BP to lower oil spill containment system into gulf

(This story was updated May 7)

Paula Dittrick
OGJ Senior Staff Writer

HOUSTON, May 6 -- BP PLC and its contractors worked May 6 to lower an oil spill containment structure about 5,000 ft down to the seabed on Mississippi Canyon Block 252 off Louisiana in the Gulf of Mexico. Oil was confirmed touching both sides of the Chandeleur island chain.

It’s hoped the containment system, once operational, will collect much of the oil and greatly reduce the volume of the oil reaching the shore. As of May 7, oil spill response skimming vessels had recovered about 30,000 bbl of oil-water mix from the surface of the water since a Apr. 20 drilling rig accident triggered the oil spill.

Doug Suttles, chief operating officer of BP Exploration & Production Inc., said the containment system will not stop or reduce the actual volume of the spill, which is estimated at 5,000 b/d. The containment system will be placed over the riser while other efforts continue to stop the flow coming from the wellhead, he said.

Transocean Ltd.’s Deepwater Horizon semisubmersible drilled the Macondo well for BP and its partners, Anadarko Petroleum Corp. and Mitsui Oil Exploration Co. Ltd. BP is the operator.

An Apr. 20 explosion and fire left 11 crew members missing and presumed dead. The Deepwater Horizon sank on Apr. 22 (OGJ, May 3, 2010, p. 31). The well struck oil and associated gas with the oil being 35° gravity.

During a May 6 news conference, the Shoreline Clean-up Assessment Team confirmed oil had reached both the beaches and the marshes of the Chandeleur island chain, which is part of the Breton National Wildlife Refuge. Mary Cocklam-Vendle, BP shoreline response manager, said BP was working with state and federal agencies on developing and implementing shoreline cleanup plans.

Containment system deployed
The 40 ft x 24 ft x 14 ft steel vessel weighs 98 tons. Wild Well Control designed the subsea containment structure, which left dock at Port Fourchon, La., on May 5.

After reaching the seabed, the process of testing and commissioning the system will begin. If everything goes well, the system could be operational on May 10, although Suttles emphasizes it’s a complex operation never done at this water depth.

BP plans to lower the dome over the damaged Deepwater Horizon riser, one of the two leak sites, on the seabed to capture the oil. Plans call for the dome to be connected by its own riser to a drillship at the surface. The intent is to pump the collected oil and gas to Transocean’s Discoverer Enterprise drillship.

"We will probably have start-up trouble," Suttles said of the subsea containment system. "We'll have to learn how to make it work."

Meanwhile, engineers also are working on possibly using a technique known as a top kill, which involves pumping a heavy liquid into the well to stop the flow of oil. Suttles said this tactic has been used on land and in shallow water but not in 5,000 ft of water.

The top kill would involve reconfiguring the blowout preventer (BOP). Another option being considered is to put an additional BOP on top of the BOP stack already at the wellhead, Suttles said.

He said "the yellow pod or brains" of the first BOP had been retrieved, and workers hoped they could reinstall this mechanism so that it would read the pressure inside the BOP. Suttles emphasized BP does not want to do anything that could make the spill worse.

In addition to these efforts, a relief well is being drilled. It had reached 7,800 ft depth from the water's surface as of May 6, Suttles said.

Transocean discusses insurance
Transocean executives said May 6 the company received $401 million as partial payment for expected insurance recoveries from the Deepwater Horizon. The total insured value of the rig was $560 million, subject to a deductible of up to $1.5 million.

Under the drilling contract, BP assumed full responsibility and indemnified Transocean of any loss, expense, claim, fine, penalty, or liability for pollution, Transocean President and Chief Executive Officer Steven L. Newman told analysts during a first-quarter earnings conference call.

In a filing with the US Securities and Exchange Commission, Transocean said, “We can provide no assurances as to the estimated costs, insurance recoveries, or other actions that will result from this incident.”

The rig operated under a contract with BP through September 2013, but total loss of the rig trigged automatic termination of the agreement. Transocean said it will be negatively impacted by loss of revenue from the Deepwater Horizon, adding the company does not carry insurance for loss of revenue.

“There have been numerous lawsuits filed related to the incident, and we expect additional lawsuits to be filed,” Transocean said in its SEC filing. “We expect to incur significant legal fees and costs in responding to these matters.”

Raymond James & Associates Inc. analysts noted Transocean carried $950 million of excess coverage, which they believe “should be sufficient to cover any lawsuit settlements.” They said, “While we do expect significant legal costs going forward, we still believe that the financial risk for Transocean is relatively manageable for the Deepwater Horizon accident.”

Napolitano visits Mississippi, Florida
US Department of Homeland Security Secretary Janet Napolitano and Department of Commerce Secretary Gary Locke met with Mississippi Gov. Haley Barbour in Biloxi, Miss., and Florida Gov. Charlie Crist in Pensacola, Fla., on May 6.

Napolitano and Locke also met with community business leaders and visiting response operations in their ongoing emphasis on interagency coordination. In Biloxi, Napolitano said the oil spill could prove to be “a long-term event.”

In St. Petersburg, Fla., representatives from BP, USCG, and the Florida Department of Environmental Protection reviewed an area contingency plan regarding various national and state wildlife refuge areas on Florida’s west coast.

Contact Paula Dittrick at [email protected].