BP warned yesterday that production from a giant oil platform in the Gulf of Mexico will be delayed for two years for safety reasons.
The Thunder Horse field had been due to come on stream this summer, pumping 250,000 barrels of oil and 200 million cubic feet of gas a day. But BP said it did not now expect production to begin until the middle of 2008 because of metallurgical failures on undersea parts of the platform.
The decision to delay the start of production is a graphic example of the new safety-first approach running through the company after last year's Texas City oil refinery blast which killed 15 workers and the oil spills at BP's Prudhoe Bay field in Alaska.
A senior BP executive has been appointed to conduct a root-and-branch review of the company's operations to improve its safety and environmental record. John Mogford, vice-president of safety and operations, will have a staff of 45 and another 45 auditors. The overhaul is being seen within BP as similar to that which Exxon undertook in the aftermath of the disastrous Exxon Valdez oil spill in Alaska in 1989 - a revamp which took 10 years to complete.
The Thunder Horse platform was left badly damaged and listing by one of the hurricanes that struck the US coastline in 2005. This delayed production start-up and allowed hydrogen to penetrate some of the platform's subsea systems in the very cold and deep waters of the Gulf of Mexico. The result was that the metal became brittle.
BP said it had discovered the problem after a weld failed while water was being pumped through the system as part of pre-commissioning tests. The platform had passed all normal industry standard tests and regulatory requirements. The metallurgical failures were only discovered when more rigorous testing was carried out as an additional safety precaution.
BP said that as a result it would now have to retrieve and rebuild all the sea-bed production equipment from the field, an exercise which is expected to cost it hundreds of millions of dollars. Investment in the platform so far stands at $1bn. When it comes on stream, Thunder Horse will be the biggest field in the Gulf of Mexico. Discovered in 1999, it will feature the biggest semi-submersible platform in the world, weighing more than 50,000 tonnes and producing oil from depths of about 6,000ft. BP has a 75 per cent interest in the field; the remaining 25 per cent is held by Exxon Mobil.
BP could not say whether Thunder Horse would have begun production by now had it not been for Texas City and the fundamental safety revamp ordered by its chief executive, Lord Browne of Madingley. A spokesman said that was an impossible question to answer but added that BP usually went beyond the minimum standards required when commissioning new production facilities.
He added that while the overhaul being carried out by Mr Mogford would cover all aspects of BP's operations, it would be introduced subtly and slowly in order not to interrupt production. He said Mr Mogford had been appointed to the new role in May last year - some two months after the Texas City blast - and had been building up his staff for some time.
In a further drive to improve its performance and image in North America, BP has appointed a new president for its US operations, Bob Malone, hired a retired US federal judge as ombudsman and created an independent American advisory panel.
BP is facing a criminal grand jury investigation into the Prudhoe Bay oil spills and civil action over Texas City, which may result in Lord Browne being forced to give sworn videotape evidence.Reuse content