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Vol. 15, No. 51 Week of December 19, 2010
Providing coverage of Alaska and northern Canada's oil and gas industry

Checking out the plan

BOEMRE asks for public comments on Shell’s oil spill contingency arrangements

Alan Bailey

Petroleum News

The Bureau of Ocean Management, Regulation and Enforcement has issued a notice requesting public comments on Shell’s oil discharge prevention and contingency plan for the company’s planned exploration drilling in the Beaufort Sea during the 2011 open water season. The agency wants comments both on the contingency plan and on some associated information by Dec. 23.

Oil spill concerns

In the fallout from the Deepwater Horizon disaster in the Gulf of Mexico, any activity with a potential for causing an oil spill in the waters of the U.S. outer continental shelf has become a cause for angst among federal regulators, with the U.S. Department of the Interior halting drilling in the deepwater Gulf of Mexico for several months and suspending the issue of drilling permits for the Arctic OCS.

In early October Shell, seeking clarity over Interior’s future policy for the Arctic, submitted an application to BOEMRE to drill a single well in the company’s Beaufort Sea Sivulliq prospect, on the west side of Camden Bay, east of Prudhoe Bay. Shell has subsequently submitted a revised Beaufort Sea exploration plan to BOEMRE in association with the drilling permit application. BOEMRE is conducting a supplementary environmental assessment for the revised exploration plan.

Presumably BOEMRE is reviewing Shell’s spill prevention and contingency plan in association with the revised exploration plan and application to drill — under federal regulations an operator of an oil drilling facility on the outer continental shelf must have an Interior-approved contingency plan before drilling can commence.

Low risk

Although some people have expressed concern about the possibility of an oil spill in remote Arctic waters, especially given this year’s events offshore the Mississippi Delta, Shell has consistently argued that its planned Arctic drilling poses much less risk than drilling into high-pressure oil reservoirs in the 5,000-foot water depths of the deepwater Gulf.

And in parallel with its oil spill contingency plan, Shell has responded to a notice that Interior issued in June, requiring an exploration plan to be supplemented by an assessment of any well blowout scenario that might occur, and requiring a description of how the well operator would respond to the blowout. Shell’s response to Interior is confidential, but the company has published an executive summary of that response, outlining some of the characteristic of the Sivulliq drilling site, describing measures that the company will take to prevent a blowout occurring, and summarizing some of the features of its oil spill response arrangements.

The executive summary says that water depths average 102 feet at the Sivulliq prospect and that the crest of the drilling target lies about 4,900 feet subsea. Thanks to two wells, the Hammerhead No. 1 and Hammerhead No. 2, drilled into the prospect in the 1980s, Shell knows that the prospect contains oil with high viscosity and a relatively low reservoir pressure. Shell says that its computer model indicates a likely worst-case initial flow rate of 860 barrels per day from an out-of-control Sivulliq well, given the characteristics of the known oil pool. The flow rate would decline from that initial rate as the oil continued to escape, the company says.

By comparison, the federal government has estimated that as much as 53,000 to 62,000 bpd of oil may have flowed from the Gulf of Mexico Macondo well over a period of several months.

BOEMRE model

A BOEMRE worst-case oil discharge model has predicted an initial oil flow rate of 1,194 barrels per day for a Sivulliq well, according to a BOEMRE briefing sheet.

“The (reservoir) sandstones are geologically young and poorly consolidated and therefore offer high permeability, which usually promotes high flow rates,” the briefing sheet says. “However, the high density of the oil creates a high back-pressure that opposes inflow at the bottom of the well. The Hammerhead crude oil is naturally viscous because light hydrocarbons have been preferentially consumed by bacteria, leaving a tarry residue.”

In its executive summary Shell says that its spill response contingency arrangements assume a worst-case discharge rate of 5,500 bpd, the State of Alaska’s planning standard for oil spill response. And oil spill response vessels and equipment specified to support Shell’s plan would accompany the drillship, able to swing into action, containing and recovering oil within an hour or less, the executive summary says.

In an information sheet, Shell says that its on-site response equipment would have a recovery capacity of about 12,000 bpd, with a 500,000-barrel tanker ready to be on-site within four hours to store recovered oil.

Additional steps

And in its executive summary Shell spells out some of the steps that it will take to prevent an incident that might require the use of the spill response fleet. Those steps include meticulous well design, a fully trained drilling team, the use of equipment to detect gas kicks, the monitoring of drilling progress by experts at remote locations, and the installation of multiple barriers and valves in the well, including redundant valves in the blowout preventer.

In addition, following lessons learned from the Deepwater Horizon disaster, Shell says that it will increase the frequency of blowout preventer tests; install an extra set of blind shear rams in the blowout preventer; position a remote-operated vehicle on the seafloor for emergency operation of the blowout preventer; have diver capability and a second remote-operating vehicle on a support vessel; have a second drilling vessel available, as a backup for relief-well drilling; and have available an oil containment and collection system for placing over the wellhead if necessary.

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Shell to eliminate mud discharge in Beaufort

Along with an application to drill a single well in its Beaufort Sea Sivulliq prospect in the 2011 open water season, Shell has submitted a revised Beaufort Sea exploration plan to the Bureau of Ocean Energy Management and Regulation. The revised plan is for the most part a carbon copy of Shell’s plan approved for the 2010 drilling season by the U.S. Minerals Management Service, the precursor agency to BOEMRE. But the plan does contain a significant new feature: a proposal by Shell to collect waste such as drilling cuttings and sanitary waste, and to transfer this waste out of the Arctic rather than discharge it into the sea.

Shell says that it plans to deploy a barge, towed into position by a tug, to collect drilling cuttings coated with drilling mud, for hauling out of the region, while other waste streams such as sanitary waste and bilge water would be held on the drillship or other support vessels, also for out-of-region disposal “in accordance with all applicable laws and regulations.” Shell spokesman Curtis Smith has told Petroleum News that the waste would probably be transferred to an appropriate disposal site on the U.S. West Coast.

Shell says that it does anticipate discharging some waste streams into the sea, in accordance with a National Pollutant Discharge Elimination System general permit. Those streams will include some well cuttings from operations involving the use of just seawater and viscous sweeps, and other harmless materials such as uncontaminated seawater.

The planned drilling operation will use non-toxic, water-based drilling mud that Shell had previously proposed discharging into the ocean along with all drilling cuttings, a practice that is normally allowed for exploration drilling.

BOEMRE is conducting a supplemental environmental assessment for Shell’s exploration plan, with public comments suggesting any new issues or information that may require consideration due by Dec. 22. As in Shell’s 2010 plan, the revised exploration plan includes provision to drill up \to two wells, although at this stage Shell has only indicated an intent to drill one of those wells.

—Alan Bailey