BP Spill Study Says BOP Needs Further Work

Last week, the results were released from the forensic study of the blowout preventer (BOP) used on BP Ltd.'s (BP-NYSE) Macondo well in the Gulf of Mexico that blew out last year causing an explosion, fire and eventual sinking of the Deepwater Horizon semi-submersible drilling rig and this nation's greatest offshore environmental accident.  Den Norske Veritas (DNV), the Norwegian engineering and risk-management firm hired by the U.S. Department of the Interior to assess the BOP and determine its role in last year's Deepwater Horizon disaster, after examining and testing the unit recovered from the ocean floor, prepared a 200-page report with a 351-page appendix.  The inspectors' conclusion was that the shear ram valves in the BOP were unable to fully sever the drillpipe as the unit is designed to do because the pipe inside buckled from the well's initial blow-out and was out of alignment that prevented complete closure.  DNV found that the shear rams had closed to within 1.4 inches.  This gap, albeit small, provided sufficient room for an estimated 4.9 million barrels of oil to escape. 

While the report details the failure, the conclusions confirm the early belief of many drilling engineers consulted about the disaster.  The inability of the shear rams to cut the pipe because of it being off center highlight potential problems for companies drilling over-pressured wells.  The buckling of the pipe was due to the high pressure fluids roaring up the drilling pipe and annulus lifting the pipe until it hit an obstacle.  At that point, the momentum of the pipe and pressures and heat of the flows resulted in its bending.

Exhibit 10.  Why BP's Macondo Well Spilled Oil

Source:  The Wall Street Journal

The report quickly generated further criticism of the offshore oil and gas industry and its safety procedures in drilling deepwater wells that tend to exhibit high formation pressures.  All facets of the oil and oilfield service industry involved in drilling these wells is working on ways to improve the performance of the drilling and safety equipment, especially the BOP.  There still remain unanswered questions about what actually caused the well to blow out and there will be more information and hypotheses presented down the road, but the DNV report was the last major report on the equipment involved in the accident.  The belief of most observers is that the Deepwater Horizon disaster was the result of a confluence of questionable decisions and actions by all parties involved that resulted in the creation of an unbalanced pressure differential between the downhole formation and the equipment designed to hold back that pressure. 

Criticism of the DNV report came immediately from political opponents of offshore drilling including Rep. Edward Markey (D., Mass.) who said, "This report calls into question whether oil-industry claims about the effectiveness of blowout preventers are just a bunch of hot air."  The man responsible for overseeing U.S. offshore drilling rules until he retired in 2009, Elmer Danenberger III, was quoted by The Wall Street Journal as saying, "They have to rethink the whole design," meaning the BOP.  The DNV report concluded that the BOP failure was due to a design flaw and not the operation, abuse or maintenance of the BOP by the companies involved in drilling the Macondo well. 

The BOP in question was manufactured by Cameron International (CAM-NYSE), the leading provider to the drilling industry of such units for over 90 years.  The BOP has been the industry's last and best defense against well pressures, which often came as a result of encountering pockets of higher-pressured natural gas at shallower depths while drilling a well.  In fact, the BOP that became the signature product for Cameron was developed in response to several high-pressure well workover accidents in 1922.  The co-founder and majority owner of then Cameron Iron Works, James Abercrombie, was also a successful contract driller with a history of putting out well fires and blow-outs, long before Red Adair made the occupation of fire-fighting glamorous. 

In late 1921, Mr. Abercrombie secured a contract to work over a troublesome well in the Hull field in Liberty County, northeast of Houston.  This was a field with many small pockets of high pressured gas.  In the course of working over wells in this field, Mr. Abercrombie's company had lost its newest and best rig and had encountered three blowouts.  While each of the blowouts resulted in lost equipment, fortunately no one was hurt.  The episode, however, focused Mr. Abercrombie on ways to design equipment that could be used to prevent wells from blowing out.  Originally, he had used an elementary blowout preventer called a "boll weevil."  It was essentially a piece of heavy-gauge pipe surrounded by a thick lead casing.  There was stopcock on top of the arrangement.  If it was suspected that a well might blowout, the unit was slipped over the well's casing and the stopcock closed.  The unit proved impractical as a well containment device but mainly it was used to try to give the drilling workers time to get away from the rig before the well blew.

There was another preventer on the market designed to improve on the "boll weevil" and Mr. Abercrombie purchased one of them to use on his next well workover in the Hull field.  Unfortunately it, too, failed to prevent another blowout.  Mr. Abercrombie came up with the idea of a ram-type preventer with the faces of the rams closing in on the drillpipe in order to close off the pressure in the well.  With a sketch of the concept, Mr. Abercrombie went to his co-founder and partner, Henry Cameron, the next morning and sketched out his concept in the sawdust and dirt of the machine shop's floor.  With a casting produced by Howard Hughes' nearby shop, Mr. Cameron machined the design.  A patent application was filed on April 14, 1922, but patent number 1,569,247 was not issued until January 12, 1926. 

As the unit was tested it was discovered that it leaked when pressure increased.  Mr. Cameron designed a fix whereby the increasing pressure would force open a notch in the corner of the ram face and force it to close tighter.  Patent number 1,498,610 was issued as a modification to the original BOP design but before the original patent was even granted.  By adding steel and cast iron parts to the BOP and being able to guarantee the unit would work to shut off 2,000 pounds of flowing pressure, the orders started coming in, not only from domestic companies in Texas, Louisiana and California, but also for use in foreign locations such as Mexico and Venezuela.  The Cameron Iron Works company was on its way to a glorious history that continues today.  [Much of this history about Cameron comes from the book, Mr. Jim, by Patrick J. Nicholson.]

We have high confidence that the engineers in the drilling business will figure out how to improve the performance and safety of the drilling process, just as they have for the past 150+ years.  Well control episodes have occurred throughout the history of the petroleum industry.  The Deepwater Horizon was the latest and most devastating, both due to the loss of 11 lives and the environmental damage to the Gulf of Mexico from the oil spill.  The evidence from the investigations of the disaster continues to show the Macondo well blowout was an accident.  All aspects of our daily lives, including the energy, involve risks.  We need to better understand the risks and their potential ramifications.  Importantly, we need to keep a perspective on risk and our risk tolerance.  We don't stop driving after a car accident.  We don't stop flying after a plane accident.  We shouldn't stop drilling after a drilling accident. 

G. Allen Brooks works as the Managing Director at Parks Paton Hoepfl & Brown. Reprinted with permission of PPH & B.