1. 1 Presentation BP, Copiapó, and the MV Braer

2. 2 Presentation BP Oil Spill

3. The BP Crisis Day 1. (April 20, 2010) Transocean moving the Deepwater Horizon:  Leased to the BP Group.  Finished drilling a high pressure well for BP.  Explosion creates an out-of-control sea-floor oil gusher.  The oil rig sinks. 3

4. In Fairness to BP Horizon Deepwater was very successful rig:  Seven-year safety record.  Drilling the deepest wells in the world.  Never fail or mostly working?  Should BP have known? 4

5. Mostly Working in Normal Times 2005: Texas City Refinery explosion.  15 deaths.  180 injuries.  Cause: Hydrocarbon overflow. Maintenance cut as a cost-saving measure. 5

6. Weak Signals At the BP Texas City refinery in :  2006. Worker crushed between a pipe stack and mechanical lift.  2007. Worker electrocuted.  2008. Worker killed by a 500-pound piece of metal. In the North Sea in good weather:  2009. BP helicopter ferrying workers from BP oil platform crashed killing all 16 on board. 6

7. Not-so-Weak Signals 2009 post-disaster inspection findings:  270 unfixed safety violations.  439 new violations. 7

8. More Details From 2007 to 2010, (Occupational Safety and Health Administration) OSHA reported:  851 willful safety violations by U.S. oil refiners.  829 by BP. February 2010. OSHA reported that “BP has a serious, systemic safety problem in their company." 8

9. Information not Shared On the Horizon Deepwater, workers were surveyed prior to the oil spill:  Concerned about safety practices.  Feared reprisals if they reported problems.  Unreliable equipment.  “Run it, break it, fix it.”  Did BP have access to the information? 9

10. Failure to Collaborate On the Horizon Deepwater, Transocean did a 112- page equipment assessment report:  Unsafe conditions and practices.  Rig had never been in dry dock.  Blowout preventer rams and fail-safe valves not inspected.  26 components and systems in “bad” or “poor” condition. 10

11. Lacey Resignation Kevin Lacy: Drilling engineer. Rigorous drilling safety program at Chevron. Hired by BP in 2007. Senior vice president for drilling operations. Resigned in 2009. Left January 2010. 11

12. Ready to Respond? Slow progress.  One thing to be surprised.  Another thing not to be ready.  Attack in stages.  Close blowout preventer valves.  Add a containment dome.  Pump in heavy fluids  Pump in mud and cement. 12

13. July 15, 2010 Day 86. Gusher is capped. Released 5 million barrels of oil. 13

14. 14 Presentation Chilean Mine Rescue

15. 15 Copiapó Mining Accident Day 1. August 5, 2010  Copiapó, Chile.  Collapse of San José copper-gold mine  Trapped: 33 miners 770 meters below ground.  Did they survive?

16. Quick Response Day 4.  Chilean President Sebastián Piñera.  Andre Sougarret, head of El Teniente mine.  Flew immediately to Copiapó.  Took charge.  Did they survive? 16

17. Situation at the Mine Day 5. Sougarret:  Nest of confusion with rescue workers, firefighters, police officers, volunteers and relatives.  Sent rescue workers home.  Talked to escaped workers.  Inspected the mine.  Gathered maps. 17

18. Gathering Information Day 6. Findings:  Huge block of stone closed the 4-mile corkscrew shaft to the miners.  Collapse involved 700,000 tons of rock.  Reopening the shaft could cause another collapse.  Nobody knew if the miners were still alive. 18

19. Hope for the Miners Day 7. Sougarret talked to miners who had escaped:  Maps were not up-to-date.  Likely location of trapped miners.  Safe room with 48-hour supply of food and water. Also repair shop.  Ventilation shaft..  Miners had a chance to be alive. 19

20. Find the Miners. 4 drill shafts to galley near shelter. 4 drill shafts to shelter. 2 points of collapse Repair shop. Shelter. 20

21. Day 17  The 8 drills getting close.  Rescue team heard banging on the drill head.  Rescue team retrieved note. 21

22. Days 18 to 69  Drill two 28-inch wide shafts.  Send food, water, oxygen, messages, progress reports.  Monitor health conditions. 22

23. Successful Rescue Day 70. October 13, 2010  From midnight to 11 pm.  One at a time.  33 times. 23

24. 24 Presentation Risk Management In Action

25. BP Weakness Before the Event Before the extreme event:  Safety information identified but not shared.  Failures to comply with regulations.  Collaboration not encouraged. 25

26. BP Weakness after the Crisis Weaknesses include:  Failure to respond decisively to spill.  Failure to respond decisively to clean up. 26

27. Copiapó Situation Copiapó was different:  Good. Local risk management.  Bad. Central risk management. 27

28. Local Risk Management Two safety features:  “Safe” room.  Stocked with provisions.  Ventilation shaft.  Separate escape route. 28

29. Central Risk Management Weakness before the crisis:  Failure to maintain safety standards in a dangerous place.  Failure to install ladders after failing a safety inspection that closed the mine.  Opportunity lost. A second collapse closed the shaft. 29

30. 30 Presentation The Big Picture

31. Question Did BP have the big picture in 2010? 31

32. Big Picture Board of Directors Safety Practices in Texas Cost Cutting Concerns of Rig Workers Maintenance of Oil Rig itself Kevin Lacy Resignation OSHA Violations

33. Big Picture Top Management High pressure well 41 miles from Louisiana wetlands Everybody not ready Rig needs overhaul Rushing to complete drilling

34. Cost Cutting and 41 Miles Linkages. leads to creating while for a big loss when 34 Cost Cutting Unsafe practices Rushing to complete drilling Everybody is not ready 41 miles from Louisiana wetlands Poor maintenance of oil rig

35. Question Did Sebastián Piñera and Andre Sougarret have the big picture in 2010? 35

36. 36 Presentation MV Braer

37. Overview Canadian Ultramar Ltd. Worldwide operator of general purpose and medium-range product tankers Cargoes. Hydrocarbon liquids ranging from crude oil to refined petroleum products. Voyage Routes. Worldwide. 37

38. Question The company formed a crisis team. Who would you recommend by title to be part of the team? 38

39. 39 The Team  Team Leader  Systems Specialist  Finance Specialist  Petroleum Engineer  Logistics Specialist  Public Relations Manager

40. 40 Situation The MV Braer, a refined-products tanker, passing the Shetland Islands in January 1993. Ran aground in a storm. Near Quendale (300 year-round residents and one 40-room hotel(.

41. 41 Crisis Response Efforts Within 12 to 36 hours after the spill:  Tugs from London arrived with oil containment equipment.  150 personnel arrived to clean up of oil.  12 hours on and 12 hours off.  3-4 weeks to finish the job.

42. 42 Question  Few local residents willing to provide sleeping accommodations for workers.  The hotel was closed. The owner would not open it.  What to do?

43. 43 Answer (1) Possibilities include:  Negotiate with the hotel owner.  Negotiate with homeowners.  Bring in tents.  Bring in a small cruise ship.  Expand the search for housing to other towns.

44. Answer (2) If you ask the wrong question, you will always get the wrong answer. Instead of, “What should he do,” we might ask, “What can he do?” Then we ask, “Does he have the authority to do it? 44

45. Answer (3) He bought The Hotel. 45

46. Contact Information www.hamptonjack.com hamptonjohnj@gmail.com 46