The big question for months has been what would happen if there was a significant spill in the deepwater outside the Gulf of Mexico. Following BP’s Macondo disaster, the industry worked together to build two spill response systems for this area. But nobody said what would happen if a deepwater disaster unfolded in the waters offshore Ghana or Brazil.
Now the industry has gathered together to address that question. Nine of the world’s biggest oil and gas companies – BG Group, BP, Chevron, ConocoPhillips, ExxonMobil, Petrobras, Shell, Statoil and Total have launched the Subsea Well Response Project (SWRP), an initiative designed to enhance the industry’s capability to respond to subsea well control incidents.
A year after the Macondo disaster, the industry has pulled together in the US and built not one, but two spill containment systems. These systems are really state-of-the-art and aimed at containing a massive spill in the deep water.
The first one, the Containment Response System, cost $1bn and is designed to be trucked to anywhere along the Gulf of Mexico, loaded onto a vessel, shipped out to a drill site and dispatched under water to contain oil spilling from a runaway well.
The system, complete with capture vessels, was developed by ExxonMobil, Royal Dutch Shell, Chevron and ConocoPhillips. It took several months to build and testing has shown it can operate in 8,000 feet of water, capturing 60,000 barrels of fluid per day at pressures of 15,000 pounds per square inch. A more comprehensive system, which can operate in 10,000 feet of water, and capture 100,000 barrels of fluid a day, will be available by the middle of next year.
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.
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.
It 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.
As the big guns of the oil industry gather in London this week for International Petroleum week, talk has been largely of two things: the effect of Middle East unrest on the oil price and how to improve its reputation, especially after Macondo.
I have just sat through a session entitled: “Restoring the industry’s licence to operate in the face of increasing public and political scrutiny”.
In it, Andrew Griffin, CEO of a PR company called Regester Larkin, explained how the Macondo spill showed that the oil industry needed to do more to explain its importance to the public. This, he said, would help protect companies’ reputations in the case of an accident or other negative event.
In the last two days, we have had two new and similar accounts of the way in which BP’s corporate culture was to blame for the Gulf oil spill.
Following hard on the heels In Too Deep: BP and the drilling race that took it down, a book by two Bloomberg reporters, which was launched last night, comes an in-depth report by Fortune magazine.
The Fortune piece finds much the same as the book (review to follow) – the focus on risky new discoveries coupled with corporate cost-cutting that characterised the company under both John Browne and Tony Hayward helped foster an environment where such an accident could happen.
The Fortune piece focuses on one thing in particular: the way in which company bosses focused on personal safety rules for staff at the expense of process rules for avoid major industrial accidents.
Now we’ve all had a day to digest the 300+ pages of the National Commission’s report into the BP oil spill, it’s worth taking a look at what the reaction has been from the wise old heads of the print and online media.
First up, the FT’s Sylvia Pfeifer points out how badly US regulation compares to that in other countries:
One of the most damning conclusions of the national commission report was that other countries with strong offshore oil industries, including Britain and Norway, had better regulatory systems than the US.
Where the US Minerals Management Service was clearly not fit for purpose, other countries – often prompted by their own offshore disasters – have put in place regulations that seem to have been more effective at preventing fatal accidents.