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Sun 6 Jun 2010 04:00 AM

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BP’s war room

Even if it can plug the leak, can oil giant BP ever hope to recover from the brand damage caused by the catastrophe in the Gulf of Mexico?

BP’s war room
BP’s war room
BP CEO Tony Hayward surveys oil recovery operations aboard a ship in the Gulf of Mexico.
BP’s war room
President Obama had arrived in Louisiana to meet with the Coast Guard and to visit a local beach.

Even if it can plug the leak, can oil giant BP ever hope to recover from the brand damage caused by the catastrophe in the Gulf of Mexico?

Five weeks into the worst oil spill in US history, BP chief executive Tony Hayward locked himself in a room on the third floor of the British oil giant's US headquarters in Houston and faced what some are comparing to the Apollo 13 crisis.

For the next five hours, Hayward, BP executives, senior engineers and the US Energy secretary and Nobel Physicist Steven Chu, who had flown in two days earlier, grappled with the latest plan to stem the thousands of barrels of oil a day gushing from a broken well at the bottom of the Gulf of Mexico.

The scheme was called "top kill" and involved pumping heavy drilling fluids, known as drilling mud, into the blown-out well to stifle the flow of oil and allow the top of the well to be sealed with concrete. The technique had worked to seal other wells, but never one out of control in 5,000 feet of water. There was a risk that the extra pressure caused by pumping in mud could rupture the top of the well, and increase the amount of oil gushing into the sea.

Even so, Hayward and his team gave the plan a 60 to 70 percent chance of success. Quietly, they hoped an end to the devastating leak - and BP's five week-long, media-saturated nightmare - might be within sight.

The room they worked in measured about nine metres by nine metres and is normally used for training sessions. BP's crisis unit had commandeered it and renamed it the "intervention room" soon after the leak began. Cables wrapped in yellow tape with the word "warning" written on it, snaked from the ceiling to the cheap, white laminated tables, which were crammed with laptops. Maps of the Gulf and diagrams of the equipment on the seabed covered the thin walls.

Next door, in an almost identical space called the "containment room", a separate group of engineers worked on strategies to capture the oil that had already leaked.

The team in the intervention room pored over the results of tests to see if the well could take the pressure. The mood was "intense", BP's director for the Americas Bob Dudley told Reuters in the narrow, artificially-lit corridor outside the room during a break in deliberations. "It's kind of like NASA and the Apollo 13 mission in there."

The uber-calm Dudley isn't normally given to hyperbole. He was formerly the head of TNK-BP, the British firm's joint venture with a group of Russian oligarchs, until the billionaires turned hostile and Dudley was forced to flee the country. He talks about that experience with the emotion of an oil man discussing his wife's choice of make-up. In Houston, though, there was a flicker of tension in his eyes.

"It's pretty dramatic," he said.

Shortly before 1pm, as a crowd of employees dressed in button-down shirts, casual golf shirts and cotton pants, gathered outside to wait for a decision, Hayward gave the green light and a call was made ordering the vessels above the site of the spill to start "top kill." As drilling fluid flowed into the top of the well, morale in the command centre lifted.

Unfortunately for BP and for everyone else, top kill misfired. If this were a NASA moment, it would have been more like the Challenger disaster than Apollo 13.With BP's stock price plummeting and analysts predicting the leak could last until August when a relief well is completed, the stakes are starker than ever: for Hayward, his globe-straddling company and, of course, the waters and beaches and wetlands of the Gulf.

On top of the technical challenges of stopping a gushing oil well, BP must contend with a public that is growing angrier by the day as well as an increasingly frustrated, and criticised, Obama administration.

The White House has come under intense political pressure to take charge of the disaster - even if it is not entirely clear what the president could do apart from stepping up rhetoric and taking a harder line on the company.

In short, instead of getting easier, the coming few months will likely be even more dauntingly complicated for BP and its press-shy boss. During four days inside the Houston command centre and travelling with Hayward to the site of the oil leak late last week, Reuters got an up-close picture of a company under siege.

In the hours after "top kill" began, BP workers in Houston seemed busier than they had in the previous two days. A sense of quiet hope filled the offices. Some people even smiled.

BP's headquarters, a twenty-storey office block in west Houston, houses the firm's permanent crisis centre, which handles the response to things like hurricanes. There are now between 500 and 600 people, including staff from Exxon, Shell, Anadarko and Chevron, working in the centre, which operates around the clock. Shifts last twelve hours, though a handover period means most are at least thirteen.

On the landscaped campus outside, ducks and geese play in man-made ponds and multi-storey car parks are crammed with top of the range muscle cars, high-end SUVs and European luxury saloons.

The intervention and containment rooms sit at the heart of the command centre. There's also "the hive", which has blacked out windows and a video wall broken into multiple screens. The screens show different views of BP's remotely operated vehicles (ROV) - the miniature submarines at work thousands of feet below the Gulf.

About a dozen workers in the room talk to ROV operators on vessels around the spill site, communicating through microphones that hang from the ceiling.

"It's kind of like kids with video games but with much bigger risks," BP senior vice president Kent Wells said.

Further along the corridor, inside the "simops" or simultaneous operations room, engineers coordinate the movement of the vessels involved in the crisis effort. On the day "top kill" began, more than a dozen large vessels, including drill ships, supply vessels and platforms were huddled in a one mile radius directly above the leaking well.

In an alcove along the long corridor that connects all the rooms, BP has laid on massage therapists for workers."When you're working people as hard as we are, you have to provide some stress relief," Wells said. The afternoon "top kill" began the two massage chairs were empty.

Most of the workers in the command centre are white, middle-aged and male. The few women present mostly fill support roles such as executive assistants or receptionists. US accents are supplemented with Norwegian and British ones - experts flown in from around the world. To make it easier for workers to know what their colleagues do, some wear red singlets with their roles stitched on the back.

The centre also houses a group of US Coast Guards. Dressed in navy blue uniforms and heavy black boots, they are there as a reminder from Washington that the government is a part of the response effort. But the Guards are often left with little to do. On the day "top kill" began, they confined themselves to a tiny windowless room along the corridor, seemingly unbothered by what was happening around them.

Several hours after mud began pumping into the well, Hayward emerged from the intervention room in what has become his trademark open-necked shirt. Flanked by the head of Britain's largest financial public relations firm and by his own head of press, a former editor of the Financial Times, Hayward gave a brief update to Reuters and a local TV new crew in the "simops" room.

Under pressure from Washington, BP had added a video stream of the leaking oil well to its website.

With "top kill" underway, Hayward cautioned against anyone trying to interpret changes in the size of the plume of oil as indication of success or failure. Not everybody listened to that warning. One BP insider said a few days later that there were "hedge funds trading the plume".

Hayward looked strained, and sounded cautious. "The operation is proceeding as we planned it," he said.

Two days after "top kill" began, Hayward touched down at Houma airport in Louisiana after a one-hour flight from Houston in a white Falcon corporate jet. He hopped into a Chevrolet Suburban - black with blacked out windows - and made the short drive across the parking lot to a trailer, where a group of medics tested the respiratory function of everyone booked to fly out to the spill site by helicopter.

As Hayward left Houston earlier that morning, president Obama had arrived in Louisiana to meet with the Coast Guard, state officials and to visit a local beach.

The president walked to the edge of the water, which was lined with brightly coloured oil-absorbing plastic sponges that looked a bit like cheerleader pompoms as well as a long thin tubular boom designed to catch the oil. After chatting with officials, Obama called the press over and pointed out the gooey black balls that had washed up on the sand.

"If you can see these little balls, these are the tarballs they were talking about," he said. "Obviously, the concern is that until we stop the flow, we've got problems."

On Air Force One on the flight back to Chicago, Obama's spokesman Robert Gibbs told reporters that the president was optimistic about "top kill".

"We're hopeful and I think we'll know over the course of the next many hours where we are," Gibbs said. "The president believes that we're making progress."

Less than 24 hours later BP announced "top kill" had failed.