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Drilling: U.S. Embargo May Hinder Oil-Spill Response in Cuban Waters

Platts – A long-standing embargo imposed by the United States on Cuba could make it more difficult to clean up potential oil spills as the Caribbean nation prepares to drill in deep water 50 miles from the shores of Florida, according to the head of an international drilling trade group. Lee Hunt, the president of the International Association of Drilling Contractors (IADC), made his comments to Platts Energy Week (http://www.plattsenergyweektv.com/), the independent, all-energy television news and talk program airing Sundays in the United States.

Hunt said that the U.S. embargo on Havana has required drillers there to use second-hand equipment to avoid buying it from U.S. companies. “The impact of the embargo has to do if something goes wrong, and what kind of resources can be mobilized to cap or stem the flow of a runaway well or to contain a spill.”

Cuba has been a target of a U.S. embargo since 1962. A subsequent U.S. law allows foreign companies working with Cuba to use only 10% U.S.-made equipment, or face sanctions on their operations in the United States.

Spanish-owned Repsol plans deepwater drilling off the Cuban coast later this year using a drilling rig built in China specifically to avoid the embargo.

“What the contractor has had to do is shop around its used inventory to locate a piece of equipment that falls outside the restrictions of the embargo, so the embargo, in effect has forced the drilling contractors working in Cuba to go to second-level equipment,” Hunt said.

Hunt’s comments come a little more than one year after the anniversary of the 2010 Macondo well blowout in the Gulf of Mexico resulted in the worst oil spill in U.S. history.  A report from the Interior Department found that human failure was the primary cause of the disaster, but that a malfunctioning blowout preventer was a major contributing factor to the magnitude of the spill.

“It is unnerving that as we work here in the Gulf of Mexico with the Department of Interior and the [Bureau of Ocean Energy Management, Regulation and Enforcement] that as we seek the gold-plated standard for the United States, the impact of the embargo is to force our neighbor, drilling very, very close to our shores, to go into a secondary market for parts, service and supply.”

Cuban officials have been very supportive of drilling safety, Hunt said. “What we are hearing from Cuban officials is a great deal of respect for the various regulatory schemes in the world, and in particular the new ones emerging in the U.S.,” Hunt said. ‘They are attempting to follow what can be communicated as best practices.”

The interview with Hunt was shortly before the U.S. announced it would allow the Cuban officials to attend a conference in Trinidad next month sponsored by the U.S.-based IADC to discuss Cuba’s deepwater drilling plans. Permission from the United Sates was required because IADC is a U.S. group and the embargo prohibits U.S. citizens from meeting with Cuban officials. The full interview may be accessed here.

As plans for deepwater drilling ramp up off the Cuban coast, the presence of a delegation from Havana including the country’s top drilling regulator would mark the first time they have discussed that drilling in an international forum. The IADC hopes to use the forum to discuss international best practices with Cuban officials.

In a segment entitled Iraq Plays Catch-up on Oil, Platts Baghdad-based correspondent Ben Lando reported on Iraq’s race to rebuild its oil infrastructure and play a bigger role in oil and natural as markets.

In this week’s Energy Watch segment, Platts Energy Week featured Devon Energy’s William Whitsitt, executive vice president for public affairs, on the topic of a new national database on fluids used in shale gas drilling. Whitsitt spoke about his company’s participation in a new voluntary database. Platts Gas Daily Associate Editor Bill Holland offered an update on the latest developments in the Marcellus Formation, the rich shale gas region that stretches from New York to West Virginia.

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High-pressure deepwater well capping stack unveiled at offshore conference

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Helix Well Containment GroupThe Helix Well Containment Group’s new deepwater well capping stack, unveiled Tuesday at the Offshore Technology Conference in Houston. The new capping stack can handle pressures of up to 15,000 pounds per square inch, an improvement over the 10,000 psi model Helix completed in February.

By David Hammer
The Times-Picayune

The Helix Well Containment Group is a cooperative effort of 24 Gulf oil companies. They have banded together and invested in spill-response technology to convince the federal government that they could return to drilling in the deep sea and stop a leak like last year’s BP disaster, in which the massive device known as a blowout preventer failed to close in the well.

Helix Well Containment Group’s participating companies succeeded in getting several new wells approved in recent months, mostly because they had access to the consortium’s capping stack, something like a mini-blowout preventer that could attach to the top of a failed blowout preventer and block hydrocarbons flowing through it at pressures of up to 10,000 pounds per square inch.

At the annual Offshore Technology Conference in Houston today, Helix Well Containment Group unveiled a second capping stack model, which promises to safely shut in flows of up to 15,000 psi. That’s a significant increase in capabilities that the industry hopes can pave the way to deeper drilling.

Like the 10,000 psi model that was unveiled in late February — and led to the first new deepwater well permit approval a day later — the new capping stack will be housed in North Houston and can be at the site of a blowout offshore in less than 48 hours, according to Helix Well Containment Group.

The consortium’s well containment plan states that if there’s no debris blocking the well bore, the stack can be attached and shut off flow in three to four days. But other complications could delay final closure. If the capping stack is not enough to stop all flow and containment vessels and systems are necessary to carry oil to the surface, it could take as long as 17 days, consortium spokeswoman Danielle Allen said.

Michael Bromwich, the government’s top offshore regulator, said the 10 deepwater wells approved since Feb. 28 can all be shut in using only the capping stack.

The consortium’s second capping stack, which weighs 156,000 pounds, boasts a larger opening than others, something that should allow scientists to keep working on the insides of a busted blowout preventer even while shutting off the flow.

It’s one of the new components developed since last summer when a cap built on the fly by one of the consortium’s contractors, Helix Energy Solutions, finally shut in BP’s Macondo well, 87 days after its blowout preventer failed.

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A diagram of Helix Well Containment Group’s full capping stack and oil collection system.

In addition, the capping stack has ports for tubes to connect to ships on the surface, in case it needs to collect excessive oil flowing out. That containment system works in up to 8,000 feet of water and is being expanded to 10,000 feet this summer, Allen said.

Asked why Helix Well Containment Group is keeping its equipment in Houston when the vast majority of deepwater oil and gas prospects are off the Louisiana coast, Allen said the threat of hurricanes played a major role in the company’s decision.

“The Louisiana coast has some vulnerability in the event of a hurricane surge,” she said. “Houston is close enough to the port, but would not put it in the path of a hurricane surge and would allow for access to other ports via land.”

She also contended that most deepwater wells are about 200 miles from each deepwater Gulf port, but Macondo and some of the wells approved recently are about 100 miles from Port Fourchon.

Original Article

OTC 2011: Coastal governors form coalition to lobby for offshore drilling

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Posted on May 2, 2011 at 11:33 am
by jenniferdlouhy

Governors from Alaska and states bordering the Gulf of Mexico are reaching out to their counterparts along the West and East Coast today in a bid to get them more involved in decisions about energy production offshore.

The push for a new Outer Continental Shelf Governors Coalition is led by four governors who know a little something about oil and gas production offshore: Rick Perry of Texas, Bobby Jindal of Louisiana, Haley Barbour of Mississippi and Sean Parnell of Alaska.

In an invitation to other coastal state governors, the foursome said they hoped the coalition would “foster an appropriate dialogue between the coastal states and the administration” about offshore drilling. The group would give the governors a vehicle to lobby for expanded drilling offshore.

“All federal decisions regarding exploration and production must be made in consultation with affected states,” the four governors said. “In recent months, however, the federal government has taken sweeping actions regarding offshore oil and gas activities with little consultation with the states.”

And too often, they say, those decisions have conflicted with the states’ best interests.

For instance, Gulf Coast governors who signed the letter have protested the administration’s decision to halt deep-water drilling after last year’s oil spill and to postpone some sales of offshore drilling leases. And Virginia state leaders were upset by the Obama administration’s move to cancel a lease sale off their coastline.

Representatives from Louisiana, Texas and other states are set to announce the new group during a session this afternoon at the Offshore Technology Conference in Houston.

David Holt, president of the Consumer Energy Alliance and a FuelFix guest blogger, said the move would allow the governors to better communicate “the need to produce American energy offshore, not only for their individual states, but for the entire nation.”

Visit FuelFix this week for the latest news from OTC. You can also like our page on Facebook or follow @FuelFixBlog on Twitter. Look for updates from reporters @houstonfowler and @jendlouhyhc under the #OTCHouston hashtag.

Original Article

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