Helix Oil Spill Group Expanding Reach To Stop Runaway Wells

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March 31, 2011

Image: Helix’s HRFS diagram courtesy Helix (click image to enlarge)

HOUSTON (Dow Jones)–The Helix Well Containment Group will nearly double the depth at which it can contain out-of-control offshore oil and gas wells by mid summer, the consortium of oil companies said Wednesday.

Currently the spill containment consortium’s system–one of two developed by the industry in the aftermath of the Deepwater Horizon disaster–is capable of handling blowouts of 55,000 barrels of oil a day in water up to 5,600 feet deep. By April 8 the system will be able to handle wells in up to 8,000 feet of water. By mid-summer that reach will be extended to 10,000 feet, the consortium said.

“Our enhanced response and containment capabilities would exceed the depth of any well currently drilled or planned by the consortium’s 22 members and would allow operators to control capping and containment stacks at the greater depths,” said Roger Scheuermann, the group’s commercial director.

None of the seven drilling permits U.S. regulators have approved since reopening the Gulf of Mexico’s deep waters have been for wells in more than 8,000 feet of water. Contract drillers, however, have been on a buying spree since last fall, ordering numerous rigs that can drill at depths of 10,000 and 12,000 feet–twice the depth the Deepwater Horizon was drilling when it exploded.

The Helix consortium is named for Houston-based Helix Energy Solutions Group Inc. (HLX), whose spill containment vessels helped stanch the flow of BP PLC’s (BP, BP.LN) Macondo well after the Deepwater Horizon exploded in April 2010. Those ships are now central to the well containment group’s system.

Since BP’s blowout–the worst offshore oil spill in U.S. history — federal regulators have required companies to show how they would contain worse-case scenario spill at their wells before they are given permission to drill.

In addition the Helix consortium, which includes a mix of international oil companies and U.S. independent producers, a group of major oil companies created their own spill response group, the nonprofit Marine Well Containment Co.

Founded by Exxon Mobil Corp. (XOM), Chevron Corp. (CVX), ConocoPhillips (COP) and Royal Dutch Shell PLC (RDSA, RDSB, RDSA.LN, RDSB.LN), the nonprofit Marine Well Containment Co. says it can capture up to 60,000 barrels of spilled oil per day at depths of up to 8,000 feet.

The Marine Well Containment Co. has recently added members, including Apache Corp. (APA) and BHP Billiton Ltd. (BHP), which is the first company to have begun drilling a deep-water Gulf well. J. Michael Yeager, who head BHP’s oil business, told investors at a conference on Tuesday in New Orleans that his company paid $130 million to join the Marine Well company, which says it can capture up to 60,000 barrels of spilled oil per day at depths of up to 8,000 feet.

-By Ryan Dezember, Dow Jones Newswires

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