Macondo under the microscope

June 8, 2011

The US Coast Guard in April released a report on its investigation into BP's Deepwater Horizon disaster, just weeks after DNV delivered the results of its forensic examination of the Macondo blowout preventer. Both will inform the Joint Investigation Team's final report, due 27 July. Russell McCulley reports on the information – and the reaction – so far.

The final report from Det Norske Veritas Columbus (DNV), delivered to the US Bureau of Ocean Energy Management, Regulation & Enforcement (BOEMRE) and US Coast Guard 23 March, concluded that a portion of buckled drill pipe prevented the Macondo BOP's blind shear rams from completely closing. DNV investigators said flow pressures from the deepwater well forced a portion of the pipe between the upper annular and upper variable bore rams to bend; at the point where the BOP's blind shear rams were designed to sever the pipe and seal off flow, the pipe was offcenter, preventing the rams from fully activating (OE April).

At an early April Joint Investigation Team hearing, David McWhorter – VP of engineering & quality for drilling services at Cameron, manufacturer of the BOP – said the DNV report ‘excluded or ignored' possible alternative causes for the device's failure, including the possibility that ‘a finicky solenoid valve' and insufficient hydraulic pressure could have led to a partial or underpowered closure of the shear ram. ‘There is a possibility that the shear ram could have been functioned not through the high pressure circuit but through the manifold pressure, which would be 1500psi, and it's possible that if that happened, we wouldn't have near enough hydraulic force pressure – you could not generate enough force with that pressure to cut the pipe.'

McWhorter, who was on hand to answer questions and offer technical advice when the forensic examination was under way at NASA's Michoud facility in New Orleans, said a solenoid valve recovered from the Macondo site ‘operated intermittently' during tests. ‘Also, there were at least a handful of cases during the course of the intervention in which the shear rams were double clutched,' he said. ‘In other words, pressure was applied to the BOP and then it was relieved. It was applied and relieved. There were at least a handful of times in which that happened. And that was not considered as a possibility for the wellbore environment that they found when they took the BOP apart. I have questions about that.'

In a meeting with reporters during May's Offshore Technology Conference in Houston, BOEMRE director Michael Bromwich acknowledged that ‘there were some challenges to the forensic findings'.

‘We're still in the process of evaluating both the report and the criticisms of the report. And we're factoring all that together as we move forward with our investigation.

‘That's still a work in progress.'

Bromwich said it was ‘too early to know' what, if any, new BOP requirements may be in store.

‘We've said all along that future rule making . . . will include specific enhancements relating to blowout preventers,' he said. ‘What the configuration combination enhancements of those will be will be driven at least in part by what are the final findings emerging from that investigation.'

BOPs are but one element in an overall drilling safety scheme, and not ‘failsafe devices' that can alone prevent another disaster, he said. ‘I'm under no illusion: for those who want the risk reduced to zero, that's never going to be reached, and I think we need to be pretty clear-eyed and realistic about that. Even when we issue the next generation of drilling safety rules, even when we further enhance blowout preventers – if we require double blind shear rams and all sorts of other enhancements to blowout preventers – we'll never reduce risk to zero. It's not humanly possible.

‘But through a combination of enhancements to drilling safety rules, a mature and robust (safety and environmental management system) rule, better containment, better spill response, we're going to get the risk down to a point where it's even better than it is today. And we're satisfied that it's at a point today where we can appropriately issue deepwater drilling permits, so long as applicants meet all of our current requirements and have containment capabilities.'

Acts and omissions
The US Coast Guard report looked beyond the immediate mechanical failures that led to the 20 April 2010 blowout to find ‘numerous systems deficiencies, and acts and omissions by Transocean and its Deepwater Horizon crew, that had an adverse impact on the ability to prevent or limit the magnitude of the disaster'. The report cited ‘poor maintenance of electrical equipment that may have ignited the explosion, bypassing of gas alarms and automatic shutdown systems that could prevent an explosion, and lack of training of personnel on when and how to shut down engines and disconnect the MODU from the well to avoid a gas explosion and mitigate the damage from an explosion and fire.'

The Coast Guard also charged the Republic of the Marshall Islands, the rig's flag state, with ‘ineffective' oversight and regulation and recommended that the USCG be granted greater oversight of foreign-flagged MODUs.

Transocean released a statement disputing portions of the report. ‘We strongly disagree with – and documentary evidence in the Coast Guard's possession refutes – key findings in this report,' the driller said. ‘The Coast Guard inspected the Deepwater Horizon just seven months before the Macondo incident and certified the rig as being fully compliant with all applicable US and international marine safety compliance standards, including those associated with fire and gas detection systems.

‘Further, at the time of the accident the Deepwater Horizon possessed all required valid documents verifying compliance with international and Coast Guard requirements.'

A report released in January by the Presidential Commission investigating the Macondo disaster spread blame for the incident among operator BP, Transocean and Halliburton, the company in charge of the well's cementing (OE March).

Bromwich said the Joint Investigation Team's final report could be released before the 27 July deadline, promising that ‘no further extensions will be granted'. OE

Blowout containment goes global
Nine major oil & gas companies have launched a project designed to improve the industry's ability to respond internationally to a subsea well blowout and spill. The companies – BG Group, BP, Chevron, ConocoPhillips, ExxonMobil, Petrobras, Shell, Statoil and Total – have signed an interim joint development agreement to create the Subsea Well Response Project and appointed former Shell VP Keith Lewis to manage the effort.
The companies said the SWRP will design a ‘capping toolbox' for shutting in wells, create hardware for subsea injection of dispersant and assess the feasibility and need for a spill containment system that could be shared among operators. The group will also ‘recommend a model for international storage, maintenance and deployment of this equipment,' the release said.
The agreement follows a set of recommendations, handed down by the International Association of Oil & Gas Producers' Global Industry Response Group, on how operators should respond to a subsea well control incident like last year's BP Macondo blowout in the Gulf of Mexico.
‘SWRP will now work to deliver on these objectives over the course of 2011,' Lewis said. ‘Designing systems that can be deployed effectively in different regions of the world is an immense challenge but member companies have assigned leading specialists to the task.'
Houston's Wild Well Control, a subsidiary of New Orleans-based Superior Energy Services, is also preparing to introduce this fall a subsea spill containment system that the company said can be deployed anywhere in the world in a matter of days.
The Global Subsea Containment System, designed for use in water depths of up to 15,000ft, will be housed in Aberdeen and deployable by air, Wild Well Control EVP and general manager Bill Mahler said at OTC 2011 in May.
The company was heavily involved in the effort last year to cap the Macondo well, which spilled an estimated 5 million barrels of oil into the Gulf of Mexico before it was plugged with a capping stack and oil & gas capture system.
Wild Well Control and the SWRP join two other US-based capping systems developed by Helix Energy Solutions and the IOC-funded Marine Well Containment Company. RM

Deepwater output dip forecast
It could be another five years before deepwater Gulf of Mexico oil & gas production recovers from the disruption caused Macondo, according to a new report from Wood Mackenzie.
April's Upstream Insight-North America report, released on the first anniversary of the disaster, estimates that the federal moratorium on new drilling permits imposed after Macondo clipped average production in 2010 by some 80,000boe/d. Deepwater Gulf of Mexico production this year will average 375,000boe/d lower than most analysts predicted before the disaster, WoodMac said.
The Obama administration lifted the moratorium last October and at the end of February this year BOEMRE issued the first post-Macondo drilling permit to Noble Energy, allowing work to resume at the its Santiago prospect.
According to BOEMRE statistics, as of late May the agency had approved 36 permits for 14 unique wells and had 18 applications pending. The agency returned 26 applications to operators, requesting additional information.
WoodMac said that permitting levels would likely reach ‘a new equilibrium' in mid-2012. ‘We assume that extensions to pre-Macondo approval periods will be negligible to overall project timelines. Exploration drilling is expected to strengthen during 2012 and return to healthy levels during 2013,' the report said, countering early fears of a mass exodus of rigs from the US Gulf and claims by some operators that development costs will rise 10% to 20% as a result of beefed-up regulations.
The report notes that four of the seven deepwater rigs to leave the region during the drilling suspension are scheduled to return during 2011, with another four newbuild rigs slated to arrive in the Gulf this year. Day rates are likely to ‘remain steady in the near-term'.
‘Much uncertainty remains around potential time extensions to drill a well, but we currently assume that any increases will be negligible to overall project economics,' WoodMac noted. Deepwater production will continue to lag for a few years before new projects help push production beyond pre-Macondo levels in 2016, when WoodMac predicts Gulf of Mexico production will hit a new peak of nearly 2 million boe/d.
‘In 2011, we calculate that a staggering 375,000boe/d, or 20% of previously estimated production levels, is expected to be pushed back.
‘This is difficult for many to accept when energy demand is strong, supply is constrained by the current geopolitical environment and Brent Crude is trading over US$100/bbl.' RM
Bromwich: contractors must assume responsibility too
Oilfield service companies and contractors could face fines and other punitive measures that traditionally have been the responsibility of the operators they work for, US Bureau of Ocean Energy Management, Regulation & Enforcement director Michael Bromwich said at OTC in Houston last month.
The change in policy is a break with the practice of assigning all responsibility for operations to oil company leaseholders, Bromwich said. BOEMRE has ‘broad authority' under existing law to pursue actions against service companies and contractors whose operations run afoul of safety or environmental rules, he said.
‘I'm not sure how much it's going to change our day-to-day practice,' Bromwich said of the new interpretation of existing law.
‘Because it's important that we preserve the principle that operators are fully liable for things that go wrong – not just accidents, but even regulatory violations.'
It was not clear what relevance, if any, the new policy will have on the Deepwater Horizon aftermath. Some investigations have accused contractors Halliburton, which carried out cementing operations, and Transocean, the rig owner, with varying degrees of responsibility for the blowout and spill.
Operator BP has so far footed the bulk of the multi-billion dollar cost of the spill response and environmental and economic reparations; in late May BP collected $1 billion from 10% Macondo interest holder MOEX to cover the Mitsui subsidiary's share.
Anadarko, which holds 25% interest in Mississippi Canyon block 252, has thus far refused BP's requests for reimbursement.
‘Certainly, in at least some cases where the behavior of non-operators – that is, contractors – is egregious enough, we need to have the ability to move directly through enforcement actions, through the assessment of civil fines, and through the other regulatory tools that we have, against non-operators,' Bromwich said.
‘I think that's an important principle to have out there so that people know that that's our view of what our power and authority is. It's fairly clear under the law. It was not as clear within the agency because of the historical practice of going exclusively against operators.'
Bromwich said the agency does not need to issue any new rules governing the on-lease activity of contractors but could release guidelines clarifying the policy if necessary.
In the year since the disaster, BOEMRE has issued strict new rules governing deepwater drilling and safety and launched an effort to beef up its regulatory and permitting staff.
Bromwich suggested that the new policy toward operator liability would likely have little impact on offshore activity.
‘But I think there are at least a small number of cases in which we want to be able to go against the contractors,' he said. ‘And I didn't want to be in the position where we were essentially declaring unilateral disarmament with respect to contractors and failing to assert authority that we have under the law.' RM

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