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Unlikely Decisions Set Stage for BP Disaster

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Deepwater Horizon Gulf of Mexico Oil Spill

(Dow Jones Newswires), May 27, 2010

It was a difficult drill from the start.

API Well No. 60-817-44169 threw up many challenges to its principal owner, BP, swallowing expensive drilling fluid and burping out dangerous gas. Those woes put the Gulf of Mexico project over budget and behind schedule by April 20, the day the well erupted, destroying the Deepwater Horizon rig and killing 11 men.

Government investigators have yet to announce conclusions about what went wrong that day. The final step in the causation chain, industry engineers have said in interviews, was most likely the failure of a crucial seal at the top of the well or a cement plug at the bottom.

But neither scenario explains the whole story. A Wall Street Journal investigation provides the most complete account so far of the fateful decisions that preceded the blast. BP made choices over the course of the project that rendered this well more vulnerable to the blowout, which unleashed a spew of crude oil that engineers are struggling to stanch.

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.

Finally, 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.

Some of these decisions were approved by the U.S. Interior Department's Minerals Management Service, which has come under fire for what President Obama has called its "cozy relationship" with the oil industry. But in at least one case, the decision made apparently diverged from a plan MMS approved. MMS declined to comment.

Some of BP's choices allowed it to minimize costly delays. "We were behind schedule already," said Tyrone Benton, a technician who operated underwater robots and worked for a subcontractor. He said that on the day before the accident, a Monday, managers "hoped we'd be finished by that Friday . . . . But it seemed like they were pushing to finish it before Friday."

He added, "They were doing too many jobs at one time." Mr. Benton is suing BP and Transocean claiming physical injury and mental anguish.

BP acknowledges the well was running over budget but says it didn't cut corners. "Safe and reliable operations remain a priority regardless of how much a well is behind schedule or over budget," spokesman Andrew Gowers wrote in an email.

Some workers agree safety was paramount for both BP and Transocean. "Safety was their No. 1 concern. Protecting the environment was their No. 1 concern," said Darin Rupinski, a Transocean employee whose job was to help keep the rig in place.

BP was drilling to tap an oil reservoir it had identified called Macondo, the same name as the cursed town in Gabriel Garcia Marquez's novel "One Hundred Years of Solitude." As on many past projects, BP hired a drilling rig from Transocean, the largest deep-water driller. Workers from Transocean and other contractors did most of the work, under the supervision of BP employees on the rig and in Houston.

BP started working on the well in October, using a different rig. After three weeks natural gas got into the well, called a "kick." That's not uncommon. But two weeks later a hurricane damaged the rig and it had to be towed to port for repairs.

BP started again in January, this time with Transocean's Deepwater Horizon, a warhorse rig that had worked for BP for years. BP filed a new drilling permit with federal regulators.

According to a company document seen by the Journal, BP approved spending $96.2 million and about 78 days on the well. The target time was much less -- about 51 days. By April 20, the well was in its 80th day, owing to delays such as one that had begun on March 8.

That day, workers discovered that gas was seeping into the well, according to drilling reports from the rig reviewed by the Journal. Workers lowered a measuring device to determine what was happening, but when they tried to pull it back up, it wouldn't budge. Engineers eventually told them to plug the last 2,000 feet of the then-13,000-foot hole with cement and continue the well by drilling off in a different direction.

The episode took days to resolve, according to drilling reports, not counting backtracking and re-drilling. Each extra l day cost BP about $1 million in rig lease and contractor fees.

Other problems arose. The rock was so brittle drilling mud cracked it open and escaped. One person familiar with the matter estimates BP lost at least $15 million worth of the fluid.

Still, by mid-April, the well seemed a qualified success. BP was convinced it had found a lot of oil. Until engineers in Houston could make plans to start pumping it out, the workers on the nearly complete well, in a standard practice, would plug it and temporarily abandon it.

One of the final tasks was to cement in place the steel pipe that ran into the oil reservoir. The cement would fill the space between the outside of the pipe and the rock, preventing any gas from flowing up the sides.

Halliburton, the cementing contractor, advised BP to install numerous devices to make sure the pipe was centered in the well before pumping cement, according to Halliburton documents, provided to congressional investigators and seen by the Journal. Otherwise, the cement might develop small channels that gas could squeeze through.

In an April 18 report to BP, Halliburton warned that if BP didn't use more centering devices, the well would likely have "a SEVERE gas flow problem." Still, BP decided to install fewer of the devices than Halliburton recommended -- six instead of 21.

BP said it's still investigating how cementing was done. Halliburton said that it followed BP's instructions, and that while some "were not consistent with industry best practices," they were "within acceptable industry standards."

The cement job was especially important on this well because of a BP design choice that some petroleum engineers call unusual. BP ran a single long pipe, made up of sections screwed together, all the way from the sea floor to the oil reservoir.

Companies often use two pipes, one inside another, sealed together, with the smaller one sticking into the oil reservoir. With this system, if gas tries to get up the outside of the pipe, it has to break through not just cement but also the seal connecting the pipes. So the more typical design provides an extra level of protection, but also requires another long, expensive piece of pipe.

"I couldn't understand why they would run a long string," meaning a single pipe, said David Pursell, a petroleum engineer and managing director of Tudor, Pickering, Holt, an energy-focused investment bank. Oil major Royal Dutch Shell PLC, in a letter to the MMS, said it "generally does not" use a single pipe.

BP's Mr. Gowers said the well design wasn't unusual. BP engineers "evaluate various factors" to determine what design to use for each well, he said.

Despite the well design and the importance of the cement, daily drilling reports show that BP didn't run a critical, but time-consuming, procedure that might have allowed the company to detect and remove gas building up in the well.

Before doing a cement job on a well, common industry practice is to circulate the drilling mud through the well, bringing the mud at the bottom all the way up to the drilling rig.

This procedure, known as "bottoms up," lets workers check the mud to see if it is absorbing gas leaking in. If so, they can clean the gas out of the mud before putting it back down into the well to maintain the pressure. The American Petroleum Institute says it is "common cementing best practice" to circulate the mud at least once.

Circulating all the mud in a well of 18,360 feet, as this one was, takes six to 12 hours, say people who've run the procedure. But mud circulation on this well was done for just 30 minutes on April 19, drilling logs say, not nearly long enough to bring mud to the surface.

This decision could have left gas at the bottom of the well. When workers poured in cement to seal the sides, that gas would have been pushed up the outside of the well. Expanding as it rose, it would have reached the top, where it either would have pushed against a massive seal on the ocean floor or might have gone even higher and reached the bottom of the pipe connecting the well to the drilling rig.

BP's Mr. Gowers said the amount of time spent circulating mud is "one of many parameters considered when designing a successful cement job." He said BP's investigation is ongoing.

Copyright (c) 2010 Dow Jones & Company, Inc.

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