Recent testimony to federal investigators also has exposed a flaw in the complex day-to-day operations at BP's Macondo well: A communication system FUBAR.
Any venture that involves multiple companies -- whether it's building a highway, launching a clothing line or developing a shopping center -- has to have a robust communication net in place to avoid disaster. Especially, when it comes to a project where safety is paramount. And the first step in any good communication system is for everybody to know who is in charge of what.
In the case of the Macondo well, which spewed 4.9 million barrels of oil into the Gulf over three months, more than a half dozen companies were involved.
- BP owns the well along with minority partners Anadarko (APC) and Mitsui.
- The Deepwater Horizon rig is owned by Transocean (RIG) and was the drilling contractor hired by BP.
- Halliburton (HAL) was the cementing sub-contractor
- Cameron International (CAM) supplied the blow out preventor
- Weatherford (WFT) was the casing sub-contractor
- MI Swaco -- a joint venture between Smith International (SII) and Schlumberger (SLB) was the mud sub-contractor.
What makes the Gulf oil spill case so interesting is one issue hammered by lawyers during testimony last week and aptly pointed out by FT"s Energy Source blog: Any of the companies involved in the drilling operation in the Gulf could have stopped the project at any time if they felt something was wrong. And according to testimony, staff from different companies raised concerns about specific elements within the project. Which begs the question, Why didn't anyone stop the operation?
The communication system was a likely contributor. As in any business, a vague and confusing operational structure has a way of masking problems and concerns until it's too late. In BP's case, sometimes the biggest challenge was finding the right person to talk to, a point noted by BP drilling engineer Brett Cocales, who suggested during his testimony that a 24-hour operations center could be helpful to avoid future disasters.
Cocales' idea is worthy, and certainly part of the solution. A more complete approach would be to establish a clear communication and operational structure before any project begins.