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Archive for the ‘drilling’ Category

Last year, there were reports that a level 3 geomagnetic solar storm rendered GPS signals unreliable and caused the brief suspension of at least one drilling operation in Canada (tweet below).

This weekend’s solar storms were level 5, the highest category (see chart below), but there have been no public reports to date of suspended drilling operations.

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According to rig locator data, the DrillMAX is moored in Bay Bulls, Newfoundland in preparation for transit to the site of Exxon’s high potential exploratory well in the Orphan Basin.

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The Valaris DS-17 drillship is now on location to drill the Algerich-1 well for Equinor 315 km from Mar del Plata in 1527 m of water at Block CAN 100.

Concurrently, at the opposite end of the Pan American continents, the Stena DrillMAX is closing in on Exxon’s Orphan Basin location offshore Newfoundland to drill another high potential well.

Meanwhile, the US Atlantic is “wind-only,” despite high deepwater oil and gas potential. The late Paul Post, an esteemed colleague and the leading expert on the petroleum geology of the US Atlantic, believed the deepwater US Atlantic could contain >20 billion BOE. No other Pan American nation has completely closed its Atlantic margin to oil and gas exploration.

Can a nation with a debt of $35 trillion afford to ignore oil and gas resources that will remain in high demand for decades?

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The DrillMAX is en route from Guyana to drill the Persephone wildcat well 500 km NE of Newfoundland in the highly prospective Orphan basin (3000 m water depth). This looks like the farthest from shore any well has been drilled in the Atlantic. The late spring date is prudent.This is definitely a well to watch because of the resource potential and difficult operating conditions.

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I had the pleasure of working with Jason Mathews when he was a young MMS engineer. He truly cared about our safety mission and has taken that commitment to the next level at BSEE. Jason shared this important, heartfelt message on the anniversary of the Macondo blowout.

One of the greatest gifts I ever received in life is having a little girl and having the opportunity to go home every evening and spending time with her at cheer, softball, doing homework, etc. I have a great deal of respect for the men and women who work offshore and put their lives on hold for 14-28 days to deliver much needed OCS production to meet US demand. Undoubtedly, they are better / tougher people than me.

Over the last year, my team has seen multiple incidents that had a high potential severity that could have led to a fatal / serious injury or major incident in the GOM. Although we can sit and debate the causal factors for hours, one that jumps to the top of the discussion is the Human Factor – Complacency. Of all the things a leader should fear, complacency heads the list. There is no doubt success breeds complacency, and complacency breeds failure.

To this day, I am still shook by the mindset and complacency of many onboard the Deepwater Horizon prior to the incident. During testimony in the public hearings, John Guide, the BP well team leader for the Horizon, believed that the rig crew had become “too comfortable” because of its good track record for drilling difficult wells. Ross Skidmore, a BP contractor on the rig on April 20, testified that the crew became complacent after completing drilling because “when you get to that point, everybody goes to the mindset that weʹre through, this job is done.”  To me, the complacency on the Deepwater Horizon could be attributable to the crew not having access to all of the well data (OptiCem reports – cement job risk) available to BP personnel onshore and the well site leaders on the rig. Our investigation concluded, the overall complacency of the Deepwater Horizon crew was a possible contributing cause of the kick detection failure.

As regulators, we have special roles in the GOM as it relates to safety:

  • Driving the avoidance of complacency and risk-free mindsets of the offshore employees
  • Understanding we can’t be selfish – Our success is not our individual personal growth / gains, but it is being unwavering in your promotion of offshore safety to ensure all offshore employees return home to their families safely
  • Holding each other (internally) and industry (externally) accountable when necessary

In order to achieve greatness offshore, we ,as a regulator,  have to believe we can, and never sit still until we achieve it. 

Everyone on this email has a very critical function and role. Never underestimate the value of what you do, have the proper mindset, and avoid complacency.

Do whatever it takes to ensure the people offshore are gifted the same gift we receive every day – going home to our families.

All In –

Jason P. Mathews, Petroleum Engineer, Field Operations – OSM

Friday Night LIghts: Coach Mathews and his daughter

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The active rig count in the GoM in 2001 was 148 (AL-4, LA-119, TX-25), which is >8 times the current Baker Hughes rig count of 18. The 2001 rig count was not a one year blip; the number of rigs active in the GoM exceeded 100 for the ten year period from 1994-2003.

While the current rig count is anemic by comparison, the capabilities of the fleet are anything but. Below is a list derived from drilling contractor status reports of deepwater rigs now operating in the Gulf.

All of these rigs are dynamically positioned and are capable of drilling in 12,000′ of water. They have dual derricks and 15,000 psi rated BOP rams (one has a 20,000 psi stack, and another can be upgraded to 20,000 psi). The annular preventers are rated at 10,000 psi. All have impressive storage and hook load capacities, the latest tubular handling equipment, advanced control systems, and efficient power generation.

Note that most of the rigs fly the flag of the Marshall Islands. This “flag of convenience” registration is preferred for reasons related to taxation and operational freedom. For the record, the fact that the Deepwater Horizon was registered in the Marshall Islands had little to do with the Macondo blowout. The DWH was subject to all Coast Guard and MMS regulations under the OCS Lands Act.

The main cause of the Macondo blowout was the poorly planned and executed well suspension operation. Certain equipment capability, maintenance, and employee training issues were contributing factors. However, with that said, the Marshall Islands report on the blowout candidly acknowledges that “the complexity of and interdependence between the drilling and marine systems and personnel suggests a need for increased communication and coordination between the flag State and coastal State drilling regulators.” Hopefully, that coordination is being achieved and the risks associated with the fragmented regulation of mobile drilling units are being effectively managed.

ContractorRigOperatorEst. end dateFlag
TransoceanDeepwater TitanChevron3/2028Marshall Islands
TransoceanDeepwater AtlasBeacon4/2025Marshall Islands
TransoceanDeepwater PoseidonShell4/2028Marshall Islands
TransoceanDeepwater PontusShell10/2027Marshall Islands
TransoceanDeepwater ConquerorChevron3/2025Marshall Islands
TransoceanDeepwater ProteusShell5/2026Marshall Islands
TransoceanDeepwater ThalassaShell2/2026Marshall Islands
TransoceanDeepwater AsgardHess4/2024Marshall Islands
StenaEvolutionShell4/2029Marshall Islands
NobleStanley Lafosse???11/2024Liberia
NobleValiantLLOG2/2025Marshall Islands
NobleGlobetrotter IShell5/2024Liberia
NobleGlobetrotter IIShell5/2024Liberia
ValarisDS-18Chevron8/2025Marshall Islands
ValarisDS-16Oxy6/2026Marshall Islands
Diamond Offshore BlackHawkOxy10/2024Marshall Islands
Diamond OffshoreBlackHornetbp3/2027Marshall Islands
Diamond OffshoreBlackLionbp9/2026Marshall Islands

Short video about the Stena Evolution, the newest entry to the Gulf of Mexico fleet:

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Swimming upstream against the Federal policy current, Gulf of Mexico drilling is demonstrating impressive forward progress. Baker Hughes reports 22 active GoM rigs on 3/15/2024, an increase of 3 from the previous week.

Glancing at the charts, this appears to be the highest GoM rig count since Nov. 2019, and is double the recent low of 11 in 2022.

It’s unclear whether Baker Hughes is including the CCS drilling operation offshore Texas. If so, the actual oil and gas rig count is 21 rather than 22.

Baker Hughes also reports 1 active rig offshore California (decommissioning?) and 1 active rig offshore Alaska (Endicott or Northstar?)

Per Baker Hughes, no rigs are currently active offshore Canada.

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Given the intermittency, space preemption, aesthetic, and wildlife issues associated with wind and solar power, more attention has been shifting to geothermal energy. Quaise’s plan to tap ultradeep heat resources has been on our radar for several years and has been attracting private funding and a bit of media buzz.

Quaise is exciting not only because of the unlimited energy potential, but because of the fascinating gyrotron technology that vaporizes hard rock and could enable wells to be drilled to depths of 20-30 km and temperatures of >1000° C. Nabors, a leading drilling contractor, is one of the Quaise investors, and will be involved with the test drilling.

Demonstrating the gyrotron technology in the field is a big step up from doing so in the lab. Those of us in the “peanut gallery” are awaiting more definitive information on the lab tests that have been conducted to date and the important field tests, which are scheduled for this year.

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A Fortune article about Autry Stephens, Endeavor Energy Resources CEO, pegs him as the world’s richest oilman following the sale of his company to Diamondback Energy. His story reinforces many of the success messages previously discussed on BOE:

  • Humble beginnings: As the son of peanut-and-melon farmers, his work ethic was no doubt established at a young age.
  • Diverse experience starting with entry level positions: He “wore nearly every hat in the oil industry, from trucker to driller to engineer.”
  • Private land: Stephens started buying Texas Permian rights early in his career.
  • Technology leader: His company embraced the horizontal drilling and advanced well stimulation practices critical to Permian success.
  • Contrarian who stuck with his plan: When major oil companies left for more lucrative opportunities overseas, he continued adding Permian leases acquiring a total of 344,000 acres.
  • Low debt: His insistence on using cash to acquire drilling rights helped him survive the 2008 financial crisis, which crushed oil demand and bankrupted some US operators.
  • Lean organization: He focused on maintaining a lean staff and efficient operations, which no doubt facilitated effective communication and instilled common values.
  • Take care of your employees: He insisted that none of Endeavor’s 1200 employees be let go after the merger with Diamondback.
  • Support the community: Served Midland and merged with the company that was located right across the street.
  • Former Federal employee 😉: Not known as a key to success, but I’ll take it 😀. (Stephens once worked for the Army Corps of Engineers.)

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Background:

  • Last summer, Trident Energy exercised multiple options for the use of the Island Innovator semi-submersible (pictured above), extending the duration of the Equatorial Guinea contract to approximately 230 days.
  • The rig arrived in Equatorial Guinea in Nov. 2023.
  • On 7 Feb, a Trident team briefed Equatorial Guinea Minister of Mines and Hydrocarbons Antonio Oburu Ondo about problems with the Innovator’s BOP system. Apparently, Island Drilling, the rig owner, was not present at that meeting.
  • Mr. Ondo subsequently reported that the BOP had serious problems and failed to respond to control system commands.
  • Trident terminated the rig contract on safety grounds.
  • Island has publicly responded that (1) the Trident statements are inaccurate, (2) there have been no critical safety incidents, (3) the BOP has been checked and tested by the OEM representative on the rig and declared safe and ready for operations, and (4) they will challenge the contract termination.

Questions & comments:

  • Since the rig had just arrived on location, the BOP issues were presumably identified during onboard stump testing. Were corrective measures discussed? Why was contract termination deemed necessary?
  • Island’s statement indicates that the rig was tested with the OEM representative present. Presumably those tests were in accordance with API S53 or the ISO equivalent.
  • Had inspections and maintenance also been conducted in accordance with the standard? Did Trident inspect the rig and review maintenance and testing records before signing the contract?
  • Have other companies had similar issues with the Innovator? None have been identified in my web search.
  • Was a bridging document in place to address differences in Trident/Island management systems? If so, what does that document say about BOP inspection and oversight.
  • Why was the drilling contractor not present at the meeting with the Equatorial Guinea authorities? Was Island advised that the contract was being terminated prior to that meeting? Did the authorities speak with Island to hear their side of the story?
  • Does the contract provide for mandatory arbitration in the event of such disagreements?
  • Could other factors have influenced the cancellation decision? I was involved with an arbitration case involving an operator that used safety issues as the reason for terminating an expensive long-term rig contract. The arbitration panel ruled in favor of the drilling contractor resulting in a very large payment to the rig owner. Ironically, serious safety violations by the operating company (but not the drilling contractor) were identified during the arbitration process.
  • Island Drilling is a Norwegian Company with an experienced management team. The Innovator has conducted operations in the Norwegian and UK offshore sectors. These factors typically imply a strong commitment to safe operations.

Hopefully, we’ll be able to learn more about the specifics of this dispute in the near future.

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