Give Him Hell! - Part 1

.


June 17, 2010

BP 'working around the clock,' but cannot guarantee outcome, CEO says

Posted: 08:58 AM ET

Add a comment [to AC360º blog]

CNN Wire Staff

Eight weeks after an explosion uncorked a massive oil spill into the Gulf, BP does not know whether its efforts to stanch the flow will soon succeed, its CEO plans to testify Thursday.

"We cannot guarantee the outcome of these operations, but we are working around the clock with the best experts from government and industry," Tony Hayward says in prepared testimony to be delivered before the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations.

"The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened - and I am deeply sorry that they did," he says.


Thursday on CNN, watch BP chief executive Tony Hayward testify before a congressional committee looking into the oil disaster. You can see it for yourself on CNN, CNN.com/Live, and the CNN app for iPhone starting at 10 a.m. ET Thursday.

(CNN) -- BP chief executive officer Tony Hayward said Thursday that he hoped the company's establishment of a $20 billion compensation fund will help restore trust in the troubled oil company.

"We said all along we would pay all these costs, and now the American people can be confident that our word is good," Hayward told a congressional hearing.

Just moments after Hayward was sworn in, a protester disrupted his testimony. The testimony was suspended as the protester was taken out of the room.

Before Hayward's testimony, lawmakers told him they intend to grill him on what they believe to be cost-cutting measures adopted by the oil giant that compromised the safety of the Gulf of Mexico well.

Hayward sat expressionless and took notes on accusations that BP acted recklessly in designing and drilling the well that ruptured and spewed millions of gallons of oil into the Gulf of Mexico.

"After learning of risks, BP made a decision to ignore them," said Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, citing documents and confidential e-mails obtained by investigators.

Waxman also said BP's top leadership was "apparently oblivious" to the design and safety of the oil well.

"BP's corporate complacency is astonishing," said Waxman, the chair of the the House Energy and Commerce Committee.

It's been eight weeks since an explosion uncorked a massive oil spill into the Gulf. BP does not know whether its efforts to stanch the flow will soon succeed, Hayward plans to testify Thursday.

"We cannot guarantee the outcome of these operations, but we are working around the clock with the best experts from government and industry," Hayward says in prepared testimony to be delivered before the House Committee on Energy and Commerce Subcommittee on Oversight and Investigations.

"The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened -- and I am deeply sorry that they did," he says.

In his prepared remarks, Hayward says, "When I learned that eleven men had lost their lives in the explosion and fire on the Deepwater Horizon, I was personally devastated."

The committee's chairman says Hayward should get ready for a whipping.

"Members are angry. Members are frustrated," Rep. Bart Stupak, D-Michigan, told CNN's Dana Bash. "They're going to take his hide off, as they should."

In his prepared remarks, Hayward says no one knows why the disaster happened.

"But whatever the cause, we at BP will do what we can to make certain that an incident like this does not happen again," he says.

Interior Department's inspector general Mary Kendall will also testify Thursday. She is expected to call the regulations guiding the government probe of the oil spill "completely backwards."

Kendall's testimony will question the training and supervision of inspectors at Interior's Minerals Management Service.

"We have been told that MMS has approximately 60 inspectors for the Gulf of Mexico region to cover nearly 4,000 facilities," her statement says. " This is juxtaposed with the Pacific Coast, which has 10 inspectors for 23 facilities."

The agency has trouble hiring inspectors, her statement says, because oil and gas companies pay more. The inspectors get trained using guidelines and instructions that "appear to be considerably out of date" and developed between 1984 and 1991, Kendall says.

"During our investigative efforts, we have found indications that inspector training and training programs have not kept pace with the technological advancements occurring within the industry," Kendall says.

Stupak appeared unimpressed with Hayward's planned appearance before his committee.

"Look, he's a corporate guy," Stupak told CNN. "At the end of the day, he's going to put his best foot forward. It's not going to ring true with me or the American public. And we've got a mess on our hands, a disaster, a catastrophic disaster for our environment and those people who lost their lives. He's just going to say, 'I'm sorry, it's not going to happen again.' It's not good enough."

Stupak: Lawmakers going to take Hayward's 'hide off'

But Hayward plans to say more than that. The drilling of two relief wells, "which we believe represents the ultimate solution to stopping the flow of oil and gas from the well," has reached depths of 15,226 feet and 9,778 feet, respectively, he says, but they are not expected to be completed until August.

"We have spent nearly $1.5 billion so far, and we will not stop until the job is done," he says.

Some Gulf Coast residents were upset by a remark BP chairman Carl-Henric Svanberg made in which he referred to residents affected by the disaster as "small people."

He told reporters, "I hear comments sometimes that large oil companies are greedy companies or don't care, but that is not the case with BP. We care about the small people."

Svanberg, who is Swedish but was speaking in English, apologized later Wednesday for the remark.

Though the company has accepted that it is the "responsible party," Hayward adds a qualification: "It is important to understand that this 'responsible party' designation is distinct from an assessment of legal liability for the actions that led to the spill," he says.

iReport: Share your views, solutions on Gulf oil spill

So far, more than 400,000 barrels of oily water mix have been recovered, and the company has paid more than $90 million on the more than 56,000 claims that have been submitted, he says.

Additionally, about $16 million is expected to be paid this week to businesses, he says. In all, 32 walk-in claims offices are open in Alabama, Florida, Louisiana and Mississippi.

Nearly 700 people have been assigned the task of handling claims, he says.

Hayward adds that though the cause of the disaster remains unclear, his company's investigation suggests that the accident was caused by the apparent failure of "a number of processes, systems and equipment."

"Investigations into the causes of the incident are ongoing, and issues of liability will be sorted out separately when the facts are clear and all the evidence is available."

The transcript of Hayward's planned remarks was given to reporters hours after he and other BP executives told President Obama that the company will set aside $20 billion in an escrow account to compensate oil spill victims.

The fund "will not supersede individuals' or states' rights to present claims in court," Obama said. BP, he asserted, will remain liable for the environmental disaster in the Gulf.

BP also has agreed to create a $100 million fund to compensate oil rig workers now unemployed as a result of closure of other deep-water rigs after the April 20 Deepwater Horizon explosion, Obama said.