x Abu Dhabi, UAETuesday 23 January 2018

Loren Steffy spills the beans on BP's Gulf disaster

The Life: Loren Steffy, a business columnist, writes about how BP's mistakes in the Gulf disaster started long before the blowout.

Drowning in Oil: BP and the Reckless Pursuit of Profit by Loren Steffy
Drowning in Oil: BP and the Reckless Pursuit of Profit by Loren Steffy

Review: Drowning in Oil: BP and the Reckless Pursuit of Profit, by Loren Steffy

It goes by many names: the Macondo blowout; the Deepwater Horizon spill; the Gulf of Mexico disaster.

But it takes only two letters to explain why it happened: BP.

That is the belief of Loren Steffy, a business columnist at the Houston Chronicle, who argues that the company's aggressive stance towards the bottom line and neglect of basic safety and engineering practices led to one of the worst environmental disasters in history.

With far-ranging sources and a background at a newspaper that sits at the heart of North America's energy industry, Steffy provides a convincing read.

He says evidence of BP's intentions dates back long before the oil spill.

It was in 1995 that Lord Browne of Madingley took over as chief executive of BP with one goal in mind: turning BP into one of the world's biggest energy companies.

That motivated billion-dollar buyouts of two smaller North American companies, Arco and Amoco.

Steffy argues that Lord Browne failed to fully integrate BP with its two acquisitions, losing an opportunity to make safety culture and engineering priorities at the two companies part of the BP mothership.

BP's next mistake under Lord Browne's leadership was to focus on cost-cutting that would deliver high returns and gain the favour of Wall Street, Steffy writes.

The BP chief let go of engineering talent and brought in droves of consultants in the belief that BP could outsource the resources that other companies maintained in-house.

It was a toxic environment for BP as it searched for risky but highly profitable deepwater oilfields, known in the trade as "elephants".

BP went for large deposits so deep below the surface that only special submarines could locate the wellhead - such as the Macondo prospect in the Gulf of Mexico.

The disastrous results sparked a US moratorium on new drilling in the Gulf and emboldened some industry executives to vocalise their wariness of BP's practices.

"Long the industry outlier," Steffy writes, "BP found itself with few friends in the oil patch."

The Quote: Oil spills occupy a prominent position in America’s rogues’ gallery of corporate villainy. Perhaps only the clubbing of baby seals is more detested by the public. Loren Steffy, author of Drowning in Oil