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Title: Rig Sinks, Showing Dangers of Deep-Water Drilling
Source:
Bloomberg.com
URL Source: http://preview.bloomberg.com/news/2 ... rs-of-deep-water-drilling.html
Published: Apr 22, 2010
Author: staff
Post Date: 2010-04-22 15:26:38 by buckeroo
Keywords: None
Views: 1531
Comments: 15
Oil and natural-gas explorers drilling deeper than the height of Mt. Everest are risking pressure surges like the one this week that may have triggered the deadliest U.S. rig accident in 23 years. Energy companies are delving 10 times deeper than a decade ago in the search for untapped reservoirs of oil and gas. The threat of pressure surges, or blowouts, that can smash steel equipment and create gushing columns of fire increases as drillers probe ever-deeper into layers of rock, Neal Dingmann, an analyst at Wunderlich Securities, said. U.S. Coast Guard rescuers continued the search today for 11 workers who’ve been missing in the Gulf of Mexico since an April 20 explosion and fire aboard Transocean Ltd.’s Deepwater Horizon rig, which the company said may have been caused by a blowout. Transocean had leased the vessel to BP Plc. for use on an 18,000-foot (5,486 meter) well about 40 miles (64 kilometers) from shore. “Offshore drilling has always been high risk, but when you talk about wells going to these kinds of depths, the risks go even higher,” Dingmann said in a telephone interview from Houston. “Once you go anywhere below 10,000 feet, all of a sudden the pressure and temperature become a lot more difficult to contend with.” If the 11 missing workers are declared dead, it would be the worst offshore oil-industry accident in U.S. waters since 1987, when a helicopter crashed into a Forest Oil Corp. platform, killing 14 people, according to a Bloomberg News analysis of data from the U.S. Interior Department’s Minerals Management Service. No Warning The Deepwater Horizon burned for more than 30 hours before sinking. Adrian Rose, who oversees Geneva-based Transocean’s quality, health, safety and the environment unit, said yesterday that the disaster unfolded with little or no warning. Michael Kersey told reporters in Kenner, Louisiana that his brother, Jonathan Kersey, 33, was aboard the Deepwater Horizon when it erupted in flames. “He said it was the scariest thing he saw in his life,” Michael Kersey said. Jonathan Kersey was among those who escaped in a life boat, his brother said. The accident may spur calls for tougher oversight and increased regulation of the drilling industry, as well as raise legal risks for companies. BP and Transocean were sued today by the family of Shane Roshto, a roustabout who was thrown overboard by the explosion and who hasn’t been located, according to documents filed in New Orleans federal court. Political Pressure President Barack Obama last month proposed expanding offshore drilling in some U.S. coastal areas. “This accident happened at exactly the wrong time,” Jud Bailey, a Houston-based analyst for Jefferies & Co., said in a telephone interview. “The offshore industry has a good safety record, but this is something environmentalists can grab onto and say, ‘See, this is why you shouldn’t drill.’” Senator Mary L. Landrieu, a Louisiana Democrat, urged the Coast Guard and the Minerals Management Service, which has authority over oil and gas exploration in federal waters, to “conduct a swift and thorough investigation.” “It is critical that these agencies examine what went wrong and the environmental impact this incident has created,” Landrieu said in a statement. Cote de Mer The minerals agency requires energy producers to inspect wells at least every 30 days during exploration work, John Schiller, chief executive officer of Energy XXI (Bermuda) Ltd., said on a November conference call with investors. Energy XXI, along with partners that included Nexen Inc., spent $75 million to bring a June 2007 blowout at the Cote de Mer field in Louisiana under control. A surge of gas in the 22,261-foot well blew through a device known as a blowout preventer, burying the rig floor in six feet of sand, rock and seashells. No one was injured, the company said. Oilfield-equipment makers such as Ametek Inc. and FMC Technologies Inc. are working to develop hardware that can withstand pressures and temperatures in wells that can plunge more than 32,000 feet (9,754 meters) into the Earth’s crust. “The conditions keep getting worse as they go deeper,” said Brian Ainley, director of business development at Ametek’s Chandler Engineering unit in Broken Arrow, Oklahoma. Calculating Risks Some companies aren’t willing to risk the danger of a blowout. Exxon Mobil Corp., the world’s second-largest oil company, abandoned its Blackbeard well in the Gulf of Mexico in 2006 after the company’s engineers became alarmed over the pressure levels and temperatures almost seven miles beneath the seafloor, Dingmann said. McMoRan Exploration Co. obtained control over Blackbeard in 2007 as part of its $1.1 billion acquisition of offshore assets from Newfield Exploration Co., one of Exxon’s partners in the project. McMoRan of New Orleans extended the well almost 3,000 feet deeper than where Exxon left it. James “Jim Bob” Moffett, co-chairman of McMoRan, told investors on a January conference call that the risks of dealing with higher-pressure deposits may be worthwhile because those fields have more oil and gas packed into each square yard of rock. Transocean fell 50 cents to $89.87 at 2:47 p.m. in New York Stock Exchange composite trading. BP dropped 11.8 pence to 636.40 pence. To contact the reporters on this story: Joe Carroll in Chicago at Jcarroll8@bloomberg.net; Jim Polson in New York at jpolson@bloomberg.net; Katarzyna Klimasinska in Kenner, Louisiana, at kklimasinska@bloomberg.net.
Poster Comment: With all the gushers springing up around the world, I wonder why anyone would commit to development of oil based products a mile deep into the ocean?
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Begin Trace Mode for Comment # 6.
#1. To: buckeroo, groundresonance (#0)
With abiotic oil and the entire core of the Earth made up of oil, why would anybody in their right mind bother exploring for oil anyway? Oil wells fill themselves back up, right? Right?
Absolutely. There is no question about that at all.... in fact the stuff just oozes out of the ground everywhere around the planet. These idiots that spend billions in oil exploration and development over a mile below sea level don't have a clue about the truth.
Can I get my picture taken with you sometime?
#7. To: Dakmar, James Deffenbach, Original_Intent (#6)
You really need to take a snapshot with the copied folks.....
He won't send me a picture.
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#5. To: Esso (#1)
Oil wells fill themselves back up, right?
#6. To: buckeroo (#5)
These idiots that spend billions in oil exploration and development over a mile below sea level don't have a clue about the truth.
Replies to Comment # 6.
#8. To: Dakmar, buckeroo (#6)
Can I get my picture taken with you sometime?
End Trace Mode for Comment # 6.