Planning Ahead For Future Containment

Jim Brown
 
Printer Friendly Version

After seeing the damage a deepwater blowout can do the other major oil companies are planning to spend $1 billion to create a system to control future blowouts.

Exxon, Shell, Chevron and ConocoPhillips will each give $250 million to establish a non-profit organization, the Marine Well Containment Co., to produce and manage the equipment. The system will be designed and built over the next 12-18 months and be capable of handling spills of 100,000 bpd in waters as deep as 10,000 feet.

The industry has been faulted for not having a plan for the eventual blowout. Even if newer and safer methods are used there will always be danger and the unexpected event will eventually bite you badly as BP found out.

The companies did not invite BP to be part of the group although BP has been informed of the plans. The Conoco CEO said in time BP may elect to join the group but not until they get past their present problems. The group said they would ask other firms to join them and those who choose not to join can have access to the equipment for a fee.

The new containment system may become standard for future wells and could be adopted in all offshore regions around the world. Exxon is taking the lead on design and engineering of the equipment.

The equipment is envisioned as a containment system with a tight seal that will fit over the blow out preventer on the sea floor. It will channel oil and gas to surface vessels through a network of valves and pipes. The system will be pre-staged and be ready to mobilize within 24 hours of an event.

Rex Tillerson, Exxon CEO, repeated the claim that when the focus of drilling remains on safe operations and prudent risk management, tragic incidents like the Horizon explosion should not occur. The four CEOs testified before Congress that this type of accident would never have happened on one of their wells because they all practiced much safer drilling standards than BP.

BP Relief Well

BP said today that they were ready to intercept the Macondo well. They only needed to cement in the last stretch of casing and they would be ready to bore into the Macondo well and begin pumping it full of mud. They hoped to have that cement in place before they have to disconnect and flee Tropical storm Bonnie this weekend.

BP also received approval to begin another "top kill" or "static kill" effort this weekend. This involves pumping mud in the top of the well under high pressure in hopes of killing the well from the top. This is similar to the top kill procedure they tried before only they won't have to contend with the violent expelling of the mud through the top of the exposed well. Now that they have it contained there is no movement of liquids inside the well. The well is holding pressure at 6,850 PSI but nothing is flowing. Any injected mud should fall to the bottom of the well and begin to retard the flow of hydrocarbons into the well bore.

Jim Brown

This newsletter is only one of the newsletters produced by OilSlick each day. The investment newsletter is also produced daily and contains the current play recommendations in the energy sector. Stocks, options and futures are featured. If you are not receiving the "Play Newsletter" please visit the subscribe link below to register.

Subscribe to Energy Picks Newsletter

Archives:200920102011201220132014201520162017