Transocean – Deepwater Horizon to Economic Horizon

Posted in BP British Petroleum,Deepwater Horizon,Government,Gulf Coast,Louisiana Maritime News,Maritime Lawsuits,Texas Maritime News,Transocean on September 22, 2010

In 2010, the Human and Organizational Factors Team for the Offshore Division of the Health and Safety Executive issued a report [HSE Report] that places Transocean in a light that demonstrates that it tries to place the blame on lower employees rather than look at corporate management decisions as it pertains to safety. The report has largely been overlooked by media since the Deepwater Horizon tragedy occurred.

Transocean

When reading this HSE Report and comparing what we have now learned from the Congressional Hearings and USCG Joint Investigation Taskforce [JIT] Hearings, it explains why Transocean will never truly fix the “Root Causes” that gave rise to the Deepwater Horizon disaster.

The findings of the UK’s HSE Report; the probable findings of the JIT; the dollar amount of pollution fines that will undoubtedly be levied against Transocean by the United States Government; the potential claims of injured and affected Gulf Coast industries such as land owners, fishing, shrimping and tourism; and then, finally, the prospect that BP could actually get contribution from Transocean under the Oil Pollution Act of 1990, places this massive international drilling giant’s continued growth in question.

To be sure, BP is a worldwide leader when it comes to egregious corporate conduct resulting in great profits and environmental disasters; but, at least in this Deepwater Horizon event, Transocean clearly is a de facto conspirator in the chase for the almighty dollar.

The HSE Report

In the years of 2007, 2008 and 2009, the HSE noticed extreme differences in accident/injury rates between various rigs in the North Sea. Over four (4) drilling rigs, the incident reporting varied from 0 to 15 in just a two year period. After Global Santa Fe merged with Transocean, the HSE began to review Transocean’s safety aspects which, among other things, included interviewing managerial onshore and offshore personnel related to these four subject rigs.

To be fair to Global Santa Fe and Transocean, not everything was negative from the over one hundred and fifty plus interviews. In fact, a number of newly implemented safety initiatives and safety factors were discovered in the process. The positive factors discovered included:

1. There was retention of long time employees that were loyal and maintained a history of the company that would assist in the future resolution of operational problems that would arise
2. The Time Out for Safety [TOFS] program seemingly had support from the executives all the way down to the offshore laborer
3. The management makes significant efforts to communicate to personnel through safety meetings, pre-tour meetings, presentations and inductions.

The HSE Report found, however, where Transocean wholly failed is what was being communicated to the rig workers, i.e., the message was the wrong message. The prominent and consistent indicators of Transocean’s organizational culture were:

1. Discipline
2. Blame
3. Zero Tolerance

Transocean’s so-called accountability process, represented in the ‘just culture decision tree’, quickly, and intentionally, lead investigations to who to blame rather than trying to establish the Root Causes such as wider organizational issues such as fatigue, distraction, communication failures, or defective equipment.

Transocean’s Internal Investigation Deepwater Horizon Report of June 8th

If one looks at the Deepwater Horizon facts and evidence, it is clear that the same factors found by the HSE Report in the North Sea were also prevalent in the Gulf of Mexico. Examples of this are found in Transocean’s recent Internal Investigation report issued in June 8, 2010 [TO Report]. The TO Report starts out with:

“The purposes of this investigation are (1) to establish the root cause(s) of events that led to the incident onboard the Deepwater Horizon the night of Tuesday, April 20, 2010 and ……”

This is certainly the right idea but when one reviews the report and compares what is now publicly known to the TO Report’s findings, it becomes readily clear that Transocean, as the HSE report found, completely and intentionally left out any discussions of fatigue, distraction, communication failures or defective equipment.

Though the TO Report states that it is a “work in progress” and a “draft”, one would think that it (1) would have been reviewed before public dissemination and (2) that all the factors that could have been known, and that were important as “root causes”, would have been included in the report. That is, one would expect this if Transocean was being honest and forthright. Unfortunately, probably to stave off the economic results of a true airing of the “Root Causes”, the TO Report was designed to buy time from probable economic extinction.

TO Report Criticisms

Though the TO Report attempts to go into great detail on the drilling technicalities on the one hand, it says that Transocean did not have access to the real-time data that would let everyone know what actually happened at crucial time periods leading up to the blowout. The TO Report says that it needed the real-time data that was in the possession of BP and provided by Sperry Sun. In fact, after the TO Report was issued, on August 18, 2010, a “scathing” letter was sent to BP from Transocean complaining that BP was “withholding evidence” from Transocean. Hence, by selecting the drilling technicalities, Transocean knew it would never reach any true conclusions as to what the “root causes” were. It was, in essence, a ruse from the start and a smoke screen in the end. Of course, it knew that when it started.

Interestingly, Transocean has yet to issue a simple court subpoena to Sperry to get these records themselves. That would be too easy and would result in getting the records which is something they would rather not do since “not having them” presents too good a smoke screen.

Why did Transocean choose the Macondo Well data, of April 20th, to evaluate as the source of potential “Root Cause(s)” instead of other topics? The answer to that question is clear and, unfortunately for Transocean, not very pretty.

The TO Report should have considered the following potential areas as “Root Causes”:

1. Strikingly Similar Prior Event – On December 23rd, 2009, the Transocean Sedco 711 rig had an actual blowout resulting in the entire evacuation of the rig and the successful deployment of the BOP to shut-off the well flow. From this event, on April 5th, 2010, just fifteen (15) days before the Deepwater Horizon explosion, Mr. Steve Hand, a Transocean Divisions’ Drilling Operations Manager, issued a Transocean Well Control Handbook amendment that required five (5) procedures to be strictly followed when displacing drilling fluid with sea water when working with down-hole pressure situations that would be known, or anticipated, to be under-balanced. Yes, just 15 days before; but was this communicated to the ill-fated drilling crew of the Deepwater Horizon? NO. Were these 5 required factors followed by the Deepwater Horizon drilling crew? NO. Why? Because Transocean specifically limited this change to be effective immediately for the North Sea Division only until the Well Control Handbook was amended worldwide.
2. Violation of Maritime Fundamental Principles on Command Issues – Why did Transocean not discuss the “internal” policy that it had so forcefully and comprehensively maintained for well over five (5) years of not having a licensed captain in charge, or in command, of its vessels that are Dynamically Positioned Vessels [DPV]. This  policy directly lead to a “confusion of command” the evening of April 20, 2010. Transocean knew that its policy of lack of command clarity had been specifically condemned by the United States Coast Guard [USCG] in 1985 when the USCG issued its report on the Glomar Java Sea [P. 79 Item #12] disaster that caused the death of 81 seamen. Transocean knew, when it issued its TO Report that: (1) Captain Kutcha had no drilling experience; (2) that he was not trained to recognize well control issues; and (3) that he had no knowledge how to operate the Emergency Disconnect System [EDS] nor did he even think that he had the authority to order its activation. Instead, Transocean, the largest offshore drilling company in the world, is the only company that adopts this internal operating system that permits an Offshore Installation Manager [OIM] to be in command of a vessel when the BOP and riser are down. Unfortunately, the OIM is not a licensed mariner and it is well accepted in the international maritime community that when a vessel is “underway”, which a DPV such as the Deepwater Horizon was, it must have a licensed captain in charge and in command. Transocean’s ‘coziness’ with the Marshall Islands allowed it to have the Deepwater Horizon misclassified as a MODU instead of a DPV [See, MODU Schedule in the Marshall Island 7-038-2 Marine Notice and compare it to the DPV Schedule which would have required a licensed captain in command instead of the OIM while “on location”]. The Marshall Islands admitted this misclassification to the JIT in September, 2010 and blamed it on a “clerical error”. There is an abundance of testimony, at the JIT, that this “confusion in command” contributed to this event. But is this discussed in the TO Report as a potential “Root Cause”? NO.
3. Violating BOP Scheduled Maintenance – As part of Transocean’s “Root Cause” investigation, why did Transocean fail to discuss that it intentionally failed to follow the American Petroleum Industry’s recommendations, as well Cameron International’s, the BOP manufacturer, recommendations that every five years the BOP must be recertified. The BOP in this event obviously failed and was never recertified as part of its scheduled maintenance. It is now common knowledge that the BOP had problems with its batteries, sea-water leaks as well as even modifications and overrides that were never properly documented. Was the BOP lack of proper certification mentioned in the TO Report? NO.
4. Pressuring & Distracting Crew to Complete the Well – Was the Deepwater Horizon drilling crew distracted that night? We now know that at least four VIPs were on board that night, i.e., two from BP and two from Transocean. The “position” of Transocean is that they were on the rig as part of a ‘routine’ program; but it sure is coincidental that (1) one of the toughest wells that had ever been drilled by the Deepwater Horizon was finally coming to an end; (2) the job was way over schedule; (3) the Macondo well had been abandoned by a previous rig, i.e., The Marianas, which had to depart due to hurricane damage and was replaced by the Deepwater Horizon; and (4) it was finally coming to an end early in the morning of April 21st had this blowout not have occurred.  In fact, Ms. Rachel Clingman, a lawyer representing Transocean stated that the purpose of these four VIPs was to give a safety award. I think that the presence of these VIPs surely could have acted as a distraction to the drilling crew. Was the presence of these four VIPs discussed as a possible distraction discussed as a potential “Root Cause”? NO.
5. “Inhibiting” the Deepwater Horizon General Alarm – The TO Report also failed to neither discuss, nor make any mention, that the entire general alarm, throughout the entire vessel, was electronically positioned in such a manner that it would not sound. In fact, every witness that was on-board the vessel on the 20th, has testified before the JIT they “heard no general alarm sound”. Transocean decided, fleet wide, to place the general alarm in an “inhibited” mode. This meant that if two or more sensors, e.g. fire & smoke, gas & smoke, gas & gas, etc. went off within a given zone that would trigger the general alarm. More importantly, if two or more gas sensors went into the “high-high” mode, that would also have triggered the general alarm. The evidence indicates that gas sensors were going off in the “high-high” mode almost throughout the entire ship well before there was any explosion. If the general alarm had sounded, that would have caused the ten men in the pump, pit and shaker rooms to muster-up thereby getting them out of the rooms that ultimately exploded. Was this discussed as a potential “Root Cause” of the event or of the deaths? NO.

Transocean Lawyer Rachael Clingman (VIDEO)

There is a list of at least five more serious events that occurred that could, and should, be considered “Root Causes” but they were also not mentioned in the TO Report.

Transocean’s plan must be to try to keep these matters as low and as ‘under the radar screen’ as possible for as long as possible; dribbling out a ‘little here and a little there’. Unfortunately for Transocean, as well as BP, Halliburton and Cameron, a judicial day of reckoning will be coming soon.

In summary, when one analyzes the findings of the HSE Report with what has factually been revealed at Congress and at the JIT hearings, it reveals a Transocean corporate “safety culture” that is only superficial in implementation and is non-productive for promoting true corrective change at the corporate management level. Transocean must address this problem and “shake-up” the management to follow through with the true reasons to have a safety culture, i.e., to recognize serious problems without fears of reprisal, analyze them, and implement corrective measures to solve the problems. If it does not do this globally, then whatever happens to this corporate giant, it deserves.

Published by maritime lawyer Gordon & Elias, LLP