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Posts Tagged ‘Talos’

Last month (12/2021), BSEE finally posted the 2020 incident statistics. Unfortunately, no details or incident summaries are provided for the 6 fatalities. The fatalities are simply classified as “occupational” (4) or “non-occupational” (2). As a result, we still know very little about these fatal incidents 13 – 24 months after they occurred.

The BSEE spreadsheet advises that 3 of the 4 “non-occupational” fatalities are being investigated, but the reports are still “pending.” Why the long delay? The National Commission, BOEMRE-CG, and NAE investigations of the Macondo tragedy were completed (and reports published) in less time.

No explanation is provided as to why the 4th occupational fatality is not being investigated.

Also, investigations of the preparedness and response aspects of the 2 non-occupational fatalities would have been beneficial. What was the cause of death? What medical screening procedures were in place? What treatment capabilities were available at the facility? How much time was required to transport the workers to hospitals? These are important considerations for the offshore community.

Below is a summary of the publicly available information for the 6 fatalities:

  • 1/14/2020: A worker died on a Diamond drillship on a lease (Mississippi Canyon 822) operated by BP. According to BSEE this was a non-occupational fatality. Per the listing of investigations, no investigation was conducted.
  • 5/16/2020: A worker died on a Fieldwood platform (Ewing Bank 826 A). Per BSEE, this was an occupational fatality and the investigation is still pending. There were no media reports or company announcements.
  • 6/2/2020: A worker died on the Valaris DS-18 drillship working for EnVen Energy at Green Canyon 767. Per BSEE, this was a non-occupational fatality and no investigation was conducted.
  • 6/20/2020: A worker died on at the Green Canyon 18 A platform operated by Talos. Per BSEE, this was an occupational fatality but no investigation is indicated for this incident. No media reports or company announcements could be found.
  • 8/23/2020: A worker died on the Pacific Khamsin drillship working for Total at Garden Banks 1003. A month later, at an Investors’ Day presentation, Total announced that the incident occurred while the crew was preparing to move the rig to avoid Tropical Storm Laura. Total’s statement included this defensive statement: “This is a routine operation that was executed with no time pressure as the rig disconnection had been decided well in advance.” Per Total, the findings of their investigation were shared with the regulators in Sept. 2020, but BSEE advises that their investigation is still pending.
  • 12/2/2020: A worker died on DCOR’s Platform Gilda in the Santa Barbara Channel offshore California. The BSEE investigations update provides no information on the status of the investigation. Per local media, 3 men fell from the platform and others jumped into the water to assist. No information is provided on the reason why the 3 men fell.

The number of US OCS fatalities remains unacceptably high, and timely data sharing and investigations are needed to better assess causes and trends. In that regard, this recommendation from the 2016 National Academies report entitled “Strengthening the Safety Culture of the Offshore Oil and Gas Industry” merits further industry/government attention and action:

Recommendation 4.2.2: Because accident, incident, and inspection data all are needed to identify and understand safety risks and corrective actions, the committee recommends full transparency such that regulators make all these data readily available to the public in a timely way, taking into consideration applicable confidentiality requirements.

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Mexico Map

As I understand it:

  1. The Zama field, with estimated reserves of ~700 million barrels, has a common reservoir that underlies Talos Block 7 and a contiguous Pemex block.
  2. Talos drilled the discovery well and 3 delineation wells. Pemex has not drilled a well.
  3. The companies were unable to concur on the terms of a unit agreement.
  4. A third party study for the purpose of initial tract participation, determined that Pemex has a 50.4% share of the reserves. Talos has criticized this study. A previous study had determined that the Talos group has 59.6% of the reserves.
  5. On July 2, 2021, the Mexican Ministry of Energy (SENER) selected Pemex as operator. Talos is disputing that decision.

Thoughts:

  • One of the few energy policy mistakes that the US has not made is the formation of a national oil company. There have been attempts, most notably the 1975 Senate proposal to establish the Federal Oil and Gas Corporation or FOGCO. (I’m not making this up!).
  • When Mexico’s national oil company is one of the competitors, SENER shouldn’t be determining the unit operator. Instead, an arbitration or independent review process should be established.
  • Pemex appears to have been largely a Zama field passenger to date. The discovery well and all delineation wells were drilled by Talos. If the “rule of capture” applied, Talos would be proceeding with development and Pemex would be negotiating with very little leverage.
  • If Mexico wants to discourage foreign investment in their offshore sector, this is a good way to do it.

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Divers identify broken pipeline as source of Gulf oil spill
satellite image provided by Maxar Techologies shows Port Fourchon and slicks on 9/2/2021
  • 12″ pipeline displaced by Ida
  • Approximately 2 miles south of Port Fourchon which took a direct hit from Ida. (Appears that the pipeline is in Louisiana State waters).
  • Water depth = 34′
  • Talos funding spill response, although the company said it was not their pipeline
  • Leak has slowed significantly; apparently production is not entering the line and the spill is limited to pipeline inventory
  • This type of incident is not surprising given the magnitude and track of Ida and the pipeline infrastructure that was exposed to major hurricane conditions

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the Mexican government’s recent decision to anoint Pemex operator of the billion barrel Zama field would seem to merit further scrutiny. Houston-based Talos Energy discovered the Zama field in 2017. The field underlies both Pemex and Zama acreage, and there are common reservoirs. Per Bloomberg:

Mexico’s energy ministry has designated Petroleos Mexicanos as the operator of the country’s largest oil discovery by private companies, in the latest sign of the government’s nationalist approach to the energy industry.

Talos said it was “very disappointed” with the decision and will explore “legal and strategic options” regarding Zama. The company added that the energy ministry had informed Talos of its “sudden” decision only three days after the driller received a letter directly from Pemex arguing for operatorship.

Bloomberg, 7/5/2021

The Mexican government’s decision is indicative of the Lopez Obrador administration’s commitment to rolling back the reforms that had encouraged private sector participation in Mexican offshore exploration and development.

Questions had already been raised about Pemex’s ability to fund Zama development and operate the field safely. This week’s deadly incident and a July pipeline fire add to those concerns. In light of the background political and financial issues, will it be possible to for Pemex and the Mexican regulators to conduct a fully independent investigation of the tragic fire that just occurred?

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