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Archive for September, 2021

and they will presumably do so with an emergency final rule. This will be interesting. Over-under on the days until publication? Number of public comments?

And since the Coast Guard functions as OSHA on the Outer Continental Shelf, will they be enforcing the offshore industry’s compliance with this mandate? BSEE inspectors?

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Mexico Map

As I understand it:

  1. The Zama field, with estimated reserves of ~700 million barrels, has a common reservoir that underlies Talos Block 7 and a contiguous Pemex block.
  2. Talos drilled the discovery well and 3 delineation wells. Pemex has not drilled a well.
  3. The companies were unable to concur on the terms of a unit agreement.
  4. A third party study for the purpose of initial tract participation, determined that Pemex has a 50.4% share of the reserves. Talos has criticized this study. A previous study had determined that the Talos group has 59.6% of the reserves.
  5. On July 2, 2021, the Mexican Ministry of Energy (SENER) selected Pemex as operator. Talos is disputing that decision.

Thoughts:

  • One of the few energy policy mistakes that the US has not made is the formation of a national oil company. There have been attempts, most notably the 1975 Senate proposal to establish the Federal Oil and Gas Corporation or FOGCO. (I’m not making this up!).
  • When Mexico’s national oil company is one of the competitors, SENER shouldn’t be determining the unit operator. Instead, an arbitration or independent review process should be established.
  • Pemex appears to have been largely a Zama field passenger to date. The discovery well and all delineation wells were drilled by Talos. If the “rule of capture” applied, Talos would be proceeding with development and Pemex would be negotiating with very little leverage.
  • If Mexico wants to discourage foreign investment in their offshore sector, this is a good way to do it.

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As expected given the magnitude and track of Ida, the necessary inspections, and the onshore damage, most GoM production remains shut-in. (BSEE data)

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Noble’s Aug. 29 statementNoble’s Sept. 2 statement
Each rig successfully secured its respective well in progress and took evasive actions to avoid the storm’s path.” (No mention of the delay in relocating the Globetrotter II or the rig, riser, and LMRP damage already reported on social media.)“several riser joints and the lower marine riser package separated from the rig during the storm and sank to the seabed.” (Confirms social media reports.)
“All personnel are safe and accounted for.” (No mention of the injuries alluded to in social media reports.)A small number of crew members were treated for minor injuries.” (The actual number was 9, i.e. not a small number, 4 of whom had to be transported to shore for further evaluation.)
“One of the ship’s cofferdams in the moonpool area sustained damage.” (Update: The storm broke part of the hull, which allowed water into some compartments. Per the ship’s master, the vessel was not in distress and not actively taking on water.)

In a proper safety culture, you don’t downplay serious incidents and you never declare victory. Spin control is for politicians, not safety leaders. The Globetrotter II, with 140 workers aboard, was slammed by a major hurricane, perhaps unnecessarily. After the frightening social media reports, Noble released an “all is well” statement that minimized the significance and potential consequences of the delayed rig relocation. Noble continued to downplay the incident when they update their statement 5 days later.

The Coast Guard and BSEE will be investigating the Globetrotter II relocation, and their findings will be of great interest. Noble has historically been a very good drilling contractor with a strong commitment to safe operations. Hopefully, they and others will learn and apply lessons from this and similar events that have occurred in the Gulf and elsewhere. Companies may also want to assess the compatibility of their messaging practices with their commitment to a robust safety culture and continuous improvement.

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Divers identify broken pipeline as source of Gulf oil spill
satellite image provided by Maxar Techologies shows Port Fourchon and slicks on 9/2/2021
  • 12″ pipeline displaced by Ida
  • Approximately 2 miles south of Port Fourchon which took a direct hit from Ida. (Appears that the pipeline is in Louisiana State waters).
  • Water depth = 34′
  • Talos funding spill response, although the company said it was not their pipeline
  • Leak has slowed significantly; apparently production is not entering the line and the spill is limited to pipeline inventory
  • This type of incident is not surprising given the magnitude and track of Ida and the pipeline infrastructure that was exposed to major hurricane conditions

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This Canadian video was a big hit at an awards program in Houston 15 years ago. I was pleased to find it on YouTube and thought it would be a nice Labor Day feature. Kudos to the workers who produce the energy that supports our economy and our way of life. Your efforts are greatly appreciated! Happy Labor Day!

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Image

In sports, the experts are soon exposed. In regulations and standards, consensus misjudgments are less obvious and may take years to be demonstrated. Also, regulations and standards are often outdated and may not reflect best practices. That is why compliance with regulations and adherence to industry standards is not sufficient. We need to continuously assess risks, observe, listen, review data, and actively manage our operations to achieve safety and environmental objectives.

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1,698,557 BOPD per BSEE. Updated recovery chart:

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Shell Offshore Inc. (Shell), a subsidiary of Royal Dutch Shell plc, conducted an initial flyover of our assets in the path of Hurricane Ida. During this initial flight, we observed damage to our West Delta-143 (WD-143) offshore facilities. When it is safe to do so, we will send personnel offshore to provide a closer inspection of these facilities to understand the full extent of the damage and the degree to which our production in the Gulf of Mexico will likely be impacted.

Shell news release

This is a very significant report given the importance of the WD 143 platform in transferring all production from Shell facilities in the “Mars corridor.” These facilities include the Mars, Olympus, and Ursa platforms.

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In a bit of a surprise, the volume of shut-in GoM oil production rebounded to more than 1.7 million BOPD (see BSEE’s 9/2 update). Because several deepwater platforms had reportedly resumed production, the sharp increase in shut-in volumes could have something to do with downstream facility damage or bottlenecks. The daily Ida shut-in volumes are plotted below.

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