Analysis Deepwater drilling

Analysis: Deepwater drilling in deep trouble

The Deepwater Horizon disaster has implications for the wider oil and gas industry.

When an explosion ripped through BP's Deepwater Horizon rig, nearly 70km off the coast of Louisiana on 20 April, it not only cost 11 workers their lives and created an environmental disaster of unheralded proportions, it also sent shockwaves through the oil and gas industry.

As time goes by the repercussions are still reverberating around the industry, with projects closing, workers losing their jobs and industry leaders facing legal action. The true impacts are unknown, but one thing is for sure: the industry will never be the same again.

When the rig sank two days after the explosion it left oil gushing from ruptured pipes. The Blow-Out Preventer (BOP) that was supposed to seal the well in the event of an incident like this failed to operate, leaving an estimated 5,000 barrels of oil a day gushing into the Gulf of Mexico.

The BOP contains mechanisms designed to shut off the flow of oil and gas, either on command or automatically, when required or when a wellhead is damaged or experiences a blow-out. Investigators are trying to find out why the BOP atop the Deepwater Horizon well failed to activate as designed.

The surface operation moved on with well-practised ease as the tried and tested combination of controlled oil burns, spraying chemical dispersants, and protective booms did their work. But it was below the ocean waves that the troubles were mounting. As BP chief executive Tony Hayward was grilled by the press in his daily briefings about the work to stem the flow of oil, there was a common theme running through his answers: this has never been tried at this depth before; we are stretching the boundaries of our knowledge.

The Deepwater Horizon well sits in 1,500m of water. Although the procedures that were attempted to cap the well had worked in shallow waters they have never been tried at this level. Effort after effort succumbed to the testing and demanding conditions, and the industry was left with the overwhelming sense that it was quite literally out of its depth.

Containment attempts

First engineers vainly attempted to manipulate the BOP using remotely operated vehicles (ROVs); then engineers constructed a 100t steel and concrete coffer dam to stop the spill. The attempt was rendered useless after ice-like crystals built up inside the structure, making it too buoyant and clogging it up.

Next BP turned to its 'Top Kill' option - an attempt to plug the broken pipe with a 'junk shot' of golf balls, bits of tyres and mud and cement. This fared little better than the coffer dam.

Next, ROVs returned to action in an attempt to stop the leak by inserting a 15cm-wide tube with a rubber stopper into the faulty pipe. This had minimal success, capturing about a fifth of the oil from this smaller flow.

Finally, in early June, engineers managed to put a cap on the well, with chimneys diverting captured oil to the surface. At the time of writing, the improvised solution appears to be capturing a large portion - although not all - of the oil.

While these short-term efforts to plug the leaks were underway, two relief wells were being drilled. These are the only truly long-term solution, but it is a long process and it will be late summer before they can be completed.

So the litany of deep sea failure appears to be clear, but what of the fall-out? In the US President Barack Obama has suspended deep-sea drilling while he awaits a report on the incident, and in the UK the new government has increased the requirements for inspection.

'The events unfolding in the Gulf of Mexico are devastating and will be enduring,' said Energy Secretary Chris Huhne. 'What we are seeing will transform the regulation of deep-water drilling worldwide.

'The Deepwater Horizon gives us pause for thought and, given the beginning of exploration in deeper waters west of Shetland, there is every reason to increase our vigilance. Initial steps are already under way, including plans to double the number of annual environmental inspections by DECC to drilling rigs and the launch of a new industry group to look at the UK's ability to prevent and respond to oil spills.'

In the US the recommendations in a 30-Day Safety Report that the Minerals Management Service (MMS) sent President Obama include: a recertification of all BOPs for floating drilling operations; stronger well control practices, blow-out prevention and intervention procedures; tougher inspections for deepwater drilling operations; and expanded safety and training programmes for rig workers.

'As we marshal every resource in support of the massive response effort for the BP oil spill, we must take appropriate action to prevent such a disaster in the future,' said US Secretary of the Interior, Ken Salazar. 'We are taking a cautious approach to offshore oil and gas development as we strengthen safety and oversight of offshore oil and gas operations.'

The Department of the Interior's initial safety report recommends a number of specific measures that can be taken in the short and longer terms to enhance the safety of offshore oil and gas activities. The report focuses on the two primary failures in the drilling process that may have led to the BP disaster: the loss of well control, and the failure of the BOP mechanism.

First, all BOP equipment used on all floating drilling rigs are to be re-inspected and receive independent recertification to ensure that the devices will operate as originally designed and that any modifications or upgrades conducted after delivery have not compromised the design or operation of the BOP.

Then, well control design, construction and flow intervention mechanisms and procedures are being strengthened to include expert review and verification - as well as mechanical and physical flow barriers in the drill casings and BOP equipment - to prevent blow-outs. Tougher requirements will improve the installation and cementing of drill casings in the well bore to increase safety.

Drilling ban

The fact remains, the drilling ban is now in place. All new leases have been cancelled and ongoing operations have been ordered to suspend drilling at the first safe opportunity.

'Evidently there will be a major impact on the subsea industry in the Gulf of Mexico as a result of the halt on deepwater drilling that will have a ripple effect across the whole sector in that region,' comments Alistair Birnie, chief executive of industry body Subsea UK. 'It is impossible to quantify at this stage what the impact will be, but we can expect it to be significant and lasting.

'Those drilling and constructing in deep water are at the frontier, pioneering new technology and ways of working to extract reserves that secure our energy supply. Despite ground-breaking and proven technology operated by the most highly skilled people, the risks are real and ever-present, as demonstrated by this truly awful and tragic incident. While our industry is adept at identifying and managing those risks, the depths at which we are now exploring make it much harder to react effectively when things do go wrong.

'It is clear that the industry's drive for new technology to make deepwater drilling safer and to protect the environment must and will continue. We have to improve our understanding of the safety and technical issues and deal effectively with them within a properly regulated and applied common safety framework.

'As a result of this incident, there is a clamour for learning but there are also opportunities for technology companies who can identify, develop and implement preventions and solutions. It's in our interest as an industry to do as much as we can to prevent this ever happening again.'

There will undoubtedly be opportunities on the horizon, but for now the industry is feeling the hurt. Already major projects are being shut down and future work cancelled, and the future looks bleak for tens of thousands of workers who rely on the deepwater oil and gas sector for their livelihoods.

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