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Posts Tagged ‘Montara’

Interesting comments from Jane Cutler, CEO of Australia’s National Offshore Safety Petroleum Safety Authority, in NOPSA’s excellent newsletter:

The incidents in the Gulf of Mexico (Deepwater Horizon) and at the Montara wellhead platform are different in many respects, particularly in technical matters. However, they share some common factors prompting regulatory action.

I agree entirely with Ms. Cutler.  International regulators and operators must work in concert to address and resolve these issues.

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-The duration of the Montara blowout was 75 Days. Ironically, Day 76 of the Macondo blowout will be the 4th of July.

-Eleven days have elapsed since the Montara Report was presented to Minister Ferguson, who has apparently retained his cabinet position in the new government.  Now that the cabinet has been settled, perhaps there will be more public clamor for the report?

-Cap Summit in DC? – According to Admiral Allen, government and industry experts will convene on Wednesday to decide whether to change the collection cap.  Other designs would provide a better seal and facilitate higher recovery rates via free-standing risers, but the well would flow unabated during the changeover.

-More Macondo irony:  Since the oil spilled is “avoidably lost,” royalties will presumably be due on both the oil spilled and the oil “produced” at Macondo.  However, for fields in water depths greater than 800m, the Deepwater Royalty Relief Act  of 1995 exempts the first 87.5 million barrels of oil equivalent from Federal royalties.  Court interpretations of this poorly written legislation have determined that this relief must be applied on a lease (not field) basis, making the royalty exemption much more generous.  Ironically, Kerr McGee (now part of Macondo partner Anadarko) filed the law suit that resulted in this favorable decision for industry.  MMS, which has been repeatedly (and incorrectly) denounced for being “too cozy with industry,” fought hard for the less generous interpretation.

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Australia dumped its Prime Minister!  See the Upstream report.

Julia Gillard is now Australia’s first female Prime Minister.  Our request to her: Please release the Montara report!

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We know about the Macondo victims, most notably the 11 men who died and their families, but who stand to benefit from the blowout?

  1. OPEC – Will OPEC’s market share grow as the US and others prevent or delay production?
  2. West Africa and Brazil – Better rates and availability for deepwater rigs?
  3. PTTEP (Montara) – Not receiving much attention as BP draws all the flack
  4. Shale gas – Can the huge promise be realized?  Will natural gas gain an increased share of the transportation market?
  5. Alternative Energy – Are these industries ready to step up?
  6. Spill response research – Government and industry oil spill research funding always jumps after major spills.
  7. Nuclear industry – Perhaps, but Macondo may remind people that “the unthinkable” can happen.
  8. Lawyers – The only sure winners.  The litigation spectacular has already begun.

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No Love for Long Strings – The rest of the industry has distanced itself from BP’s casing program, swearing their allegiance to tiebacks.

CEO sails while “small people” suffer – The PR disaster continues for BP.

BP partner seeks annulment – The first shots in the multi-billion dollar BP-Anadarko dispute have been fired.  Look for new liability clauses in operating agreements and regulations.

Who is in charge and accountable? – Macondo, like Montara, was entirely preventable.  Know who is in charge, and make sure they are competent and cautious leaders.  As a friend told me yesterday, the best technology can be undone by human arrogance.

Just ‘Roo It! – Australia’s investigation process works great until it comes to releasing reports.  Varanus Island deja vu?

Storm watch – Another common concern for Montara and Macondo – the onset of hurricane/cyclone season.  We need about six more weeks (preferably more) until the first hurricane evacuations in the Gulf.

Sad irony – The first FPSO production in the Gulf of Mexico is at the Macondo field.

90+% recovery – Promised soon with new well cap and production systems.

Relief? – First relief well is ahead of schedule.  Has a well ever been more anticipated and needed?

Aftermath – While the chance of BP operating Macondo is virtually zero, will PTTEP be allowed to continue operating Montara?

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BP Gas Station

In addition to the obvious irony in this BP gas station’s warning sign, perhaps there is a separate and unintended message in the sign’s last 3 lines – “you are responsible for spills.”  The gasoline that we purchase at the pump does not just arrive there magically.  That gasoline is the end product of a complex exploration, production, transportation, and refining process.  When we consume petroleum products (and other forms of energy), we are tacitly accepting the associated environmental risks.  If we aren’t comfortable with those risks, we should look at our own habits and how they contribute.

BP is responsible for the Macondo spill.  However, our own lifestyle decisions are the reason for the extraordinary demand for the oil that BP and other companies produce.  We can’t blame BP for the intractable sprawl, congestion, and pollution that have resulted from those decisions.

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If the contrast between the Montara and Macondo political responses wasn’t already evident, take a look at today’s events.  While Tony Hayward was being hammered once again at a congressional hearing despite establishing a $20 billion damage payment fund, Australian Resources Minister Martin Ferguson seems to be in no hurry to release the Montara Inquiry Report.  According to Australia Broadcasting, Mr. Ferguson says he has to take into account legal considerations:

So as to ensure that I do not prejudice any potential further investigations which could include criminal offenses, or undermine any natural justice considerations of any individuals.

Say what?  How about preventing future accidents?

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Check out this entertaining Australian TV bit on the Gulf of Mexico spill.

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A BP plan review prepared in mid-April recommended against the full string of casing because it would create “an open annulus to the wellhead” and make the seal assembly at the wellhead the “only barrier” to gas flow if the cement job failed. Despite this and other warnings, BP chose the more risky casing option, apparently because the liner option would have cost $7 to $10 million more and taken longer.

While the circumstances and details differ significantly, Montara (Timor Sea blowout) flashed across my mind repeatedly while reading this informative letter from Chairmen Waxman and Stupak to BP.  Common themes:

  1. Well integrity roulette: high risk well design
  2. Suspect production casing cement job
  3. Only one questionable barrier above the cement
  4. Multiple poor decisions on barriers
  5. Schedule concerns, time and efficiency pressure
  6. Failure to run Cement Bond Log and conduct confirming tests
  7. Mud weight and conditioning issues

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Vancouver, BC, Canada

 

The program for the International Regulators’ Offshore Safety Conference has been updated to include keynote presentations on the Montara and Macondo blowouts, and roundtable sessions that will address the lessons learned and how they should be applied by operators, contractors, and regulators.  The presentations, discussions, and debates are sure to be thought provoking and informative.  If you would like to participate, visit the conference website for more information.

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