Exxon CEO Asks If Deepwater Horizon Risks Were Beyond Norms

14th Jun 2010 21:19

By Tennille Tracy Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--Exxon Mobil Corp. (XOM) Chief Executive Rex Tillerson said it is critical to learn whether companies involved in the Deepwater Horizon oil spill took on higher-than-average risks. "We need to know if the levels of risk taken went beyond industry norms," Tillerson said in testimony prepared for delivery Tuesday before a U.S. House Energy and Commerce subcommittee. Decisions made by BP PLC (BP) in the weeks and days leading up to the oil spill in the Gulf of Mexico will come under the spotlight this week as lawmakers continue hearings to understand the cause of the rig explosion. Prominent oil industry executives will be featured at several Capitol Hill hearings. Tillerson, BP America President Lamar McKay and executives from ConocoPhillips (COP), Royal Dutch Shell PLC (RDSA, RDSB) and Chevron Corp. (CVX) are scheduled to testify at Tuesday's House energy hearing. Tillerson's testimony takes on added significance given his company's role in the 1989 Exxon Valdez oil spill in Alaska. On Thursday, BP Chief Executive Tony Hayward is to make his first appearance before Congress at a House oversight subcommittee. Oil executives will attempt to paint the ongoing oil spill as an anomaly. Drilling projects, when conducted appropriately, don't pose the same threats, Tillerson argued. "This incident represents a dramatic departure from the industry norm in deepwater drilling," Tillerson said. The oil industry executives will seek to put offshore drilling in a broader context. Tillerson's testimony notes oil and gas activity in the Gulf of Mexico supplies 170,000 jobs and that deepwater drilling accounts for 24% of U.S. oil production in that region. The hearings will come after release of a House energy investigation of five "crucial decisions" BP made before Deepwater Horizon caught fire in April, leading to one of the largest oil spills in U.S. history. The investigation revealed BP "repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk." House Energy and Commerce Committee Chairman Henry Waxman (D., Calif.) and oversight subcommittee Chairman Bart Stupak (D., Mich.) described the findings in a letter Monday to Hayward, BP's chief executive. The letter also notes that BP's Macondo well project, where the Deepwater Horizon well was located, was taking longer than expected to complete. This delay could have "set the context for the series of decisions that BP made in the days and hours before the blowout," the House panel said. -By Tennille Tracy, Dow Jones Newswires; 202-862-6619; [email protected] (END) Dow Jones Newswires June 14, 2010 16:19 ET (20:19 GMT)