DECC and Macondo – time for change

February 1, 2012

The Deepwater Horizon went to its grave on 22 April 2010 taking eleven men with her. In the two years since, the disaster has been investigated and reviewed by several august panels and consultants in the US at the behest of the Obama administration. In his latest think piece for OE, consultant Ian Fitzsimmons asks what lessons, if any, the UK's offshore regulators have learned post-Macondo. 

First, let's set the regulatory scene. In the US, within a month of Macondo, the Minerals Management Service was reorganised with the creation of BOEMRE to regulate the US offshore industry. MMS became the US licensing and royalty authority – stripped of its regulatory authority.

BOEMRE under Michael Bromwich made astonishing progress on the safety front in Macondo's aftermath but was in turn re-organised into two entities: the Bureau of Safety & Environmental Enforcement (BSEE) and Bureau of Ocean Energy Management (BOEM). The fiscal rump of MMS became the Office of Natural Resources Revenue under the jurisdiction of the US Department of the Interior.

In the UK, the major regulatory players are the Health & Safety Executive (HSE) – an autonomous agency without governmental control – and the Department of Energy & Climate Change (DECC), a government department.

While the HSE Offshore Division (OSD) deals with safety regulation offshore, the DECC deals fundamentally with exploration & production licensing, field development approval, environmental compliance, leak & spill containment, and statutory legislation and instruments.

In December 2011, DECC posted on its website the results of an independent review‡ of the UK offshore regulatory regime with the following terms of reference:

‘To carry out a review of the UK oil & gas regulatory regime against the issues and recommendations emerging from the key investigations into the Deepwater Horizon incident in the Gulf of Mexico and other relevant reviews.

‘To make any recommendations for improvement to the UK regime in the light of that review.' One may perhaps wonder why DECC chose to produce such a report at this late stage, and to what purpose. But it does at least offer a starting point for determining the nature and extent of any changes made to the UK regulatory process in the past two years.

Reporting standards

While the US Presidential Commission, BOEMRE and the US Coast Guard have between them set a new world standard for open, concise and constructive reporting of offshore mishaps in the wake of Macondo – readily accessible by public and industry alike – the recent DECC offering falls woefully short of that mark. It is both insipid and fawning. This is admittedly a subjective judgement; readers may or may not reach the same conclusion having read the 200-page report and this piece in their entirety.

 

My first action after receipt of the DECC report was to review the list of independent panel members (found in Appendix A). These are some of the industry terms you will not find within the aggregated experience quoted: BOP, underbalanced drilling, underbalanced wells, negative pressure test, formation isolation valves, float collar, flapper valves, well design, long string production casing, semisub, IBOP, annular preventer, LP mud/gas separator, slip joint, drill string, multiplexed electrohydraulic controls, blind shear rams, stripping, simulator training, and lower completion.

For me, these and other exclusions in relation to Macondo were already flagging up potential shortcomings in the report, a suspicion that proved well founded on subsequent reading.

The extent to which DECC relied on the HSE for input can be seen in Appendix E, with the HSE submission to the panel described as ‘Deepwater Horizon Incident Review Group – Interim Summary Report, October 2011'. Quite why an ‘interim' report should have taken this long to produce is unclear, and in that regard the report's closing paragraph offers little encouragement that a ‘final' report will be with us any time soon:

‘This report remains work in progress and this group will continue to examine any new evidence or findings which may emerge with a likely conclusion the publication and subsequent assessment of the CSB [US Chemical Safety Board] investigation report.'

Interestingly, the interim report makes no reference to the blowout narrowly averted on Transocean's Sedco 711 semisub while working on the Shell-operated Bardolino field in the UK North Sea on 23 December 2009, so there is no account of any lessons learned from an event the US Presidential Commission was later to describe as ‘eerily similar' to Macondo.

But there is a reference to the earlier blowout (pictured above) offshore the Northern Territories in the Australian sector of the Timor Sea, which wrote off the PTTEP Australasia-operated Montara wellhead platform and Seadrill's attendant jackup rig West Atlas, but thankfully resulted in no loss of life (OEDecember 2009).

The Montara blowout occurred in about 80m of water on 21 August 2009 and the BOP was not over the well at the time. It was eventually sealed (by an interceptor well) on 3 November 2009. The final report into the disaster, issued on 24 November 2010, attributed the blowout to a failed cement job, which had not been pressure tested; an underbalanced well condition; and the removal of a pressure containing corrosion cap. Like the Macondo Presidential Commission report, the final Montara report was detailed, produced expeditiously and refreshingly open in its content. It named names, severely criticising the Northern Territories regulatory authority as well as the drilling contractor.

Disseminating information

The recent DECC/HSE report does not compare favourably at any level, and raises more questions than it answers. Why, for example, was it considered appropriate to elaborate on Montara but ignore the incident involving Sedco 711 (pictured above) at Bardolino? Although a ‘near miss' and not on the scale of either Macondo or Montara, Bardolino's root causes were similar and thus relevant to any review of the UK regulatory regime.

Surely there were lessons to be learned. We know as much from the HSE submission to the DECC parliamentary committee (OE March 2011). But where are the details? And for that matter, when will the HSE get around to addressing the questions I posed in that same issue of OE in reference to such things as formation isolation valves, lower completion flapper valves, negative pressure testing, under balanced circulation of wells, and regulatory issues arising? I wanted to know, for example, why the HSE had not disseminated details of the Bardolino incident to the offshore industry, Shell having duly reported the details and circumstances to the HSE as required by current legislation.

No answers have been forthcoming. But there was a curious letter from Steve Walker, head of OSD, published in OE's April 2011 ‘Mailbag' column, which included the following asinine statement: ‘We do not control the way information is disseminated.'

That presumably remained his stance when making his submission to the DECC panel. But this is what the panel (Executive Summary, page 4) had to say about that:

‘There has not been a major drilling related incident on the UKCS of the scale or consequence of the Macondo incident. However, there have been incidents requiring closure of blowout preventers, as a result of failures in the other risk control mechanisms. It is not clear that the lessons from such incidents were always as widely or rapidly communicated and implemented as they should be [sic].' 

On page 46 of the panel report Section 4: ‘Learning from Incident Experience and Improving Best Practice' the following can be found under ‘The Structures Available for Sharing Lessons Learned':

‘. . . HSE drew attention to its expectation that industry itself should promote sharing and learning, rather than depend on regulatory authorities to manage it on its behalf. At the same time there appears a clear view within the industry that regulators have a unique, sector wide perspective that equips them to play an important role.' The following Recommendation 4.1 appears on page 50:

‘Although obligations to share any learning from incidents or near misses experienced by UK operators are clearly defined by existing legislation and several fora [forums] exist to do so, the panel remains unconvinced that sharing occurs on a timely basis, risking the occurrence on an avoidable incident.'

That is exactly the point the Presidential Commission made. But the panel did not stop there. In Recommendation 4.2, page 51, it states: 

‘The industry should agree principles to ensure concerns about proprietary information and legal exposure do not prevent rapid sharing amongst operators of lessons, which could help mitigate the risk of a serious incident. Regulators should use existing powers and influence to help ensure learning is shared on a timely basis.'

Given the foregoing, Steve Walker may wish to reconsider his position on the duty of the HSE to disseminate information on a timely basis. After all, they receive the information first hand, and they have an existing obligation to disseminate it to the industry – on a timely basis.

It also has to be said that Oil & Gas UK has a major role to play here. We await with interest details of how Oil & Gas UK intends to comply with the panel recommendation.

Blind shear rams

I would have thought it to be a matter of common sense that every BOP should have two pairs of blind shear rams or, as an alternative, a pair of super shears and a pair of blind shears. From a BOP configuration point of view, the lower annular preventer should be located immediately above the upper blind shear rams. In my opinion, the foregoing should be mandatory by now. But here is what the DECC panel has to say on the subject (Observations and Recommendations, page 11):

‘The panel's view is that specific decisions on the appropriate number of shear rams must be based on the risks presented by the particular circumstances at each well and the range of controls available to deal with them.

‘The decision to include more than one set of shear rams may be appropriate where risk assessment concludes that that specific well and geological factors make the risk of failure of these primary methods unacceptably high'.

This is complete nonsense. One could reasonably conclude that the panel was unaware of the circumstances surrounding the Macondo disaster. My risk assessment states unequivocally that two pairs of blind shear rams are required because the system should be configured on the assumption of failure of one pair from the outset.

The notion of a BOP stack up being configured for individual wells is impractical and would constitute an operational nightmare. One can only assume this issue was beyond the experience of the panel, hardly surprising given their CVs. Turning to (Appendix E, page 127) of the HSE submission, we find the following:

‘There have been calls for consideration of the need for two sets of shear rams to be installed on BOPs, along with the installation of a secondary means of activating them . . . This work is ongoing.'

From the foregoing, the reader may wonder why such a commonsense, twin barrier solution is causing so much heartache and prevarication in DECC and the HSE. I suspect the voice of Oil & Gas UK can be heard in the quotes above. After all, they do not have to wait for any mandatory instruction from either the HSE or DECC to instigate the twin BSR configuration. A simple risk analysis would prove the point.

Moving off station

The Deepwater Horizon (pictured above) could not move off station after the explosion because she was tethered to the subsea wellhead by the LP drilling riser/LMRP system. At the surface the riser was tethered by the travel limit on the LP slip joint and the constant tension winches.

The explosion following blowout severed all communication between the rig's topsides and the LMRP. As result, the LMRP could not be disconnected from the BOP by the drill crew. In turn, the autoshear system at the BOP/LMRP interface could not be activated. The problems were further compounded by the fact that the BOP fail safe system could not be activated due to flat batteries in the BOP control system.

In previous pieces for OE, I have emphasised the critical importance of the need for a secondary direct hydraulic control system to control the safety features of the BOP and LMRP. I suggested the provision of a secondary umbilical either suspended at a safe location from the drilling vessel or suspended from a standby vessel. Had this provision been in place on the Deepwater Horizon the rig would have at least survived the explosion and perhaps the lives of some crew members would have been spared. Had the LMRP/LP drilling riser interface comprised a hydro-mechanical connector rather than a flanged connection, another avenue of escape would have been provided – not to mention a speedier containment of the erupting well fluid.

The accumulation of control systems and umbilicals around Deepwater Horizon's moonpool and the drilling riser constituted the risk of a single point failure. The same applies to every drilling semisub in operation today.

According to the HSE's submission to the DECC report (Appendix E, page 128):

‘The learnings from Deepwater Horizon indicate that the HSE should:

 

  • challenge DP Mobile Drilling Unit (MODU) operators in new safety cases and thorough reviews to demonstrate that emergency disconnect and emergency moves off location is a reliable barrier for loss of well control;
    • determine for drift off and mooring release scenarios, whether the duty holder has established a mechanism to release the marine riser or established a force that will physically break the marine riser.' The DECC report did not make either comment or recommendation in respect of this fundamental issue. No number of BSRs will compensate for the lack of a secondary LMRP release mechanism, independent of the LP drilling riser. The requirement for a secondary BOP/LMRP control system must be made mandatory, together with a revised LP riser/ LMRP interface.

The DECC report did not make either comment or recommendation in respect of this fundamental issue. No number of BSRs will compensate for the lack of a secondary LMRP release mechanism, independent of the LP drilling riser.

The requirement for a secondary BOP/LMRP control system must be made mandatory, together with a revised LP riser/ LMRP interface. 

Human element

The human element figures largely in most disasters and that was certainly the case with Macondo. I have no wish to criticise the Deepwater Horizon driller because he cannot defend himself with his version of events. But I have proposed that all drillers should be trained and examined regularly in simulators similar to those employed by NASA and all Civil Aviation Authorities.

Such drilling simulators are available and operational today. But they are not a compulsory requirement. A simple annual Q/A written test is all that is currently required. The advantage of a simulator is to prepare the individual for the occasional curve ball or (for the cricketers amongst OE readers) reverse swing – and to assess their ability to train for, and respond to, critical upset conditions.

The DECC response can be found in the report's Recommendation 6.1, page 105:

‘In regard to the training and competency of personnel involved in drilling operations, the review panel recommends that the regulators work with the industry (through Oil & Gas UK) to develop clear competency guidelines for different offshore jobs and develop appropriate audit processes to ensure their effective implementation.' That recommendation, if indeed that is what it is, simply is not good enough. We need something better than a fawning tribute to Oil & Gas UK. But since the panel has raised the subject, perhaps Oil & Gas UK would like to explain what exactly it has been doing in this regard for the last two years. Training of drillers in simulators must be made a mandatory requirement without further delay. Which part of that statement would Oil & Gas UK care to dispute?

Unless I have overlooked something in its Interim Report Section 3 Conclusions, the HSE chose not to address the issue of simulator training in its contribution to the DECC review.

Who was in charge?

The Deepwater Horizon was owned by Transocean and chartered by BP to drill the Macondo well. BP had prepared the well execution plan and Transocean was contracted to execute it. On the drill floor, the driller and Transocean had every right to expect that BP had correctly specified the design of the well and the included components.

 

But the safety of the Deepwater Horizon and her crew remained the ultimate responsibility of Transocean. While the rig was latched to the subsea wellhead, the offshore installation manager (OIM) was responsible. As soon as it was detached from the subsea wellhead, the Master/Captain became responsible. That was the agreed protocol.

Usually when things go well, the partnership between the operator and contractor works well. When things go awry, the consequences can be disastrous. The September 1988 Ocean Odyssey disaster (pictured opposite), referred to on page 129 of the HSE submission, was caused by a major disagreement between the operator and the rig owner (OE October 1988).

But who was in charge of Deepwater Horizon at the time of the disaster? The evidence of the protocol confirms that it was the OIM because the vessel was still latched to the subsea wellhead. But there was a problem – he was in his stateroom, not on the bridge, at the time of the explosions. Without his specific approval, therefore, the ESD could not be activated.

Already on the bridge/central control room and aware of the explosions, the Master/Captain is said to have repeatedly refused requests from the subsea supervisor to activate the ESD. The record shows that after the explosion the OIM did make it to the bridge, ‘somewhat blinded and deafened', whereupon the rig's chief engineer requested approval to activate the EDS. The OIM gave his approval and the subsea supervisor pushed the control panel ESD button. But nothing happened.

At 21:00 hours on 20 April 2010, drill pipe pressure at the IBOP started rising when it should have been falling. At 21:41 mud overflowed onto the drill floor. The first explosion occurred at 21:49. At 21:56 the OIM approved the activation of the EDS. It was a futile gesture. Eleven men were already dead on the drill floor and around the drilling facilities. The OIM should have been summoned to the central control room at 21:41 when mud first appeared on the drill floor.

The HSE Interim Report for DECC (Appendix E, page 130) states:

‘The reports identified confusion as to who had overall control of the Major Hazard risks on Deepwater Horizon and the "potential" conflict between the OIM and the Captain. In the UKCS, the OIM unequivocally has control.'

 

In the light of events on the Deepwater Horizon bridge, the HSE may care to review its stated position.

The OIM only has control when the drilling vessel is latched to the subsea wellhead. It is also perfectly obvious that when the OIM is either incapacitated or absent from the bridge, then a nominated deputy should assume the full authority of the OIM.

In the case of the Deepwater Horizon, what would have then happened if the OIM had not made it to the bridge after the explosion? Hopefully common sense would have prevailed and the subsea supervisor would have acted on his own initiative. But that was not the case. In the absence of OIM, as telling extracts from the USCG record of events testify, there was a near mutiny on the bridge.

Strangely, but not unexpectedly, the DECC review panel is silent on this issue. That silence has to be rectified and the HSE must reconsider its ‘unequivocal' position. There was no conflict as such between the OIM and the Captain. The OIM was just not there when he was most needed. That is the issue that has to be faced.

The European dimension

Nothing is more guaranteed to raise panic both in UK government departments and Oil & Gas UK than the threat of EU regulation. Take for example the declaration in DECC Report Section 4: ‘The European Dimension' that draft regulatory European Union proposals published on 27 October 2011:

‘. . . resonate with the findings and recommendations of this report, particularly with respect to the merits of greater integration of the various regulatory elements of the oil and gas lifecycle, a more proactive role for regulators promulgating best practice, and greater transparency around information relating to the industry and its safety and environmental performance'. I particularly enjoyed the bit about ‘greater transparency', given the HSE's recent performance. The panel continues:

‘Particular care should be taken to ensure that any future changes at an EU level neither dilute the fundamental strengths of the UK system or [sic] undermine the authority of the relevant regulatory bodies within it nor, through the mechanism and process of their introduction, frustrate or delay the potential improvements highlighted elsewhere in this report.'

...

 

The desperate, fawning tone of this last statement has the fingerprints of the HSE and Oil & Gas UK all over it and is perhaps indicative of the level of anxiety induced by the threat of further EU involvement in UKCS regulatory matters. But many industry observers and commentators now see such intervention as inevitable, indeed would welcome it given past performance, if that's what it takes to secure the safety of those who explore and develop North Sea resources with MODUs.

Conclusion

I wish I could say that much has changed offshore UK in the past two years and that we now have a more vigorous and open HSE, but I cannot. What we have is a constipated, rather secretive HSE promising for the future what it should have delivered by now.

December's independent panel report was commissioned by DECC, not the HSE. The HSE were summoned by DECC to participate as contributors, no more than that. Just as they had previously been hauled before a DECC parliamentary committee.

Nothing could more adequately demonstrate its dissatisfaction with the performance of the OSD. On the face of it, one can only deduce that the HSE has learned little or nothing about the way it is expected to behave – by public and industry alike – in the post-Macondo era. The inescapable conclusion, to my mind, is that the autonomous HSE/OSD as currently constituted has no part to play in the new regulatory world order.

Something has to change. The OSD will have to be taken back into DECC and reorganised accordingly. Perhaps change was on UK energy minister Charles Hendry's mind when he asked ‘the regulators and industry to consider the [DECC review's] findings in detail' and report back to him in July. If so, it can't come soon enough. OE 

Ian Fitzsimmons, a regular contributor to OE, is an independent consultant with more than 30 years' offshore industry experience. He has worked for major operators around the world and major subsea hardware/ drilling equipment contractors, and has extensive due diligence and expert witness experience. He was chief engineer for RJ Brown & Associates in London. The views expressed in this article are the author's own and do not necessarily reflect OE's position.



Current News

Tullow Extends Maersk Drillship Term After Cancellation Notice

Tullow Extends Maersk Drillship Term After Cancellation Notice

KrisEnergy Charters Jack-Up Rig for Apsara Drilling. Platform to Sail Away Soon

KrisEnergy Charters Jack-Up Rig for Apsara Drilling. Platform to Sail Away Soon

Erdogan: Turkey will Retaliate to Any Attack on Seismic Vessel in Mediterranean

Erdogan: Turkey will Retaliate to Any Attack on Seismic Vessel in Mediterranean

Norway's Yme Field Start-up Could Face More Delays

Norway's Yme Field Start-up Could Face More Delays

Subscribe for OE Digital E‑News

Offshore Engineer Magazine