Deepwater Horizon, by Metin Çakanyıldırım and references cited therein.

Transcription

1 Deepwater Horizon Page 1 Outline Summary of the events and companies Technical problems and their association with companies Managerial problems Risk averse vs. risk seeking tendencies Suggestions to avoid disasters Ethics Sources: Deepwater Horizon, by Metin Çakanyıldırım and references cited therein. This file is electronically made available to MERIT students who agree NOT to post or to distribute it to the others.

2 Geography Page 2 Digging Macondo well 582 miles southwest of UTD campus Macondo well is in block 252 of Mississippi canyon; Undersea river canyons are rich in sedimentary rocks 48 miles from the nearest land, 114 miles from Port Fourchon that services and supplies oil rigs 154 miles from Houma helicopter base used for transporting oil & gas personnel to the rigs in Gulf of Mexico

3 Geology Page 3 Macando well is in deepwater region of GOM (Gulf of Mexico), sea depth 5000 ft. It is on the continental shelf where the shelf slope are dropping fast Region has turbidites (sedimentary rocks deposited by currents) with HC reservoirs: high porosity & permeability Cost of drilling 12,000 ft into the seabed is high but the production rate is very high Cost per bbl is low Additional complexity: Gap between pore pressure and fracture pressure is tight in GOM deepwater fields

4 Companies Involved Working Interest in Block 252: 65% BP, 25% Anadarko (Houston based) and 10% MOEX (Japan based). Operated as a joint venture (cost and revenue sharing) while BP was responsible for the operations On the day of blowout only 7 out of 126 on board were BP employees. Other companies: Transocean: Halliburton:. Page 4

5 Transocean s Deepwater Horizon Rig Page 5 From sea level to top of derrick 320 ft ft From sea level to bottom 75 ft 9000 ft of drilling at Macondo with Transocean s Marianas rig, damaged during Huricane Ida in Nov ft of drilling with Transocean s Deepwater Horizon, brought in Feb 2010 to complete the drilling Deepwater Horizon was a dynamically positioned semi-submersible rig. It is transferred from one location to another on cargo ships. At its intended location, it uses directional thrusters (8 small propellers) to maintain its location and orientation If the thrusters do not work (e.g., with power loss), the rig can be carried or rotated by waves. Transocean paid $560 million to Hyundai Heavy Industries in BP rented Deepwater Horizon at a rate of $530,000 per day and incurred a similar amount for fuel, expendables and services, bringing total cost to $1 million per day.

6 Technical Problems Page 6.. A well design with few barriers to gas flow;.

7 A well design with few barriers to gas flow Page 7

8 Managerial Problems Page 8.. Too much re-organization in BP Limited tenure and experience at a certain position.

9 Why they did what they did? Page 9 BP: Well design to avoid pressure build up in the annulus Transocean Need to satisfy the client BP Halliburton..

10 Who wanted to progress fast Page 10 Names / positions of people at BP Transocean Halliburton

11 Recommendations to avoid another disaster Page 11

12 Unethical behavior, if any, how to avoid? Page 12

13 Final Thoughts? Page 13

14 Summary Page 14 Summary of the events and companies Technical problems and their association with companies Managerial problems Risk averse vs. risk seeking tendencies Suggestions to avoid disasters Ethics

15 A Glance Page 15 Discussion in the main body focuses on technical and managerial problems Even with multitude of problems, there are fail-safe mechanisms employed to prevent a blowout One of them id the Blowout preventer BOP did not function well One control panel was out of battery The other was mis-wired Rig crew hesitated to cut the pipe Well manager attempted but could not cut Blowout preventer was investigated afterwards:

16 Value of a Rig Page 16 Rig values drive the rig lease fees, which create pressure on the rig lessee (e.g., BP) Estimated value of a rig by using Rig Valuation Tool (RVT) by Norwegian Company Bassoe Offshore See I went through this valuation in 2017 for Semi-submersible rig Years in service starting Currently drilling: Yes Ability to operate in harsh environment: Yes Hi-tech and specifications: Yes» This rig has a value between $283 and $312 millions, almost half of what Transocean paid in 2001.