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As previously posted (July 27, 2010), deep water had little to do with the well integrity problems and other contributing factors leading to the Macondo blowout. The Bly (BP) report further confirms this position.

Of the eight key findings in the Bly report (listed below), only number 4 could be considered to be more of a deepwater issue.  The BOP failures may also have been influenced by deepwater factors.  However, as previously noted, surface BOPs have a much higher failure rate than subsea stacks.

While the Montara blowout was in relatively shallow water, slight variations of findings 1 through 4 were the primary causes of that accident.

BP findings:

  1. The annulus cement barrier did not isolate the hydrocarbons.
  2. The shoe track barriers did not isolate the hydrocarbons.
  3. The negative-pressure test was accepted although well integrity had not been established.
  4. Influx was not recognized until hydrocarbons were in the riser.
  5. Well control response actions failed to regain control of the well.
  6. Diversion to the mud gas separator resulted in gas venting onto the rig.
  7. The fire and gas system did not prevent hydrocarbon ignition.
  8. The BOP emergency mode did not seal the well.

Secretary Salazar, Deputy Secretary Hayes, and BOEMRE Director Bromwich testified at today’s National Commission hearings. Director Bromwich made several important announcements and comments of interest to BOE readers:

  1. He has completed his public meetings and will submit his report to the Secretary by the end of the week, approximately two months ahead of schedule.  Does this point to an early end to the drilling moratorium?
  2. Two significant interim final rules will also be issued by the end of the week.  These rules will address well integrity,  BOP performance, and other issues raised in the 30-day report submitted to the President at the end of May.
  3. New drilling will not be authorized until operators and contractors can demonstrate compliance with the new rules.
  4. BOEMRE resources will be reallocated to assist with the workload associated with the resumption of drilling.

Chairman Reilly expressed concerns about the leasing and regulatory functions reporting to the same Assistant Secretary under the new organizational structure.  He also drew attention to the regulatory regimes in Norway, the UK, and elsewhere, and the importance of studying those programs.

Secretary Salazar’s goal is for the US offshore oil and gas program to serve as the “gold standard” for safe and clean operations around the world.

Monday’s hearings will be broadcast on CSpan 2 beginning at 0900 ET. Admiral Allen will be the first witness and will address decision-making within the Unified Command.  Given the number of high profile witnesses and the limited time allotted to each witness,  in-depth questioning would seem to be unlikely.  Will this be a day of short speeches?

From the Huffington Post:

Oil-producing countries on Thursday rejected a German proposal for a moratorium on deep-water drilling in the Northeast Atlantic that reflected environmental concerns after the BP Gulf of Mexico oil spill.

So Germany, which has essentially no offshore oil and gas production in its sliver of the North Sea, proposed a ban on deepwater drilling at an OSPAR meeting in Bergen, Norway?  Does the word chutzpah come to mind?  The equivalent might be a Norwegian proposal to ban the manufacturer of luxury cars at a meeting in Stuttgart!

The German proposal also called for making sure that offshore operations meet the highest safety standards and demanded an analysis of whether the circumstances that led to the Deepwater Horizon accident could also occur in the Northeast Atlantic.

Now there is some original thinking.  No one has ever suggested that before! (sarcasm intended)  Don’t you think Norway, the UK, Denmark, the Netherlands, and other countries that actually produce oil and gas might be looking into these issues?  I can assure you that they are, but that they are doing so quietly and professionally without the type of “grandstanding” demonstrated by Germany at the OSPAR meeting in Bergen.

Representatives from Germany and other nations with concerns about the safety of offshore oil and gas operations are encouraged to join us in Vancouver next month for serious discussions about the regulatory practices, technology, and management systems that minimize safety risks.

The National Commission has a diverse lineup of “heavy hitters” slated for hearings on 27-28 September. CSpan doesn’t have their schedule posted yet for these dates, but I assume they will be broadcasting the hearings live.

from The Sun

Deepwater drilling may be on hold in US waters, but that is not the case elsewhere.  However, drilling in other parts of the world is not free from political tension and intrigue. Of particular interest is a recent discovery well in 450m of water in the North Falkland Basin. From the Buenos Aires Herald:

As President Cristina Fernández de Kirchner prepares to address the UN General Assembly and renew the Argentine claim on the Malvinas Islands sovereignty, British explorer Rockhopper said its controversial oil discovery offshore the islands could have produced double the amount of oil had a test not been besieged by technical problems.

According to the Sun:

Analysts believe up to 60 BILLION barrels of oil lie in waters off the UK territory.

That estimate would seem to be a considerable stretch (to say the least), but will no doubt complicate the diplomatic challenge facing the UK and Argentina.

Aban Pearl

The Aban Pearl sank off the coast of Venezuela in May.  Shortly after the accident, Venezuela announced that a high-level commission would investigate. However, interested parties, inquiring through official diplomatic channels, have been unable to even confirm that the sinking is being investigated.

Until operators, contractors, and governments agree to conduct accident investigations and release reports in a timely manner, offshore safety objectives cannot be achieved.

Montara Blowout, Timor Sea

I awoke to two very important developments from Australia as reported by Anthea Pitt with Upstream:

  1. According to Energy Minister Martin Ferguson, the Montara Inquiry Report will be publicly released by the end of the year. As BOE readers know, there are important similarities between the Montara and Macondo blowouts, most notably the production casing cementing issues that created a flow path via the shoe track on both wells and the evidence that both disasters would have been prevented if negative flow tests had been properly conducted and interpreted.  Would Macondo have been prevented if BP and Transocean had followed the Montara hearings and made sure that all drilling personnel were aware of the causes of this 74-day blowout in the Timor Sea?
  2. Minister Ferguson also announced that the role of the National Offshore Petroleum Safety Authority (NOPSA) will be expanded:

By expanding Nopsa’s role, one central agency will look out for the safety of our offshore workers and the environment from exploration to decommissioning. That means it will be responsible for approvals and regulation of safety and environment, as well as integrity of facilities and day-to-day operations.

Bravo to Australia and Minister Ferguson! As I indicated in  a submission to the Montara Commission and testimony before the US Senate Committee on Energy and Natural Resources, a single agency must be responsible and accountable for the regulation of offshore oil and gas operations if safety and pollution prevention objectives are to be achieved.

Louisiana Superdome

CBS has caused quite a stir with their short article equating the Macondo spill to 3 beers in the Louisiana Superdome:

“How big was the oil spill in the Gulf? It was equal to pouring three cans of beer into the Superdome.”

Beer in the Superdome?  How could that be possible?  Certainly not during a Saints game! 🙂

I never liked these types of analogies for the following reasons:

  1. They imply that you are trying to downplay the problem.  The Macondo spill was massive, and it is silly to argue otherwise.
  2. The spill affected only a portion of the Gulf, so using the volume of the entire Gulf as a denominator is unrealistic.  If the spill was diluted by the entire Gulf, it wouldn’t have been necessary to disperse it. Is a spill near Cape Cod diluted by the entire Atlantic Ocean?
  3. Once oil is on the beach, in a marsh, or on a bird, it doesn’t matter how big the adjacent body of water is.  The beach or marsh is still soiled, and the bird is still harmed.
  4. People whose livelihoods were affected by the spill aren’t comforted by the fact that most of the Gulf was clean.

Queen Beatrix recognizes Jan de Jong, Inspector General, and the State Supervision of Mines

200 jaar Staatstoezicht op de Mijnen!

A regulatory agency does not survive for 200 years without the respect and support of elected officials and the public. The State Supervision of Mines (SSM) in the Netherlands has earned its outstanding reputation through sustained excellence and innovation.

SSM regulates all aspects of oil and gas exploration, production, and transportation, wind projects, and mining activities.

To learn more about the SSM, I encourage you to view this 200th anniversary video. At about the 6 minute mark, pay particular attention to SSM’s regulatory philosophy which emphasizes risk assessment and effective management systems.  SSM does “not focus on nuts and bolts but on the effectiveness of management systems.”

Congratulations to Jan, Roel, Jos, Michael, and the dedicated professionals of the State Supervision of Mines. Keep going strong through anniversaries 210, 220, and beyond!