BP tackles Texas City failings

British Petroleum's tragic March 2005 explosion has been well-documented through the press. Read here to find out how that tragedy spurred the development of a new program addressing management issues at BP.

By Foster Finley and Karl Roberts, AlixPartners

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The popular press has been filled with coverage of the tragic March 2005 explosion in BP’s Texas City, Texas refinery.  Less well publicized are the successful steps BP has taken in recent months to establish safer and more stable operations in the near-term – and to develop a long-term plan to make the Texas City refinery one of the safest in the BP system. BP has made solid progress – led by a site-wide Texas City Program Office, established with the assistance of AlixPartners.

Although the sidebar details the direct causes and consequences of the Isomerization Plant (ISOM) explosion, the underlying reasons are complex.  The final Fatal Accident Investigation Report identifies five underlying cultural issues (Figure 1).

Figure 1

Figure 1. Not giving safety highest priority was only one of a number of critical mistakes. (Click to enlarge)

Restoring Texas City’s safety and performance requires a comprehensive and far-reaching program going well beyond mere technical refinements. Corrective action must address failings in management, culture and control.

Initial move

BP’s first action following the accident was to install veteran Colin MacLean, a proven leader with more than 30 years’ experience in turn-around management, as the refinery’s new Business Unit Leader.  His charge was monumental: turn one of the largest, most complex, and – in the minds of many observers – most notorious refineries in the world into a safer, simpler and consistently performing operation.  Consider the complications confronting him on his arrival: emotions were still running high among the 2,600 workers on site – many of whom were personally affected by the tragedy; incumbent site management held a wide array of opinions on remediation actions; BP’s corporate leadership mandated that necessary steps be taken to restore the refinery; and a wide range of federal and state authorities (including EPA, OSHA and the Chemical Safety Board) and local groups were scrutinizing the site. All were pressing for major changes.

Today, just slightly after the first anniversary of the disaster that brought the attention of the world to Texas City, the refinery is becoming a very different place. Safety is the priority at the site, and more than 500 discrete safety-enhancing and performance-enhancing initiatives are scheduled for implementation. Planning extends over a 7-year period – led by MacLean under the direction of the Texas City “Focus on the Future” Program Office. Daily production at the site is being meticulously brought back on line following a complete production stoppage precipitated by Hurricane Rita’s approach.  Most importantly, the site’s safety incident rates continue to improve and safety now takes precedence over production.

Texas City is one of the world’s largest and most complex refineries. It accounts for 17% of BP’s global capacity — 460,000 barrels/day of crude distillates — 3% of U.S. refinery capacity. The facility first began operation in 1934. It was acquired by Amoco in 1947 and has been expanded a number of times since then. The BP-Amoco merger brought the Texas City refinery into the BP network in 1999. Today’s compound comprises some 30 refinery units spread over 1,200 acres.

Regaining control

After the March 2005 explosion, BP had rapidly begun organizing a response. On his arrival at the site, MacLean realized that BP needed to accelerate the pace of the plant’s safety recovery efforts, and decided to implement and run a site-wide Program Office mandated to organize, coordinate and communicate an integrated response to better safeguard workers. MacLean was frank about the immediate situation necessitating this approach: “We had too many development initiatives. We had lost focus. Events of 2005, particularly the ISOM explosion, made us recognize how much we had to do. We needed to develop a five- to seven-year program that we knew would be in the multi-billion dollar range.”

MacLean quickly recognized a need for external assistance. He needed to augment his team’s skills and abilities with practical guidance and a results-oriented approach.  MacLean chose the global turnaround and crisis management firm AlixPartners for the task. When asked how he made this choice, MacLean said, “Based on previous experience with [AlixPartners professionals] at our chemicals plant in Grangemouth, we knew they had resources with the track record, experiences and frameworks to support our strategy and needs. Our confidence in their capabilities allowed us to sole source this on short notice.”

A small team of AlixPartners resources mobilized and was on the ground within days of MacLean’s call. BP dedicated Tim Wilk, previously of Texas City’s Strategic Planning Group, to become head of the newly established “Texas City Focus on the Future” Program Office.  Figure 2 shows the workflow approach developed by the Program Office, which rapidly mobilized to:

Figure 2

Figure 2. The office not only collects recommendations and prioritizes actions but tracks results. (click to enlarge)
  • Solicit and catalog hundreds of specific improvement recommendations,
  • Detail, organize and rationalize the recommendations into a logical structure,
  • Develop focused and action-oriented improvement initiatives in response to site 
    objectives and the recommendations,
  • Prioritize and sequence the initiatives into a fully integrated, multi-year safety and
    performance enhancement program,
  • Approve, resource and drive each of the initiatives as it was launched,
  • Serve as a site-wide communications ‘clearing-house’
  • Build-out a world-class Program Office and enable BP to manage and drive
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