Business, Economics and Jobs

BP and Transocean: Gulf spill never happened?


It never happened.


US Coast Guard

So you think there was an oil spill last summer in the Gulf of Mexico? Never happened. At least that’s what BP and Transocean would want us to believe.

First came BP’s annual report. In a section entitled “Preventing oil spills,” a chart shows that the company spilled less than 2,000 liters (528 gallons) of oil in 2010.

Granted, the chart clearly states that it the amount is “excluding the Gulf of Mexico oil spill.” Why not include that gusher? Way too much uncertainty. Here’s the company’s explanation:

"Although there are several third party estimates of the flow rate or total volume of oil spilled from the Deepwater Horizon incident, we believe that no accurate determination can be made or reported until further information is collected and the analysis, such as the condition of the blowout preventer, is completed. Once such determination has been made, we will report on the spill volume as appropriate."

In case you’re wondering, the spill is estimated at 190 million gallons, an amount that could cost it a fortune in fines.

Here’s the offending BP chart:


But BP isn’t the only Gulf spill firm glossing over the summer of 2010.

Transocean, the Swiss firm that owned the embattled Deepwater Horizon rig recently filed its annual executive compensation report. Of course, as the world’s biggest offshore rig developer, safety is a something the company clearly takes seriously. Part of executives’ bonus comes from a safety premium.

So how did Transocean handle the explosion on the rig that killed 11 people and kicked off the spill? The New Orleans Times Picayune reported:

In a recent regulatory filing, the company said it paid its senior managers two-thirds of their total possible safety bonus for achieving the "best year in safety performance in our company's history." The company Monday said the phrase "may have been insensitive."

CEO Steve Newman collected $374,062 bonus, a quarter of which came from safety, according to MarketWatch. Investigators have found that some Transocean decisions contributed to the accident.

As the outrage mounted, executives decided to donate the safety portion of their bonuses to the families of the victims. That didn’t hurt Newman much: his pay package was $5.8 million. "The executive team made this decision because we believe it is the right thing to do," Transocean Chief Executive Steven Newman told the Wall Street Journal.

Meanwhile, Footnoted is reporting that Transocean has been seeking immunity to prevent its shareholders from suing its leadership over the accident.

Seems they knew the safety record wasn't so exemplary after all. 

Follow David Case on Twitter: @DavidCaseReport