Archive for the ‘Offshore Energy – General’ Category

15 years ago the Minerals Management Service pushed hard for better offshore medevac capabilities. Harlan King, the father of an offshore worker whose injuries were exacerbated by the delayed medical response, was the main impetus behind this effort. The industry responded favorably and Mr. King, BP, and Petroleum Helicopters Inc received Offshore Leadership Awards in 2009 for their initiatives. This 2009 article describes PHI’s dedicated medevac capabilities at the time.

The number of “non-occupational” fatalities (at least 6) at US OCS facilities in 2021 suggests that medical care and evacuation capabilities are once again a concern. BSEE is therefore applauded for their medical evacuation assessment initiative. Their recent presentation is attached.

BSEE’s presentation describes 6 more “non-operational” fatalities in 2022, and raises concerns about CPR training deficiencies, evacuation challenges posed by stairways, and the absence of medics at some facilities. BSEE’s findings (pages 14-21 of the presentation) are eye-opening and merit the attention of all operators, contractors, and others interested in offshore facility safety.

While historical data on health-related OCS fatalities are not readily available, 12 such fatalities over the past 2 years seems high relative to past experience, particularly given that the total number of hours worked has declined by more than 50% since 2011. As suggested in our 2 February post, further investigation into this disturbing trend is warranted. Given the sensitivity of the topic, it would seem best for the Coast Guard and BSEE, with appropriate medical assistance, to conduct this review.

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Comments on the major offshore provisions:

  • The bill neither repeals nor amends the massive land withdrawals by Presidents Obama, Trump, and Biden that have fenced the OCS program into portions of the central and western Gulf of Mexico. Worse yet, the bill tacitly endorses those withdrawals by specifically stating that they are not affected in any way (Sec. 20114).
  • Sec. 20107 mandates that at least 2 lease sales be held annually in the GoM. The certainty would provide some incremental benefit, but is unlikely to stem the decline in GoM reserves. We are becoming increasingly dependent on the 4% of our OCS that may be leased, about 3/4 of which is not prospective or has limited production potential.
  • The bill also mandates at least 2 sales per year offshore Alaska. What will be offered given that most Alaska areas are off limits? We have seen how little interest there is in the Cook Inlet.
  • Sec. 20601 lowers the revenue to the US Treasury and increases the revenue to Gulf producing states. This would garner further support from those states, but will have little effect on production.
  • Sec. 20106 requires DOI to publish information and report to Congress on the processing of drilling permits. However, delayed drilling permit approvals do not seem to be a significant issue on the OCS.

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Remembering the 123 offshore workers who lost their lives on this day in 1980 🙏

Photo: Norwegian Petroleum Museum

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The OCS Orders were the foundation for the current operating regulations in the US and many states and other countries. They were logically organized, easily updated, and published for public comment prior to being finalized.

I have an email message indicating that the first OCS Order No. 1 (Identification of Wells, Platforms, and Structures) was signed on 1/31/1957 and the first OCS Order No. 2 (Drilling) dates back to 2/3/1958! (If anyone has access to the actual documents, please let me know.) The orders were developed much further in the 1970s and 1980s.

Contents of the 1/1980 Atlantic Orders:

  • OCS Order No. 1: Identification of Wells, Platforms, Structures, Mobile Drilling Units, and Subsea Objects
  • OCS Order No. 2: Drilling Operations
  • OCS Order No. 3: Plugging and Abandonment of Wells
  • OCS Order No. 4: Determination of Well Producibility
  • OCS Order No. 5: Production Safety Systems
  • OCS Order No. 6: Well Completions and Workover Operations
  • OCS Order No. 7: Pollution Prevention and Control
  • OCS Order No. 8: Platforms and Structures
  • OCS Order No. 9: Oil and Gas Pipelines
  • OCS Order No. 10 (reserved)
  • OCS Order No. 11: Oil and Gas Production Rates, Prevention of Waste, and Protection of Correlative Rights
  • OCS Order No. 12: Public Inspection of Records
  • OCS Order No. 13: Production Measurement and Commingling

You can view the full set of 1977 Gulf of Mexico OCS Orders here

There has been much discussion, particularly since the 1988 Piper Alpha tragedy, regarding the optimal approach to offshore safety regulation be it prescription, goal setting, safety cases, management systems, or some combination, and how to best influence facility, company, and industry safety culture.

My personal view is that the quality and type of regulations are not nearly as important as the people implementing them. My take:

  • Good regulators are more important than good regulations and are the key to a successful regulatory program. 
  • Regulators must understand and be committed to their organization’s mission and the strategy for achieving that mission. 
  • While they should have a good understanding of the activities that they regulate, their focus is on challenging operators, not directing them. 
  • Regulators should audit operator activities and carefully review incident and performance data.  They should identify problems and concerns, but should not direct solutions. 
  • Safety leaders should be applauded and poor performers should be penalized. 
  • The quality of regulators is more important than the quantity. 
  • Internal and external communication and collaboration are critical to their success.
  • Management should ensure that regulators are able to focus on their mission and that organizational distractions are minimized.  

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Last week, my colleague Keith Meekins attended a presentation by petroleum geologist Samuel Epstein. Like the late Paul Post, a leading expert on the petroleum geology of the Atlantic OCS, Epstein believes the US Atlantic has major resource potential. Per Epstein:

Untested ultra-deep potential hydrocarbon resources are located in the BOEM play area 8, termed the BCT Structural Belt Jurassic-Cretaceous Interior Shelf. Thus, significantly more risked recoverable reserves, due to 1) Two salt ridges penetrating Middle Jurassic age sediments identified in seismic records located to the north of the Schlee Dome, analogous to the ultra-deep salt related Norphlet Formation, offshore Gulf of Mexico and the onshore East Texas, Pearsall Field and 2) stratigraphic plays including below a 60 m thick and 7500 km square evaporitic feature in Early Jurassic rocks flanking the Schlee Dome.

Looking more broadly at Atlantic resource potential, Paul Post had estimated that the US Atlantic could contain 21.4 billion BOE with the major caveat that the presence of a working petroleum system was required and that could only be determined through drilling. Per Paul:

The US Atlantic stands out. It has not been explored in paleo deep- and  ultra-deepwater using exploration concepts proven successful in similar settings.

Paul Post slide

Also, see “Opportunity Lost

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Relax; just kidding about the California part (or am I? 😉).

BOE’s Mexican correspondent, Andrew Konczvald, took pictures of what looks like a deepwater drillship parked near the beautiful Pacific coast resort town of Manzanillo. Upon further review, our crack investigators determined that the rig is the Hidden Gem, a deepsea mining vessel, owned by The Metals Company (TMC). Last year, TMC conducted a pilot nodule collection program in the Clarion Clipperton Zone between Hawaii and Mexico.

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The terms for congressionally mandated Gulf of Mexico Sale 261 have been proposed. As is also the case for Sale 259, the royalty for leases in <200 m or water is 50% higher than for prior sales. This is partly because of the royalty floor (16 2/3%) established in the Inflation Reduction Act, and partly because the Dept. of the Interior opted for the highest royalty allowed (18 3/4%). The royalty for shelf leases is thus the same as for deepwater leases with much greater production potential.

Rental terms for leases in <200 meters of water are higher and more punitive (for delayed development) than for previous sales and for deepwater leases.

Minimum bid requirements are unchanged from sales 256 and 257, and are higher for deepwater leases ($25/acre for <400m and $100/acre for >400m).

Bottom line: While the terms for deepwater leases are unchanged from Sales 256 and 257, that is far from the case for shelf leases where royalty rates were increased by 50% and rentals were increased by 43% for all lease years.

SaleDate% royalty
year 1-5/6/7/8+ rentals
($/acre, <200m)
year 8+ rentals for
leases in 400m+ ($/acre)

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Of the 1.7 billion acres of Federal land on the US Outer Continental Shelf, only about 73 million acres in the Gulf of Mexico and 1 million acres in the Cook Inlet may be offered for oil and gas leasing. Official or de facto exclusions prohibit leasing in the entire US Atlantic, the entire US Pacific, all Alaska areas except the Cook Inlet, and most of the Eastern Gulf of Mexico. No other coastal nation has restricted access to oil and gas resources to this extent.

As demonstrated in recent sales, many of the tracts being offered have little or no production potential. Only 308 tracts (1.7 million acres) received bids in GoM Sale 257. 94 of the high bids were for sequestration purposes and were arguably invalid. Sale 258 in the Cook Inlet only received a single bid.

The number of active leases, currently 2153, has been at a historically low level for the past 2 years. Only 0.7% of our OCS is leased and thus open to exploration. 26% (552) of these leases are already producing, leaving a historically low number of nonproducing leases.

Oil is where you find it, not where you wish it was or want it to be. Denying access to all but a small portion of the OCS limits exploration strategies and prevents publicly owned resources from supporting our economy in the manner intended by the OCS Lands Act.

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Per yesterday’s post, below are US OCS fatality data from a 2014 presentation. Ten year intervals were selected for 1975-2004. The longer 1953-1974 era was selected so the activity indicators (well starts and production) would be comparable with the next 3 intervals. The last interval (2005-2013) was limited because the presentation was prepared in 2014.

Fire/explosion fatalities exceeded fall/struck fatalities only in the first interval (1953-1974). As one would expect, the fire/explosion deaths were associated with a limited number of better known incidents (e.g. Main Pass 41, Bay Marchand, Macondo). While the overall trend is favorable, fall/struck incidents and helicopter fatalities at offshore platforms have proven to be more chronic.

I hope to update these data in the not too distant future.




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The most common causes of offshore fatalities and serious injuries, falls and being struck by equipment, receive little media attention because there is no blowout, oil spill, or fire. However, these are often the most difficult types of incidents to understand and prevent. Human and organizational factors predominate, and prevention is dependent on a strong culture that emphasizes worker engagement, awareness, teamwork and mutual support, effective training and employee development, risk assessment at the job, facility, company, and industry levels, stop-work authority, innovation, and continuous improvement.

This new BSEE Safety Alert addresses such a fatal incident on the Pacific Khamsin drilling rig, and makes recommendations that have widespread applicability.

Incident summary:

While unlatching the lower Marine Riser Package from the Blowout Preventor in preparation for ship relocation, a crewmember was lifted into the air after being struck by a hydraulic torque wrench (HTW), hitting a riser clamp approximately six feet above the elevated work deck before falling to the rig floor. The crew member was given first aid and transported to the drillship’s hospital, where he was later pronounced deceased.

In an upcoming post, BOE will provide historical fatality data by cause and operations category.

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