BP has cast doubt on the ability of its key safety system to stop future accidents.
Three months after the explosion that caused the huge oil spill in the Gulf of Mexico, BP said “there can be no assurance” that a major global deployment of its in-house Operating Management System would identify all risks or provide information on the right actions to take when things go wrong. The rollout will be complete this year.
OMS was introduced as a key safety step following the large explosion in BP’s Texas City Refinery in 2005, which killed 15 workers and injured 170. The system is being implemented across BP operations in locally-tailored modules, following global standards. It is now in all US sites and will be rolled out by the end of the year to the remaining few sites elsewhere that do not yet have it.
The OMS system, described by BP as the “cornerstone” of its safety efforts, was developed by BP in-house, built around Microsoft SharePoint and Performance Point. It helps integrate local standards and management systems, set priorities, define processes and measure performance, and is accessible on BP PCs as well as mobile devices used by engineers on the rigs.
But yesterday BP said: “Even after implementation of OMS has been completed, there can be no assurance that OMS will adequately identify all process safety, personal safety and environmental risk or provide the correct mitigations, or that all operations will be in compliance with OMS at all times.”
It warned shareholders that many of its operations are in “difficult or environmentally sensitive locations”, and if it fails to abide by environmental and safety and protection standards it “could lead to damage to the environment and could result in regulatory action, legal liability, material costs and damage to our reputation or licence to operate”.
The news comes as BP reported a record $17.2 billion loss for the three months to June, related to it setting aside $32 billion to cover costs resulting from the accident. It also confirmed that chief executive Tony Hayward, who has driven aggressive cost cutting steps but famously said following the accident that he wanted his “life back”, will step down on 1 October. He will be replaced by US managing director Bob Dudley.
Meanwhile, BP is continuing high-tech efforts to drill a relief well aimed at taking the pressure off the recently-placed containment cap. That work is expected to be completed, weather permitting, in early August.
In February, two months before the Gulf of Mexico spill, Tony Hayward spoke of the OMS in an interview in BP’s annual report, adding that “oil spills and recordable injuries” were “at the lowest levels for 10 years”. He said that he was “pleased with the progress made on safety”.
Hayward also referred to the system just five days before the explosion, at BP’s Annual General Meeting in London, explaining how it was setting the framework for continuous process improvement. There was “clear progress” in safety, he said, with a “significant reduction” in major incidents.
US government investigations into the Gulf of Mexico accident are ongoing, with BP admitting in its results that the authorities could seek to file criminal charges or a civil suit. BP is also conducting its own internal investigation into the accident, with early findings demonstrating a series of IT problems may contributed to the disaster. The company declined today to say whether the OMS played any part in the accident.
The chief technician at Transocean, which owns the lease on the rig, last week told a US federal investigation into the disaster that alarms and shutoff systems had been switched off, and key monitoring systems were freezing. BP said in response that investigations were ongoing, and responsibility lies with a range of parties.
BP also warned today that the “adverse public and political sentiment” towards it, following the oil spill, had “increased” the risk of its facilities being damaged, including by attacks on its IT systems.
“A breach of our digital security,” it said, “could cause serious damage to business operations and, in some circumstances, could result in injury to people, damage to assets, harm to the environment and breaches of regulations.”