Thursday, June 17, 2010

Pointless, Valueless Theater.

Tony Hayward, CEO of BP, is not an Oil Man. His pedigree is finance, serving in the corporation's Mergers and Acquisitions department for the majority of tenure at BP. In today's testimony to Congers, it was very clear that Hayward was not there to answer questions specific to his expertise, but was summoned so that Congresscritters could look good to the "little people" by ranting at him. Not that they understood the significance or triviality most of the technical questions they threw at him. If we were offered a seat along side the Critters, we would have asked the following questions:
  1. When you became CEO of BP and directed a "laser-like focus" on improving safety, at that time were you made aware of any drilling, production, refining, or petroleum transportation activity that was operating with unacceptable bounds of safety, regardless of whether they met federal oversight requirements? For example, were you told that the overall approach to drilling procedures could allow operations with an amplified risk of failure or accident? Were there operations that you unilaterally halted because of safety concerns?
  2. As CEO you receives safety briefings that were at the highest level, with little technical detail for evaluation. Basically, you are given "red light - green light" status reports of safety initiatives. Who in the BP organization does have the responsibility to evaluate the technical criteria to assess whether BP operations were improving in safety? What reports were you getting from these personnel about the state of drilling safety?
  3. What conditions did you place on your subcontractors, Transocean and Haliburton, in decision-making for safe practices on the rig? Did either have veto power over procedures directed by BP personnel?
  4. What are the experience requirements for BP rig managers? Does a single BP manager have authority for rig operations?
  5. What direction or guidance were you given by MMS as part of your improved safety initiatives? Did you solicit input from MMS for this? If so, what was their response?

These hearings can be quite valuable in determining the structure of risk manangement and decision making for operations of BP and the other producers in the Gulf, and the interaction of MMS. Or they can be useless theater.

Calling Gene Kranz!

There are Oil Men who know what to do. We don't care who they work for or where they live, pound on their doors and get them in here!

Yup, Never Let a Crisis Go to Waste.

The Wall Street Journal comments on how the Administration used the good name of oil engineering experts to push ideology.

Sunday, June 13, 2010

The Failure of Risk Management.

Nansen Saleri, former head of reservoir management for Saudi Aramco, provides a non-hysterical, apolitical, and sober analysis of oilshore oil drilling in the shadow of the Deepwater Horizon accident. His claim is that the principal failure that lead to the catastrophe was that of effective risk management. Saleri also reminds us that shutting down offshore drilling may actually increase the risk of another oil spill from much more vulnerable oil tankers.