Deepwater oil operators start to see effects of GoM spill

NEW ORLEANS: The BP/Transocean disaster is already being felt by the wider deepwater oil industry, with the Obama administration ordering immediate inspections of all deepwater drilling rigs and platforms in the Gulf of Mexico to determine if risks of any further spills are on the horizon.

The rigs are to be examined first, with the blowout preventor stacks a particular focus. Authorities want to know whether equipment tests have been done and the records are there to prove it. In addition, Washington wants to ensure operators are performing emergency well control exercises.

Given the scale of production in the Gulf, and the high tech equipment deep out and under the ocean, this will be a time consuming process. There are 30 drilling rigs operating in the deepwater Gulf and 47 deepwater production facilities.


It’s not clear yet what this might mean for oil drilling in shallower waters. Much of the difficulty in addressing the Deepwater Horizon disaster stem from the sheer depth and while accidents like this are rare, the number of shallow water operations is so great – 90 working rigs and 3,500 production platforms – that it’s conceivable they will also come under greater scrutiny.

Ken Salazar, Secretary of the Interior, said:

“Though this type of incident is rare, it is very serous, and we expect industry to be fully complying with the law and to be taking aggressive measures to ensure that this type of incident does not happen again.”

The accident is not only fanning the usual critics about growing that industry but could well turn more people against it. In the words of PFC Energy, the consultancy, which said the accident already has “cast a long shadow” over the Obama administration’s intent to open the Eastern Gulf of Mexico to exploration:

“While the industry is focused on the tragedy of lost life, the investigation and spill containment, drums are already beating in the media and in Washington about the downside of offshore drilling.”

Several lawsuits have already been filed over the accident, not only against BP and Transocean – other service contractors including Halliburton, Cameron International and M-I SWACO are the subject of a lawsuit launched by Brent Coon & Associates, the lawfirm that won a case against BP following the high profile and fatal Texas City refinery explosion.

These companies will not be alone in being caught up in the dragnet. The entire industry stands to suffer from this, as ExxonMobil noted on Thursday, and this is no doubt why BP’s competitors such as Shell are assisting in the efforts to stem the flow.

Related links:

Obama steps up fight to contain oil spill - FT
Oil disaster spills into political arena - FT
Exxon warns on impact of BP spill
- FT

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