Monday, April 25, 2011

Transocean (RIG) Poor Safety Culture Contributes to Gulf Spill, Alleges Coast Guard

Saying the emergency training, equipment and safety culture of Transocean (NYSE:RIG) had flaws in it, the Coast Guard released a report alleging the company contributed to the failure of the Deepwater Horizon oil rig which exploded in the Gulf of Mexico while extracting oil and gas from the Macondo well owned by BP (NYSE:BP).

Transocean owned the rig, and was thus the primary bearer of responsibility for its safety, the reason the Coast Guard zeroed in on them.

According to the report, electrical equipment that may have been responsible for igniting the explosion was poorly maintained, while gas alarms and automatic shutdown systems were bypassed so that they did not alert the crew. Also alleged was rig workers didn't receive proper training on how and when to disconnect the rig from the well to avoid an explosion.

The reported concluded, "These deficiencies indicate that Transocean's failure to have an effective safety management system and instill a culture that emphasizes and ensures safety contributed to this disaster."

Transocean closed Thursday at $75.41, falling $0.20, or 0.26 percent.

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