Bud's Offshore Energy (BOE)

Fortunately, no human life was lost. However, the implications and consequences of the blowout are broad and wide ranging, including for the environment, for the petroleum industry and the Australian system of regulation of offshore petroleum operations – Tom Howe, Counsel for the Inquiry

Firstly, kudos to the Commission for promptly posting the hearings transcript.  Because of a change in schedule, the only speakers were two attorneys for the Inquiry Commission – Tom Howe and Andrew Berger.  A  senior representative of Atlas, the drilling contractor, is scheduled to testify tomorrow.

Observations from Day 1:

1. The Commission appears to have carefully reviewed the submissions and seems to be well prepared for the hearings.
2. From a regulatory perspective, this comment from Mr. Howe was particularly interesting: “The preliminary view of counsel assisting is that in relation to matters of wellhead integrity, a greater level of prescription may be necessary to ensure compliance with the apparently nebulous concept of ‘good oilfield practice’.”  I fully agree with this comment.  No matter what type of regulatory regime is in place, best industry practices should be clearly identified and companies should be legally obligated to conduct their operations in accordance with such practices.
3. Quoting Mr. Berger: “one area of concern to counsel assisting is that PTTEP applied to suspend the H1 well using a … pressure corrosion cap instead of a cement plug as a barrier, this approval appears to have been granted in precisely 30 minutes.”   In a command-and-control type of regulatory regime,  the regulator has to be available and able to make timely decisions.  However, absent compelling justification, deviations from accepted practices should never be made in this manner.
4. There were no surprises with regard to previously reported cementing problems.  However, according to Mr. Howe, both
   PTT and Atlas now accept that the failure to conduct a pressure integrity test after cementing the 9 5/8″ casing was a root cause of the subsequent blowout.
5. I am puzzled by this statement from Mr. Howe: “As we understand it, PTT now accepts that PTT personnel on the West Atlas rig should have been alert to risks associated with cementing of the casing shoe and should have been more forthcoming when assistance was sought about the problem from PTT personnel located on shore.”  Is PTT (PTTEP) management trying to distance itself from the problem, reduce its liability, and pass the buck to the rig crew?  What a surprise! (sarcasm intended)
6. More internal PTT finger pointing with regard to the missing PCC (corrosion cap): “PTT personnel on shore had been told in writing by PTT personnel on the rig that the PCC had been installed.”
7. Good job by the two speakers for the Commission of Inquiry.

Looking forward to hearing the Atlas testimony tomorrow.

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