Infomania (May 18th, 2012)
Two points: Hafle had access to the Sperry Sun display and could have seen the flow rate and surface pump pressure. Also, everybody seems to assume that the phone clock and the Sperry Sun time stamps are synchronized, but I haven't seen anything to show that this is or is not the case.
At 2052 hours the fluid pumping rates were reduced from 30 bpm to 12 bpm (1,260 gpm to 504 gpm) anticipating the completion of mud displacement and arrival of the water-based spacer at the MODU.
At the same time, the flow rate out slightly increased compared to flow in and surface pump pressure increased rather than decreased. [Snip] Although these events can be interpreted an an indication that the high pressure formation is not isolated, the displacement operation was continued.
Post-incident analysis indicates that by this time oil and gas had entered the wellbore. As the gas migrated upward it expanded.
At 2108 hours the mud pumps were stopped in order to conduct the static sheen test.
The article failed to mention that Hafle has exercised his Fifth Amendment rights and refused to testify. I wouldn't be surprised to see Vidrine do the same if he fails to keep his medical records from the court. All part of the blame game, and as in war, truth is the first casualty.
Infomania (May 18th, 2012)
NOLA.com : Gulf of Mexico oil spill prompts Halliburton to take $300 million charge
Rebecca Mowbray, The Times-Picayune 04/20/2012 7:15 AM
As the settlement between BP and plaintiff attorneys in the oil spill litigation was filed in court Wednesday, Halliburton, the company that performed the cement job on the ill-fated Macondo well, took a $300 million charge on its earnings over the incident.
In its earnings release, Halliburton said "the $300 million Macondo-related charge represents the amount of probable losses related to the incident that can reasonably be estimated at this time, and may be adjusted in the future as new information and developments become known."
In the months leading up to the trial over the April 2010 explosion and sinking of the Deepwater Horizon rig and 87-day oil spill, which was supposed to begin Feb. 27, BP had been unable to settle with Halliburton or Transocean, the rig owner.
As part of the settlement with plaintiff attorneys, BP assigned the rights to its claims against the two companies to the plaintiff attorneys. The move was a strategic one, giving new incentive to plaintiff attorneys to go after the companies, and making it easier for BP to move on from the incident and work with other major oil exploration companies on future endeavors.
The proposed settlement filed Wednesday in federal court in New Orleans contains multiple references to that assignment of rights, suggesting that Transocean and Halliburton could become a more significant target in the litigation than the companies originally expected.
The parties to the case are expected to send their proposals to U.S. District Judge Carl Barbier next week on what form the litigation should take place after the settlement between BP and the plaintiff attorneys, which settles a portion of the case.
BP details supply chain response to oil spill | Official CIPS Magazine – Supply Management
In addition to mobilising a supply chain of emergency goods on an unprecedented scale, the BP supply chain team had to contend with opportunistic suppliers in the aftermath of the Deepwater Horizon oil spill of 2010.
Clint Wood, then a critical resources programme manager, described the manner in which the organisation responded to the disaster to an audience at the Institute for Supply Management’s (ISM) 97th annual conference in Baltimore in the US this week.
Working with various Oil Spill Removal Organisations, the US Coast Guard, National Oceanic and Atmospheric Administration, BP operations and other departments, the supply chain team was among 48,000 people that assisted with the response to the accident in the Gulf of Mexico.
Averting a deep-sea disaster | In-depth | The Engineer
(long article, interesting snippet:Mr.Earl, you have alluded to several ideas in this article)
Shell is working on this as part of an alliance with Nobel Consortium, a drilling contractor, and National Oilwell Varco, a drilling equipment maker. Such automation would be new to subsea operations, Brakel admitted, but this shouldn’t be off-putting; wells are becoming more automated all the time, with drilling now being carried out from a computerised ‘cyber-chair’ (which strongly resembles the captain’s chair from Star Trek) rather than from the manual control board of old. ‘Processes that are highly automated are more efficient and safer,’ he said. The example of the autopilot in passenger aircraft shows that such a degree of automated operation is trusted. ‘Nobody thinks about it,’ Brakel said. ‘The drilling industry can be fully automated as well.’
But even that level of automation needs a back-up. What if the hydraulic rams in the BOP can’t cut through the drill pipe? This can happen when thicker sections of pipe are within the BOP as the drill is lifted out of the well. Brakel’s team at Nordwijk, Shell’s R&D centre near Rotterdam, has devised two further systems to seal off the well while the capping stack is brought from its base. The first is a system that sits above the well, at the first flexible joint in the drilling pipe above the BOP. Consisting of a pair of collars through which the drill pipe passes, this is an explosive system that uses pyrotechnic charges to cut straight through the pipe.
The collars contain a ring of shaped charges embedded in a high-density foam matrix, formed and positioned in two stacks one on top of the other. When triggered simultaneously, their explosive force goes straight into the drill pipe from all directions and cuts it, in milliseconds, without deforming the pipe. This means that the cut section of pipe will then fall back into the well, clearing the BOP so that the rams can close. ‘It will sever any equipment above the BOP when experiencing well control issues,’ Brakel explained.
A further system is part of the casing that lines the drilled hole, sitting inside the oil well itself but above the hydrocarbon-bearing zone. Another explosive device, it contains charges that sit just outside the casing and, when triggered, buckle the lining itself so that it almost entirely blocks the well.
Both of these devices are designed to be triggered by an encrypted acoustic signal, sent from the rig or from a remote location. ‘One advantage of this is that it can be milled out to clear the pipe and bring the well back into operation,’ Brakel said.
All of these measures are designed to mitigate the damage caused by a blowout until the well can be stopped by a mobile capping system. This is a standard part of the oil industry’s armoury against wellhead blowouts; if the BOP fails, then the cap can be taken to the location and lowered onto the well.
The approach described looks like more of a interim measure to maintain the the investment in the current BOP inventory, which is OK given how familiar the crews are with the use of the BOP for other than emergencies.
I wonder if National Oilwell Varco intends to use the team that put together the HiTec system that was on the Deepwater Horizon. It would be hard for my opinion of that work to be any lower.
Ex-BP Engineer Mix Says Evidence May Clear Him in Spill Case- Bloomberg
A former BP Plc (BP/) engineer charged with destroying evidence sought for a U.S probe of the 2010 Gulf of Mexicooil spill said a “third party” is withholding information that could clear him, according to court filings.
Lawyers for Kurt Mix, who worked on internal BP efforts to estimate the amount of oil leaking from the Deepwater Horizon well, said an unidentified third party has refused to allow them to hand over evidence to prosecutors that “eviscerates” the charges against the engineer, according to the filing today in federal court in New Orleans.
The evidence is key to Mix’s defense “and capable of fully exonerating him,” the engineer’s lawyers said in the filing. The lawyers are asking a judge to allow them to disclose the information and to use it at trial if the government proceeds with the case.
The U.S. Justice Department, which began investigating the incident in June 2010 after a fatal explosion ripped through the well and caused the largest offshore oil spill in U.S. history, said in April it was continuing to consider whether to file more criminal charges over the spill. The charges against Mix are likely to be followed by others, U.S. Attorney General Eric Holder said last month.
A federal grand jury had been investigating the spill estimates, Federal Bureau of Investigation Special Agent Barbara O’Donnell said in a sworn statement filed in the Mix case last month.
Mix’s lawyers contend that because the third party hasn’t waived attorney/client privilege over the evidence, they haven’t been able to make it available to prosecutors.
“The government was unaware of this exculpatory information when it chose to indict defendant Mix and it remains unaware of it today,” according to the filing.
Alisa Finelli, a Justice Department spokeswoman, and Ellen Moskowitz, a spokeswoman for London-based BP, said they couldn’t immediately comment on the filing by Mix’s lawyers.
BP agreed in March to pay an estimated $7.8 billion to resolve most private plaintiffs’ claims for economic loss, property damage and spill and cleanup-related injuries. The settlement establishes two separate classes, one for economic loss and the other for physical injuries related to the spill or the cleanup.
A judge is set to decide in November whether to give final approval to the accord. A trial to decide liability for the spill is set for Jan. 14,Louisiana officials said last month.
The blowout and explosion on the Deepwater Horizon drilling rig killed 11 workers and started millions of barrels of crude leaking into the Gulf. The accident prompted hundreds of lawsuits against BP; Transocean Ltd. (RIG), the Vernier, Switzerland- based owner and operator of the rig; and Halliburton Co. (HAL), which provided cementing services.
The case is U.S. v. Mix, 12-cr-00171, U.S. District Court, Eastern District of Louisiana (New Orleans).
Arrested BP Engineer Kurt Mix Responds to Government's Indictment - "Dismiss" - Forbes
On April 24, 2012, just a little over two years after The Deepwater Horizon oil rig exploded in the Gulf of Mexico, an arrest was made of former BP drilling project engineer Kurt Mix. Mix, was not responsible for the explosion, the loss of life associated with the explosion nor the millions of barrels of oil dumped into the Gulf Of Mexico. Mix, who like other engineers from BP, was working countless hours, under pressure to stop the flow of oil that was spewing out at a rate of …. well that’s what everyone is trying to determine. How much oil spilled?
Once the spill was stopped on the 87th day of the disaster (August 4, 2010), the effort of the cadre of engineers switched to calculating how much oil spilled. Such a calculation was important not only to assess the environmental impact (resources and studies needed), but also to determine the amount of fine to be paid by the offending parties (namely BP), who would be paying by the barrel. Under the Clean Water Act, the fine is $1,100 for each barrel of oil spilled but if gross negligence is determined, the federal government can quadruple that amount …. meaning BP could pay a hefty $21 billion fine for the spill.
According to an affidavit by FBI Special Agent Barbara O’Donnell who is investigating the matter of Kurt Mix, “Mix deleted numerous electronic records relating to the Deepwater Horizon disaster response, including records concerning the amount of oil potentially flowing from the well …” From what I understand about the latest techniques of forensic accounting, it’s really hard to delete electronic messages, particularly text messages (plenty of embarrassing examples of those out there). The offending text deleted from his iPhone?
“Too much flow rate – over 15,000 [barrels] and too large an orifice Pumped over 12,800 bbl of mud today plus 5 separate bridging pills. Tired. Going home and getting ready for round three tomorrow.”
What? No mention of the outfit he was wearing, or who he was meeting for drinks, or how trashed he was? No wonder TMZ has completely passed on this story. What the message does say is that the flow of oil from the well was large, over 15,000 barrels per day….IN A TEXT MESSAGE! In other words, it’s a guess at best, unless iPhone text messages offer some sort of measuring device (yet another challenge to those App designers). So what does Mix, through his attorney Joan McPhee, say about the offending text and the alleged deletion? In a motion filed today, McPhee wrote, “Defense counsel have recovered the entire universe of text messages exchanged …… during the relevant time period.” McPhee went as far as to add an attachment detailing many of the “missing” messages between Mix and a Contractor, such as:
Contractor: “hey brother. had lunch yet?” Mix: “No but I am not going to make it”
Mix: “How’s your back this morning?” Contractor: “killin me. hey, do u need some cayenne? and where r u right now?”
No conspiracy here unless you’re looking for a snack or a remedy for back pain. For the novice reader out there, a crime text message would look like this, “Hey dude, did you delete all the important stuff the government was looking for about how much oil was leaking? ’cause I did.” Now that’s some good stuff, but it isn’t to be found in this case. In fact, Ms. McPhee stated in her motion a desire to produce evidence which would exonerate Mix….evidence that exists, evidence that the government may not even be aware exists, but it is protected by attorney-client privilege of someone else involved in the case. Confused? McPhee states that the evidence she has, but can’t really share with the public (open court), establishes that “…Mix had no intent to hide either flow rate or Top Kill (procedure that failed to cap the well) information and that he in fact hid neither.” The trick now is releasing this privileged information to exonerate Mix while at the same time preserving the attorney-client privilege of someone else. Gotta love justice.
Mix left BP back in January 2012. Even if cleared by this revelation of new evidence, if they can get it submitted, I bet his life has been upside down for a while.
(Found this interesting Don Vidrine article in my DWH folder)
Hearing Records Detail Deepwater Horizon Blast - NYTimes.com
Documents Fill In Gaps in Narrative on Oil Rig Blast
LAFAYETTE, La. — In a quiet suburb of this oiltown, there is a spacious brick house with all of the shades drawn. Inside is a graying and pale man who knows as much as anyone about what happened on the Deepwater Horizon drilling rig the day it exploded in the Gulf of Mexico. He is not talking.
“No comment, no comment,” says Donald J. Vidrine, who was one of two “company men,” or well-site leaders for BP, when a surge of gas caused a blowout and fire on April 20, killing 11 men and starting one of the largest oil spills in United States history.
Mr. Vidrine, who was the most experienced and highest-ranking BP manager on the floating oil rig, has been mentioned frequently during hearings into the disaster, along with the name of the other, less-experienced well-site leader, Robert Kaluza.
Together the two men oversaw critical tests in the two days leading up to the explosion, and Mr. Vidrine, who is 62, overcame his apparent doubts about the well’s integrity and made a momentous decision that led to the accident, according to the testimony of others. He gave the order to replace heavy drilling mud in the riser pipe, which leads from the rig to the well’s head, with lighter seawater, a necessary step before capping the well.
That decision made it impossible for the drilling crew to control a surge of natural gas from deep within the well, leading to the blowout. The rig burned and then sank two days later. More details about the events may come to light Wednesday, with the release of BP’s internal investigation into the disaster.
Mr. Vidrine has refused three times to appear at hearings into the disaster held by the Coast Guard and federal regulators, saying he is in ill health.
Mr. Kaluza, 60, who had been on the rig for only a few days, has also declined to appear, citing his Fifth Amendment right to avoid self-incrimination. Both face possible federal criminal charges.
In hearings, witnesses from BP and the various subcontractors involved in the project have painted a picture of Mr. Vidrine as the pivotal figure in the drama preceding the disaster.
The roles of Mr. Vidrine and other managers on the rig are also being scrutinized as the companies involved in the disaster argue over liability.
Worried about an unexplained high-pressure reading in the drill pipe, Mr. Vidrine insisted on a second pressure test to make sure there was not an explosive bubble of gas building up in the well, even though senior members of the drilling team for Transocean, the Swiss company that owns and operated the rig, thought another test was unnecessary, according to the testimony of managers and workers on the rig.
In addition, notes from an interview he gave to BP officials investigating the blowout, obtained by The New York Times, show Mr. Vidrine raised concerns about the possibility of a surge of gas, or a kick, with a superior in Houston before going ahead and replacing the mud in the riser pipe with seawater.
Mr. Vidrine said the superior, Mark Hafle, an engineer, responded, “If there had been a kick in the well, we would have seen it.”
In the end, however, Mr. Vidrine made the call that it was safe to proceed, according to the notes and the testimony of several witnesses. He accepted the explanation provided by members of Transocean’s drill team that the high pressure reading in the drill pipe, of about 1,400 pounds per square inch, was no cause for alarm.
These drillers — chief among them the night-shift toolpusher, Jason Anderson, who died in the ensuing fire — insisted they had seen a similar phenomenon before, calling it “annular compression.”
Engineers say they were referring to cases in which the downward pressure from the heavy drilling fluid, known as mud, between the drill pipe and the walls of the well surrounding it pushes the seawater back up the drill pipe, an effect also known in the oil business as “U-tubing.”
Mr. Vidrine, who has 30 years’ experience working on oil rigs both at sea and on land, told lawyers from BP that he had heard about annular compression “but had not seen it before.”
“The toolpusher and the senior toolpusher told me it was this annular compression thing,” he said, according to the notes, dated April 27. “I wanted to do another test.”
Other witnesses, testifying at the Coast Guard hearing, described Mr. Vidrine as wary when he came on duty on the drill floor that day at 6 p.m. to relieve Mr. Kaluza.
It had been an unusually busy day for the two men because not only were they were preparing to seal the well, but four high-level executives from BP and Transocean had also visited the rig for a tour. Mr. Vidrine had skipped sleep and started work early to help shepherd the V.I.P.’s around the rig.
During the day, Mr. Kaluza and Transocean’s top manager on the rig, Jimmy W. Harrell, had overseen a “negative pressure test” to see if gas was leaking into the well, through its cement-and-pipe-lined walls or around a series of cement plugs.
The test involved replacing the heavy drilling fluid in the drill pipe with seawater down to 8,300 feet to see if the well would start to flow, an indication the well’s walls or plugs might be allowing gas and oil from deep underground to leak in.
Not only did the well flow, Mr. Harrell testified, but the drillers lost at least 23 barrels of drilling fluid during the test. Some drilling experts said that suggested that the well’s concrete casing and plugs were not entirely sound.
“They shouldn’t be losing any mud at all,” said Greg McCormack, an engineer with the Petroleum Extension Service at the University of Texas. “That is an indication that something is wrong somewhere.”
Yet Mr. Harrell testified to the marine board that he still believed the test had gone well. He said that some drilling mud was always lost during such tests, and that the amount lost was too small to signal a leaking well.
“It had a good test the first time, but they wanted to do it again once the company man come on — Don Vidrine,” Mr. Harrell testified on May 27.
Senior members of the drilling crew agreed with Mr. Harrell and theorized that the pressure in the drill pipe was caused not by a surge of gas deep in the well, but by the U-tubing phenomenon.
Others on the rig were skeptical. Wyman Wheeler, who was the day-shift toolpusher, argued with Mr. Kaluza and others about the pressure and then walked off the drill floor in a huff.
“Bob Kaluza and them was saying it was U-tubing and Wyman was convinced that something wasn’t right,” recalled a witness, Christopher Pleasant, the subsea engineer.
Mr. Kaluza, who had little experience inoffshore drilling, also seemed doubtful, witnesses said. He called a stop to all work until Mr. Vidrine came on duty at 6 p.m.
When Mr. Vidrine arrived, he grilled Mr. Kaluza about the first test for about an hour, Mr. Pleasant recalled.
Mr. Vidrine told BP officials that some members of the Transocean team found his questioning of Mr. Kaluza and his worries about drill-pipe pressure odd. “They found it kind of humorous that I talked about it for a long time,” he said, according to the notes.
Still, Mr. Vidrine insisted on a second test that would be done slightly differently, measuring the upward flow in a smaller line running from the wellhead to the rig known as the “kill line.”
According to the notes, Mr. Vidrine’s theory was that if the pressure in the drill pipe was evidence of a surge of gas deep in the well they would see similar pressure in the kill line.
The precise results of the second test remain an open question. No paper record survived, and neither Mr. Vidrine nor Mr. Kaluza has testified. Mr. Harrell said he left the drilling floor and was told by Mr. Vidrine later “they had a good negative test for 30 minutes.” Other witnesses have reported that Mr. Vidrine told them the same thing.
In his comments to BP, Mr. Vidrine said the second test dispelled his doubts. “There was no indication the gas was coming up,” he said, according to the notes, which are not verbatim.
A short while later, Mr. Vidrine gave the order to start displacing all the drilling mud in both the riser pipe and the drill pipe with seawater, one of the final steps before capping the well and moving the rig to a new spot. He left the rig floor to go to his office and do some paperwork.
Ten minutes later, Mr. Anderson, the night-shift toolpusher, called Mr. Vidrine in a panic and said the drilling mud had begun to spew out of the well, according to the notes. This was around 9:30 p.m., according to witnesses.
“I grabbed my hat and started for the floor,” Mr. Vidrine told BP officials, according to the notes. “It must have taken around 30 seconds to get outside. I went through the short hall and upstairs. There was mud and seawater blowing everywhere.”
NOLA.com : Oil, gas regulators get 25% raise to stay with federal office
David Hammer, The Times-Picayune05/16/2012 10:30 PM
The federal government is giving some of its beleaguered oil and gas regulators a raise as it tries to strengthen its four Louisiana field offices and compete with the private sector to recruit 200 more people to review and approve offshore drilling proposals, permits and spill-response plans. Empowered by a congressional spending bill passed in December, the Interior Department's Bureau of Safety and Environmental Enforcement granted 25 percent raises over the base salaries of 102 petroleum engineers, geophysicists and geologists stationed in its New Orleans, Houma, Lafayette and Lake Charles offices.
The new rates took effect April 22 and have been touted by the bureau's director, James Watson, as a key tool for recruiting and retaining employees in competition with private industry.
The employees actually are getting an 11 percent raise over their current salaries because they already had a cost-of-living adjustment equal to a 14 percent over their base pay. For example, a typical senior petroleum engineer or geoscientist making $95,459 before the raise would now make $104,524. Survey data collected by the Society of Petroleum Engineers show that the average private-sector geoscientist made $152,475 in 2011 and the average drilling engineer earned $175,363.
The Bureau of Safety and Environmental Enforcement has hired 28 new engineers since it was reorganized from the old Minerals Management Service following the BP oil spill in April 2010. Five of them were recruited and hired this year after the raise was approved by Congress, the bureau said.
Most of the work of reviewing offshore drilling permits in the Gulf of Mexico is handled by the bureau's engineers, and they've come under heavy fire in the past two years. First, the attention was on the role they played in approving permits and plans for the ill-fated Deepwater Horizon rig. They approved stock spill-response plans, failed to check tests for a piece of safety equipment and took just a few minutes to approve 11th-hour changes in BP's well design and drilling operations. President Barack Obama said the regulatory agency had a "cozy relationship" with the oil industry and ordered its overhaul.
But when that reform came in the form of three new agencies and new leadership, the scientists and engineers were demonized again by Louisiana politicians who blamed them for slow-walking permits for an industry trying to get back to work. The conflict reached a head in September when U.S. Rep. Jeff Landry, R-New Iberia, tried to meet with a bureau official in charge of permits and was turned away from the New Orleans office, then said the agency was akin to the Gestapo, Nazi Germany's secret police.
With morale at an all-time low, even the government's most outspoken critics say more competitive pay is justified. But some question why the raises are also going to the engineers who approved plans and permits for the Deepwater Horizon.
"It's reasonable they should get a raise and it's reasonable that the congressional delegation should back off, but it's also reasonable to have some accountability for the people who are at least partially responsible for the worst environmental disaster in the history of the United States," said Anne Rolfes, director of the Louisiana Bucket Brigade.
The bureau declined to comment on whether any regulators were disciplined as a result of the Deepwater Horizon investigation, although none of the various accident investigations found their decisions had been a direct cause of the rig explosion and oil spill.
NOLA.com : Judge in case of deleted BP oil spill texts recuses herself
05/15/2012 10:15 PM
A day after formerBP engineer Kurt Mix filed documents in federal court that he claims will exonerate him of felony criminal charges of allegedly deleting text messages showing the company was knowingly lowballing the size of the Gulf oil spill, the federal judge hearing the case recused herself.
U.S. District Judge Jane Triche-Milazzo filed a two-sentence order on Tuesday disqualifying herself under two sections of federal law that require a judge to step aside from "any proceeding in which his impartiality might reasonably be questioned" or when the judge meets one of a number of disqualifying circumstances:
Personal bias or prejudice toward a party in the case or personal knowledge of disputed facts in the case.
Served as a lawyer in the case or where a previous lawyer associated with her served as a lawyer in the matter, or the judge or lawyer was a material witness.
While a governmental employee, acted as counsel, adviser or material witness in the case or expressed an opinion about the case.
She or someone else in her household has a financial or other interest in the case that could be affected by its outcome.
She or someone related to her is a party to the case, has acted as a lawyer in the case, or is known to have an interest that could be substantially affected by its outcome.
Is likely to be a material witness in the case.
The brief order does not say which provision applied to Triche-Milazzo.
Triche-Milazzo was appointed to the bench in 2011 by President Barack Obama. In 2008, she was elected a judge of the 23rd Judicial District Court in Napoleonville. Before that, she was in private practice with her father, former Louisiana Rep. Risley "Pappy" Triche.
The Mix criminal case has been reassigned to U.S. District Judge Stanwood Duval Jr., who is also overseeing a variety of lawsuits concerning damages resulting from levee failures during Hurricane Katrina.
FINAL DETAILS FOR GULF OF MEXICO LEASE SALE SCHEDULED FOR JUNE 20th IN NEW ORLEANS
NEW ORLEANS- Today the Obama Administration provided final details for the Central Gulf of Mexico lease sale announced by President Obama in January 2012, as part of his administration's ongoing focus on expanding safe and responsible production of our domestic energy sources. Secretary of the Interior Ken Salazar and Bureau of Ocean Energy Management (BOEM) Director Tommy P. Beaudreau today announced the Final Notice of Sale for a June 20, 2012 lease sale that will make available all unleased areas in the Central Gulf of Mexico Planning Area, offshore Louisiana, Mississippi and Alabama, including 7,276 blocks on about 38.6 million acres.
The sale will take place at the Mercedes-Benz Superdome in New Orleans. BOEM estimates the sale could result in the production of over 1 billion barrels of oil and more than 4 trillion cubic feet of natural gas.
"As part of the Obama administration's all of the above energy strategy, we continue to make millions of acres of federal waters and public lands available for safe and responsible domestic energy exploration and development," said Secretary of the Interior Ken Salazar. "Holding this lease sale is one of the many administrative steps we are taking, at the President's direction, to increase U.S. production, reduce dependence on foreign oil, and incentivize early production on leases that industry holds."
"The Gulf of Mexico is the crown jewel of the U.S. Outer Continental Shelf, and home to a number of world-class producing basins - including many in deepwater areas that are becoming increasingly accessible with new technology," said Bureau of Ocean Energy Management Director Tommy P. Beaudreau. "There have been a number of significant discoveries in the past two years alone, and this sale will continue making significant and promising areas available while encouraging diligent development and providing the taxpayer a fair return."
From a personal standpoint all the private citizen mineral leases i am familiar with on the land side of the business are for $250 a acre with 1/4 royalty instead of $100 @ 1/8. I know the development expenses are much greater offshore, but the payouts on good wells are much greater also.
Energy debate plays out in Louisiana oil town - latimes.com
By Alana Semuels, Los Angeles Times
May 20, 2012, 9:48 p.m.
LAFAYETTE, La. — Visitors to this oil town might be forgiven for wondering whether the BP oil spilland subsequent drilling moratorium ever happened. "Now hiring" signs are plastered on billboards around town, and hotels such as the Crowne Plaza are chock full of seminars training students to work on offshore rigs. Many offshore companies can't find enough workers for the jobs they're listing. This parish has the lowest unemployment rate in Louisiana, 4.8%.
Such is the opportunity on the offshore rigs that Sheila Clark, whose husband, Donald, died in the Deepwater Horizon explosion two years ago, said her 22-year-old son recently asked her how she'd feel if he went to work on a rig.
"I can't stop him," said Clark, who moved to Baton Rouge after her husband's death. "He wants to make a good living for himself."
Those in Lafayette are divided over Obama's record.
"We find there's a lot of rhetoric coming from the politicians – they say they're going to lift the moratorium, and then they don't issue permits," said Keith Mosing, chief executive of Frank's International, which provides tools and workers for offshore rigs. He says 80% of the equipment he makes in Lafayette is going overseas.
But Volker Rathmann, president of Collarini Energy Staffing, which finds workers for offshore rigs, said the demand for such workers had tripled in the last year and a half.
"If you take the rhetoric and politics out of it, I don't think the Obama administration is very far away from what the Republicans are saying," he said. "If you can spell drilling, you can get a job."
Well Blowout Device Upkeep Rules Seen Issued by September - Businessweek
Energy companies in the Gulf of Mexico will need to improve maintenance of blowout preventers and train employees working with the devices designed to stop a runaway well, the U.S. Interior Department said.
The agency is planning to propose a rule by September, and will ask that drillers ensure the units can cut, or shear, the pipe to completely seal a failing well, Deputy Interior Secretary David Hayes said today at a forum in Washington. The rule also will require sensors on the devices to alert companies about mishaps in the deep water, he said.
The Obama administration is considering additional requirements for the $45 million, five-story tall devices after a unit used by BP Plc (BP/) in 2010 was jammed by a portion of a pipe, and failed to prevent the largest U.S. offshore spill. More than 100 people from industry and government were at the forum hosted by the Interior Department.
“Today’s focus on the blowout preventer is our continuing effort to make sure that we are exploring and developing our oil and gas resources in the America’s oceans in a safe and responsible way,” Interior Secretary Ken Salazar told reporters. “This rule will basically set the standards for the world.”
The blowout preventer sits atop the wellhead to regulate the force propelling oil and gas up the pipe. If the device fails to control the fluctuating pressure, a large blade is designed to sever, or shear, the pipe to choke the flow and, like a window blind blocking the light, prevent explosive gases from reaching the rig and crews on the surface.
Elements of the new rule may add costs for energy producers, although it’s worth the investment to avoid future disasters, Mark Denkowski, International Association of Drilling Contractors vice president for accreditation and certification, said in an interview today.
Under already adopted rules, drillers need independent third-party verification that their devices work, and must show evidence of inspections and maintenance. Operators also must maintain safety and environmental programs, and provide management oversight of operations and contractors under the current rules.
The Interior Department also is preparing a safety rule for equipment such as the subsea valves used in oil production, updating the standards adopted two decades ago, James Watson, director of the department’s Bureau of Safety and Environmental Enforcement, told reporters today.
At the forum, Salazar asked the industry whether two sets of blind shear rams are needed to ensure the units don’t fail.
BP added double shear rams on all its Gulf of Mexico operations in the standards adopted by the London-based company before resuming work in the Gulf.
The blind shear rams at BP’s Macondo well in the Gulf failed to complete a seal in April 2010 because they were jammed by a portion of drill pipe knocked out of alignment in the explosion, Oslo-based Det Norske Veritas, a management-risk company, found in a report commissioned by the Interior Department and published last year.
Transocean CFO Misspeaks, it’s NOT Likely Employees Will be Indicted in DWH Disaster
HOUSTON–Transocean Ltd. (RIG, RIGN.VX) said an executive misspoke Tuesday morning when he said that the company expected the U.S. to file more charges against workers of companies involved in the 2010 Deepwater Horizon explosion.
Greg Cauthen, Transocean’s interim chief financial officer, said during an investor presentation that in the wake of public statements by the U.S. Justice Department, the company expects that “ourselves and BP and Halliburton and other employees will be indicted.” But a Transocean spokesman later said Cauthen misspoke and that the company believes it is unlikely individuals at Transocean will be charged.
Last month, the Justice Department brought the first criminal charges in the case against a BP employee.
Halliburton Co. (HAL) couldn’t immediately be reached for comment. BP PLC (BP) declined to comment.
Cauthen said that Transocean was taking the potential charges “very seriously.” Transocean is well prepared to defend itself in court, although it is also open to a fair settlement, Cauthen said.
Transocean owned the Deepwater Horizon rig, which exploded and sank in April 2010 while working for BP in the Gulf of Mexico. The explosion killed 11 men and led to the worst offshore oil spill in U.S. history.
Cauthen also said that Transocean, which has seen its profits squeezed by downtime related to equipment overhauls mandated by regulation that followed the blast, is working to have that downtime accounted for in its contracts with oil producers.
“We are negotiating improved contractual terms,” including tighter liability protections and downtime provisions for the maintenance of blowout preventers, Cauthen said. The company’s case is helped by rising demand for deep-water and ultra-deep-water rigs, Cauthen added.
In April, federal prosecutors charged Kurt Mix of Katy, Texas, with two counts of obstruction of justice for deleting from his iPhone hundreds of text messages about the spill that he exchanged with a co-worker and a contractor. Mix’s attorneys have said that the information in the messages existed in other forms that others still have and that Mix preserved, and that they have evidence they believe exonerates him.
location within the hour.
Feds plan tougher rules for oil well blowout preventers | DailyComet.com
Interior Plans Proposal in September To Tighten Standards for Blowout Preventers | Bloomberg BNA
Personal comment ...
Two years and rules are still not finalized.
Seems like the blind leading the unwilling.
I'm amazed that industry reps are feigning not knowing what is required to provide positive shut in of a well when taking into account the sea floor temperature and pressure, the maximum drill pipe and or casing weight and hold back theoretical bottom hole pressures with a 1.2 -1.5 safety factor.
Perhaps, the rules are not questionable.
Remember, wells were drilled in high pressure deepwater zones long before the Macondo catastrophe based on common rules of understanding, namely API guidelines. Perhaps, action taken, the human interface on the vessel, is the real problem here. If we don't know how to interpret the information it doesn't matter what guidelines exist, because the system allowed offshore personnel to make decisions about something more complex than any of them were qualified to truly understand, and that includes all decision-makers on the vessel.
The physics of the dilemma facing they expected to make conclusions was really quite elementary. Is this why the industry has failed to change in any drastic way?
Alcor and Earl,
I am generally referring to this study.
Can't find the exact document but I recall the test results almost 50% of shear rams failed to sever and seal drill pipe and several manufacturers refused to even furnish BOPS for testing. Maybe you guys can find a better source of info.
SHEAR RAM CAPABILITIES STUDY
For U.S. Minerals Management Service Requisition No. 3-4025-1001
Studies suggest MMS knew blowout preventers had 'critical' flaws | MinnPost
By Mark Clayton | 06/17/10
The federal agency charged with setting safety standards for offshore oil exploration failed to act on at least four warnings about vulnerabilities in subsea blowout preventers, the critical safety device that failed to shut down the Gulf oil spill when the Deepwater Horizon oil rig exploded April 20.
Each of those four design flaws - detailed in three studies conducted for the US Minerals Management Service (MMS) during the past decade - threatened the ability of blowout preventers in deep water to function in an emergency.
Yet the flaws did not result in federal safety alerts or tougher standards for blowout preventer (BOP) manufacturers, say experts familiar with the MMS response to such findings.
With investigators still seeking to determine the cause of the Deepwater Horizon explosion, it remains unclear whether any of these vulnerabilities played a role in the failures that led to the Gulf oil spill. But MMS’s lack of action in spite of warnings about the flaws, three of which have not been previously reported, points to a long pattern of ignoring rather than fixing known safety threats, the experts say.
“Were BOPs designed to fail and did MMS know this? Yes, some of their key people knew,” says Robert Bea, an engineer at the University of California, Berkeley and one of the expert reviewers of President Obama’s 30-day offshore oil-exploration safety review. “Did BP know?” he adds. “Yes, some of their key people knew. Did the industry know? Yes, some of their key people knew.”
So what exactly did the MMS and industry officials know about the BOPs’ vulnerabilities and when? Government and industry officials have said the Deepwater Horizon disaster was unforeseeable - that BOPs were previously regarded as a virtually infallible “last line of defense” against a catastrophic blowout in deep water.
But a deeper look into three engineering studies from 2004, 2006, and 2009 commissioned by MMS - or done with MMS participation - tells a different story. The 2009 study, for instance, identifies 62 instances of BOP failures, four of which were deemed “safety critical.” The study was a joint industry-MMS venture and included the participation of at least four senior MMS officials. Each study sounded warnings about BOP vulnerabilities that, if heeded, could have given the agency years to fix them.
Officials at West Engineering Service, the consulting company and BOP specialist that conducted all three of the studies referenced in this article, did not return e-mails or phone calls. MMS officials, along with the Department of Interior, responded to e-mailed questions but refused requests for an interview.
“We are looking at everything, from what happened on the rig that night and the equipment that was being used, to the safety, testing, and backup procedures that are in place for that equipment,” Kendra Barkoff, Interior Department press secretary, wrote in an e-mail. “It’s also clear that we need a stronger oversight and enforcement agency to police the industry.”
The four design flaws highlighted by the three studies are as follows. The first three have not been previously reported.
No. 1: deep water pressure
In the fall of 2006, West Engineering Services of Brookshire, Texas, turned over to MMS officials a study on the effects of pressure on BOPs. Among its key findings: High deep-water pressure could severely damage the critical gaskets and seals on BOPs’ hydraulic ram valves, causing them to leak and fail in an emergency.
One type of hydraulic ram valve, called a shear ram, is designed to prevent a situation like the one in the Gulf. In the event of a catastrophic failure, the shear rams are supposed to stop the flow of oil by cutting and crumpling the pipe between them. The Deepwater Horizon’s shear rams failed, though it’s not yet clear why.
Many BOP gaskets (the Deepwater Horizon’s included) are designed to handle up to 15,000 pounds per square inch (psi) of internal pressure - the pressure of the oil and natural gas pressing outward on the BOP. But they are not mandated to handle external water pressure, which can equal more than 2,000 psi in deep water.
Moreover, stress on seals and gaskets could be exacerbated if the pressure inside the well drops dramatically, meaning pressure is higher outside than inside.
The study noted that neither the MMS nor the American Petroleum Institute (API) had any specific standards dictating how much external pressure the seals and gaskets must be able to withstand.
“The maximum allowable external pressure is never published and indeed may not even be known by the manufacturer,” the report said. “If differential pressure is applied to a component not designed to withstand it, there could be serious consequences for well control; the deeper the water the greater the risk. ...”
A BOP engineer active in the industry who asked not to be named corroborates the study’s findings: “It was gaskets and seals that were the challenge.”
The study recommended that the industry have an external-pressure test for closure mechanisms. That “would demonstrate a factor of safety in this critical area,” it said.
Some manufacturers have upgraded seals and gaskets voluntarily. “Manufacturers don’t sit around waiting for the MMS to write a spec,” says the BOP expert who requested anonymity. “If they waited for specs from MMS, they would still be waiting.”
But the lack of specific federal standards resulted in a lack of uniformity both in seal quality as well as their maintenance, say Dr. Bea and others.
Minerals Management Service officials said by e-mail that the agency’s safety research division did act on the 2006 report by sharing it with headquarters staff charged with writing regulations, with regional field staff who enforce the regulations, and with industry organizations. Technical papers were presented at conferences with the findings.
But almost four years after the study findings, there are no federal or industry external water pressure standards for BOP closure device seals and gaskets. “We have not updated our regulations related to these findings since the 2006 report,” an MMS official wrote in an e-mail.
No. 2: test ram vulnerability
Test rams are a relatively new innovation in the offshore oil and gas industry and are currently on only a few deep water drill rigs’ BOPs. They are designed to streamline costly and time-consuming hydraulic test procedures required under federal regulations. The Deepwater Horizon was one of the few rigs whose BOP had a test ram. One big problem: The devices don’t help in an emergency - and they may obscure emerging dangers.
That is precisely what happened in one of the “safety critical” failures recorded in the 2009 report. One of the BOPs studied experienced a critical failure when a leak developed at the wellhead connector, compromising its ability to maintain the correct pressure. “On rigs with test rams, the leak, regardless of size, would not have been identified,” the report noted.
The report strongly criticized test rams because they obscured leaks and took up space on a BOP that otherwise could have been used for a real ram.
Critics in Congress said the test ram retrofitted onto the Deepwater Horizon impaired the BOP’s redundancy and, therefore, reliability of the BOP.
The MMS responds that its “drilling engineers have allowed the use of test rams only after a very thorough review.”
No. 3: No safety alert
The 2009 study recommended a “safety alert” concerning the threat of failure of a BOP valve called an annular. Annular valves are like a large doughnut made of rubber and steel that can be mashed into the pipe to seal a well. The study recommended an alert that would derate - or lower - the estimate of how much pressure the annulars could handle when special large-bore drill pipe was being used.
“Failures have occurred while using this drill pipe size with standard [annular] elements,” the study found.
No such alert was ever issued, the MMS confirmed in e-mailed comments. The 2009 study “is not an MMS study” and therefore its “proprietary” data never became part of the agency’s safety research program data, the MMS wrote.
But the study itself and the prospectus for it refer to a partnership between MMS and 17 oil companies and other industry groups. The study and other documents related to it also reference four senior MMS officials who participated in the report.
No. 4: failure to cut pipe
The 2004 study for MMS suggested that changes in industry practices made shear rams increasingly prone to failure in deep water, a finding first reported by The Wall Street Journal. Among the problematic changes: higher well-bore pressures and greater drill pipe thickness.
Only 3 of 14 newer deep-water drilling rigs were found able to shear pipe at their maximum rated water depths, the study found. Not only that, only half of those rigs' operators required a shear-ram test during commissioning or acceptance. “This grim snapshot illustrates the lack of preparedness in the industry to shear and seal a well with the last line of defense against a blowout,” the study said.
Moreover, the industry was increasingly compounding the problem by using thicker, harder-to-cut pipes in deeper water. The shear rams could also fail if a thicker “tool joint” in the drilling pipe was between the rams when a disaster stuck.
In an e-mail, MMS writes that it did have a 2003 regulatory requirement that required rig operators to file data that show shear rams “are capable of shearing the drill pipe in the hole under maximum anticipated surface pressures.”
But even after the more comprehensive 2004 study, the MMS did not issue safety alerts or require specific new requirements for shear ram design to ensure they were powerful enough to cut the thickest pipe.
All this raises the question: How tough should federal regulators be?
During the past decade, MMS’s approach has been to set a performance goal but not to dictate any specific requirements or regulatory standards.
But the president’s 30-day safety review of offshore drilling offers a laundry list of measures that will likely lead to tougher requirements, experts say.
At a New Orleans hearing last month, Michael Saucier, MMS field-operations supervisor in the Gulf, testified to federal investigators that the agency did not ensure that BP had proof that shear rams on Deepwater Horizon would work. But the agency had “highly encouraged” companies to have backup systems to trigger blowout preventers in an emergency, he said.
“Highly encourage?” US Coast Guard Capt. Hung Nguyen, asked. “How does that translate to enforcement?”
“There is no enforcement,” Mr. Saucier answered.