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December 2011

Vol. 16, No. 52 Week of December 25, 2011

‘Flawed decisions’ cited in Gulf blowout

Latest report on Deepwater Horizon disaster details causes, makes safety recommendations; BP, Cameron reach $250M settlement

Wesley Loy

For Petroleum News

Multiple “flawed decisions,” including an ill-advised procedure to displace drilling mud with seawater, led to the disastrous blowout at BP’s Macondo exploratory well, says a major new report.

“Neither industry nor U.S. regulators appear to have foreseen the risks of a Macondo-scale event,” the 134-page report concludes.

A 15-member expert panel put together the report, titled “Macondo Well-Deepwater Horizon Blowout: Lessons for Improving Offshore Drilling Safety.”

The panel was convened by the National Academy of Engineering, operating through the National Research Council, in response to a request from the interior secretary.

The report is among numerous regulatory, corporate and other inquiries into the April 20, 2010, blowout, which killed 11 workers on Transocean’s Deepwater Horizon drilling rig and unleashed a nearly three-month spill that sent almost 5 million barrels of oil into the Gulf of Mexico.

Previously released reports came from the U.S. Coast Guard’s Marine Board of Investigation and the presidential National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

The NAE-NRC report is of significant interest to Alaska’s drilling regulators, who wanted to see it prior to possibly developing new state regulations in reaction to Deepwater Horizon.

Release of the report coincides with the Dec. 16 announcement of a $250 million settlement between BP and Cameron, which manufactured the Deepwater Horizon’s blowout preventer. The device, positioned on the seafloor at the Macondo well about 50 miles off the coast of Louisiana, failed to prevent the blowout.

No blame assigned

The 15-member committee that produced the NAE-NRC report has expertise in geophysics, petroleum engineering, marine systems, accident investigations, safety systems, risk analysis, human factors and organizational behavior.

The report features several findings as to how the blowout and rig fire happened, and a set of safety recommendations for the industry and regulators.

The committee had access to recovered items such as drill pipe and the blowout preventer. The panel also visited the Wild Well Control school in Houston, and Shell provided access to the Deepwater Nautilus, sister ship to the sunken Deepwater Horizon.

“The report does not attempt to assign responsibility for the incident to specific individuals or corporations, nor does it attempt to make a systematic assessment of the extent to which the parties involved complied with applicable regulations,” the NAE-NRC report says. Such matters, it says, were “deemed to be appropriately addressed” in the Coast Guard report.

Findings and recommendations

The report notes the Macondo well presented “little margin for safe drilling” because the reservoir pore pressure (the pressure exerted by water or hydrocarbons in the pore space of rock) was close to the fracture pressure of the formation.

Rig crews use drilling mud to control subsurface pressure and prevent unintended hydrocarbon flow into the wellbore.

The committee made several factual findings, based on the evidence. Among the findings:

• The flow of hydrocarbons that led to the blowout began when the heavy drilling mud was displaced with lighter seawater as part of operations to temporarily abandon the well for later oil and gas production. The abandonment also involved installing a production casing from the seafloor to the bottom of the well and cementing the casing in place.

• Proceeding with the mud displacement was a “questionable decision,” given that multiple tests had failed to clearly establish whether the well cement job was good.

• The reservoir formation, with multiple zones of varying pore pressure and fracture gradients, posed a casing and cementing challenge. “The approach chosen for well completion failed to provide adequate margins of safety and led to multiple potential failure mechanisms,” the report says.

• The loss of well control was missed for more than 50 minutes after hydrocarbon flow from the formation started. The blowout preventer failed to sever the drill pipe and seal the hole, and the emergency disconnect system failed to separate the Deepwater Horizon from the well.

• The blowout preventer “was neither designed nor tested for the dynamic conditions that most likely existed at the time that attempts were made to recapture well control.”

• Once well control was lost, gas rushed onto the rig and, due to low winds and “questionable venting selection,” ignition was “all but inevitable.”

• The corporations involved demonstrated a “lack of a strong safety culture,” which was “evident in the multiple flawed decisions that led to the blowout.”

The report makes numerous safety recommendations. One is that tests of cemented flow barriers “should be subject to independent, near-real-time review by a competent authority.” Also, blowout preventers should be redesigned, and “instrumentation and expert system decision aids should be used to provide timely warning of loss of well control to drillers on the rig.”

Relevance to Alaska

The Alaska Oil and Gas Conservation Commission, which regulates drilling, was looking forward to the NAE-NRC report.

After the disaster, the three-member commission began an inquiry on whether changes are needed to state regulations with respect to offshore and ultra-extended reach wells.

The commission held a public hearing on Sept. 15-16, and resolved to leave the record open and possibly resume the hearing following the release of the NAE-NRC report.

“It’s a very authoritative and respected report,” Commissioner John Norman told Petroleum News on Dec. 21.

The record will now stay open another month, and commissioners will meet again if requested, he said. Afterward, the commission will begin internal deliberations on possible regulation changes.

Generally, the commission so far has found that its regulations, if properly followed, would prevent an incident such as Deepwater Horizon, Norman said. Also, he noted that conditions are different in Alaska in that drillers operate in relatively shallow waters.

One regulation change the commission is likely to make is requiring companies to file plans, when applying for permits to drill, on how they would respond to blowouts, Norman said.

BP, Cameron settle

BP and Houston-based Cameron on Dec. 16 announced a settlement under which Cameron will pay BP $250 million. BP said it will apply the money to the trust it has established to pay claims arising from the disaster.

“Today’s settlement allows BP and Cameron to put our legal issues behind us and move forward to improve safety in the drilling industry,” Bob Dudley, BP chief executive, said in a press release. “Cameron is the fourth company to settle with BP and contribute to economic and environmental restoration efforts in the Gulf. Unfortunately, other companies persist in refusing to accept responsibility for their roles in the accident and for contributing to restoration efforts.”

Cameron, once known as Cameron Iron Works, invented the blowout preventer in 1922, the NAE-NRC report says.

Cameron said its insurers were expected to fund at least $170 million of the BP settlement.

Det Norske Veritas, which examined the Deepwater Horizon blowout preventer, found that because the drill pipe had buckled and was off center, the device’s shear rams failed to close completely and seal the well.






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