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Well, well. In early March, Cuba will commence with deep water drilling under contract with Repsol and Statoil ASA, using an older rig that was recently rehabbed by the Chinese. Reports indicate that it has fewer safety features than the BP’s infamous Deepwater Horizon. The site is located a scant sixty miles southeast of Key West, Florida. Benzinga.com

There are some  errors and unsupported opinions in this article, so I would take the March spud date with a grain of salt.  As confirmed by Rigzone, the Saipem Scarabeo 9 is a new rig, not a rebuild. It was built in China and commissioned in Singapore. The inflammatory comment about the rig having fewer safety features than the Deepwater Horizon is also without substance. Everything about the Scarabeo 9 appears to be state-of-the-art.

While a projected 2011 spud date has been reported and appears likely, Cuba’s deepwater drilling program has been marked by repeated delays. BOE has seen no confirmation that the rig has arrived or is en route to Cuba. We would appreciate any updates that others might be able to provide.

The updated Norwegian health, safety, and environmental regulations, effective 1 January 2011, are now available online. This includes applicable regulations that other Norwegian authorities (in addition to PSA) oversee.

Associated Press story forwarded by Cheryl Anderson:

In the two years since the frenzy of activity began in the vast underground rock formation known as the Marcellus Shale, Pennsylvania has been the only state allowing waterways to serve as the primary disposal place for the huge amounts of wastewater produced by a drilling technique called hydraulic fracturing, or fracking.

State regulators, initially caught flat-footed, tightened the rules this year for any new water treatment plants but allowed any existing operations to continue discharging water into rivers.

Pennsylvania shale gas producers seem to be getting the message, but the industry is once again in a reactive mode. Where was the leadership during the critical first two years?  Why were new regulations needed to address the obvious?

Records verifying industry claims of a major dropoff in wastewater discharges to rivers will not be available until midwinter, but John Hanger, secretary of Pennsylvania’s Department of Environmental Protection, said he believed that the amount of drilling wastewater being recycled is now about 70 percent — an achievement he credits to tighter state regulation pushing the industry to change its ways.

“The new rules, so far, appear to be working,” he said. “If our rules were not changed … we would have all of it being dumped in the environment, because it is the lowest cost option,” Hanger said.

That last sentence must be painful reading for industry’s true safety and environmental leaders. The Marcellus Coalition, and the rest of us, need to remember this message:

We’re all in this together. We’re all only as good as whoever had a mistake this morning.

Anchorage Daily News:

The federal Environmental Appeals Board, which is part of the EPA, reviewed the permits. It found last week that the analysis of the impact of nitrogen dioxide emissions from the ships on Alaska Native communities was too limited, and remanded the permits so that problems cited by the board could be fixed by the agency.

The closest proposed drill site is 60 miles off shore and about 80 miles from Wainwright, an Inupiat Eskimo village 710 miles northwest of Anchorage.

The folks at WordPress.com sent us a blog health report and it looks like we are doing surprisingly well:

Healthy blog!

The Blog-Health-o-Meter™ reads Wow!

WordPress.com added:

The Louvre Museum has 8.5 million visitors per year. This blog was viewed about 71,000 times in 2010. If it were an exhibit at The Louvre Museum, it would take 3 days for that many people to see it.

In 2010, there were 470 new posts, not bad for the first year! There were 412 pictures uploaded, taking up a total of 97mb. That’s about 1 pictures per day.

We did okay for an obscure blog that accepts no sponsorships, advertisements, or donations, and focuses on niche safety and regulatory issues.  Thanks for your support.

Among the many BOE contributors, special thanks go to Odd Finnestad, Colin Leach, and Malcolm Sharples. These internationally recognized experts have voluntarily provided suggestions, data, and and informed analyses. It’s a pleasure working with them and the others who have contributed, some of whom prefer to remain anonymous.

Over the past year, I have heard from many dedicated energy professionals and safety leaders.  Because of their commitment and enthusiasm, I am optimistic that we will resolve our issues and move forward in a manner that benefits the offshore industry and society.

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