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Encouraging and prudent decision:

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) today notified 13 companies whose deepwater drilling activities were suspended by last year’s deepwater drilling moratorium that they may be able to resume those previously-approved activities without the need to submit revised exploration or development plans for supplemental National Environmental Policy Act (NEPA) reviews. Before resuming those activities without additional NEPA review, however, the companies must comply with BOEMRE’s new policies and regulations.

The resumption of operations on suspended wells was the major concern of some operators and had the potential to delay anticipated new production.

Michael de Vos

The cold Dutch winter hasn’t kept BOE friend and sports enthusiast Michael de Vos from conducting his critical safety inspections for the Netherlands State Supervision of Mines.  Michael just finds new and innovative ways to deal with the conditions.

Wall Street Journal on on Gulf delays

The Energy Information Administration, the research arm of the Department of Energy, last month predicted that domestic offshore oil production will fall 13% this year from 2010 due to the moratorium and the slow return to drilling; a year ago, the agency predicted offshore production would rise 6% in 2011. The difference: a loss of about 220,000 barrels of oil a day.

UK moves ahead with deepwater drilling

MPs have ruled out a moratorium on deep water drilling in the North Sea, despite concerns it could lead to a disaster worse than BP’s oil spill in the Gulf of Mexico last year.

Shallow water struggle (Wall Street Journal)

From bad to worse for shelf operations:

“We were on our knees when Macondo hit,” said Jim Noe, senior vice president and general counsel for Hercules.

Almost 10 years ago, Brazil experience its own offshore tragedy when the P-36 floating production facility exploded and sank killing 11 workers (sadly, the same number of lives that were lost on the Deepwater Horizon). Brazil has recovered to become a world leader in deep water production and technology. Ten years from now, will the US still be mired in Macondo litigation, reforms, and access and permitting snarls; or will we once again be a leader in deep water innovation and production?

Malcolm Sharples sent 3 excellent articles which have been translated from Portugese.  Links to the articles and excerpts are posted below:

Subsea Cities

The legend of Atlantis, the Lost City, was widely portrayed in books, drawings and film in the twentieth century. In the real world in the XXI century, Petrobras is preparing to create real cities underwater, which will mark a new phase in the exploration and production of oil at great depths, in the pre-salt. On the seabed, more than 2000 meters under the surface, they will install the major equipment that now operate on the platforms, allowing them to become smaller, lighter and, most importantly, cheaper. The entire system will have a high degree of automation, with part of the operation controlled remotely.

The underwater cities of Petrobras will be inhabited by machines, equipment and giant robots tasked to inspect production systems to extract millions of barrels of oil. Sounds like science fiction, but it is one of the most important aspects of research carried out by Petrobras in partnership with universities and suppliers. “Our goal in ten years is to not depend on platforms,” said Carlos Tadeu Fraga, executive manager of Petrobras Research Center (Cenpes). Whether this is possible, only time will tell. He tells of an ambitious objective which is to put on the seabed in a horizon of ten years, the processing plants, compression systems, separation equipment (oil, gas, water and sand) and even energy generation modules needed to make everything work.

The Offshore Industry’s Silicon Valley

Petrobras Research Center

If California has its Silicon Valley, a region that brings together high-tech companies, Rio moves to create a Pre-Salt Valley or Valley Energy. This hub, which brings together the experts of oil, is under development in the technology park at the Federal University of Rio de Janeiro (UFRJ), in Fundão Island, where Petrobras inaugurated the new building, expanding its research center. There are technologies being studied for electromagnetic characterization of deep reservoirs, nuclear magnetic resonance and special equipment to drill the pre-salt in a safe and fast.

Brazil will be the technological center of oil and gas in the next decade. Petrobras has a contractual obligation with the National Petroleum Agency (ANP) to invest at least 1% of gross revenue of fields to pay in special participation in R & D projects.

3-D Monitoring

Among the developments currently underway are two software systems: Environ, where you can view details of equipment platforms in 3D; and integrated exploration and production system (Siviep), which shows the fields and geological formations below the seabed. And both should have the first versions available for use in July 2011.

Colin Leach has provided a nice overview of the loss of well control scenarios for a deepwater well (Figure 1), and a concise, but comprehensive, summary of the critical elements of a well control program (Figure 2).   Click on either figure to enlarge.

We appreciate Colin’s continued leadership and initiative on well control issues.

Figure 1: Well Control Activities in Deep Water

Figure 2: Activities Focused on Maintaining Primary Well Control

Happy New Year!

Memories of 2010 will not soon be washed away, nor should they be. These memories will help guide us into the future.

Obviously, big challenges lie ahead for the offshore oil and gas sector.  Open and honest communication will be especially critical in 2011. No company or agency can resolve the issues independently, and everyone must be willing to participate.

As always, I’ll celebrate at midnight GMT, and will be fast asleep when the new year officially arrives at BOE World Headquarters :).  Here’s to a successful and fulfilling 2011!

Good article on the oil and gas industry safety institute proposal.

John Hofmeister sure knows how to make headlines. I suspect he may be right on this one.

If we stay on our present course there is no question but that prices will rise to the $5.00 gallon level by 2012 in my opinion. CNN Interview

Conflicting fears will shape the offshore energy policy debate in 2011 – fear of another Macondo vs. fear of soaring oil prices. Industry and government need to make the necessary changes in safety programs and move ahead. We can’t afford to embargo ourselves.

A colleague sent a link to a Marathon Oil Company Macondo presentation that was posted by the Houston Chronicle. The presentation was intended for internal training and discussion purposes.

Firstly, I applaud Marathon for ensuring that the blowout is studied and debated within the company. Hopefully, they did the same thing for Montara, have a good internal system for studying accidents throughout the industry, and thoroughly investigate all of Marathon’s incidents and near misses.

I thought Marathon’s comments about safety culture were particularly interesting, including these on slide 58:

Although harder to define and measure, and even more difficult to regulate, we pointed to our culture as the single most important differentiating attribute when comparing us to BP.

In a recent meeting with an individual who has numerous dealings with BP, he observed that regardless of the purpose of the gathering (planning session to morning rig call), it is almost impossible to determine who is ultimately responsible and accountable for the operation being discussed. Evidence of this exists in the very report this presentation was derived from.
I wonder what convinces Marathon that their safety culture is superior. The above anecdote, while interesting, doesn’t tell us much. Prior to Macondo (and perhaps even after the blowout), I’ll bet most BP employees thought that they had a strong safety culture. Ditto for Transocean. Does Marathon have any better evidence demonstrating the strength of their safety culture? If not, what makes them so confident? Does Marathon have a process for assessing and monitoring the attitude and commitment of their employees? Have they conducted regular internal surveys to gauge safety culture? My sense is that they have not. If they had, they could make their case without the very subjective comparison with BP.

Posted with the approval of the Rig at Sunset Foundation

As a holiday gift to our readers, BOE has obtained exclusive rights to post this picture of the masterpiece “Rig at Sunset,” the world’s most famous and artistically significant painting of an offshore drilling rig.

“Rig at Sunset” was painted 45 years ago by a US Geological Survey (USGS) employee who has chosen to remain anonymous.  Initially, the masterpiece was presented to  USGS (later MMS)  engineers and scientists who had made important contributions to the offshore oil and gas program.   Understandably, the intended recipients were so humbled by the magnificence of the painting that they could not accept it.  As the painting grew in value and international prominence, framed copies were presented to retirees and the original painting was kept at an undisclosed location.

Great museums have an eye for artwork that is bold and unique, and curators soon lined up for an opportunity to exhibit “Rig at Sunset.” The masterpiece has now appeared at the world’s top art museums including the Louvre, the National Gallery, the Tate in London, the Rijksmuseum in Amsterdam, the Norwegian Petroleum Museum in Stavanger, and the Jo Ann Rose Gallery at the Reston Community Center.  While the permanent home of the painting is a well kept secret, it is rumored to be a maximum security facility in historic (and heavenly) Herndon, Virginia, the gateway to Dulles International Airport.

At a later date, BOE will explore the painting’s symbolism and artistic significance, but for now we just want you to appreciate its stunning beauty. Enjoy the holidays!