Image: BP, Transocean, Halliburton executives are sworn in
Jason Reed  /  Reuters
BP America President Lamar McKay, Transocean President Steven Newman and Halliburton Global Business President Tim Probert are sworn in at a Senate Energy and Natural Resources Committee hearing on Tuesday in Washington.
msnbc.com news services
updated 5/11/2010 7:40:23 PM ET 2010-05-11T23:40:23

Executives of the three companies involved in the Gulf oil disaster — BP, Transocean and Halliburton — testified before senators Tuesday and were quick to lay blame elsewhere.

In their opening statements, the executives said it was too early to draw conclusions but then explained what they thought went wrong and who was responsible.

Transocean, which owned the rig that exploded, suggested work done by subcontractor Halliburton could have been the key factor. Halliburton and BP, meanwhile, said the blowout preventer that failed on Transocean's rig was critical.

"I can see the liability chase that's going to go on," Sen. Robert Menendez, D-N.J., told the Senate Energy and Natural Resources Committee as the hearing got under way.

Sen. Lisa Murkowski, R-Alaska, urged the companies not to point fingers, saying that "we are all in this together."

Separately, the Obama administration announced it will split up the federal agency that oversees offshore drilling as part of its response.

In Congress, lawmakers asked oil industry giant BP, which operated the Deepwater Horizon drilling rig 40 miles off the Louisiana coast, why its drilling plans discounted the risk that such a catastrophic pipeline rupture would ever happen, and why it assumed that if a leak did occur, the oil would not pose a major threat.

A top executive of BP, which leased the rig for exploratory drilling, focused on a critical safety device that was supposed to shut off oil flow on the ocean floor in the event of a well blowout but "failed to operate."

Video: Trading blame

"That was to be the fail-safe in case of an accident," said BP American President Lamar McKay, pointedly noting that the 450-ton blowout preventer — as well as the rig itself — was owned by Transocean Ltd.

Of the 126 people on the Deepwater Horizon rig when it was engulfed in flames, only seven were BP employees, said McKay.

But Transocean CEO Steven Newman sought to put responsibility on BP.

"Offshore oil and gas production projects begin and end with the operator, in this case BP," said Newman. It was BP that prepared the drilling plan and was in charge when the drilling concluded and the crew was preparing to cap the well 5,000 feet beneath the sea, he added.

To blame the blowout preventers "simply makes no sense" because there is "no reason to believe" that the equipment was not operational before the explosion, Newman argued.

Newman said it was BP that gave the go-ahead to fill the well pipe with sea water before a final cement cap was installed, reducing the downward pressure.

The executives said this was a practice that was being used frequently and that BP got approval from the federal Minerals Management Service.

Newman said there is "no reason to believe" its blowout preventer didn't work and that it might have been clogged by debris shooting up the well.

Halliburton brought in
Newman also cited Halliburton Inc., which as a subcontractor was encasing the well pipe in cement before plugging it — a process dictated by BP's drilling plan.

"The one thing we know with certainty is that on the evening of April 20, there was a sudden, catastrophic failure of the cement, the casing, or both," Newman said. "Therein lies the root cause of this occurrence; without a disastrous failure of one of those elements, the explosion could not have occurred."

Slideshow: Oil disaster

A Halliburton executive, Tim Probert, said the company's work was finished "in accordance with the requirements" set out by BP and with accepted industry practices.

Pressure tests were conducted after the cementing work was finished to demonstrate well integrity, he said. "The results of the positive test were reviewed by the well owner and the decision was made to proceed with the well program," he added.

Departing from his prepared remarks, Probert also said that "had the blowout preventer functioned as expected this catastrophe may not have occurred."

Video: Islanders wait for oil to hit Republican Senator Jeff Sessions questioned the three executives over reports BP may have asked the government for permission to remove thick drilling mud from the well before a final cement plug was put in place by Halliburton to seal the well at the sea floor.

Sessions' home state of Alabama could suffer severe environmental and economic damages if the oil slick hits its southern coast.

McKay said he could not answer Sessions' inquiry, but that a BP investigation of the accident would examine all procedures that preceded the explosion.

Pressed on whether removing mud was unusual, Probert said "it is a procedure that has been used on multiple occasions" in offshore projects.

He added any decision to remove the drilling mud would be made between the leaseholder of the rig, in this case BP, and government regulators.

The morning hearing and an afternoon session before the Senate Environmental and Public Health Committee gave lawmakers their first chance to question the executives publicly about the rig fire, attempts to stop the flow of oil and efforts to reduce the damage.

Ramifications from the environmental crisis spilled over into landmark climate change and energy legislation that is coming out Wednesday. The bill from Sens. John Kerry and Joe Lieberman proposes letting coastal states veto drilling projects off the shores of neighboring states if they can show the potential for harm.

In Louisiana, the Coast Guard and the Interior Department's Minerals Management Service were beginning two days of hearings on the cause of the explosion. The list of witnesses scheduled to testify includes a Coast Guard search and rescue specialist, crew members from a cargo vessel that was tethered to the Deepwater Horizon rig and two Interior inspectors.

The Obama administration, lawmakers and environmental groups have said new regulations will likely be needed to improve safety at deepwater wells.

The executives in their testimony did not offer recommendations on how to protect workers from such explosions in the future or how to better prevent and control oil spills in the Gulf's very deep waters.

Lawmakers in the House and the Senate have also introduced legislation that would raise the amount of money BP would be responsible to dole out for economic losses caused by the spill to $10 billion, from $75 million under current law.

The executives will return to Capitol Hill Wednesday, when they will testify about the oil spill before a House Energy and Commerce subcommittee.

The hearings come during a desperate race against time to stem the oil gushing from a well ruptured after an explosion last month that killed 11 workers, sank the rig and set in motion the unfolding economic and ecological disaster.

Delays in containing the leak — estimated at 5,000 barrels (210,000 gallons) of oil a day — increase the chances it could become the worst U.S. oil spill ever, surpassing the 1989 Exxon Valdez accident in Alaska.

BP now aims to deploy a small "top hat" dome over the leak after its effort over the weekend to cover it with a huge metal box was stymied by a buildup of crystallized gas hydrates.

In other developments:

  • The Environmental Protection Agency gave the go-ahead Monday to use oil dispersing chemicals near the sea bottom where the oil is leaking, although the agency acknowledged ecological effects of the chemical are not yet fully known. Two tests have shown the procedure helps break up the oil before it reaches the surface.
  • BP said it has spent $350 million so far on spill response activities.
  • President Barack Obama, after being briefed on the latest developments Monday, directed that more independent scientists get involved in seeking a solution to the spill. Energy Secretary Steven Chu will take a team of scientists to BP in Houston.
  • BP said it has received 4,700 claims for damages related to the spill and so far has paid out $3.5 million on 295 of the claims.

The Associated Press and Reuters contributed to this report.

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