Federal Probe Extends to Two BP Managers - WSJ.com

Federal Probe Extends to Two BP Managers - WSJ.com

• JULY 22, 2010

BP Managers Named in Disaster Probe

The Two Men Were Aboard Rig for the Oil Giant; Documents Show Key Safety Switch on Deepwater Horizon Didn't Work

• Article

By BEN CASSELMAN And RUSSELL GOLD

Associated Press

Concerns about a tropical storm disrupted efforts Thursday to permanently seal the BP well in the Gulf of Mexico. Development Driller II and Development Driller III, shown above, are drilling the relief wells.

KENNER, La.—Two managers from BP PLC have been named as subjects of a federal investigation into the explosion and sinking of the Deepwater Horizon oil rig in the Gulf of Mexico.

The two men are the first individuals from BP to be named "parties in interest" in the case, indicating that they are potential targets of the probe.

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Both were aboard the rig representing BP, which owned the well being drilled, when the well blew out April 20, killing 11 and unleashing the worst offshore oil spill in U.S. history.

Investigators on Thursday said they had named as parties Robert Kaluza, a BP employee overseeing operations on the rig, and Patrick O'Bryan, BP's vice president in charge of drilling. Neither could be reached for comment Thursday evening. A lawyer for Mr. Kaluza didn't immediately respond to messages. BP declined to comment.

Mr. Kaluza has twice been called to testify in front of the investigative board holding hearings in this city just outside New Orleans. He declined, citing his rights under the Fifth Amendment of the U.S. Constitution.

Five employees of Transocean Ltd., which owned and operated the oil rig, have previously been named as parties in the investigation; this gives the employees additional protections, such as access to evidence and the right to question witnesses.

Investigators' move to name the BP employees comes after a week of testimony in which investigators repeatedly questioned the company's decisions aboard the rig and suggests investigators believe those decisions could have contributed to the disaster.

BP and Transocean had already been named as subjects of the probe, which is being conducted by the U.S. Coast Guard and by the Bureau of Ocean Energy Management, Regulation and Enforcement. There are now 16 subjects of the probe, including individuals and contractors.

Meanwhile, internal documents reviewed by The Wall Street Journal show engineers who pulled some of the Deepwater Horizon's equipment from the seabed two weeks after the rig exploded found that a crucial safety switch wasn't functional.

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The safety switch addressed in the documents, known as a "deadman switch," should have activated once the floating rig erupted into flames and lost communication with well-control equipment a mile below the surface. The switch should have triggered the blowout preventer, a 450-ton set of valves designed to shut down the well.

But a test of the blowout preventer's control system found that the deadman switch was inoperable, according to a May report by Cameron International Corp., which made the equipment. Cameron employees attempted to activate the switch, but nothing happened.

A second control system had a dead battery, congressional investigators have said, though Transocean disputes that.

The Cameron report, which was ordered by Transocean, also noted that the deadman switch was rebuilt, most likely aboard the rig, in February by an "unknown person."

A Cameron spokesman declined to comment. A Transocean spokesman said that testing after the blowout was "inconclusive" and that there was no reason to believe the deadman switch "wasn't fully functional."

The report, which hasn't previously been made public, provides a new clue into why the blowout preventer didn't operate as expected and seal off the raging well—one of the chief unanswered questions in the Deepwater Horizon disaster. While a working switch wouldn't have prevented the uncontrolled blowout on April 20, it could have cut off the fuel that fed the inferno for 36 hours until the rig sank.

During the hearings, federal investigators have had tough questions for Transocean, probing the driller's maintenance of the blowout preventer, safety systems and other equipment aboard the rig.

According to testimony at the hearings, the Deepwater Horizon experienced a series of power losses, computer crashes and other issues in the months before the explosion, and hundreds of items were overdue for maintenance. But in a March 29 email, a BP manager praised workers on the rig for completing 63 of 70 maintenance items. It wasn't immediately clear whether the email referred to the same maintenance issues.

A survey of the oil rig's workers by Lloyd's Register Group, which was done last spring at Transocean's request, found that they were concerned about safety aboard the rig. Less than half felt they could report unsafe conditions without reprisal, according to the survey, which was earlier reported by the New York Times.

In hearings Thursday, Natalie Roshto said her husband, Shane, who died on the rig, was particularly worried. "From day one he deemed this hole a well from hell," said Ms. Roshto, who is suing Transocean for the wrongful death of her husband. "He said Mother Nature just doesn't want to be drilled here."

Write to Ben Casselman at ben.casselman@wsj.com and Russell Gold at russell.gold@wsj.com