BP report on Gulf oil disaster to accept some blame: FT

8th September 2010, Comments 0 comments

An internal BP inquiry due on Wednesday into what caused the Gulf of Mexico oil spill is expected to accept that BP staff made mistakes before the disaster, the Financial Times reported.

The report, due at 1100 GMT, is likely to admit failures ahead of an explosion at a BP-operated oil rig in April which killed 11 workers and caused the worst spill in US history, the FT said.

Britain-based BP has already rejected any suggestion that it was guilty of gross negligence over the spill that spewed an estimated 4.9 million barrels of oil into the Gulf.

The probe by the oil giant's head of safety and operations, Mark Bly, is viewed as key to how BP defends itself against legal proceedings involving the spill, which followed an explosion at the Deepwater Horizon oil rig on April 20.

The leaking Macondo well has now been secured but the disaster is being examined in a string of court cases and probes, including a criminal investigation being carried out by the US Department of Justice.

As well as BP's actions, the report is also looking at the role of contractors including Transocean, which leased the Deepwater Horizon rig off the Louisiana coast, and Halliburton, which cemented the well.

BP's report is set to highlight failings by Transocean and Halliburton, the FT said.

BP has already spent eight billion dollars (6.3 billion euros) trying to contain the disaster and has forecast that it will eventually cost the group more than 32.2 billion dollars after clean-up costs and compensation are taken into account.

US lawmakers have accused the oil giant of sacrificing safety to improve its profit margin but chief executive Tony Hayward denied this during a hostile grilling in Congress in June.

Hayward subsequently announced he would quit the top job in October.

Peter Hutton, an analyst on the oil industry for NCB Stockbrokers, said he expected that in the report, "BP will judge it pragmatic to make an open admission of failures in some key areas".

He added: "For example, BP is likely to acknowledge that company engineers misread pressure data which indicated that a blowout was imminent.

"But it will be crucial for BP to differentiate errors from a systemic process or culture which allows the charge of 'gross negligence' which has implications for the level of punitive damages."

© 2010 AFP

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