Leaked BP report reveals risk of lethal accidents

BP has come close to at least two potentially lethal accidents as a result of shortcomings in the way it monitors the safety of its refineries and petrochemicals plants, according to an internal report seen by the Financial Times.

An internal investigation last year found that the British oil group lags behind Royal Dutch Shell and other competitors in managing crucial engineering information at its downstream operations, and has an “urgent” need to address the problem.

BP introduced stringent new safety procedures in the wake of the 2010 Deepwater Horizon disaster but its internal report, obtained by Greenpeace, recorded several “near misses” at refineries and chemical plants. BP operates eight refineries worldwide, with a share in five more, giving the company the capacity to refine 1.9m barrels a day. It owns in part or in whole 16 petrochemical plants.

According to the report, BP’s most serious near miss occurred in 2014 at Whiting, a vast facility near Chicago with capacity to process 413,000 barrels of crude a day that helps to fuel the Midwest.

Whiting’s hydrotreater — the machine that extracts sulphur and other impurities from petrol — suffered a “HiPo”, or “high potential” incident. Such incidents are generally defined as a near miss where, on another day, it is likely that lives would have been lost. Although the report gave few details of the event, it said it cost BP $258m in lost production.

After the Texas City oil refinery explosion and the Deepwater Horizon oil spill BP introduced stringent new safety measures. BP has since sold Texas City © CSB, AP

BP’s internal review, which took place while stubbornly low oil prices were forcing companies across the sector to slash spending, concluded that “a standard and global approach to managing engineering information and data throughout the life of an asset does not exist” at the company.

“This leads to a consistent lack of clear accountability and responsibility for managing critical engineering information,” the report said.

Its authors — BP managers working with consultants from IBM and Worley Parsons — said there was an “urgent need” for improvements that would cost $170m over five years.

BP declined to say whether it had acted on the report’s recommendations or taken any measures to address the concerns it raised. It said the report “is not an analysis of any operational incidents, and any suggestion that this report indicates BP is wavering from its safety commitment is wrong”. It added: “BP is committed to safe, reliable and compliant operations.”

[The report] is not an analysis of any operational incidents, and any suggestion that this report indicates BP is wavering from its safety commitment is wrong. BP is committed to safe, reliable and compliant operations

A few months before the Whiting incident, BP completed a five-year project to modernise a refinery that was first opened in 1889. But the report’s authors found that “deficiencies in engineering information management contributed to the failure of barriers to prevent the incident from occurring”.

Experts in engineering information management describe the discipline as a vital, if unglamorous, part of the oil business. Its central task is to ensure that operators have accurate data about their facilities, in order to check that they are running as intended.

However, Robert Bea, professor emeritus at the University of California, Berkeley, who has worked as a consultant for BP several times since the 1970s and read the report, says: “There’s persistent evidence that BP is not paying sufficient attention to these critical safety measures.”

Professor Bea says the report echoes the findings of safety studies on refineries he conducted for then-chief executive Lord Browne, following a series of explosions and fires at the Grangemouth facility in Scotland between 1987 and 2001.

“It tells me that the problems we identified back in the early 2000s are continuing within the refinery operations,” he says. “Some are alarming. There are early signs of degradations in the safety systems that could lead to major accidents.”

Grangemouth oil refinery. A series of incidents there in the late nineties prompted an earlier safety review © Getty

The leaked report lists a catalogue of shortcomings in information management at BP’s downstream facilities.

At BP’s chemical plant at Hull, on the north-east English coast, the failure to operate a piece of equipment in accordance with its manual cost $35m-$45m. At the same site, inaccurate and incomplete drawings and procedures led to another “high potential” — or potentially fatal — incident.

At Hull and elsewhere, the lack of clear systems for storing plans and other engineering data meant staff had to contact colleagues who had left the company to retrieve information.

It tells me that the problems we identified back in the early 2000s are continuing within the refinery operations. Some are alarming

At Lingen in Germany — which BP describes as “one of the most complex refineries in the world” — and at other sites, master plans had not been updated to reflect changes during construction.

A failure to update plans has the potential to cause serious problems, Professor Bea says. “This is important when things are developing rapidly and you turn to the [drawings] and discover, ‘My God, there’s not a valve there’.”

At BP’s Rotterdam refinery, the delay in updating drawings had been “further exacerbated by previous budget reductions and current cost constraints,” the report found.

In addition, almost half of the data sheets at the plant where BP makes the raw material for plastic bottles, at Geel in Belgium, were incorrect, the internal investigation said. Consequently, the wrong parts had been supplied for relief valves.

Of 500 recent incidents, information problems caused or contributed to 15 per cent, the review concluded.

Shell, the British oil major’s Anglo-Dutch rival, was “significantly ahead of BP in managing downstream engineering information,” the report said. ConocoPhillips and Chevron of the US were also doing better than BP, as was Malaysia’s Petronas, one of a crop of fast-rising state-owned oil groups.

Charlie Kronick, senior climate adviser at Greenpeace, says: “BP has got away with cutting corners and crossing fingers for far too long.”

BP declines to answer questions from the FT about the report and the incidents it described. It says it was “dedicated to continuous safety improvement and is introducing new training programmes, deploying innovative technologies, and strengthening its safety culture — all in an effort to provide overlapping layers of protection”. It added that its safety record had improved over the past five years.

Reports of safety failures are potentially most significant for BP in the US, where the company has mounted a public-relations campaign to try to repair is reputation after Deepwater Horizon. At the same time, it has spent heavily at Whiting as it seeks to process growing supplies of North American crude.

The 1955 fire at the Standard Oil refinery in Whiting, Indiana, was one of the largest industrial blazes seen and burned for more than a week. The facility came to BP in its takeover of Amoco in 2000 © Wallace Kirkland/Getty Images

However, BP’s chequered record in the US extends beyond the massive Gulf of Mexico spill in 2010 and includes trouble in its refineries.

In 2005, an explosion at BP’s Texas City refinery killed 15 people and injured 180. A US government report into the disaster found that “personnel were not encouraged to report safety problems and some feared retaliation for doing so”. It also said the lessons from Grangemouth had not been adopted.

BP has since sold Texas City but still operates three refineries in the US, where the leaked report paints a mixed picture.

It said staff at Toledo in Ohio were striving to improve the accuracy of plans but “as with other sites, there are inadequate resources and funding to improve”. At Cherry Point in Washington state, where a large fire was swiftly extinguished in 2012, departments used different systems to manage information about the plant, slowing staff’s response to emergencies. At Whiting, as well as the serious incident in 2014, inaccurate data caused the plant’s control system to burn off all the fuel it was processing, breaching environmental rules.

Raúl Grijalva, an Arizona congressman and a vocal critic of BP since Deepwater Horizon, says he was concerned about what he called “cavalier attitudes” to safety at the company. Mr Grijalva, the senior Democrat on the House of Representatives natural resources committee, says he would ask regulators to examine the incidents at US refineries mentioned in the leaked report.


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