Halliburton 2011 Annual Report Download - page 104

89
Investigative Reports. On September 8, 2010, an incident investigation team assembled by BP
issued the Deepwater Horizon Accident Investigation Report (BP Report). The BP Report outlined eight
key findings of BP related to the possible causes of the Macondo well incident, including failures of cement
barriers, failures of equipment provided by other service companies and the drilling contractor, and failures
of judgment by BP and the drilling contractor. With respect to the BP Report’ s assessment that the cement
barrier did not prevent hydrocarbons from entering the wellbore after cement placement, the BP Report
concluded that, among other things, there were “weaknesses in cement design and testing.” According to
the BP Report, the BP incident investigation team did not review its analyses or conclusions with us or any
other entity or governmental agency conducting a separate or independent investigation of the incident. In
addition, the BP incident investigation team did not conduct any testing using our cementing products.
On June 22, 2011, Transocean released its internal investigation report on the causes of the
Macondo well incident. Transocean’ s report, among other things, alleges deficiencies with our cementing
services on the Deepwater Horizon. Like the BP Report, the Transocean incident investigation team did not
review its analyses or conclusions with us and did not conduct any testing using our cementing products.
On January 11, 2011, the National Commission released “Deep Water -- The Gulf Oil Disaster
and the Future of Offshore Drilling,” its investigation report (Investigation Report) to the President of the
United States regarding, among other things, the National Commission’ s conclusions of the causes of the
Macondo well incident. According to the Investigation Report, the “immediate causes” of the incident were
the result of a series of missteps, oversights, miscommunications and failures to appreciate risk by BP,
Transocean, and us, although the National Commission acknowledged that there were still many things it
did not know about the incident, such as the role of the blowout preventer. The National Commission also
acknowledged that it may never know the extent to which each mistake or oversight caused the Macondo
well incident, but concluded that the immediate cause was “a failure to contain hydrocarbon pressures in
the well,” and pointed to three things that could have contained those pressures: “the cement at the bottom
of the well, the mud in the well and in the riser, and the blowout preventer.” In addition, the Investigation
Report stated that “primary cement failure was a direct cause of the blowout” and that cement testing
performed by an independent laboratory “strongly suggests” that the foam cement slurry used on the
Macondo well was unstable. The Investigation Report, however, acknowledges a fact widely accepted by
the industry that cementing wells is a complex endeavor utilizing an inherently uncertain process in which
failures are not uncommon and that, as a result, the industry utilizes the negative-pressure test and cement
bond log test, among others, to identify cementing failures that require remediation before further work on
a well is performed.
The Investigation Report also sets forth the National Commission’ s findings on certain missteps,
oversights and other factors that may have caused, or contributed to the cause of, the incident, including
BP’ s decision to use a long string casing instead of a liner casing, BP’ s decision to use only six centralizers,
BP’ s failure to run a cement bond log, BP’ s reliance on the primary cement job as a barrier to a possible
blowout, BP’ s and Transocean’ s failure to properly conduct and interpret a negative-pressure test, BP’ s
temporary abandonment procedures, and the failure of the drilling crew and our surface data logging
specialist to recognize that an unplanned influx of oil, gas, or fluid into the well (known as a “kick”) was
occurring. With respect to the National Commission’ s finding that our surface data logging specialist failed
to recognize a kick, the Investigation Report acknowledged that there were simultaneous activities and
other monitoring responsibilities that may have prevented the surface data logging specialist from
recognizing a kick.