Executives from other major oil companies turned on BP Plc and defended their own drilling practices during a U.S. congressional hearing on Tuesday as they sought to stave off new government regulations in the wake of BP's oil spill in the Gulf of Mexico.
Summoned before the U.S. House of Representatives subcommittee on energy and environment, executives of the biggest oil companies moved to isolate BP while asserting that the accident could have been prevented.
Exxon Mobil Chairman Rex Tillerson told the panel it is crucial to find out what caused the offshore rig to explode in April, creating the biggest oil spill in U.S. history.
This incident represents a dramatic departure from the industry norm in deepwater drilling, Tillerson said.
Shell Oil Co President Marvin Odum testified, We remain confident in our drilling expertise and procedures, built on a foundation of multiple required safety barriers, proven methods and strict company standards.
The hearing preceded President Barack Obama's scheduled televised address from the Oval Office on Tuesday night amid doubts among many Americans that his administration has done enough to clean up the spill and prevent future accidents.
The other executives appearing at the hearing were from Chevron, ConocoPhillips and the U.S. unit of BP, which is responsible for oil spill that began almost two months ago when the Deepwater Horizon drilling rig it leased exploded and sank, killing 11 workers.
'SHOULDN'T BE PUNISHED'
One oil industry official, speaking on condition of anonymity, said Shell, Exxon Mobil and the other oil companies had no choice but to turn against BP at the hearing and demonstrate how they operate more safely than BP. They shouldn't be punished for BP's actions, the official said.
Exxon Mobil's Tillerson said if oil companies properly designed offshore oil wells, built in layers of protective redundancy, properly inspected equipment and focused on safety, then tragic incidents like the one we are witnessing in the Gulf of Mexico today should not occur.
In response to the oil spill and rig accident, the Obama administration imposed a six-month moratorium on drilling in waters more than 500 feet deep.
Odum said Shell acknowledges the reasons for the administration's pause in deepwater drilling. However, he said the policy will throw thousands of people out of work and cost billions of dollars in lost wages and spending.
While BP America head Lamar McKay was on the hotseat on Tuesday, BP chief executive Tony Hayward on Thursday was due to make his first appearance at a congressional hearing since the spill.
The hearings are a significant risk to BP and to the future of U.S. offshore drilling, as lawmakers begin to consider legislative options to address the massive Gulf oil spill and to possibly increase the penalties companies will face.
The industry is seeking to stave off possible new regulations that they consider onerous.
Representatives Henry Waxman and Bart Stupak, in a letter released on Monday, said BP put profits over safety because the leased rig was 43 days late for its next assignment, costing BP as much as $21 million in leasing fees.
It may also have set the context for the series of decisions that BP made in the days and hours before the blowout, they said in a letter.
Raymond James & Associates said in a special report on Monday that the moratorium is a textbook knee-jerk reaction of policymakers who want to be seen in control of a crisis situation -- even though, in actuality, they are not.
The firm said about 49,500 direct jobs are at risk with the 33 deepwater rigs shut by the moratorium, and each rig generated about $1 million a day in economic activity.
(Reporting by Tom Doggett; Editing by Will Dunham)