BP has made significant progress in restoring trust in the company through its economic and environmental restoration efforts in the Gulf Coast region following the 2010 Deepwater Horizon tragedy, and continues with ongoing efforts to enhance its safety and risk management, BP Executive Vice President Bernard Looney told attendees at the Offshore Technology Conference in Houston on Monday.
Looney, who admitted the company was in no position to preach, said the energy industry should work together to further enhance safety standards, sharing lessons learned within the industry and with regulators, continuing to build industry capability and competence, and becoming more transparent as a means of earning public trust.
Looney outlined examples of these efforts the company is pursuing, including the implementation of a new safety and operational risk organization within the company, including a team of experts at its center designing and updating standards, and another team deployed alongside the businesses to provide advice and scrutiny.
This organization can stop operations and veto appointments, but its main aim is to provide deep technical expertise to enable every operations leader to deliver their activity in a safe, reliable and compliant manner, Looney said.
The company also has implemented 26 recommendations made in the Bly Report, the company's internal inquiry into the accident.
"It is no simple task," Looney noted. "It means new practices, new training, new verification processes and new expectations. And that's why we have a team of around 85 people working full time on it."
BP also has taken specific steps going beyond current regulations, including the requirement that any blowout preventer used by a dynamically positioned rig must have two sets of blind shear rams, along with a set of casing shear rams.
"Sometimes we are asked – what does all this cost?" Looney said. "The answer is simple – we don't view this as cost – this is an investment. And we know it is one worth making."
Cross industry initiatives also are making a difference, including the Global Industry Response Group and The Marine Well Containment Company in the U.S., Looney said. Collaboration within the industry such as the sharing of well-control incident data and asking companies to contribute their experiences also are needed, Looney said.
'Soul Searching' Leads BP to Remain in U.S. Gulf
The Deepwater Horizon tragedy of 2010 raised questions about BP's ability and willingness to continue operating in the deepwater Gulf of Mexico. After much soul searching, BP concluded it would be wrong to walk away, Looney said.
"To do so would have been abandoning thousands of employees, who represent generations of experience, innovation and resilience," Looney commented.
The company decided to press ahead with its exploration and development in the Gulf, coupled with a reinforced focus on risk management. Two weeks ago, the company reached a legal settlement that BP estimates will cost approximately $7.8 billion.
To date, BP has spent more than $22 billion, including $8 billion to individuals, businesses and government entities, and $14 billion in response operations and clean-up.
"As we look to the future, the challenges for our industry are immense. Deeper waters, harsher environments, a negative perception of large business, to name but a few," Looney commented. "But so too are the needs of the world – BP projects the world might need as much as 40 percent more energy between now and 2030 – that's another America and another China."
BP to Add Rigs in U.S. Gulf; Mad Dog to Come Online at End of Decade
BP has five rigs currently operating in the Gulf of Mexico, including two at Thunder Horse, two at Atlantis and one rig at Kaskida, the same number as before the Deepwater Horizon incident. BP expects to add three more rigs by the end of 2012.
The company also has reached a final investment decision on the second phase of the Mad Dog field development project, BP's first operated standalone facility in nearly a decade in the Gulf. First oil from the second phase of Mad Dog is expected by the end of the decade, with production expected to last beyond 2050.
In its effort to pursue the Lower Tertiary play in the deepwater Gulf, BP will work with other companies to develop an integrated system from rig to risers to subsea, to drill for and produce hydrocarbons that lie beyond the industry's current limit of 15,000 pounds per square inch and 275 degrees Fahrenheit.
The 20K project will seek to increase capability to 20,000 psi and temperatures of 350 to 400 degrees Fahrenheit. This could include blowout preventer's weighing more than 1 million pounds and standing more than 70 feet high, state of the art sensing and monitoring systems for real-time subsea integrity management and subsea valves weighing 20 tons.
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