Deepwater symposium sheds light on upcoming regulations

Bruce Beaubouef • Houston

The offshore oil and gas industry got a glimpse of the latest E&P tools and technologies at the recently convened 15th annual Gulf of Mexico Deepwater Technical Symposium.

Held in New Orleans on Aug. 11 and 12, the event also featured two lunchtime keynote presentations that provided attendees with insights into regulatory and policy changes that will soon impact oil and gas development in the Gulf.

On Thursday, William Reilly, chairman of the Presidential Oil Spill Commission and former head of the US EPA, recapped the commission's findings and reviewed the past year of post-Macondo development. He opened his presentation by asking "what has changed, and what have we learned?"

He noted that in the wake of the Macondo oil spill, BP had accepted responsibility and worked to contain and remove the oil from the Gulf; created the $20-billion Oil Spill Liability Trust Fund; and collaborated with BOEMRE, the Ocean Energy Safety Advisory Committee, and the Center for Offshore Safety to advance the science of BOP systems.

At the same time, Reilly argued that prior to Macondo, an "aura of complacency" had characterized the entire offshore industry, not just BP. He recognized that this conclusion had been rejected by the industry, but pointed out that before the spill, the industry had devoted considerable attention to exploration and development – but had not placed a comparable emphasis on subsea containment technologies. He recognized that the industry was now rectifying this with the development of the Marine Well Containment Corp. and the Helix Well Containment Group.

Looking ahead, Reilly commented that the industry needs to develop a system that calls negligent companies to task. Since a second blowout would have a "calamitous" effect on future energy development, he said that "some sort of collective punishment, from the industry, is needed."

Toward this end, he recommended the formation of a new industry safety institute that would help the offshore energy industry police itself. Reilly noted that the mechanical and nuclear energy industries already have such organizations, and he contended that such an organization would enable the offshore oil and gas industry to monitor and censure wayward members, as needed; retaining the power of expulsion as the ultimate sanction. This new organization would not replace traditional industry bodies and best practices; but would instead serve as a complement to them.

Next, Reilly turned to the commission's findings on the federal government. He noted that the former MMS had been overmatched by the industry's manpower and expertise, and had been more focused on revenue generation than oversight. To remedy this, he noted that Interior Secretary Ken Salazar had separated revenue generation and resource management from safety regulation with the new Bureau of Ocean Energy Management (BOEM) and Bureau of Safety and Environmental Enforcement (BSEE). "Congress should codify this change with legislation," Reilly commented.

Reilly then described BOEMRE's accomplishments over the past year. These include NTL 6, which requires operators to develop response options for blowout and discharge scenarios; NTL 10, which requires statements of regulatory compliance and revised oil spill response plans; and the new Workplace Safety Rule which requires operators to develop, implement, and maintain a Safety and Environmental Management Systems (SEMS) plan.

Reilly also noted that the agency will soon have a new investigations unit; has launched recruitment efforts; and is planning to establish a new training institute for its personnel. He also said that the industry should lobby Congress to increase funding for the agency. "The industry needs BOEMRE to have qualified personnel," he said.

On Friday, Lars Hebert, regional director-BOEMRE, discussed the agency's accomplishments and path forward. He noted that on Oct. 1, 2011, its revenue collection and regulatory responsibilities will be separated with the formal establishment of BOEM and the BSEE. He also noted that there will still be five district offices, and that each will remain in its current location.

Hebert also discussed the Interim Final Rule (also known as the Drilling Safety Rule). He said it addressed both wellbore safety and well control equipment and procedures, including blowout preventers. He noted that operators are now urged to get third-party inspections and certifications of proposed drilling procedures. Hebert also noted that an engineer must now certify that a blowout preventer meets the new standards for testing and maintenance.

With regard to the SEMS requirements, Hebert affirmed that operators must have its plan in place by Nov. 15, 2011. The BSEE will then begin conducting audits to ensure that SEMS plans are in place and operative. He noted that operators must ensure that their contractors conform and adhere to the plan.

Hebert also gave an update on BOEMRE's rate of permitting for deepwater drilling in the Gulf. He noted that since Feb. 28, 2011, permits for 27 deepwater wells had been approved.

He also said that BOEMRE is working to streamline the permit process. On this front, Hebert noted that it was particularly important for operators to be aware of the "need for completeness" in their documentation. "Complete permits will get the highest priority," he said.

Hebert also observed that rig activity for all water depths was up in August 2011 as compared to both 2009 and 2010, and was just slightly above the (pre-Macondo) 2009 levels. With regard to deepwater, he said that rig activity is above 2010 levels but below 2009.

Looking at offshore drilling trends, Hebert turned to deepwater rigs available for work in the GoM. He noted that drillships had a 100% utilization rate, and said that this trend is expected to continue. Semisubmersibles had an 80% utilization rate, a metric that was expected to rise, Hebert noted.

Delmar completes mooring installation for Who Dat field

Broussard, Louisiana-based mooring contractor Delmar Systems, Inc. says it has completed preset mooring systems installation and facility connection operations for the Mississippi Canyon 547 "A" floating production facility, as part of the WhoDat field development for LLOG Deepwater Development Co., L.L.C.