A Sticky Situation: Forensic Decisioning

Subject: BP oil spill.

Forensic Accounting Definition: Providing an accounting analysis (many times after the fact) that is suitable to the court which will form the basis for discussion, debate and ultimately dispute resolution.

Because of the magnitude of this disaster, the complexity and cover of darkness of the incident, the theory and practice of forensic accounting could objectivity be shadowed by a similar process given the facts in this case…forensic decisioning.

Forensic Decisioning Definition: Providing a decision making analysis (at all levels) that is suitable to the court which will form the basis for discussion, debate and ultimate dispute resolution.

In each of the following decisions highlighted, the forensic question and mystery that would need to be answered is: HOW was the decision made?

Wall Street Journal
5-25-10
By STEPHEN POWER

Oil giant BP PLC told congressional investigators that a decision to continue work on an oil well in the Gulf of Mexico after a test warned that something was wrong may have been a "fundamental mistake," according to a memo released by two lawmakers Tuesday.

The document describes a wide array of mistakes in the fateful final hours aboard the Deepwater Horizon-but the main revelation is that BP now says there was a clear warning sign of a "very large abnormality" in the well, but work proceeded anyway.

The rig exploded about two hours later.

Full article:
http://online.wsj.com/article/SB10001424052748704026204575265701607603066.html?KEYWORDS=decisions

msnbc.com news services
Wed., May 26, 2010

Brown said the top Transocean official on the rig grumbled, "Well, I guess that's what we have those pinchers for"…which he took to be a reference to devices on the blowout preventer, the five-story piece of equipment that can slam a well shut in an emergency.

The argument concerned "displacing the riser," Brown said, a reference to a decision made by rig personnel to remove heavy drilling mud from the drill pipe and replace it with sea water, in an attempt to wrap up drilling operations and plug the well with cement until it was ready for production.

Drilling mud is a mixture of synthetic ingredients that is pumped into the well to exert downward pressure and prevent a column of oil and gas from rushing up the pipe.

The switch presumably would have allowed the company to remove the fluid and use it for another project, but the seawater would have provided less weight to counteract the surging pressure from the ocean depths.

Because water is lighter and less dense than mud, the procedure allowed a flood of flammable methane gas to surge up the drill pipe, which ignited and led to a catastrophic fire, according to documents from the House Energy and Commerce Committee.

Conflicting pressure tests

Congressional investigators say BP and Transocean made a decision late on April 20 to begin removing mud from within the drill pipe despite pressure tests from within the well that a BP official described as "not satisfactory" and "inconclusive."

Earlier in the day, well pressure tests showed an imbalance between the drill pipe choke and kill lines running from the drill deck to the blowout preventer. The pressure in the drill pipe was 1,400 pounds per square inch, while the choke and kill lines read zero PSI, according to BP documents gathered by the House Energy and Commerce Committee.

In BP's internal investigation, made public by the committee, BP said it might have been a "fundamental mistake" to continue with the procedure because there was an "indication of a very large abnormality."
The statements obtained by The Associated Press include those by Truitt Crawford, a Transocean worker who told Coast Guard investigators about similar complaints.
Full Article:
http://www.msnbc.msn.com/id/37363106/ns/gulf_oil_spill/

“Deeply disturbing”

Interior Secretary Ken Salazar called the latest report "deeply disturbing" and said it highlights the need for changes he has proposed, including a plan [Decision] to abolish the minerals agency and replace it with three new entities.

The report "is further evidence of the cozy relationship between some elements of MMS and the oil and gas industry," Salazar said Tuesday. "I appreciate and fully support the inspector general's strong work to root out the bad apples in MMS."

Salazar said several employees cited in the report have resigned, were fired or were referred for prosecution. Actions may be taken against others as warranted, he said.

Top Kill:
Engineers Try to Control Gulf of Mexico Oil Spill; Louisiana Asks for More Help
BP Tries Pumping Mud Down Pipe to Stop Oil Flow; Gov. Bobby Jindal Asks for Supplies

By NED POTTER, AYANA HARRY and BRADLEY BLACKBURN
May 26, 2010

http://abcnews.go.com/WN/Politics/bp-oil-spill-engineers-begin-top-kill-effort/story?id=10751007

Louisiana Gov. Bobby Jindal said today that his state doesn't have what it needs to fight the spread of BP's oil. All eyes are on the latest plan to stop the Gulf oil spill.

"We need more boom, more skimmers, more jack-up barges," Jindal said at an angry news conference in Venice, Louisiana, complaining that Louisiana has received a fraction of the supplies it requested to protect itself from the oil spill in the Gulf of Mexico.

"More than 100 miles of our shoreline has been impacted by the oil spill. That is more than the entire sea coastline of Mississippi and Alabama combined," the governor said.

Yet, Other Countries Offer Aid…

While the governor asks for more supplies, a number of countries said today that the U.S. government and BP had yet to take them up on offers of assistance, including booms and skimmers.

The State Department said in a briefing today that 17 countries had offered assistance, including Canada , Mexico, South Korea, Croatia, France, Germany, Ireland , Japan, the Netherlands, Norway , Romania, Russia, Spain, Sweden, the United Arab Emirates, the United Kingdom and Vietnam. BP added another two countries to that list, Brazil and Saudi Arabia.

While BP has accepted some supplies, including booms and skimmers from Norway, most other countries said they were waiting for a response [Decision] from the U.S. government.

The Decision?

"We have the equipment," said Ferran Tarradellas, a spokesman for the European Union agency coordinating Europe's response, "but at this point in time, we have not received any requests."

Full Article:
http://abcnews.go.com/WN/Politics/bp-oil-spill-engineers-begin-top-killeffort/story?id=10751007&page=3

ZDT author’s note:
Again, the question is: How were these decisions being made? In the forensic process, the “how” issue can potentially mitigate the same mistakes being made going forward. Considering the lives, money, industry, ecosystems and every other contingency at stake in this case, that should be a small but vital request. (To be continued)…