Report: Slack Management Exposed BP to Risk
BP's refining operations are exposed to high safety risks that can lead to deadly accidents and pollution as a result of slack management and a lack of investment, according to a leaked internal report from 2015.
The report, co-authored by BP, IBM and industry consultancy WorleyParsons, states that the British company's refining and petrochemical business, known as downstream, is trailing rivals such as Royal Dutch Shell (RYDAF) by up to seven years in managing information to reduce safety risks and financial losses.
"Inadequate management and use of engineering information has been a root cause or contributing factor" in 15 percent of 500 high-risk incidents reviewed in the report, which was provided by Greenpeace.
BP has strived to improve its safety record since the 2010 Deepwater Horizon rig explosion in the Gulf of Mexico where 11 people were killed and which led to the largest environmental disaster in U.S. history.
In comments on the leaked report, BP said it was "committed to safe, reliable and compliant operations. With that in mind, BP regularly conducts internal assessments in an effort to make improvements to its operations".
"This particular report focused on potential enhancements to how BP manages engineering data. It is not an analysis of any operational incidents, and any suggestion that this report indicates BP is wavering from its safety commitment is wrong," a company spokesman said.
The most significant incident recorded by the authors occurred in January 2014 at the 413,500 barrels per day (bpd) Whiting, Indiana refinery which cost BP $258 million in lost production. The incident at the gasoil hydrotreater unit, which removes sulphur from oil, was due to "multiple deficiencies in engineering information management".
At the Hull petrochemical plant in northern England equipment that was not operated correctly led to losses of $35 million to $45 million.
BP's safety record came in to focus in 2005 when a blast at its Texas City refinery killed 15 workers and injured 180 others. BP was fined $84.6 million by the U.S. Occupational Safety and Health Administration between 2005 and 2012 for safety rules violations found at the refinery in investigations following the blast.
The report said highly material safety risk and financial performance issues remained due to "the lack of refining and petrochemicals-wide direction, governance, coordination and investment".
The upstream segment, which produces oil and gas, has further work to do but is however significantly ahead of downstream, the report said, reflecting the big focus BP has placed on safety after the Deepwater Horizon explosion.
Greenpeace UK's senior climate adviser Charlie Kronick said in a statement that "BP's sloppy approach to a crucial aspect of safety hasn't changed".
"The same happy-go-lucky attitude that played a role in major accidents in the past is seemingly still reflected in the management of safety information across the oil giant's operations from rig to refinery."
Reporting by Ron Bousso
