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I had the pleasure of listening in to a phone conference on Friday organized by Morgan Stanley's oil field services' analyst, Ole Sorer. The topic was the
Deepwater Horizon disaster, including what went wrong, who is liable, and what some of the longer-term impacts to the E&P industry might be. The discussion leaders included Mike Smith, a 15-year veteran of
Transocean (since retired) and two attorneys who have dealt with oil spill litigation in the past. I learned a lot, and thought I'd share some of their perspectives with the readers of Seis Matters.
According to the Transocean veteran, BP had discovered significant quantities of oil and gas at Macondo, the name of the field that the
Deepwater Horizon rig was drilling. BP had reached total depth and penetrated the reservoir horizon at 18,000 feet.
Halliburton had cemented the last casing string in the well and inserted several cement plugs within it which BP intended to drill out at some future point when they returned to Macondo to begin full-field development.
With the cement plugs in place, Transocean had begun the process of removing the drill string in the well (used during the cementing operation) and had begun to replace the heavier mud in the wellbore with less dense sea water. This is apparently a common practice, as the plugs are designed to contain the reservoir fluids downhole. Effectively, the
Deepwater Horizon was hours away from moving off the Macondo location.
At this point, some speculation begins. The leading hypothesis is that the cement plugs failed. The drilling crew wouldn't be expecting a failure and perhaps weren't monitoring the systems that detect an influx of fluids into the well, drill string, and drill pipe riser. Unbeknownst to those on the rig, a mixture of gas and water was coming up the drill string and riser to the surface and the deck of the
Deepwater Horizon. The volatile mixture of high-pressure hydrocarbons likely ignited quickly and unexpectedly, killing the 11 individuals who were on the drilling floor itself.
Normally, one of these drillers would have hit the "panic button" that closed the blowout preventers (BOP) on the seabed, but likely didn't have the time to do it. The toolpusher a bit farther away also has access to a panic button, but himself may have been incapacitated in the explosion or, if the electrical switches to the BOP were cut when the riser exploded, may have been unsuccessful in his attempt.
The next line of defense is called a "dead man's switch" and is supposed to activate the BOP on the sea floor if electrical and hydraulic communications with the rig are lost. If this switch had activated properly, five hydraulic "rams" under thousands of pounds of pressure, including one "shear ram" that acts like a pair of scissors, should have cut the drill string and closed in the well. The shear ram is designed to cut up to 13-3/8โณ casing, which is far larger than what was in the well at the time.
For reasons not understood, the BOP's either didn't activate at all or didn't do their job as intended. ROV pictures from the seabed show drill pipe extending out of the BOP (which should have been sheared off) and the oil is leaking at this point, as well as at several points above it where a part of the drilling riser remains.
As for liability, it primarily rests with BP according to this panel of experts. Maritime law has a precedent called "the anchored tanker" that says that the owner of the anchored tanker is liable for any damage resulting from it, even if that tanker is hit by another ship that was behaving in a reckless or negligent manner. BP is the owner of the anchored tanker in this case.
Moreover, the typical 100+ page drilling contract specifies that the rig owner (Transocean) is liable only for spills that happen in the course of the drilling operation (such as a tank of diesel rupturing and spilling overboard). In the case of a blowout, all drilling contracts specify that those are the responsibility of the oil company that has contracted the rig (BP in this case) and that most of them even specify that the oil company will "protect and indemnify" the rig owner even if they are shown to be reckless, negligent, or had behaved with gross misconduct.
It would appear that this will be hard for BP to prove, especially since the
Deepwater Horizon was the "top performing rig" for BP worldwide, with an unmatched safety and operational performance record and a crew that had been on board more or less continuously since 2001. Net-net, it sounds like BP is going to shoulder the lion's share of the liability for this accident and clean-up.
As for fall-out, there are three expected ramifications. The first is the "natural resource damage" that will be incurred (presumably by BP) as marine habitat, fisheries, etc. are shut-in and temporarily or permanently damaged. These costs, primarily resulting from jury awards or settlements in commercial litigation, are expected to far outweigh the clean-up costs (which themselves are estimated to be approaching $1 billion).
The second impact will likely be increased government intervention. The participants on the call don't believe that there will be a blanket ban on offshore drilling (despite some
White House commentary suggesting this earlier today) but they do see Congress spending significant time on the holistic topic of offshore drilling in the years ahead. In their opinions, this could actually be a good thing as it might provide a more consistent and stable regulatory regime for E&P operators.
Lastly, they expect higher costs to conduct offshore E&P operations. Similar to Congress mandating double-hulled tankers after the
Exxon Valdez spill, they expect a host of regulations to be put in place to add "double and triple redundancy" in offshore operations to prevent incidents like the
Deepwater Horizon explosion and the Macondo blowout and spill from repeating in the future.
A truly unfortunate incident in every sense.
May 1, 2010
Informant Says: "Oil Rig Was Blown Up"
The claim that the BP Gulf oil rig was purposely destroyed may just be real and/or intentional, as it is British Petroleum (BP), an alien company that is involved. Did they have a purpose, is there a casus belli? Quite likely, as British Petroleum is a Rothschild company, a crowd of One Worlders (along with the Rockefellers) who have long sought to use oil as the means, the commodity, for securing that world wide dominion over all companies and nations. This goal is the principal theme of the Babylonian Talmud of Judaism: one world dominion under the aegis of the Jews. (Maybe you are ready to look it up yourself now.)
Now what would the real purpose be for blowing up this oil rig? Why now? We must recall that the current White House occupant has stated that permission is granted to drill in America's off-shore sites: Virginia, for instance.... Well, if more oil is found and in quantity, as is most likely, such finds would drive the price of oil downward and the Oil Barons would lose their historic control over pricing and availability. For it is they who limit production, control pricing and close refineries to aid in their control over this important commodity. So, it is a typical British approach to retaining control and dominion out of that little Jewish-owned Banksters' Inner-"City" located within London. So they create a massive diversion and limit the promotion of off-shore oil drilling until they can work their way into controlling it! Such tactics have been used before to influence political decisions, to limit oil production and new finds โ and the history and status of another American oil site seems to confirm these methods by BP.
In Alaska, the US oil company, ARCO, first worked the oil sites there, doing the initial site work, setting up the pipelines and doing the additional searches for more oil in that region. When this was completed, ARCO, for some reason not ever explained to the American people, sold its oil rights in Alaska to British Petroleum (who have been criticized for how poorly they have maintained the pipeline and other infrastructure). It is they who have failed to continue the drilling in Alaska and it is they who have kept secret "other" massive oil finds (as reported by ARCO's chaplain, Lindsey Williams) that exist off the coast of Alaska. Williams has stated that he was well aware of a reported discovery known as the Gull Island find, which is reported to be so large as to support America's oil needs for 200 years. Not only is the Gull Island find large, it was subsequently reported to him by one of ARCO's old senior officials that another oil find, equal to the Gull Island find, was discovered northwest of the Gull Island find. (Google Lindsey Williams for confirmation)
Now why have these secrets related to oil been kept from the American Public? Well, obviously it is necessary to limit production and hide the details of oil discoveries so as to continue sitting in the catbird seat of oil controls... as the Rockefeller/Rothschild crowd have done since oil was first discovered and found important: not just for navies, but increasingly for other industrial and personal needs.
The best review of this issue of oil was done by Dr. Emmanuel Josephson who wrote of the historic battles over control of the world's oil. (See "Rockefeller Internationalist: The Man Who Misrules The World." Chedney Press, 1957)
So what in effect is going on, stems directly from the British Rothschild power over the economics and politics of the world, gained from their massive money supply and influence over those who are "elected" into office in America and other nations, especially in Europe. Why else would BP want to "own" the Alaskan oil?
Now, it may have become apparent to some of America's intelligence agencies that the Gulf oil rig may just have suffered from a purposeful sabotage; and it may also account for why the current Occupant sent American SWAT teams to other oil rigs in the Gulf, and probably elsewhere... as the Rothschild/Rockefeller crowd may be flexing their muscles and showing this new president just exactly who is running the world. Only this time, they may have stepped on themselves. The world is awakening to this deceit and who is behind it....
JRN