Lord Browne responsible for BP's string of disasters, according to book

16 May 2012

Oil giant BP has experienced a run of major accidents and disasters in recent years, culminating in the 2010 Gulf of Mexico oil spill. A new book, by an acclaimed US writer on environmental issues, traces the roots of these disasters to a change in corporate culture under former Group Chief Executive Lord Browne, who headed the group from 1995 to 2007.

"Run to Failure: BP and the Making of the Deepwater Horizon Disaster," by ProPublica investigative reporter Abrahm Lustgarten, offers a detailed portrait of a corporate culture geared to minimising costs and maximising revenue.

Lustgarten argues that the culture had been spreading through the British oil company for years, culminating in the April 2010 tragedy that killed 11, seriously injured 16 and spewed crude oil into the Gulf for 87 days.

"The roots of the story concern corporate responsibility, business ethics, and leadership and go back at least two decades, to a point at which BP executives sought to redefine the company and reposition it as one of the great corporations of our time," writes Lustgarten, who won a 2009 George Polk award for environmental reporting.

Browne drove a spree of acquisitions while pushing BP into riskier drilling and ruthlessly cutting costs. In 1990, for example, he cut 1,700 jobs before tasking managers with finding $750 million in budget reductions. Maintenance crews were asked to do more with less, Lustgarten says.

To achieve this, the group abandoned its historical affinity for safe and predictable operations, he says.

Under this new regime, the author claims, pipeline inspectors in Alaska were pressured to doctor their results; key safety infrastructure deteriorated; and managers pushed aside employees who spoke out.

"The workers were fewer and the hours longer," he writes. "Tasks that a pipeline inspector used to complete every three months now happened maybe once a year."

Unlike Exxon, which Lustgarten says changed its ways after the Valdez debacle, BP failed to right itself even after major accidents, including a 2006 oil spill in Alaska and the explosion of a Texas City, Texas, refinery in 2005 that killed 15.

"Run to Failure" gives a minute-by-minute account of the Deepwater Horizon events. Before the rig exploded, BP managers, behind deadline and over-budget, brushed aside serious warnings and skipped a routine but critical test, Lustgarten says. Once the explosion occurred, fail-safes failed, as did a blind shear ram, then faulty electrical valves prevented a deadman switch from working.

Lustgarten says BP and drilling contractor Transocean never bothered to install an acoustical control switch, a final backup for such an emergency situation, "even though it had become standard safety equipment for legal drilling in other parts of the world."

He says there are signs BP has not changed its ways. As recently as late 2010, a BP spokesman downplayed a leaked memo showing that 148 sections of its pipelines in Alaska had severely corroded, the author says.

In a public statement, BP's latest CEO, Robert Dudley, denied that BP had an enduring problem managing safety, but he admitted "for BP to remain strong and viable in the US, it has a great deal of work to do".