UPDATE 1-UK regulator warned Transocean on blow-out valves

* Health and Safety Executive warned in 2005, 2006

* Transocean says issues were rectified quickly

(Recasts, adds Transocean comment, background, updates shares)

By Tom Bergin

LONDON, May 6 (BestGrowthStock) – Britain’s safety regulator
criticised Transocean (RIG.N: ) in 2005 and 2006 over blowout
prevention equipment which did the same job as the gear which
failed two weeks ago and caused a huge oil slick in the Gulf of
Mexico.

The Health and Safety Executive (HSE) issued Transocean with
an improvement notice in 2006, criticizing the testing of a
so-called blow out preventer (BOP).

“The multi-purpose tool used in blow-out preventer pressure
testing was not so constructed as to be suitable for the purpose
for which it was provided: and failed in service, exposing
persons to risks that endangered their safety,” the regulator
said in a notice in June 2006.

A year earlier, the HSE issued an improvement notice
criticising the condition of the equipment used to operate the
BOP on another Semi Submersible Mobile Drilling rig, which a BP
spokesman said was on contract to the London-based oil major.

The regulator’s 2005 warning said Transocean had failed to
ensure that a remote BOP control panel had been properly
maintained.

The notices are available on the regulator’s website but the
regulator was unable to immediately give further details on the
matters on Thursday.
On April 20, the Deepwater Horizon, a semi-submersible
drilling rig owned and operated by Transocean and contracted to
dril a well for BP, exploded and caught fire.

The companies believe a BOP failed to operate properly when
the well hit a pocket of high pressure, causing the explosion.

The failure of the BOP to engage means the well is still
pumping around 5,000 barrels/day of crude into the Gulf,
generating a slick which is threatening wildlife, fishing and
tourism across the region.

The notices relate to activities in the North Sea. Different
types of BOPs are used in the deep waters of the Gulf of Mexico,
the BP spokesman said.

The cost of the spill is expected to run to billions of
dollars.

A spokesman for Transocean said the matters highlighted in
the HSE notices were addressed and rectified within a short
space of time.

BP Chief Executive Tony Hayward said last week that the
accident could show that new safety regulations are needed in
the industry, and cited the testing of equipment as a possible
area where changes could be made.

BP shares continued to regain big losses since the accident,
trading up 0.8 percent at 1151 GMT, against a 0.2 percent rise
in the STOXX Europe 600 Oil and Gas index.

Investing Advice

(Reporting by Tom Bergin; Editing by Hans Peters)

UPDATE 1-UK regulator warned Transocean on blow-out valves