Part 2: BP Covered Up Blow-out Prior to Deepwater Horizon

Greg Palast
Eco Watch / News Investigation
Published: Saturday 21 April 2012
“Evidence now implicates top BP executives as well as its partners Chevron and Exxon and the Bush Administration in the deadly cover-up—which included falsifying a report to the Securities Exchange Commission.”
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Yesterday, Ecowatch.org revealed that, in September 2008, nearly two years before the Deepwater Horizon explosion in the Gulf of Mexico, another BP rig had blown out in the Caspian Sea— which BP concealed from U.S. regulators and Congress.

Had BP, Chevron, Exxon or the Bush State Department revealed the facts of the earlier blow-out, it is likely that the Deepwater Horizon disaster would have been prevented.

Days after the Deepwater Horizon blow-out, a message came in to our offices in New York from an industry insider floating on a ship in the Caspian Sea. He stated there had been a blow-out, just like the one in the Gulf, and BP had covered it up.

To confirm this shocking accusation, I flew with my team to the Islamic republic of Azerbaijan. Outside the capital, Baku, near the giant BP terminal, we found workers, though too frightened to give their names, who did confirm that they were evacuated from the BP offshore platform as it filled with explosive methane gas.

Before we could get them on camera, my crew and I were arrested and the witnesses disappeared.

Expelled from Azerbaijan, we still obtained the ultimate corroboration: a secret cable from the U.S. Embassy to the State Department in Washington laying out the whole story of the 2008 Caspian blow-out.

The source of the cable, classified “SECRET,” was a disaffected U.S. soldier, Private Bradley Manning who, through WikiLeaks.org, provided hot smoking guns to The Guardian.

The information found in the U.S. embassy cables is a block-buster. 

The cables confirmed what BP will not admit to this day: there was a serious blow-out and its cause was the same as in the Gulf disaster two years later—the cement (“mud”) used to cap the well had failed.

Bill Schrader, President of BP-Azerbaijan,  about the Caspian disaster:

“Schrader said that the September 17shutdown of the Central Azeri (CA) platform…was the largest such emergency evacuation in BP’s history.  Given the explosive potential, BP was quite fortunate to have been able to evacuate everyone safely and to prevent any gas ignition. … Due to the blowout of a gas-injection well there was ‘a lot of mud’ on the platform.”

From other sources, we discovered the cement which failed had been mixed with nitrogen as a way to speed up drying, a risky process that was repeated on the Deepwater Horizon.

Robert F. Kennedy Jr., president of Waterkeeper Alliance and senior attorney for Natural Resources Defense Council, calls the concealment of this information, “criminal. We have laws that make it illegal to hide this.”

The cables also reveal that BP’s oil-company partners knew about the blow-out but they too concealed the information from Congress, regulators and the Securities Exchange Commission. BP’s major U.S. partners in the Caspian Sea drilling operation were Chevron and Exxon.

The State Department got involved in the matter because BP’s U.S. partners and the Azerbaijani government were losing more than $50 million per day due to the platform’s shutdown. The Embassy cabled Washington:

“BP’s ACG partners are similarly upset with BP’s performance in this episode, as they claim BP has sought to limit information flow about this event even to its ACG partners.”

 

 

Kennedy is concerned about the silent collusion of Chevron, Exxon and the Azerbaijani government. “The only reason the public doesn’t know about it is because the Azerbaijani government conspired with them to disappear the people who saw it happen and then to act in concert, in collusion, in cahoots with BP, with Exxon, with Chevron to conceal this event from the American public.”

Kennedy’s particular concern goes to the connivance of the State Department, then headed by Secretary of State Condoleezza Rice, in the cover-up and deception. Chevron, noted Kennedy, named an oil tanker after Rice who had served on the oil company’s board of directors. “BP felt comfortable—and Chevron and Exxon—in informing the Bush State Department, which was run by Condoleezza Rice,” he said, “and they felt comfortable that that wasn’t going to come out.”

The U.S. Securities Exchange Commission requires companies to report “material” events. BP filed a ” report in 2009 stating, “a subsurface gas release occurred below the Central Azeri platform,” suggesting a naturally occurring crack in the seafloor, not a blow-out. This contradicted the statements of three eyewitnesses and the secret statement of BP’s Azerbaijan President in then WikiLeaks cable.

“The three big actors, Chevron, Exxon and BP all concealed this from the American public,” concludes Kennedy. “This is a criminal activity.”

And why would the Azerbaijan government cover up a disaster costing it $40 million to $50 million a day? According to another insider, Les Abrahams, it has to do with at least $75 million in bribes that he paid to Azeri officials in Baku. 

Abrahams was a BP executive in Baku in the 1990s working simultaneously, at BP’s insistence, with MI6, British intelligence. We met with Abrahams in London who told us he was joined in his payoff runs by BP’s CEO and Chairman Lord Browne who insisted on handing over a “sweetener” himself.

BP refused to be interviewed for this investigation, but did answer our questions in writing. The company will neither confirm nor deny the 2008 Caspian Sea blow-out. As to the failure to tell Congress and US regulators and the SEC about the blow-out, BP states only that it informed the government and regulators of Azerbaijan.  However, the company does implicate its partners (Chevron and Exxon). BP states it, “shared the facts of its investigation with the Azerbaijan government, regulators, partners and within BP.”

In response to further questions, BP does not deny the payment of bribes to Azerbaijan officials by company executives.  It should be noted that at the time, that, unlike under U.S. law, Britain had not made bribery of foreign officials a crime.



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ABOUT Greg Palast

Greg Palast is the author of the New York Times bestseller, "Armed Madhouse" (Penguin Paperback 2007). When Palast, an investigator of corporate fraud and racketeering, turned his skills to journalism, he was quickly recognized as, "The most important investigative reporter of our time" [Tribune Magazine] in Britain, where his first reports appeared on BBC television and in the Guardian newspapers.

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7 comments on "Part 2: BP Covered Up Blow-out Prior to Deepwater Horizon"

joacim gogjom

April 22, 2012 12:47pm

It seems irresponsible for Palast to implicate B. Mannig as the source of his information when this poor soldier is being held by the national sec. state as a proxy fall guy for something Wk lks actually did. Please explain why this journalistic ethical lapse. Just because there is a consensus about this mans complicity doesn;t mean that journalists have the right to jump on the bandwaggon so to speak.

Irene Arm

April 22, 2012 11:21am

Why don't the journalists uncovering these awful truths make sure the public gets to know about them too immediately? Who picks what we need to know? I don't want to hear these stories after the fact and not get some sort of satisfaction that everyone is equally aware of what's happening.

Josephine Rutledge

April 21, 2012 10:24pm

Don't let money destroy Americans.

Jeff Mowatt

April 21, 2012 11:35am

In 2005 our article 'Really Betraying a Revolution' described how BP were involved in efforts to undermine Ukraine's Orange Revolution, in collusion with TNK and the Kremlin.

Clarence Swinney

April 21, 2012 11:04am

Shame
14,000 National Income--3600 budget--borrow 1300
50% get 87% inidvidual income
70,000,000 workers get 13%
10% get 50%
OECD rankings--#2 Least taxed--#2 Least Taxed Corporations-#3 inequality
Tax Book=Chirstmas Tree for goodies for Rich and Corporations
Public fund election--6 months-3 primary 3 general-debate  week=12-adequate to evaluate candidates---no $$  none
Since members of Congress and White House would have no need for campaign funds
ban acceptance of anything with a financial value.. This closes K Street Bribery
Will we change to protect the Middle Class?
Christian Nation? Care For The Least Amongst thee.
POOR= most used word by Jesus Christ
clarence swinney Lifeaholics of America
Work For a LIFE not just a LIVING($$$$$$)

Clarence Swinney

April 21, 2012 11:03am

did you hear?
TESTIMONY OF EXXON CEO THIS WEEK IN SENATE HEARINGS ON SPECULATORS?
 
He was asked: " it this were a true demand + supply market what do you think the price of oil would be now?"
His reply--"$50 to $70 per barrel.  It is $98.
 
Amazing. I have yet to hear ON TV any Talk show hitting on this
 
Will you?
clarence swinney  mad mad mad at Inequality in America
#4 in oecd.
 

Clarence Swinney

April 21, 2012 11:05am

HOW CONSERVATIVES DESTROYED AMERICA
Ruined our great Savings and Loan Industry
Closed Fairness Doctrine that has allowed Mush Dimbaugh types on our public airwaves
Closed Revenue Sharing
Since 1980, initiated our involvement in 10 foreign conflicts
Repealed Glass Steagall—took deposits in 7000 banks and put 80% in (10) Too Big To Fail
Modernization of Commodities Market—from Investment to Casino Derivative Of America
2 very dumb invasions of two of most poor -most unarmed nations on earth=OIL OIL OIL
Ruined our International Reputation as a Do Good Christian nation to Big Bully Devil.
Stood by as Freak Marketeers ruined our Housing Industry.
Stood by as Casino Derivative of America ruined the World Financial Industry.
Impeached a Great President for petty political gains that created long term animosity between two parties.
Attempted to destroy Safety Nets that make America great middle class
Implemented Tax Codes that permitted redistribution of Wealth to top (10%) who now own (73%) of all Net Wealth and (83%) of all Financial Wealth and take home (50%) of all individual income.
Today, they have taken America to ranking in oecd nations as (# 2) as Least Taxed---(# 2) as least taxed corporations and horror horror (# 4) on Inequality from bottom 5 in 1980.
Since 1980, their Spend & Borrow policies are, mainly, responsible for adding 14,000 Billion to a 1000 Billion debt
Fought the great GI Bill.
Fought the WWII Draft
Installed strict laws which created 57 % of prison inmates on Marijuana use charges which make us lead the world in prison population.
Refuse to control the drug Beer.
There are many many more baddies.
CONCLUSION:::: WANT TO SEE END OF AN EMPIRE YIELD CONTROL TO
REPUBLICAN CONSERVATIVES AS WAS DONE IN 2001-2002-2003-2004-2005-2006.
SIX OF WORST YEARS IN OUR HISTORY. IMAGINE IF THEY HAD 12 YEARS???