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President's Oil Spill Commission Reports of Management and Systematic Failures

Source: WSJ

Posted on 06 Jan 2011

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A report by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling states that the explosion that triggered last year's Gulf of Mexico oil spill was an avoidable disaster that resulted from management failures by BP PLC and its contractors. But the accident also reflected systemic failures by oil companies and regulators to deal with the risks of deep-water exploration, the panel said.

The presidential commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling castigates BP and two of the British oil giant's contractors -- Transocean Ltd. and Halliburton Co.-- for missteps that contributed to the worst offshore oil spill in U.S. history and the deaths of 11 rig workers.

The problems go far beyond BP, however, the report concludes—disputing oil-industry arguments that the April 20 explosion on the Deepwater Horizon rig was a one-time event caused by unusual and risky decisions by the oil company.

The panel said all three companies did a poor job of assessing the risks associated with their decisions and failed to adequately communicate, either with one another or with their own employees. Federal regulators lacked training and manpower to properly police the industry, the report finds.

The blowout "was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again," according to a chapter of the report released Wednesday. "Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur."

The commission plans to issue the full report next week.