Deepwater Horizon: Lessons from the Recent BP Project Failure and Environmental Disaster in the Gulf of Mexico – Part I

Introduction

Deepwater Horizon was an ultra-deepwater dynamically positioned, semi-submersible offshore oil drilling rig. Built in 2001 in South Korea by Hyundai Heavy Industries, the rig was commissioned by R&B Falcon, which later became part of Transocean, registered in Majuro, Marshall Islands, and leased to BP plc until 2013. In September 2009, the rig drilled the deepest oil well in history at a vertical depth of 35,050 ft (10,683 m) and measured depth of 35,055 ft (10,685 m) in the Tiber field at Keathley Canyon block 102, approximately 250 miles (400 km) southeast of Houston, in 4,132 feet (1,259 m) of water. [1]

On April 20, 2010, when drilling at the Macondo Prospect, an explosion on the rig caused by a blowout killed eleven crewmen and ignited a fireball whose flames were visible from 35 miles (56 km) away. The resulting fire could not be extinguished and, on April 22, 2010, Deepwater Horizon sank, leaving the well gushing at the sea floor and causing the largest offshore oil spill in United States history. [1]

The Deepwater Horizon oil spill (also referred to as the BP oil spill) in the Gulf of Mexico is the largest offshore spill in U.S. history. Some estimates have already placed it as among the largest oil spills in history with hundreds of millions of gallons spilled to date. The gusher is now estimated to be flowing at 35,000 to 60,000 barrels of crude oil per day. For comparison, this is an amount equal to the 1989 Exxon Valdez oil spill every one to two weeks. The resulting oil slick covers at least 2,500 square miles (6,500 km2). Scientists have also reported immense underwater plumes of oil not visible at the surface. [2]

The Deepwater Horizon accident was a Project Failure of immense proportions. The resulting environmental disaster is widely affecting life below and above the sea throughout the region, seriously damaging coastal wetlands and wildlife, and has negatively affecting fishing, tourism and many other industries in those US states bordering the Gulf of Mexico. The lives of nearly all residents of the coastal regions of Louisiana, Mississippi, Florida and several other US states have been seriously affected. In addition, the inability of BP to stop the flow, communication blunders by BP management, negative media accounts and continuing coverage have resulted in serious negative consequences for BP, subcontractors on the project and the oil exploration industry as a whole. The US federal government has also been criticized for slow and weak response to the disaster.

While I am not an oil industry expert, and have not studied all aspects of this disaster in detail, the story is impossible to ignore by the project management profession. Some lessons have already emerged from this project disaster; other lessons will be learned over coming months and years. Some lessons are crystal clear – risk management plans were inadequate, BP was not prepared for the accident, project management mistakes were made during drilling, communication mistakes were made by BP executives following the accident (although many good decisions were also apparent), the impact on the environment and stakeholders will be far reaching, and the future of BP is at risk from this single incident. [3]

In addition, there are some other broader implications that can also now be highlighted. For example, it is clear that citizens and societies around the world are connected by earth systems (the oceans, the atmosphere, the weather); globalization is not just an economic, social and political phenomenon. Disruptive events can have far reaching affects. Emergency response and disaster recovery must be major aspects of any risk management program, and are important fields for professional project management. And if the scope of a project changes rapidly, in this case from oil drilling to stopping the oil spill to environmental cleanup, so do the range of stakeholders, now including much more directly here, the residents and government leaders of various US states; the President, agencies and Congress of the United States; top executives and shareholders of BP; other large oil companies and their respective executives, boards, shareholders, suppliers; and many others.

Organizations, projects and stakeholders around the world are being affected by this disaster. As Rohm Emmanuel, President Obama’s Chief of Staff has been quoted as saying, “no disaster should go unused,” I wanted to take this opportunity to discuss the Deepwater Horizon project failure and environmental disaster, from the perspective of both project management and some broader implications. So here we go…

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