the audit

The Journal Excels on BP

An investigation shows the company repeatedly cutting corners in the Gulf
May 27, 2010

The Wall Street Journal unloads a huge, devastating investigation into the BP oil catastrophe this morning, finding that the company cut corners in several areas to get an over-budget, over-deadline project finished.

The paper has been doing excellent work on this story but this one particularly shows the paper flexing its muscles (emphasis in all quotes below are mine). By the way I love the lede:

It was a difficult drill from the start.

Simple, but sets up the story nicely. And it puts the reporting that follows—on how BP didn’t conform with industry best practices—into context:

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.

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The paper’s Ben Casselman and Russel Gold (with the assistance of six contributors) also report that BP used a single pipe instead of a double pipe, which would have offered a backup layer of protection.

And more on the rush job:

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.

It would have taken six to twelve hours to do it properly. BP did just 30 minutes, the Journal says.

The picture the Journal paints is one that’s going to make it that much harder for BP to deflect blame on to its contractors, as it has tried to do.

BP also didn’t run tests to check on the last of the cement after it was pumped into the well, despite the importance of cement to this well design and despite Halliburton’s warning that the cement might not seal properly. Workers from Schlumberger Ltd. were aboard and available to do such tests, but on the morning of April 20, about 12 hours before the blowout, BP told Schlumberger workers their work was done, according to Schlumberger. They caught a helicopter back to shore at 11 a.m.

BP told the Journal Tuesday that the tests weren’t run because they were needed only if there were signs of trouble in the cement job, and the work seemed to go smoothly. But the same day, BP officials told congressional investigators there were signs before the disaster that the cement might have been contaminated and that some cementing equipment didn’t work properly, according to a memo from two Congressmen.

You think the post office or DMV would have done a better job running this? The paper also reports that BP appears to have violated its drilling permit.

Kevin Senegal, a subcontractor employee who cleaned tanks, said he was told to be ready to clean two tanks on a coming shift instead of the usual one. “To me it looked like they were trying to rush everything,” he said.

Awful lot of rushing around going on. It sure reminds me of what worker bees do when somebody up the chain decides something’s taking too long. I imagine that will be a good line of inquiry for reporters and government investigators alike.

That will come. In the meantime, this is outstanding work by The Wall Street Journal—one of those authoritative, deep-dive reconstructions that would stand out even in the paper’s pre-Murdoch era.

Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at Follow him on Twitter at @ryanchittum.