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B. Scheduling Conflicts and Cost Overruns

As the Deepwater Horizon crew prepared to complete operations at the
Macondo well, they were significantly behind schedule. BP stated, in a
submission to MMS, that the Deepwater Horizon would arrive at BP’s Nile well
(the next well after Macondo that the Deepwater Horizon was scheduled to work
on) by March 8, 2010. By early 2010, it became clear to BP that this schedule for
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the Deepwater Horizon rig would not hold.

In addition, as discussed previously in this Report, by the time of the
blowout, BP had exceeded its original budget for the Macondo well by $58.34
million. The Panel collected and reviewed evidence showing that BP personnel
were aware of the cost overruns and were concerned about incurring additional
costs that they deemed unnecessary. John Guide’s testimony suggests that his
effectiveness at reducing costs was part of the evaluation of his performance as
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wells team leader. Correspondence between Guide and others suggested his
awareness of others’ evaluation of his effectiveness in containing costs. For
example, on April 20, Guide responded to an email request from Ross Skidmore,
a BP contractor, to conduct a standard procedure that would increase the
likelihood of a successful lock‐down sleeve installation – a “wash run” that
would “avoid a bad LIT [lead impression tool] impression” – by saying “[w]e
will never know if your million dollar flush run was needed. How does this get
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us to sector leadership.”

The Panel found evidence that BP’s decision to have the Deepwater Horizon
crew install the lock‐down sleeve, discussed in more detail below, was motivated
by cost‐savings. A lock‐down sleeve is a piece of equipment necessary for the
production of a well. It connects and holds the production casing to the
wellhead during production, thereby protecting the connection from the
pressures generated by a flowing well. Lock‐down sleeves are often installed by
lower cost rigs that are used mainly for completion work instead of by a drilling
rig like the Deepwater Horizon. Email correspondence reveals that BP did not
initially intend to have the Deepwater Horizon install the lock‐down sleeve, but
then changed course when it was shown that doing so would likely save 5.5 days

173 APM submitted by BP to the MMS (Agency Tracking ID: EWL‐APM‐123805).
174 Guide Testimony, October 7, 2010, at 142‐43.
175 BP‐HZN‐MBI00258507.

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