In Too Deep

The truth behind the greatest environmental disaster in U.S. history In 2005, fifteen workers were killed when BP's Texas City Refinery exploded. In 2006, corroded pipes owned by BP led to an oil spill in Alaska. Now, in 2010, eleven men drilling for BP were killed in the blowout of the Macondo well in the Gulf of Mexico. What's next? In In Too Deep: BP and the Drilling Race That Took it Down, Stanley Reed, a journalist who has covered BP for over a decade, and investigative reporter Alison Fitzgerald answer not only that question, but also examine why these disasters happen to BP so much more than other large oil companies. Places the blame on a corporate culture created by former BP CEO John Browne who was forced to resign in 2007 after he lied in court documents in a case involving his gay lover Details a BP built on risk-taking and cost-cutting Examines the past, present, and future of BP In August 2010, BP successfully "killed" the company's damaged deepwater well. But, the environmental fallout and public relations campaign to rebuild the brand are just beginning. In Too Deep details why BP, why now, and what's next for this oil giant.

Q&A with Authors Stanley Reed and Alison Fitzgerald

Author Alison Fitzgerald How did you do the research for this book?

We had both been writing about BP and the disaster for some time so we each had an enormous trove of information, interviews and documents before we even began writing In Too Deep. Stanley had covered BP for more than a decade and drew on the reporting from his many stories for BusinessWeek. He also had notes and recordings from several exclusive interviews with John Browne and a trip to Russia with the powerful BP boss. The book includes lots of never-before-published details from these experiences. Alison had been covering the investigations into the causes of the Deepwater Horizon disaster and so had a vast file of documents related to BP's safety history and violations. Armed with that information, we both set out to speak to as many people as possible -- BP executives, former executives, competitors, oil workers, lawyers, government officials, safety experts, and politicians. We conducted dozens of new interviews just for the book while continuing to follow the investigations and the financial and legal troubles of the company. We also had the help of our Bloomberg colleagues who were writing about this tragedy every day and were generous in sharing their research, published stories, and unpublished notes. Their work was central to shaping this book. Author Stanley Reed You trace BP's record of accidents -- and specifically the Gulf oil spill -- to the reign of John Browne, the CEO who preceded Tony Hayward. What was it about his tenure that led you that conclusion?

John Browne built today's BP, mostly through deals. He also pushed hard for financial performance. The company he created was good at gaining access to oil both through deals and exploration. But it was weaker on day-to-day operations. The culture he instilled at BP stressed financial performance and risk-taking while paying only lip-service to safety. Even before the end of Browne's tenure at BP in 2007, those shortcomings were revealed by the explosion that killed 15 people at the Texas City refinery in 2005. Tony Hayward vowed to fix those problems, but he was a protégé of Browne, and in the end couldn't do enough to change his predecessor's legacy. Was BP really different than other oil giants like ExxonMobil or Shell?

Yes. This was actually a notion that surprised us both, in fact. Just after the Deepwater Horizon exploded, many people thought this was simply a random accident, one that was bound to happen to someone, and that BP was unlucky. Instead, we heard over and over from oil executives, regulators, and outside safety experts that BP had a particular problem with safety. The actual safety and enforcement records confirmed what all these people were telling us.

What do the other companies do that's different?

We looked at ExxonMobil, in particular, and found that they have strict safety rules and these are inviolable. Every operation is tested against a safety matrix. As the risk rises, the hurdle to approve the operation also rises. When they can't make the hurdle, the job is canceled. BP didn't have such a strict system in place. The company had a decentralized structure that left mid-level people in charge of major decisions and those people were judged and compensated based on the financial performance of their units. BP was putting in a centralized safety system, but the Gulf of Mexico unit had resisted that. Given that, how is it that BP was so successful before 2010?

Browne bought two companies, Amoco and Arco, when oil prices were in the doldrums. Those deals looked very smart when prices surged and the profits rolled in. BP is also very good -- better than its competitors -- at exploration and at persuading governments to give it access to oil. They spent less money to find more new oil than almost any other oil company for more than a decade.

What's next for BP?

BP is still a money machine. It's profitable again even after writing off $40 billion 2010. Recent asset sales proved that BP's oil and gas properties are worth much more than the market thought. With its strong portfolio and depressed stock price, the company is a potential takeover target--though only a handful of companies could contemplate such a move. The new CEO, Bob Dudley, is trying to instill a new safety culture throughout the company. His challenge is to clean up BP's act without destroying its creativity.