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BP Used Cheaper, Riskier Oil Wells

Oil Spill

June 18: This image from video provided by BP PLC shows oil continuing to gush millions of gallons a day, from the broken wellhead, at the site of the Deepwater Horizon oil well in the Gulf of Mexico.AP

Anadarko Petroleum Corp., which owns a quarter of BP PLC's blown-out oil well in the Gulf of Mexico, late Friday blasted BP "reckless decisions and actions" that led to the well's explosion.

In recent years, oil giant BP PLC used a well design that has been called "risky" by Congressional investigators in more than one out of three of its deepwater wells in the Gulf of Mexico, significantly more often than most peers, a Wall Street Journal analysis of federal data shows.

"The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP's reckless decisions and actions," said Hackett in the statement. "We recognize that ultimately we have obligations under federal law related to the oil spill, but will look to BP to continue to pay all legitimate claims as they have repeatedly stated that they will do."

The design was used on the well that exploded in the Gulf of Mexico on April 20, killing 11 workers and causing America's worst offshore oil spill. The only other major well design, which is more expensive, includes more safeguards against a natural-gas blowout of the kind that destroyed the Deepwater Horizon.

A Wall Street Journal analysis of records provided by the U.S. Minerals Management Service shows that BP used the less costly design—called "long string"—on 35 percent of its deepwater wells since July 2003, the earliest date the well-design data were available. Anadarko used it on 42 percent of its deepwater Gulf wells, though it says it doesn't do so in wells of the type drilled by BP.

BP chief executive officer Tony Hayward said in a statement that the company strongly disagreed with the allegations

"These allegations will neither distract the company's focus on stopping the leak nor alter our commitment to restore the Gulf coast," Hayward said. "Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations."

Both companies used the design much more often, on average, than other major Gulf drillers. Out of 218 deepwater wells in the Gulf drilled since July 2003, 26 percent used the long-string design. It derives its name from its use of a single, long "string" of pipe from the sea floor to the bottom of the well.

Other big drillers use long-string design less frequently than BP, according to the Journal's data analysis. Royal Dutch Shell PLC used long string designs on 8 percent of its wells and Chevron Corp. on 15 percent. Australian firm BHP Billiton PLC used long string on 4 percent of its wells.

The Wall Street Journal and the AP contributed to this story.

 

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