Written Tuesday, June 22, 2010
Tyrone Burton saw it leaking and informed the company, but BP decided not to have it repaired, as that would stop production, thereby costing time and money.
Testifying before Congress in May, Christopher Pleasant, the rig worker in charge of the blow-out preventer itself, stated that when he would activate the device that should trigger the blow-out preventer, it lacked enough hydraulic pressure to operate. Which he did report to the company.
“After I saw that there was no hydraulics, I knew it was time to leave,” said Pleasant.
Coincidentally, BP CEO Tony Hayward sold off 223,288 shares, one third of his total holdings with the company, on the 17th of March for a total of £1.4 million. He used the proceeds from the sale to pay off the mortgage on his family’s mansion in Kent, England, which carries an estimated value of £1.2 million, according to a June 5th article in the U.K. publication The Telegraph.
There is no proof that he knew that his company’s stock value would likely soon plummet, therefore no insider trading charges are currently being brought. However, I believe that the evidence that the company was made aware of the previously mentioned problems with the blow-out preventer on the rig should certainly be explored in relation to the timing of this stock sale. His decision allowed him to avoid losing more than £423,000 when BP’s share price plunged by 30% after the oil spill began in April. Hayward’s pay package from BP is £4 million per year.
It is also interesting to note, in relation to the blow-out preventers, that immediately after the spill began BP issued many assurances that failure of a blow-out preventer was a rare event. However, according to a recent article in the New York Times, Transocean had commissioned a strictly confidential study on the reliability of blow-out preventers. The researchers looked at 15,000 wells drilled off the coast of North America and in the North Sea between 1980 and 2006 and found the staggeringly high failure rate of 45% in deepwater situations.
Curiously, the Obama administration’s moratorium on exploratory deep-water drilling has been overturned by U.S. District Court judge Martin Feldman, who owns stock in 17 different energy companies and related industries, including Transocean (who owned the Deepwater Horizon rig) and Halliburton (who was pouring the concrete at Deepwater Horizon when the explosion occurred). Judge Feldman ruled that the moratorium created a hardship on jobs in the region, however it should be noted that of the 3,600 oil drilling platforms in the Gulf of Mexico, only 33 would have been affected, as the moratorium only applies to exploratory wells, like Deepwater Horizon. Also, the moratorium is only for six months. Just long enough for the experts to determine the exact cause of this disaster and, hopefully, find solutions to ensure that it could never happen again before work on other exploratory wells continues. This does not seem unreasonable to me in any way, but then I don’t get stock dividend payments from the oil industry like Judge Feldman. Why this judge did not feel obligated to recuse himself from this case is beyond my understanding.
In response to the decision, White House Press Secretary Robert Gibbs said, “We will immediately appeal to the fifth circuit. The President strongly believes, as the Department of the Interior and the Department of Justice argued yesterday, that continuing to drill at these depths without knowing what happened, does not make any sense.”
Lastly, it seems that BP has a plan for the Arctic beginning this coming fall. In order to circumvent the regulations about “offshore drilling,” BP intends to essentially build a tiny, five acre gravel island, just large enough to hold the rig. From that rig, they intend to drill 2 miles straight down, and then 6-8 miles sideways…thereby drilling offshore, from on-shore (if you count a tiny little man-made “island” of dumped gravel to be a “shore”).
According to an article in Rolling Stone magazine, “This would be the longest ‘extended reach’ ever attempted, and the effort has required BP to push drilling technology beyond its proven limits. BP calls the project ‘one of its biggest challenges to date’…in what the company itself admits is ‘some of the harshest weather on earth.’”
Hmmm…is it just me that thinks that BP has pushed drilling technology far enough already??