Month: September 2010

Interesting in this latest post-Deepwater Horizon BP story, not just creating an independent safety group with teeth (which I’m not sure about, being seen to do something decisive I guess), but more importantly re-organizing E&P into three separate operations Exploration, Drilling and Production.

Mentioned in my earlier post on BP’s accident report [the second post-note] that there must be some cultural hangover between wild-catters and producers in terms of who takes what kinds of risks to get their respective jobs done. BP takes corporate responsibility for the whole, but behaviour patterns within the whole are complex and culturally conditioned by local history. Separating the areas may allow greater focus on the systemic problems of each.

Only just noticed this – that Microsoft (MSN / Live Spaces) is migrating all users to WordPress. Wow.

Personally I think it is healthy that Google still offers the hosted Blogger option for simpler blogs where users don’t want to be bothered with configuration of many optional plug-in functions and separate ISP provision of other content management. (Even though of course, WordPress itself offers pretty well any content management as a hosted service too.) Can’t see any natural reason for a monopoly in this space. Interesting move.

Arctic Oil & Gas makes mainstream media.

Deepwater Horizon Accident – Full report and exec summary available here.

Masterful understatement

“It may also be appropriate for BP to consider further work to examine potential systemic issues beyond the immediate cause and system cause scope of this investigation.”

Interestingly contrary to hearsay and published accounts …. although one of the two annular preventers was compromised by earlier error it seems the leak flow path was through the failed cementation in the main well-bore “shoe-track” rather than the annulus [*] ? Basically after all the errors – and there were many – it was a failure to notice they had a loss of containment problem until it was too late.

Even outgoing (outgone) chairman Tony Hayward gets to comment …

“To put it simply, there was a bad cement job and a failure of the shoe track barrier at the bottom of the well, which let hydrocarbons from the reservoir into the production casing. The negative pressure test was accepted when it should not have been, there were failures in well control procedures and in the blow-out preventer; and the rig’s fire and gas system did not prevent ignition. Based on the report, it would appear unlikely that the well design contributed to the incident, as the investigation found that the hydrocarbons flowed up the production casing through the bottom of the well.”

[Post Note – different annulus. The cementation in the annulus at the reservoir depth was part of the failure. The annular BOP (in the annulus between drill pipe and casing) did fail to seal when needed, even the undamaged one of the two. From my perspective, which is not directly concerned with the operational drilling and cementation procedures and quality controls, the systemic concern must be about key safety critical information not being available in real time to a permissive command level of supervisory management systems ? Which is strange because in my direct experience of BP (onshore, downstream) activities in 70’s/80’s/90’s, it was they that first introduced formal criticality ratings to the industry.]

[Post Post Note : In terms of shifting “blame” from BP to others – I just don’t see it. In the reports, the joint representation of the different companies involved is clear at each stage, BP included. And the “bad cement job and bad testing” conclusion does have a prior design element that is maybe not obvious to a lay reader. I have no doubt the string design was not unusual for the Gulf deep-water situation, but it is pretty clear that the cement job included cement design parameters – densities, mixes, liquid and gas proportions – that meant the margins for placing successfully were quite tight – ie it should not have been a great surprise to find an unsuccessful cement job first time around, but that’s why the process quality controls include testing before removing the mud load. The facts in the report don’t extend to the (time is money and we’re behind schedule) motivations to get the mud out and get the rig off the site – just the actual timings and actions. That’s going to require a different kind of investigation with fuller cooperation from the contractors involved.

Two corollaries : First, the commercial pressure to get off the job would presumably concern only the rig costs and opportunity costs …. there is no production downtime issue here for BP, since the job was to seal the well up indefinitely for future exploitation. And second, part of the systemic problem is presumably the cultural distinction between the wildcat – risk-taking – part of drilling operations being “deliberately” separate from the owner-operator production exploitation. Unlikely that BP are the “cause” of such a culture in the US/Gulf, but clearly they have responsibilities about which they could take / could have taken action. Choosing what to know and when to intervene. Tricky one. ]