocedure.On9August,BPconrmedthatthe
casinghadbeensuccessfullysealedwithcement.On16September,the
rstreliefwellinterceptedtheannulusoftheMacondowell.After
completingcementingoperationson19September,BP,thefederal
governmentscienticteamandtheNationalIncidentCommander
concludedthatthewell-killoperationshadsuccessfullysealedtheannulus.
BPthenbegantheabandonmentoftheMacondowell,which
includedremovingportionsofthecasingandsettingcementplugs.This
workwascompletedon8November.Inparallel,operationstoplugand
abandon(P&A)thereliefwellthatinterceptedtheMacondowellalsotook
placeandwerecompletedon30September.P&Aofthesecondreliefwell
isinprogressandisexpectedtocompleteinearlyMarch2011.All
responseactivitiesattheMacondosite(withtheexceptionofthenal
seabedsurveyandseismicsweep,whicharescheduledtotakeplaceat
theendofrstquarterin2011),werecompletedon8Januarywiththe
recoveryofthebuoyandanchorsystemforthefree-standingriser.
Thegroupincomestatementfortheyearended31December2010
includesapre-taxchargeof$40.9billioninrelationtotheGulfofMexicooil
spill.SeeFinancialconsequencesonpage38andFinancialstatements–
Note2onpage158formoredetails.
Key statistics
2010
Totalpre-taxcostrecognizedinincomestatement($million)  40,935
Totalcashowexpended(pre-tax)($million)  17,658
Totalpaymentsfrom$20-billiontrustfund($million)  3,023
TotalnumberofclaimantstoGCCFa468,869
Numberofpeopledeployed(atpeak)(approximately)  48,000
Numberofactiveresponsevesselsdeployedduringthe
 response(approximately)  6,500
Barrelsofoilcollectedorared(approximately)  827,000
Barrelsofoilyliquidskimmedfromsurfaceofsea
 (approximately)  828,000
Barrelsofoilremovedthroughsurfaceburns(UACestimate)  265,450
GulfCoastClaimsFacility(GCCF).
Gulf Coast Restoration Organization (GCRO)
Followingtheaccident,BPestablishedaseparateorganizationalunit–the
GulfCoastRestorationOrganization(GCRO)–toprovidethenecessary
leadershipanddedicatedresourcestofacilitateBP’sfullmentofits
clean-upresponsibilitiesandtosupportthelong-termefforttorestorethe
Gulfcoast.TheGCROaddressesallaspectsoftheresponse,including:
executingourongoingclean-upoperationsandallassociatedremediation
activities;coordinatingwithgovernmentofcials;keepingthepublic
informed;andimplementingthe$20-billionDeepwaterHorizonOilSpill
Trustestablishedtomeetcertainofournancialobligations.Attheendof
2010,theGCROhadapermanentstaffof100employeesandabout5,900
contractorsincludingtheGulfCoastincidentmanagementteam.The
majorityoftheclean-up,maintenanceandmonitoringisbeingcarriedout
bycontractstaff.Sinceinception,manyotherBPstaffandcontractorshave
been,andwillcontinuetobe,temporarilysecondedtoassistthe
permanentteamandtoprovideadditionalresourcesorspecialistskills
whererequired.
Our response
BPimmediatelytookresponsibilityforrespondingtotheincident,taking
stepstoremedytheharmthatthespillcausedtotheGulfofMexico,the
Gulfcoastenvironment,andthelivelihoodsofthepeopleintheregion.The
USgovernmentformedaUniedAreaCommand(UAC)tolinkthe
organizationsrespondingtotheincidentandprovideaforumforthose
organizationstomakeco-ordinateddecisions.Ifconsensuscouldnotbe
reachedonaparticularmatter,theFederalOn-SceneCoordinator(FOSC)
madethenaldecisiononresponse-relatedactions.BP’scomprehensive
responsefocusedonthreestrategicfronts:stoppingtheowof
hydrocarbonsatthesource;workingtocapture,containandremoveoil
offshoreandneartheshore;andcleaningandrestoringimpacted
shorelinesandbeachesalongtheGulfcoast.
InitiallyBPmobilizedaeetof30vesselsandoveramillionfeetof
protectiveboom.Thereafterthescaleofactivitygrewrapidly,andatits
peakincludedmorethan6,500vessels,morethan13millionfeetofboom
andalmost48,000personnel.
BPalsoformedaninvestigationteamchargedwithgatheringthe
factssurroundingtheaccident,analysingavailableinformationtoidentify
possiblecausesandmakingrecommendationsthatwouldhelpprevent
similaraccidentsinthefuture.Theteamconcludedthatnosingleactionor
inactioncausedthisaccident.Rather,acomplexandinterlinkedseriesof
mechanicalfailures,humanjudgments,engineeringdesign,operational
implementationandteaminterfacescametogethertoallowtheaccident.
Multiplecompanies,workteamsandcircumstanceswereinvolvedover
time.SeeInternalinvestigationandreportonpage37forfurther
informationontheinvestigationanditsndings.
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34BPAnnualReportandForm20-F2010