Friday, April 30, 2010

Gulf Oil Spill: Cost-cutting to Blame?

Greg Palkot

LONDON Critics of British Petroleum have told Fox News past cost-cutting by the London-based oil giant helped to contribute to the rig explosion and oil spill disaster now unfolding in the Gulf of Mexico.

Tom Bower, author of the 2009 book “The Squeeze, Oil, Money and Greed in the 21st Century,” told Fox, British Petroleum’s economizing led to a lack of engineers, an overdependence on out-sourcing, and even a lack of supervisors to keep an eye on the sub-contractors.

The explosion which led to the oil spill in Gulf while occurring on an oil rig operating for BP was run by another company, Transocean. BP has said while it assumes responsibility for the incident, it is still waiting for an investigation to show Transocean’s role .

Critics say if there was at least a supervisor on the rig, BP would already have a better understanding of the incident

It is also charged a voluntary remote control cut-off switch might have headed off the oil spill. When Fox put that to BP spokesman Robert Wine, he told us that was Transocean’s responsibility.

As to the broader charge that BP has stripped its engineering ranks, spokesman Wine told Fox News those numbers are being built back up and that subcontractors are actually bringing “expertise to the operation.”

BP’s Wine DID admit to Fox News, in the wake of a series of other safety-related incidents involving BP including the deadly fire at a Texas City refinery in 2005, the company is in the midst of a “renewal” of “procedures” aiming at improved safety and a reduction of oil spills.

While the exact dimensions of the spill are still being assessed, its already taking its financial toll on the BP oil giant.

Nick McGregor, oil analyst for London-based Red Mayne Bentley told Fox News that 20 billion dollars has been written off the market value of the company. He said thats four to five times the total cost of the devastating 1989 Exxon Valdez spill.

“People are uncertain how this is going to go,” McGregor told us, “they don’t know how bad it’s going to get.”

As to the charge that engineering cut-backs at BP might have contributed to the disaster, McGregor said that only during the “post-mortem” stage of the probe would it be clear where the exact fault lies.

He did acknowledge the broader difficulties of running such a large company in situations like this. Sometimes, McGregor noted “…the folks at the top don’t know everything that is going on throughout the firm.”

For British Petroleum, much of this analysis will have to wait. It is in full damage control…and prevention mode.

“It is not a question of whether we WILL stop the spill,” BP’s Robert Wine told us, “it’s a question of WHEN.” He went on to say, “The most important thing is, it doesn’t happen again.”

No comments:

Post a Comment