Halliburton 2011 Annual Report Download - page 43

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The Investigation Report also identified two general root causes of the Macondo well incident:
systemic failures by industry management, which the National Commission labeled “the most significant
failure at Macondo,” and failures in governmental and regulatory oversight. The National Commission
cited examples of failures by industry management such as BP’ s lack of controls to adequately identify or
address risks arising from changes to well design and procedures, the failure of BP’ s and our processes for
cement testing, communication failures among BP, Transocean, and us, including with respect to the
difficulty of our cement job, Transocean’ s failure to adequately communicate lessons from a recent near-
blowout, and the lack of processes to adequately assess the risk of decisions in relation to the time and cost
those decisions would save. With respect to failures of governmental and regulatory oversight, the National
Commission concluded that applicable drilling regulations were inadequate, in part because of a lack of
resources and political support of the MMS, and a lack of expertise and training of MMS personnel to
enforce regulations that were in effect.
As a result of the factual and technical complexity of the Macondo well incident, the Chief
Counsel of the National Commission issued a separate, more detailed report regarding the technical,
managerial, and regulatory causes of the Macondo well incident in February 2011.
In March 2011, a third party retained by the BOEMRE to undertake a forensic examination and
evaluation of the blowout preventer stack, its components and associated equipment, released a report
detailing its findings. The forensic examination report found, among other things, that the blowout
preventer stack failed primarily because the blind sheer rams did not fully close and seal the well due to a
portion of drill pipe that had become trapped between the blocks and the pipe being outside the cutting
surface of the ram blades. The forensic examination report recommended further examination,
investigation, and testing, which found that the redundant operating pods of the blowout preventer may not
have timely functioned the blind shear rams in the automatic mode function due to a depleted battery in one
pod and a miswired solenoid in the other pod. We had no part in manufacturing or servicing the blowout
preventer stack.
In September 2011, the BOEMRE released the final report of the Marine Board Investigation
regarding the Macondo well incident (BOEMRE Report). A panel of investigators of the BOEMRE
identified a number of causes of the Macondo well incident. According to the BOEMRE Report, “a central
cause of the blowout was failure of a cement barrier in the production casing string.” The panel was unable
to identify the precise reasons for the failure but concluded that it was likely due to: “(1) swapping of
cement and drilling mud in the shoe track (the section of casing near the bottom of the well); (2)
contamination of the shoe track cement; or (3) pumping the cement past the target location in the well,
leaving the shoe track with little or no cement.” Generally, the panel concluded that the Macondo well
incident was the result of, among other things, poor risk management, last-minute changes to drilling plans,
failure to observe and respond to critical indicators, and inadequate well control response by the companies
and individuals involved. In particular, the BOEMRE Report stated that BP made a series of decisions that
complicated the cement job and may have contributed to the failure of the cement job, including the use of
only one cement barrier, the location of the production casing, and the failure to follow industry-accepted
recommendations.