Based on drilling contractor rig activity reports, the table below lists 19 deepwater MODUs under or soon to begin contracts in the GoM. (Further details are pasted at the end of this post.) Per the Valeris report, platform rigs are operating on bp’s Thunder Horse and Mad Dog platforms. Per the BSEE borehole file, Arena and Cantium continue to drill development wells on the GoM shelf.
“BSEE will continue to evaluate the process for issuing decommissioning orders and will continue to issue decommissioning orders to jointly and severally liable parties on a case-by-case basis.“
Although the news release for BSEE’s final decommissioning rule asserts that the regulations “provide the certainty requested by industry,” that does not seem to be the case. The main change in the final rule was to delete the reverse chronological order (RCO) provision which called for issuing decommissioning orders to the most recent predecessor first. Instead, BSEE may continue to issue decommissioning orders arbitrarily.
While deleting the RCO provision may be advantageous for the regulator, and in some cases for the public, claiming that the decision provides certainty for industry is quite a stretch. BSEE may continue to issue a decommissioning order to anyone in the ownership chain, whether the company was a recent lessee or one that had owned the lease decades ago. Original or early lessees may be held liable for decommissioning old facilities regardless of subsequent damage, modifications, or neglected maintenance.
The absence of a defined procedure for issuing decommissioning orders may also expose BSEE to new legal challenges, particularly in cases where a company has not held the lease for decades. A 1988 letter from the Director of the Minerals Management Service to Amoco (attached below) explicitly relieves the assignor (predecessor) of decommissioning liability after the lease has been assigned. A revised bonding rule published on May 22, 1997 reversed that policy, but decommissioning liability for leases assigned prior to the 1997 rule may still be very much in question.
Another concern is the split jurisdiction for decommissioning between BSEE and BOEM. The financial, land management, operational, and environmental aspects of decommissioning are inextricably intertwined and attempts to divide these responsibilities between two bureaus with separate regulations is a prescription for gaps, overlap, inconsistency, inefficiency, disputes, and confusion. Decommissioning should be regulated holistically, not with separate “BOEM-only” and “BSEE-only” regulations.
Finally, wind facility decommissioning may prove to be even more challenging given the higher facility density and economic uncertainties. The regulatory regime needs to be clearly established early in the development phase.
Sharing this touching tribute to the 11 men who died on the Deepwater Horizon on April 20, 2010. These American heroes gave their lives exploring for energy to power our economy. The video is introduced by singer Trace Atkins, a former Gulf of Mexico rig worker. Please take a moment to watch.
Prior to the installation of these platforms, the last deepwater platform addition was Shell’s Appomattox in 2018. That gap in deepwater platform installations was the longest since Bullwinkle was installed in 1988.
The 5 new structures will increase the deepwater platform count by 9% from 56 to 61, and in the next few years should account for approximately 1/4 of GoM oil production.
This picture was posted by MaritmePhoto. The”Blue Marlin” heavy lift vessel is arriving in Texas (2005) with the massive semisubmersible production platform “Thunder Horse” on board.
Above (from BOE archives): Pre-commissioning inspection of Thunder Horse
Thunder Horse has a most interesting history. The project was initially named Crazy Horse, but the name was changed out of respect for concerns raised by the Lakota nation. The massive structure is 136 m in length and 113 m in width, and is located in 6300′ of water in the Mississippi Canyon area of the Gulf of Mexico.
Many of you no doubt remember the near disaster during Hurricane Dennis (2005) when the platform was being commissioned. In light of the extensive pre-production hype for the “world’s largest production platform,” this was a costly and embarrassing incident for BP and the OCS program.
Findings indicate that failures associated with the hydraulic control system and its isolation on evacuation led to the partial opening of multiple hydraulically actuated valves in the ballast and bilge systems of the vessel. This allowed ballast water migration to take place, causing the initial listing (to approximately 16 degrees) of the vessel shortly after the hydraulic system was isolated.
The findings also indicate that ballast water migrated into manned spaces in the lower hull, via faulty and improperly installed check valves in the integrated ballast/bilge piping system. As the degree of list increased beyond the 16 degree mark, downflooding of seawater occurred, initially through overboard discharge lines and/or vents, and possibly later through the deck box as it entered the water. Since the PDQ was already listing at a 16 degree angle prior to the passage of Hurricane Dennis, wave action associated with the passage of the hurricane may also have contributed to the downflooding of seawater.
Although not an initiating event, failed Multiple Cable Transits (MCTs) and two unintended openings in the bulkheads allowed water transfer between watertight compartments, which led to extensive flooding and water damage in the lower hull.
Fortunately, there were no injuries. Repairs were made and production was finally initiated in June 2008.
The authors conclude that inventory emissions of CO2 (as reported to BOEM) “are generally consistent with observations from our aircraft survey, suggesting that combustion is well represented in the federal inventory.“
However, that is not the case for methane (CH4) emissions which are underestimated by the Federal inventories. As summarized in the chart below, deepwater facility methane emissions are consistent with the reported inventories, but shelf emissions in State and Federal waters differ significantly.
Comments:
As previously discussed, the lower CI for deepwater production is entirely consistent with expectations. When the most modern 5% (57) of GoM platforms are producing 93% of the oil and 76% of the gas, their CI should be impressive (which indeed it is).
As summarized using ONRR data, more gas-well gas was vented from 2015-2021 than was flared, which is not what you want from a GHG standpoint. Gas wells are predominantly at shallow water facilities, many of which are not equipped with flare booms.
Oil-well gas, most of which is produced at deepwater platforms, is flared rather than vented by a ratio of approximately 4 to 1.
One bad actor may have been a major contributor to the shelf methane emissions observed during the study’s observational flights. That company entered into bankruptcy proceedings. Presumably those issues have been resolved and more rigorous monitoring and enforcement practices have been implemented. I’ll be looking at the 2022 ONRR flaring and venting data for evidence of such improvement. The remainder of the 2022 data should be available in May.
The subject study’s only observational measurements were in August 2020. Followup airborne measurements would be helpful.
The study only considered production emissions. Shelf facilities are primarily natural gas producers and would thus have a lower relative CI when consumed.
Deepwater (>1000′) activity continues to dominate, accounting for 61% of the well starts.
Not a single company drilled both shelf and deepwater wells.
While shelf facilities currently account for only about 7% of GoM oil production, 1122 of the 1179 remaining platforms are on the shelf and they account for 24% of GoM gas production, most of which is environmentally favorable nonassociated gas.
Two companies, Arena and Cantium, accounted for 75% of the shelf well starts. Excluding the CCS bids, Arena and Cantium were the most active shelf bidders in Sale 279. Arena bid alone on 7 blocks. Cantium was the high bidder on 5 blocks. (Focus Exploration was high bidder on 4 shelf blocks and was “outbid” by Exxon for High Island 177.)
One company, Shell, accounted for 39% of the deepwater well starts
One of BP’s exploratory wells (drilled subsequent to Sale 257) was in Green Canyon 821, immediately south of GC 777, the block that BP/Talos bid $1.8 million for in Sale 257. That bid was rejected by BOEM. In sale 259, BP was the sole bidder for GC 777, and their bid was only $583,000, less than 1/3 of their Sale 257 bid. Perhaps the GC 821 exploratory well reduced the value of GC 777? Will this lower bid now be accepted?
DW expl
DW dev
shelf expl
shelf dev
Anadarko
5
1
Arena
22
BOE
1
4
BP
2
3
Byron
2
Cantium
20
Chevron
3
Contango
2
Cox
2
Eni
2
5
EnVen
5
Greyhound
2
Hess
2
Kosmos
1
LLOG
3
1
Murphy
4
QuarterNorth
2
Shell
25
9
Talos
2
8
Walter
1
Woodside
3
1
Gulf of Mexico well starts during 2022 and the first quarter of 2023
Cheryl Anderson took oil spill data analysis to a level worthy of a world class offshore program. In my opinion, Cheryl was the top analyst in the history of the OCS program, a true Hall of Famer. Regardless of the politics of the day, she always stuck to the facts and resisted “spin,” and that was a trait her colleagues greatly admired.
Cheryl retired at the end of 2010 and her final update, with assistance from 2 other OCS program icons, Melinda Mayes and Bob LaBelle, was published in June 2012. That update is attached.
ITOPF also deserves mention for their comprehensive tanker spill data. A recent chart is pasted below. ITOPF’s data are nicely presented on their website. No such data are available for international offshore production.
Bud's Offshore Energy (BOE) 