British Petroleum's Macondo Well Accident BOP Failure - Research Paper Example

?British Petroleum's Macondo Well Accident BOP Failure The Deepwater Horizon disaster at Macondo well is considered as one of the largest oil spill incidents in the history of petroleum industry which resulted in loss of human lives and significant effects on the wildlife and marine habitats This devastating incident also had long-standing social, environmental and economic consequences. The major findings of this paper have been derived from identifying the root causes of this incident and assessing an investigative analysis made by BP. It has been viewed that within the management of BP, there was a lack of communication with the contractors, inappropriate risk evaluation, inaccurate decision making and use of improper operation activities. The investigation team of BP revealed that requisite tests were not conducted properly by the engineering personnel because of which this disaster spread quite largely. Due to this devastating incident, the US federal government imposed a huge amount of fine upon BP. After the ocuurence of this incident, BOEMRE and Mineral Management Services (MMS) took strict initiatives and implemented various rules and regulations along with restructuring the working procedure so that this type of devastating incident might not occur in future. Table of Contents Abstract 2 Introduction 4 Thesis Statement 5 5 An Overview of Macondo Well Accident 5 Root Causes of the Macondo Well Disaster 9 Investigation Report about Macondo Well Accident 10 BOP Failure 12 Steps Taken By BP after BOP Failure 13 Conclusion 15 Works Cited 16 Appendix 1 17 Petroleum Industry Terms 17 Appendix 2 18 Introduction BP plc is regarded as one of the leading oil and gas multinational companies in the world. It operates in more than 80 nations all over the world. However, over the years, in its operations the company has faced certain obstacles especially related to oil spill incidents which have created a significant impact on the overall sustainability and reputation of the organisation. In this context, Deepwater Horizon oil spill incident was one of the infamous chapters in the history of BP. The oil spill incident took place in Gulf of Mexico in the year 2010. It is considered as one of the biggest accidents in the history of petroleum industry. Deepwater Horizon (DH) was an oil rig which was built by the ‘Hyundai Heavy Industries’ shipyard in South Korea and was delivered to BP in the year 2001. The rig was valued to be of multi-million dollars and it was considered as a 5th generation advanced technological ‘semi-submersible’ drilling rig. This rig comprised automatic drilling systems by which oil was generated into the wellbore of Macondo Prospect. This fully automatic drilling machine consisted of 15,000 ‘PSI-rated BOP system’ and operated below the sea level at about 9000 ft. The rig had drilled well up to 35,055 feet, which took almost nine years. This entire drilling system was owned as well as operated by the Transocean Company under a mutual agreement with BP (Deepwater Horizon Study Group, “Final Report on the Investigation of the Macondo Well Blowout”). Thesis Statement The paper intends to investigate and analyze the Macondo well accident of BP Plc at Gulf of Mexico which caused continued oil spill for several days resulting in widespread damage to marine habitats as well as wildlife. An Overview of Macondo Well Accident Deepwater Horizon’s ‘Blowout Preventer (BOP)’ was one of the main factors regarding the Macondo disaster. The incidents surrounding Macondo disaster have been more visible to the society through reports prepared by BP and the National Commission of the United States. The US federal government imposed a huge fine amounting to around 4.5 billion USD against BP to settle illicit charges brought against the company regarding the Deepwater Horizon disaster (Capaldo, “US Government Fines BP $4.5bn Over Deepwater Horizon Disaster”). This incident occurred on the evening of 20th April 2010 due to the release of hydrocarbon gas on Macondo well resulting in an explosion and fire on the rig. The Macondo well is located around 48 miles from the nearest seashore, 154 miles from the Houma, Louisiana helicopter base and 114 miles from the transport point of Port Fourchon (Appendix2, Figure 1). Due to this accident, eleven workers lost their lives and 17 others were seriously injured. The fire which was ignited by hydrocarbon gas burnt for around 36 hours until the rig sank. Continuous leak out of this gas occurred from the reservoir through the blowout preventer (BOP) and the wellbore for 87 days which resulted in the main debacle causing this incident. BP Exploration and Production Inc. is the main operator of ‘Mississippi Canyon Block 252’ where Macondo well was located. This incident took place due to a lack of integrity failure, due to which there was a loss of hydrostatic control of wellbore. This mainly occurred due to the loss of flow control from the BOP and the wellbore, which facilitated the ignition of hydrocarbon. After this explosion, the emergency system functions of BOP were not successful to seal the wellbore. During the time of this accident, the ‘production casing’ was running inside the well and a barrier of cement had been placed in order to isolate the flow of hydrocarbon gas. Technical tests were also conducted at a level of 8,367 feet where mud was circulated with the help of sea water in order to check the balance position of the well (The Washington Post, “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling”). The Macondo well was a kind of valve located inside the reservoir which is situated more than 13,000 feet below the sea floor which contained over 110 million barrels of oil. Upward extension from the reservoir up to the sea floor was connected with the steel pipe called ‘production casing’. During the oil production process, this pipe was surrounded by ‘production tubing’ which would carry oil upward from the reservoir to the vessel of the sea surface. This production casing was further surrounded by another casing which was essential for conducting drilling process and which also facilitated to create a barrier among the production casing as well as the rock formation which covered the wellbore. After this incident, most of the lifeguard teams were unable to control the blowout of Macondo well. From April 20, 2010 for 87 days the well continuously burnt until there was a stop of flow of oil into the Gulf of Mexico. The federal government organized various engineers and technical teams in order to investigate the reason for Macondo blowout (The Washington Post, “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling”). Industry Analysis Related to the Macondo Well Accident In May 2010, the ‘Deepwater Horizon Study Group (DHSG)’ was incorporated by the association of the ‘Centre for Catastrophic Event (CCRM)’ in order to analyze the incident regarding Macondo well blowout which happened on April 20, 2010. The organizational reasons behind this disaster are intensely rooted within the histories as well as the cultures of the oil and gas industry. This disaster affected a global industry as well as its governance. This incident was avoidable if the necessary guidelines and policies had been followed. It has been observed that BP did not follow a decisive safety culture regarding their operational activities. Their organizational operations were not focused towards ensuring maximum safety regarding entire activities. This incident occurred due to the failure of control effectiveness, improper plan execution and inferior clean-up facilities. Moreover, it has also been observed by DHSG that there were ample opportunities for this organization to appropriately evaluate the organizational decision regarding risk management whereas the management avoided this imperative function regrading their operational activities (BP Plc, “Deepwater Horizon Investigation Report”). Contextually, there were multiple scopes from the management perspective of BP to do the right things at the right time which they failed to carry out resulting in the occurrence of the disaster. In many ways, this disaster was among a few noteworthy disasters that have been experienced by the ‘offshore oil and gas industry’. Eight months before this disaster, there was a similar kind of blowout in ‘Montara well offshore’ in the Timor Sea, Australia. The Piper Alpha platform oil related diaster occurred in the year 1988 at North Sea. This oil production platform was operated by Occidental Petroleum (Caledonia) Ltd. The major causes behind these incidents were the system failures comprising a series of unexpected compounding breakdowns. The major causes of these disasters were a lack of risk assessment for hazardous effects on natural environment and improper decisions taken by industrial governance as well as management authority. The ‘industrial-governance-management’ environments were unable to create appropriate barriers which might have prevented these failures. Within these environments, management decisions were taken either by the industry and or by public sector agencies regarding improper cost cutting and lack of risk evaluation, which was the major constituent for all these disasters. The outcome of this aspect was the degradation of environmental natural components due to flammable fluids and gases that destroyed the overall system (Deepwater Horizon Study Group, “Final Report on the Investigation of the Macondo Well Blowout”). Root Causes of the Macondo Well Disaster The major causes behind the Macondo well disaster comprise inappropriate systematic operations and inability to take right decisions regarding both industry as well as government policies. The inaccurate operational activities were caused due to the systematic failures of BP’s management team. The oversight of governmental decisions for implementing strict regulatory policies in relation to offshore drilling also contributed to the occurrence of the incident. Inaccurate management decisions within BP, lack of communication between BP and its contractors and ineffective training sessions regarding engineering operations of rig workers were among major causes behind the incident. BP and other operational management teams always maintained ineffective work procedure system, unethical corporate culture and inaccurate decision taking protocols regarding several contractors who were in-charge of drilling deepwater well. Contextually the other causes consist of the aspect that BP’s management procedure did not properly recognize or evaluate the risks which could have been helpful for taking the necessary steps at the right time (Horton, “Macondo – What Happened; And What Can We Learn”). Halliburton is one of the world’s leading oil service companies which also maintained a contract with Macondo well. Halliburton and BP’s management system did not properly ensure that cement quality was adequately assessed and also maintained inadequate communication with Macondo well. In addition, ‘Mineral Management Service (MMS)’ policies were improperly implemented for assessing the risk of deepwater drilling. BP’s contractors did not properly review the necessary safety requirements. There was also inadequate funding regarding obtaining resources and personnel training programs which were strongly needed for improving the operation procedures. Furthermore, there was also a lack of control on the part of BP regarding Macondo well’s engineering decisions. All these overall aspects were the root causes behind the occurrence of Macondo well disaster (Horton, “Macondo – What Happened; And What Can We Learn”). Investigation Report about Macondo Well Accident Apart from the discussed aspects, there were also several operational procedures which were considered as among the contributing factors for Macondo Well accident. According to BP’s investigation report of the year 2010 regarding Deepwater Horizon accident, there were inaccurate engineering operations which were done before the accident occurred. A day before the incident cement had been pumped down the ‘production casing’ and brought up into the ‘wellbore annulus’ for preventing hydrocarbon gas which was entering into the wellbore from the reservoir. The quality of cement which was placed on the main hydrocarbon zone was very light and it was a kind of nitrified foam cement slurry. The annulus cement was essentially placed in order to avoid the leakage of gases. The investigation team analyzed that there was use of low quality cement and there was existence of low risk evaluation (BP Plc, “Deepwater Horizon Investigation Report”). After applying the cement, the hydrocarbon gas should have passed down the wellbore and entered the 97/8 inch * 7 inch of production casing and flown through the shoe track which was installed in the casing bottom. A key reason for this accident was that both the obstacles were unable to prevent the entry of hydrocarbon into the ‘production casing’. In terms of this operational aspect, the investigation team analyzed that the flow of hydrocarbon was through the production casing rather than shoe track. It had also been observed by the investigators that shoe track cement and the ‘float collar’ facilitated the flow of hydrocarbon into the ‘production casing’ (BP Plc, “Deepwater Horizon Investigation Report”). A negative pressure of hydrocarbon gases within the shoe track should have been tested and verified by the senior engineering team. The tests should have been verified in order to analyze the mechanical barriers, whether they were working properly or not, such as ‘production casing’, shoe track and casing hanger seal assembly. The tests should have comprised restoring the heavy drilling mud into seawater in order to maintain controlled and well balanced condition. The investigators of BP analyzed that there was an inappropriate review by the management of BP in which they reported that the tests were successfully conducted (BP Plc, “Deepwater Horizon Investigation Report”). After the negative pressure test was done, the wellbore should have been in a well balanced condition which should have protected further influx within the wellbore. As per the normal operation mode, heavy drilling mud should further be replaced within the sea water in order to balance the wellbore properly. During this process, hydrocarbon should flow through the ‘production casing’ and pass into the BOP. The investigators viewed that the rig members did not properly identify the influx which made the wellbore uncontrollable until the hydrocarbon passed through the BOP. Initially, action was taken in order to close the BOP along with the diverter whereas oil was flowing out into the ‘Deepwater Horizon Mud Gas Separator (DHMGS)’ system rather than diverter line. It has been analyzed by the investigator team that if oil had been diverted to the overboard rather than DHMGS then there should have been ample amount of time to respond to the crisis which may have reduced the severity of this accident (BP Plc, “Deep Water Horizon Investigation Report”). BOP Failure Blowout Preventer (BOP) is a kind of device which functions through shearing blades and a series of rams and valves in order to protect the sub-sea wells if oil or gas starts to leak out from below the sea level. At Macondo, BOP was located at a deep sea level which was miles away from the upper sea level. BOP stack is required for drilling process by which oil is generated from the deep below to the upper sea level. BOP is mainly referred as the lower portion of stack. The BOP at Macondo well comprised five individual devices called “Closing Ram”. The top section of the BOP stack is known as “lower marine riser package”. In case of Macondo well, these stacks comprised two additional sealing systems called “annular preventers”. Each preventer consists of a hard rubber mechanism in the form of tire which facilitates to enlarge automatically and cover as a seal throughout the drill pipe at the time of emergency or leakage of oil (Appendix 2, Figure 5) (The Washington Post, “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling”). Moreover, the investigator team also evaluated that BOP emergency system did not seal the well properly. In this incident, the crew members were futile in order to seal the well through the BOP emergency mode. The explosion quickly disabled the emergency operating equipments where rig personnel were not able to appropriately control the system before the fire spread within the entire system. In BOP, there are yellow and blue control pods which become activate automatically during the emergency situation (OilOnline, “Macondo: the BOP's Story”). These pods are called ‘Automatic Mode Function (AMF)’ which are primarily designed in order to seal the well automatically without the rig personnel as well as electric power. It has been observed that there was a fault of solenoid valve of yellow pods and also AMF batteries of blue control pods had inadequate charge which made BOP incapable to operate at that emergency mode (Appendix 2, Figure 2). Another emergency mode of operating BOP is the auto shear function which is also knows a ‘Bind Shear Ram (BSR)’. Due to certain technical problems the BSR also failed to seal the well properly. The BP investigator team analyzed that there was an improper maintenance of BOP system by the engineering personnel (The Washington Post, “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling”). Steps Taken By BP after BOP Failure After the occurrence of BOP failure in Macondo well incident, short-term measures had been commenced developed by the Department of ‘Interior’s Bureau of Offshore Energy Management, Regulation and Enforcement (BOEMRE)’. The ‘Mineral Management Service (MMS)’ recognized three aspects i.e. regulation, leasing and revenues, each of them is responsible for various aspects regarding offshore oil and gas development. The initiatives are implemented for both technical as well as organizational aspects. In addition, the National Commission imposed both short-term as well as long-term government policies in order to restructure the overall operational procedures, management team and technical equipment. Oil industry organizations in the US also suggested regarding a large variety of technical as well as organizational changes in policies which must be considered for the upcoming operations (Rigzone, Inc, “BP Spill Study Says BOP Needs Further Work”). Contextually, most of the government agencies throughout the world also have taken various strict initiatives where every level of employees should as well as management team must be conscious regarding risk evaluation. It has been precisely recommended that before starting any operation, the necessary tests should be evaluated appropriately by the engineering personnel (Deepwater Horizon Study Group, “Final Report on the Investigation of the Macondo Well Blowout”). Conclusion The incident of oil spill at Deepwater Horizon resulted in certain kind of penalties imposed on BP by the federal government. This operation did evaluate appropriately the potential risks, which were considerably high at the time of operations, but the management team, was unable to take appropriate initiatives at the right time. It has been observed that there was a lack of risk assessment and inappropriate decision making by the management team of BP as well as there was a lack of communication with the contractors. After Macondo well disaster took place, the entire oil and gas industry has taken strict initiatives and subsequently the federal government has imposed certain regulations for the functioning oil companies in order to make it mandatory to have proper risk assessment. From this disaster, it has been observed that BOEMRE and MMS where unable to improve the development process related with hydrocarbon hazardous material and also there was inaccurate tests done due to which this incident occurred. Apart from inaccurate engineering operations there was also a lack of management responsibilities in terms of short and long-term goals, insufficient risk assessment, lack of necessary funding for the improvement of machinery, inadequate communication with contractors and irresponsible work culture. Works Cited BP Plc. Deepwater Horizon Investigation Report, 2010. Web. 11 Dec. 2012. BP Plc. Investigation Report: Executive Summary, 2010. Web. 11 Dec. 2012. Capaldo, Franco. US Government Fines BP $4.5bn Over Deepwater Horizon Disaster. ICIS News, Web. 11 Dec. 2012. Deepwater Horizon Study Group. Final Report on the Investigation of the Macondo Well Blowout, 2011. Web. 11 Dec. 2012. Horton, Steve. Macondo – What Happened; And What Can We Learn, 2011. Web. 11 Dec. 2012. OilOnline. Macondo: the BOP's Story, 2011. Web. 11 Dec. 2012. Rigzone, Inc. BP Spill Study Says BOP Needs Further Work, 2011. Web. 11 Dec. 2012. The Washington Post. National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, 2012. Web. 11 Dec. 2012. Appendix 1 Petroleum Industry Terms BOP (Blowout Preventer): A BOP is a kind of advanced mechanical device which is installed inside the stack. This device is essentially used in order to control, balance and seal oil as well as gas wellbore. Annular Blowout Preventer: It is a kind of sealing component made by rubber. It is activated at the time of emergency scenario and it prevents the flow of oil and gas if it is leaked within the production system. Blind Shear Ram (BSR): It is also known as ‘Sealing Shear Ram’. It is used to seal the wellbore by regaining the oil pressure which flows through the bore. Drilling Rig: Drilling rig is a kind of machine which is used for drilling the ground in order to accumulate the oil into the reservoir. Drilling string is located inside the production casing by which oil is generated from the lower to upper sea level. Appendix 2 Figure 1: Geographical location of Macondo Well Source: (BP Plc, “Deepwater Horizon Investigation Report”) Figure 2: Internal Structure of Macondo Well Source: (BP Plc, “Investigation Report: Executive Summary”) Figure 3: The Macondo Blowout - Industry Analysis Source: (Horton, “Macondo – What Happened; And What Can We Learn”) Figure 4: Blowout Preventer (BOP) Source: (Deepwater Horizon Study Group, “Final Report on the Investigation of the Macondo Well Blowout”). Figure 5: BOP stack connected with Macondo Well Source: (The Washington Post, “National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling”). Read More