The BP Macondo Tragedy What we've Learned The BP Macondo Tragedy What we've Learned

© 2010 PetroSkills, LLC. All rights reserved. 1

The BP Macondo Tragedy What we’ve Learned

The BP Macondo Tragedy What we’ve Learned

Ford Brett, PEManaging Director

PetroSkills

Aquarium of the Pacific20 Oct 2010

Long Beach, Calif


Purpose of Presentation (20 min)Purpose of Presentation (20 min)

My point of view Perspectives, biases, and some historical context

VERY BRIEF review of potential causes What went wrong and why?

What’s been & can be done to prevent this from happening again? Can we prevent this from happening again?


My Perspective (Biases?)My Perspective (Biases?)

• Professional Engineer with 30 yrs Drilling Experience– Expertise in Drilling Project and Process Management

• PetroSkills - Managing Director – Privately owned, industry consortium (26 member companies) that develops

and delivers competency based training to the petroleum industry– One purpose of the alliance is to create common competency standards for

the petroleum technical professionals– In 2010 will train >15k Petroleum Professionals in 50 countries

• Society of Petroleum Engineers - Board of Directors– Responsible for the Society’s Drilling and Completion Activities

• Speaking as an individual– Relatively well informed about Drilling with less direct bias than many in drilling industry…

… Not operator, contractor, or drilling service provider.


Personal Biases, …Personal Biases, …

• BP & Halliburton are PetroSkills customers- <5% of Total Business

• I have been involved in many drilling performance and incident audits in the past.

- Very rarely, if ever (never?) is there one root cause.- Normally a combination of people, process, and equipment factors…

… and equipment failures are almost all people and process related at a deeper level

- Should withhold judgment until investigation is complete, but I find it difficult to believe there won’t be a number of contributing causes.

• I developed and implemented Safety Management Systems in response to the N.S. Piper Alpha Disaster

- My experience leads me to believe there are rarely unavoidable ‘acts of God’

- Safe operations can be achieved if people do the right things in the right way


Piper Alpha Influence DiagramPiper Alpha Influence Diagram

Pate-Cornell, Risk Analysis Vol 13, No 1993

Rarely (never?) is there one root cause.

Statistic are so thin, that in process improvement language most deviations have ‘special causes’ rather than ‘common causes’

Often a cavalier “this-can’t-happen-to-me” attitude is also in play


Historical Perspective: Summerland, Calif.Historical Perspective: Summerland, Calif.

World’s first “Offshore”Production

Platform

By 1906


Huntington Beach, CaliforniaHuntington Beach, California

1920’s


Advancements in Deepwater OperationsAdvancements in Deepwater Operations

Production 2734m

Drilled 3000m

Design 3600m

Eifel Tower(to scale)

BP Macondo


>4000 wells in >1000 feet of water

Deepwater GOM…Deepwater GOM…

> 50,000 wells offshore

BP Macondo Location

>7000 wells in >1000 feet of water Worldwide


Safety Record of Drilling on the OCSSafety Record of Drilling on the OCSOver 50,000 wells drilled. 4,000 in over 1,000 feet of water.Last major incident resulting in oil coming ashore in 1969 (Santa Barbara), 41 years ago.1970 to April 2010, a total of 1,800 barrels of oil spilled due to blowouts.All measurements of safety indices have shown a steady level of improvement since modern MMS regulations came into effect in 1970.Record is better than or equal to that or any other region of the world.


GOM Safety History – Since MMS Started

Lost Time Incidents

Man-hours

Recordable

Days Away & Restricted Time

2007 Man-Hours are estimated2007 Incidence Rates 3rd Qtr.

97.5

% d

eclin

e in

LTI


BP Macondo DisasterBP Macondo Disaster

Final judgment should be suspended until the final detailed findings. But as information has been discovered it is increasingly clear that best practices were not followed. The well design was not robust (fault tolerant) Human errors in judgment were made at very key operational

decision points Warning signs were overlooked on the rig There may have been some failure of equipment

This was all preventable by following currently in place standard practices.

But something certainly went wrong…


Deepwater: Important even without MacondoDeepwater: Important even without Macondo

Sources: MMS, EIA Office of Oil and Gas, includes Condensate

Gulf of Mexico Federal Offshore Oil Production


Deepwater… Important to Our FutureDeepwater… Important to Our Future

US Oil Production World Oil Production

Mill

ion

Bar

rels

per

Day


GIANT CAVIAT: Final judgment should be suspended until the final detailed

findings.

The purpose of this presentation is to present possibilities and outline what can, has, and is being done to address similar causes in the future.

BP Macondo: What went wrong?BP Macondo: What went wrong?


Pre Well: What went wrong? Pre Well: What went wrong?

1. Maximum discharge estimates generally low Non uniform approach Sometimes cut and paste engineering

2. Undersized spill response/containment plans Based on history and too low maximum discharge estimates

3. General can’t happen to me attitude Based on history and too low maximum discharge estimates


BP Macondo: What went wrong? BP Macondo: What went wrong?

1. Casing Design Long String vs. Liner Lock Down

2. Cement Design and Execution Centralizers Nitrogen Cement Cementing Procedure

3. Cement Bond Log Decision not to run one

4. Shoe Failure or Lock down (?) At least one flow path failed

5. Seal Test Failure of negative pressure

test

6. Circulating to sea water One Plug One Pass Circulation

7. Reaction to Signs Volume control Safety award

8. BOP “Failure” Shear Ram

9. Decision not to divert Uncontrolled Fire

10. ROV and Intervention Interoperability

11. Post Blow Out Actions Containment capability


BP Internal ReportBP Internal Report


Deepwater Well Barrier Comparison –Production Liner Vs Full StringDeepwater Well Barrier Comparison –Production Liner Vs Full String

>90% of Deepwater Wells BP Macondo Wells


BP MacondoBP Macondo

Casing Design Issues “Long String” (not liner) Cement and Seal are barriers No Lock Down

Cementing Nitrified Cement Limited Circulation 6 vs 21 Centralizers No Cement Bond Log

Circulating out in single Pass Faster, Less Safe

Seal Test Issues


BP Internal ReportBP Internal Report


Barriers Vs. ControlsBarriers Vs. Controls

• Barriers are inherent to the well design and keep the wellbore fluids in place….until you want to produce the oil and gas

• Controls are used if the fluids start to flow before production is desired

BOPs are a Control, … NOT a Barrier

• Best Practice – Design your well with sufficient barriers to reduce the use of controls


Blow Out Prevention (BOP) SystemBlow Out Prevention (BOP) System

“Preventer” is the wrong word – if things go right you won’t need themLast line of defense (like a parachute)Shear Rams cut the pipe and are the very last thing you do (like the reserve chute)


Reaction to Signs…Reaction to Signs…

Safety Award Ceremony Perhaps loss of focus

Volume Control Off Loading Mud While circulating

outIndicators showed problems

“When you get to that point everybody goes to the mind-set that we’re through. This job is

done”- Ross Skidmore Sub-sea well supervisor

BP Macondo


Reaction to Signs…Reaction to Signs…

!


Blow Out PreventerBlow Out Preventer

BOP Modifications / Maintenance may have hampered performance May have been stressed beyond design limits

(trash)

Difficulty actuating with ROV after event may have created Standards Maintenance Remote operation functionality

No Matter what……Closing Shear Rams 1st is a sign

that something went wrong before the BOPs failed


What’s going on in Response?What’s going on in Response?• US Government Reports/ Investigations

USGS/MMS Marine Board of Inquiry President’s National Commission on the BP Deepwater Horizon 30-Day Report - Completed May 27 OCS Safety Oversight Board (within DOI) NAE Investigation Requested by DOI NRC Marine Board Committee to Review the MMS Inspection Program (Nov ’09) Department of Justice Criminal Investigation

Industry Associations – API, IADC, NOIA, IPAA Offshore Equipment: BOPs, Well heads, ROVs Offshore Operating Procedures Subsea Well Control and Response Oil Spill Response

Major GOM Operators Containment Response – CVX, COP, XOM, Shell $1 Bil. Oil Spill Containment System to Protect Gulf of Mexico

Technical Society Activities – AIChE, AIME, ASCE, ASME and SPE Prevention, Response and Clean-Up of Offshore Oil Spills: Lessons Learned

University Activities – UC Berkley Document technical and organizational elements of Deepwater Horizon Failures

Other Governments – UK, Norway, AustraliaReview of Regulations and Policies

• Mind Brain Safety Culture Research - PetroSkills Alliance


New BOEMRE Drilling Safety Requirements …New BOEMRE Drilling Safety Requirements …

Wellbore integrity improvements1. Mandatory compliance with API cementing

standards2. Certification of casing design by professional

engineer3. Certification of two tested barriers during

completion activities4. Approval by BOEM District Manager before

replacing heavier fluids with lighter fluid5. Enhanced deepwater well control training standards

and requirements


…New BOEMRE Drilling Safety Requirements…New BOEMRE Drilling Safety Requirements

Assurance of blow out prevention equipment1. Disclosure of all control systems2. 3rd party verification of BOP shear rams3. Remotely Operated Vehicle (ROV) intervention capability4. ROV equipment and crew on all floating rigs at all time5. Autoshear and deadman system for dynamically positioned rigs6. Minimum requirements for personnel to operate BOP equipment7. Documentation of BOP maintenance to API standards8. Testing of ROV intervention functions on stump and seafloor9. Function testing autoshear and deadman functions on stump and

sea floor 10. Require pressure testing if shear rams are used in emergency


Other Industry Actions…Other Industry Actions…

Common, and Vetted approach to Maximum well Discharge estimatesReliable reconnect equipment and processesManagement that is ‘all over this’


BOEM Rules to address each possible contributing factorBOEM Rules to address each possible contributing factor Casing Design

Long String vs. Liner Lock Down

Cement Design and Execution Centralizers Nitrogen Cement Cementing Procedure

Cement Bond Log Decision not to run one

Shoe Failure or Lock down (?) At least one flow path failed

Seal Test Failure of negative pressure

test

Circulating to sea water One Plug One Pass Circulation

Reaction to Signs Volume control Safety award

BOP “Failure” Shear Ram

Decision not to divert Uncontrolled Fire

ROV and Intervention Interoperability

Post Blow Out Actions Containment capability


Pre Well: What went wrong? Pre Well: What went wrong?

Maximum discharge estimates generally low Non uniform approach Sometimes cut and paste engineering

Undersized spill response/containment plans Based on history and too low maximum discharge estimates

General can’t happen to me attitude Based on history and too low maximum discharge estimates


Deepwater… Important to Our FutureDeepwater… Important to Our Future

US Oil Production World Oil Production

Mill

ion

Bar

rels

per

Day


US Natural Gas – Wild CardUS Natural Gas – Wild Card


QUESTIONS?QUESTIONS?


Putting Oil Spill Amount in PerspectivePutting Oil Spill Amount in Perspective

The Gulf of Mexico receives 1,000,000 barrels of oil a year 915,000 is from natural oil seeps 14,000 is from oil and gas production and

pipelines 71,000 form ship traffic, runoff, and other

sourcesMacondo Well put 4,000,000 barrels into the gulf environment 5,000,000 barrels were spilled 1,000,000 barrels were captured, burned, or

skimmedWhile we have introduced the equivalent of four years’ oil input in a few monthsNatural processes will eventually absorb this the oil

Question: How long will it take nature to repair the damage?Answer(?): To early to tell


The Environmental ImpactThe Environmental Impact

There has been a large environmental impact that has soiled marshes and beaches and has introduced oil into the open water.


Putting Oil Spill Amount in PerspectivePutting Oil Spill Amount in Perspective

The Gulf of Mexico receives 1,000,000 barrels of oil a year 915,000 is from natural oil seeps 14,000 is from oil and gas production and

pipelines 71,000 form ship traffic, runoff, and other sources

Macondo put 4,000,000 bbl into environment 5,000,000 barrels were spilled 1,000,000 barrels were captured, burned, or

skimmedWhile we have introduced the equivalent of four years’ oil input in a few monthsNatural processes will absorb the oil

Question: How long for nature to repair the damage?

Answer: (?) Too Early to tell


Impact on the Marshes Impact on the Marshes

Louisiana has 4000-5000 square miles of marsh

25-35 square miles are lost each year to natural processes

3.4 square miles have been impacted by oil

“More than a dozen scientists interviewed said the marsh here and across the Louisiana coast is healing itself, giving them hope delicate wetlands might weather the worst offshore spill in US history better than they had feared. Some marshland could be lost, but the amount appears to be small compared with what the coast loses every year through human development.” (Boston Globe 8/10)


Impact on the BeachesImpact on the Beaches

Grand Isle beach in Louisiana had significant quantities of oil come ashore.

Small stringers of oil came ashore from time to time and were cleaned up at specific areas in the Mississippi, Alabama, and Florida beaches to the west of Pensacola.

August 3 water samples from Galveston to Pensacola showed no oil in the water at any beach. (5 ppm test sensitivity)

Tar balls are a problem and continue to wash ashore at multiple locations. This will be a lasting effect for weeks? Months? Years? Some of the tar balls that have been found

have been shown chemically NOT to be from the Macondo well.

Tar balls form from heavy ends of weathered oil mixed with water and solids on the surface. They do not form from microscopic oil droplets dispersed in the water column.


Impact on the SeaImpact on the Sea

Currently a big unknown. No one has yet found large

concentrations of oil on the bottom anywhere near the well site.

Reported Subsea “plumes” contained dispersed and dissolved oil in concentrations less than 0.5 ppm (1.0 ppm = 0.001%) One of the plumes discovered was shown by

chemical analysis NOT to be from the Macondo well.

Water discharged to sea from ships and offshore production operations is allowed to have 15 to 30 ppm oil.

Within the “plumes” there is approximately 20% less oxygen than normal, due to the action of bacteria degrading the oil.

Gulf of Mexico “dead zone” caused by run-off from the Mississippi has 60% less oxygen than normal and covers approximately 7,000 –9,000 square miles.


Impact on Marine, Mammals, and BirdsImpact on Marine, Mammals, and BirdsToo early to tell (as of August 13)

Dolphins found: 71 dead, of which 4 may have

died from oil 1 oiled dolphin in rehab

Whales found: 1 dead, but shows no signs of

oil

Turtles found: 524 dead, of which 7 showed

signs of oil 370 oiled in rehab

Birds found: 4187 dead, of which 1872 showed

signs of oil 1917 found alive with signs of oil,

of which 846 have been released


Impact on Fish and ShellfishImpact on Fish and Shellfish

Too early to tell

36% of US Federal waters in the Gulf of Mexico were closed to fishing at the peak. As of 8/13, 22% still closed

Government gave permission to States to open state waters for fishing and shrimping. (Crabbing was awaiting results of lab test.) 8/7 Alabama 8/2 Florida 7/29 Louisiana- River to

Mississippi line 8/2 Mississippi


Economic Impact in PerspectiveEconomic Impact in Perspective

Loss of direct jobs on rigs 200 to 300 per rig

Loss of jobs on supply vessels, barges, helicopters, terminals, and service company personnel 100 to 150 per rig

Loss of work in factories and fabrication shops, equipment suppliers, truckers, etc. PESA employs 400,000 and effects 1,000,000 jobs through

suppliers

Knock-on effect to others who depend on these workers


Bureua of Economic Analysis2004 2005 2006 2007

Tourism RelatedAccomodation 16,058 16,643 16,812 17,046Amusement, gambling, and recreation 11,930 12,245 12,630 13,010Food services and drinking places 33,957 35,317 36,726 37,630

Tourism Total 61,945 64,205 66,168 67,686Oil and gas extraction 48,600 44,134 46,397 46,271Forestry, fishing, and related activities 5,446 5,851 5,775 5,558

Total 115,991 114,190 118,340 119,515

GDP by NAICS Classifications**

Real GDP Millions of Chained 2000 $

Gulf States* GDP ContributionsGulf States* GDP Contributions

Preliminary Analysis


Impact on GoM Production Rates & Deferred ProductionImpact on GoM Production Rates & Deferred Production

Most likely decline (MMS) rate ~ 15%/yr

Production Rate would decline to 0.95 MMBOPD in 2 yrs 0.60 MMBOPD in 5 yrs

“Lost” Production (relative to 2010 Production) 450 MMBO in 2 yrs 1,375 MMBO in 5 yrs “Lost” production would have to be replaced by

additional imports to maintain 2010 production level


Potential ImpactPotential Impact

YearYears Before

Drilling Resumes

Production Rate(MBOPD)

Volume of Lost Production

(MMBO)

Additional Shuttle Tankers to Import Lost Production

Volume

Value of Lost Production (at

$70/bbl)

2010 1,600

2012 2 1,069 450 1,500 $31,500,000,000

2015 5 657 1,375 4,500 $96,250,000,000

Summary: Potential Impact on GOM Oil Production Assuming the 6-Month Drilling Moratorium Results in No

Drilling in the GOM for a 2-Yr or 5-Yr Period after the Moratorium

MBOPD = Thousand barrels of oil per day. MMBO = Million barrels of oil.

The BP Macondo Tragedy What we've Learned The BP Macondo Tragedy What we've Learned

Documents

Transcript of The BP Macondo Tragedy What we've Learned The BP Macondo Tragedy What we've Learned