US official decries exec bonus in Gulf oil spill

AP News
Posted: Apr 04, 2011 3:56 PM
US official decries exec bonus in Gulf oil spill

The company that gave executive bonuses for safety after its Gulf of Mexico rig exploded a year ago, killing 11 and causing the largest offshore spill in U.S. history, "just doesn't get it," the head of a U.S. presidential commission investigating the spill said Monday.

Transocean Ltd's executive bonuses underscore the commission's finding that lax standards caused the accident that dumped more than 200 million gallons of oil into the gulf, William Reilly said.

Reilly and his co-chair, former U.S. Sen. Bob Graham, joined U.S. Secretary of Interior Ken Salazar on Monday for talks with Mexican officials on uniform regulations for drilling in the gulf.

Transocean gave bonuses for the "best year in safety performance in our company's history," according to a regulatory filing last week.

"What I've seen from various investigative reports is that they were at least at some fault," Salazar said in a news conference, adding that 2010 "was probably the greatest year of pain in terms of development of deep-water gas and oil in the world, especially in the Gulf of Mexico."

The commission appointed by President Barack Obama has said the explosion was caused by a series of time- and money-saving decisions by Transocean, BP and oil services company Halliburton Inc.

Ihab Toma, Transocean's executive vice president, said some of the wording in the 2010 proxy statement "may have been insensitive in light of the incident that claimed the lives of 11 exceptional men."

"We deeply regret any pain that it may have caused," Toma said in a statement.

Salazar said the U.S. team is in Mexico to share its findings from the spill as part of discussions with Mexican government officials and oil industry leaders to develop common standards and protocols for exploring and drilling in the Gulf.

"The Gulf of Mexico in terms of its natural state is one body of water," Graham said. "What happens in one country will have an effect on others."

Responding to a reporter's question, Graham said he hopes Cuba, which also plans to explore for oil in its territorial waters of the Gulf, would adhere to whatever standards are developed. The U.S. team noted that Cuba is working with Spanish oil company Repsol and Russia's Gazprom Neft.

"In Florida there is great concern about the prospect of drilling so close to our coast by a country that hasn't engaged in this previously," said Graham, who represented Florida in the Senate. "That's part of what we're talking about with Mexico, that a Gulf of Mexico agreement would be adhered to by any country. We're optimistic that it will occur."