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Archive for January, 2022

Yesterday, BSEE issued investigation reports for 2 of the fatal 2020 incidents. Both of these incidents involved falls, a chronic and preventable cause of offshore worker casualties. Not enough industry and trade association attention is given to such incidents, which have been trivialized in the past by categorizing them as “slips, trips, and falls.” The reports are linked below:

The reports describe how the incidents occurred and what we can do better to prevent similar events in the future. Despite the advance in safety management programs over the past 30 years, there has been no discernible improvement in preventing these incidents. We need to rethink training programs, planning, and methods. Deadly falls are not inevitable.

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Per our 10/20/2021 post about this Saudi recreation venture, below is a nice promotional video. This greatly exceeds what we had envisioned many years ago!

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“We will need gas throughout the transitional phase,” government spokesman Steffen Hebestreit said.

oilprice.com

Germany has a very strong Green lobby that has now become part of the ruling coalition. Despite an anti-fossil fuel discourse, the Greens have now apparently accepted the necessity of at least one fossil fuel, perhaps not least because Germany has plans to shut down all of its nuclear power plants by the end of this year.

oilprice.com

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Last month (12/2021), BSEE finally posted the 2020 incident statistics. Unfortunately, no details or incident summaries are provided for the 6 fatalities. The fatalities are simply classified as “occupational” (4) or “non-occupational” (2). As a result, we still know very little about these fatal incidents 13 – 24 months after they occurred.

The BSEE spreadsheet advises that 3 of the 4 “non-occupational” fatalities are being investigated, but the reports are still “pending.” Why the long delay? The National Commission, BOEMRE-CG, and NAE investigations of the Macondo tragedy were completed (and reports published) in less time.

No explanation is provided as to why the 4th occupational fatality is not being investigated.

Also, investigations of the preparedness and response aspects of the 2 non-occupational fatalities would have been beneficial. What was the cause of death? What medical screening procedures were in place? What treatment capabilities were available at the facility? How much time was required to transport the workers to hospitals? These are important considerations for the offshore community.

Below is a summary of the publicly available information for the 6 fatalities:

  • 1/14/2020: A worker died on a Diamond drillship on a lease (Mississippi Canyon 822) operated by BP. According to BSEE this was a non-occupational fatality. Per the listing of investigations, no investigation was conducted.
  • 5/16/2020: A worker died on a Fieldwood platform (Ewing Bank 826 A). Per BSEE, this was an occupational fatality and the investigation is still pending. There were no media reports or company announcements.
  • 6/2/2020: A worker died on the Valaris DS-18 drillship working for EnVen Energy at Green Canyon 767. Per BSEE, this was a non-occupational fatality and no investigation was conducted.
  • 6/20/2020: A worker died on at the Green Canyon 18 A platform operated by Talos. Per BSEE, this was an occupational fatality but no investigation is indicated for this incident. No media reports or company announcements could be found.
  • 8/23/2020: A worker died on the Pacific Khamsin drillship working for Total at Garden Banks 1003. A month later, at an Investors’ Day presentation, Total announced that the incident occurred while the crew was preparing to move the rig to avoid Tropical Storm Laura. Total’s statement included this defensive statement: “This is a routine operation that was executed with no time pressure as the rig disconnection had been decided well in advance.” Per Total, the findings of their investigation were shared with the regulators in Sept. 2020, but BSEE advises that their investigation is still pending.
  • 12/2/2020: A worker died on DCOR’s Platform Gilda in the Santa Barbara Channel offshore California. The BSEE investigations update provides no information on the status of the investigation. Per local media, 3 men fell from the platform and others jumped into the water to assist. No information is provided on the reason why the 3 men fell.

The number of US OCS fatalities remains unacceptably high, and timely data sharing and investigations are needed to better assess causes and trends. In that regard, this recommendation from the 2016 National Academies report entitled “Strengthening the Safety Culture of the Offshore Oil and Gas Industry” merits further industry/government attention and action:

Recommendation 4.2.2: Because accident, incident, and inspection data all are needed to identify and understand safety risks and corrective actions, the committee recommends full transparency such that regulators make all these data readily available to the public in a timely way, taking into consideration applicable confidentiality requirements.

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Declines in drilling activity and discoveries suggest that higher real oil prices are on the horizon. We may be fortunate enough to escape significant price hikes and supply disruptions over the next couple of years, but they are coming.

Rystad’s not-so-cheery pre-Christmas press release reported that, on a volume basis, 2021 oil and gas discoveries had sunk to the lowest level in 75 years.

20211220 OG global discoveries PR chart.png
Rystad Energy

US offshore trends are even more troubling. Per BOEM’s database, no deepwater fields were discovered in 2021 and there were only 2 discoveries in the past 3 years (see chart below). HartEnergy reports 5 announced discoveries in 2021, none of which has been determined by BOEM to be commercially producible. Regardless of the status of those 2021 determinations, recent discoveries have not been sufficient to reach and sustain GoM production volumes at the 2019 peak (August) of 2.044 million BOPD. 2019 was the first year since 1982 without a confirmed deepwater discovery and the trend (below) is not encouraging. Schlumberger data through 2016 indicated GoM depletion rates greater than 20%, and the subsequent low discovery rates do not bode well for future production trends.

from BOEM data

You can’t make discoveries without drilling and only 9 companies drilled deepwater GoM exploratory wells in 2021 (34 wells total). With the Pacific in decommissioning mode, the Atlantic and Eastern GoM off-limits, limited options offshore Alaska, and the decline of the GoM shelf, the deepwater GoM is the only important US offshore production option. The exploration numbers below are therefore concerning.

The shale revolution made the US a net oil exporter, but skepticism about shale production forecasts suggests the need for other supply sources. Given the shale uncertainty and the unrealistic expectations regarding the energy transition, greater US dependence on imported oil is on the horizon. This bodes well for OPEC, but not so well for US and international consumers.

Meanwhile, the US Dept. of Energy shows no evidence of concern about oil and gas production. Although oil and gas account for about 70% of our energy consumption, there has been no mention of either on the DOE homepage for months. DOE does express a strong interest in “energy justice.” Perhaps they can explain how increased imports and higher energy prices benefit the poor. They should also explain how oil imports are environmentally and economically superior to domestic oil and gas production, when the reality is exactly the opposite.

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EIA data

October production rebounded to 1.744 million BOPD from the 2021 low of 1.064 million BOPD in September (Hurricane Ida). November and December production should exceed 1.8 million BOPD.

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As we enter 2022, BOE salutes the outstanding Minerals Management Service (MMS) professionals who retired from the successor bureaus in 2021:

  • Elsie Baker – Bureau of Safety and Environmental Enforcement (BSEE)
  • Alton Bates – BSEE
  • Roy Bongiovanni – BSEE
  • Jane Carlson – BSEE
  • Kim Coffman – Bureau of Ocean Energy Management (BOEM)
  • Mark Eckl – BSEE
  • Darryl Francois – BOEM
  • Vanessa Grable – BSEE
  • Lars Herbst – BSEE
  • Bob Martinson – BOEM
  • Mike Prendergast – BSEE
  • Robert Ranney, – BSEE
  • Julie Reynolds – BOEM
  • Jane Roberts – BOEM
  • Dennis Thurston – BOEM
  • George Triebsch – Dept. of the Interior
  • Elverlene Williams – BOEM

With very few exceptions, the career staff in the US offshore program are highly competent and dedicated to their safety, environmental, and resource management missions. I have also found this to be true for the professionals occupying similar positions elsewhere in the offshore world. Cultures, legislation, policies, and practices differ, but the objectives and commitment are similar.

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