Tag: BP oil spill

FT Energy Source

Sheila McNulty

An oil rig in the Gulf of MexicoWhat a difference a year makes. Or does it?

Activity in the Gulf of Mexico remains slow following the Macondo disaster – but it is moving again. And despite all the talk about how the US risked driving away the industry by tightening up processes and procedures, just about everyone is still here.

Seahawk Drilling was forced into bankruptcy and Plains Exploration & Production is moving to exit the deepwater, but, for the most part, it is the same people, working for the same companies (BP was even among the first companies to get permission to resume drilling in the deepwater), using the same technology. Even the much maligned blowout preventer that got jammed and failed in the Macondo disaster is still here as the last line of defence.

And the gulf coast economy has remained pretty resilient. Michael Hecht, chief executive of the Greater New Orleans economic development agency, said the local economy received a boost from BP’s spill response effort that gave work to fishermen and tour boat workers who had lost jobs with the spill. That false economy is only now ending in some places, leaving the real economic cost still to be seen.

Kiran Stacey

In this week’s readers’ Q&A session, Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, answers your questions.

In this second post, he discusses the reliability of blowout preventers (BOPs), the future of drilling in Alaska, and whether commercial concerns dictate his decision making.

Earlier, he talked about how his organisation balances safety concerns with political ones, what technological improvements have been made since the BP oil spill and whether new regulations on BOPs will delay the issue of new permits.

Next week, Steve Cunningham, chief executive of Landis+Gyr, the world’s biggest smart meter maker, will be in the hotseat. Email your questions to energysource@ft.com by the end of Sunday, April 17th.

But for now, over to Michael:

Kiran Stacey

In this week’s readers’ Q&A session, Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, answers your questions.

In the first of two posts, he discusses how his organisation balances safety concerns with political ones, what technological improvements have been made since the BP oil spill and whether new regulations on blowout preventers (BOPs) will delay the issue of new permits.

In the second post, published above, he talks about the reliability of BOPs in general, the future of drilling in Alaska, and whether commercial concerns dictate his decision making.

Next week, Steve Cunningham, chief executive of Landis+Gyr, the world’s biggest smart meter maker, will be in the hotseat. Email your questions to energysource@ft.com by the end of Sunday, April 17th.

But for now, over to Michael:

Kiran Stacey

Deepwater Horizon explosionThe chief regulator of US offshore oil drilling has dismissed warnings from the industry about the risk to oil output from delays in issuing new permits.

Reacting to warnings that a two-year delay could put at risk up to 680,000 barrels of oil equivalent a day by 2019, Michael Bromwich, director of the US ocean energy regulator, pointed out that no output had so far been lost. He also insisted he would not be swayed either by companies or politicians when making permitting decisions.

Kiran Stacey

The first BP AGM since the oil spill, and the first one with Bob Dudley at the helm, has come to a close. With the various disputes and controversies surrounding the company at the moment, did Mr Dudley come out of it with his reputation enhanced? And what about the other parties represented? Here is our take:

Kiran Stacey

Thursday morning sees Bob Dudley’s first AGM as BP chief executive, and it is not the one he would have planned.

After taking charge last year in the wake of the Gulf of Mexico spill, the new BP CEO initially won plaudits for his plan to overhaul the company’s safety procedures.

Then came his big eye-catching move, the deal that could seal his reputation as CEO. His plan for a $16bn share swap with Rosneft would open up the Russian arctic for exploration and provide an source of revenues that could rival the North Sea.

Sheila McNulty

The oil and gas industry has been afraid there might be repercussions from the recent  investigation that found Macondo’s blowout preventer failed to close because a section of drill pipe had buckled during the accident and blocked efforts to seal it off.

Gary Luquette, Chevron’s president for North America exploration and production, said the industry would learn from the report. But he hopes it will not lead regulators to stop the permitting process just when companies have started to see progress. He explained:

The best way to deal with a blowout is never to have one. In this case, the pipe was blown up the hole because of a loss of control situation. If you have complete loss of control, you can’t imagine a BOP that can be designed for that.

Sheila McNulty

Deepwater Horizon explosionIt turns out the reason why the blowout preventer on BP’s Macondo well failed to close was because a section of drill pipe had buckled inside the well during the accident and blocked efforts to seal it off. This is according to Det Norske Veritas, a consultancy hired by the US interior department to investigate why the blowout preventer failed.

Cameron International, the maker of the blowout preventer, responded:

The BOP was designed and tested to industry standards and customer specifications. We continue to work with the industry to ensure safe operations.

Sheila McNulty

Ken Salazar, the US interior secretary, and Michael Bromwich, director of the US oceans regulator, held a press conference amid great fanfare on Monday to unveil that they had approved a plan by Shell for deepwater oil and gas exploration.

The approval was trumpeted as the first plan approved since the Macondo disaster last April, and one that provided a template for the industry to follow to get their own plans approved.

But the approval does not mean Shell can drill. Its plan calls for drilling three exploratory wells in about 3,000 feet of water, 130 miles offshore Louisiana. To actually drill, Shell must still get permits for each well. And, despite the fanfare, nobody has received a permit to drill a new deepwater well in the Gulf of Mexico since BP’s accident.

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