Drilling Dangers: Deepwater Horizon disaster raises concerns for local industry

By: Tom Mason

For the global oil and gas industry, the Deepwater Horizon disaster was the shot heard round the world. The tragic explosion, fire and subsequent undersea blowout that took place in the Gulf of Mexico off Louisiana on April 20 was a wakeup call that will have profound effect on the worldwide oil and gas industry for years to come, and has industry leaders in the Atlantic region taking a close look at the fail-safes in place in their industry.

The disaster is already having an effect on policy in Atlantic region. In the second week of May the government of Newfoundland and Labrador announced a review of offshore oil spill prevention and response practices. The review, to be headed by marine safety and environmental management expert Captain Mark Turner, will assess the ability to prevent and respond to oil spills in Newfoundland waters. The same week, the government of Nova Scotia announced that the moratorium on drilling on the Canadian side of Georges Bank has been extended until the end of 2015 – although it’s not clear whether Deepwater Horizon influenced that decision.

Now the eyes of the media are turning to a project about to get underway off the coast of Newfoundland. When Chevron begins drilling its Lona O-55 well in the Orphan Basin, 430 km northeast of St. John’s, the well will be more than a kilometer deeper under the water than the well that Deepwater Horizon was drilling.

Sean Kelly, public relations manager with the Canada Newfoundland and Labrador Offshore Petroleum Board (CNLOPB), says that his organization has oversight responsibility for Chevron’s project, but the operator has responsibility to ensure operations are carried out with all the necessary and approved safety measures in place.

“We thoroughly assessed Chevron’s application and they demonstrated to us that they met all the regulatory requirements. We will monitor their activity as they proceed, he said.”

On May 20, the CNLOPB announced special oversight measures for the drilling program in the Orphan Basin. A team consisting of a chief safety officer, chief conservation officer, members of CNLOPB’s management as well as selected staff members will provide the regulatory oversight of the drilling program. Chevron is required to post daily reports to the team, and meet with them every two weeks to review matters of interest. In a statement from the CNLOPB, Chevron confirmed it was facilitate with the oversight. More information about the measures can be found at www.cnlopb.nl.ca.

Kelly noted that the primary way of preventing a blowout is through effective well control from the drill floor of the installation. Personnel are trained to manage pressures within the well and to react appropriately when changes in pressure are detected. Kelly also says, the drill ship that has been contracted to carry out the Orphan Basin operation is a state-of-the-art vessel. The Stena Carron is a 228-meter drill ship designed to drill in up to 3,000 meters of water depth. Chevron also announced in early May that it has hired a consultant to review the maintenance and reliability of the drill ship’s blowout preventer. “If personnel are unable to control the well by adjusting the density of drilling fluids, the Stena Carron is fully equipped with the necessary back-up systems to activate the BOP. We’re confident that it can carry out its operations in the Orphan Basin safely, but no regulator can guarantee safety,” says Kelly.

In fact, the Orphan Basin isn’t the Stena Carron’s first foray into deep Atlantic Canadian waters. Before it began this latest project, the ship was subleased to ConocoPhillips to drill a deep exploration well in the Laurentian Sub-basin. "Based upon our recent drilling experience off the coast of Newfoundland the safety standards and requirements set by the CNLOPB are very comprehensive, thorough and stringent," says ConocoPhillips spokesperson Rob Evans.

Paul Barnes is the Atlantic Canada manager of the Canadian Association of Petroleum Producers. He says that Atlantic Canada already has a significant amount of response capability if a major accident or blowout was to occur here. “We have a robust management and regulatory regime here in Atlantic Canada that has evolved over a number of decades,” he says. For example, all companies operating in the region are required to file a Tiered response system that identifies the company's own emergency response capability and the capability that's nearby that is owned by others but able to be utilized . And all companies must be members with the Eastern Canada Response Corporation that provides oil spill response services to the region.

“One thing we need to keep in mind is that we don’t have a full understanding of the accident yet,” says Tanya Taylor-White, public relations manager with the Canada Nova Scotia Offshore Petroleum Board (CNSOPB). “Everyone in the industry is watching with interest to see what comes out of the investigation and what we can learn from it. There is a sense of concern, and it does put the industry under the microscope, but attention to due diligence is never a bad thing. Our industry standards are high.”

Sean Kelly agrees that whatever happens in the aftermath of Deepwater Horizon, the accident will be a crucial learning experience. “There have been two major blowout events in the past few years, one in the Gulf of Mexico and one in Australia,” he says. “Blowouts are very rare, but the fact that we’ve had two in a short period of time means that it’s something we need to look at very carefully. We’re confident in our regulatory regime, but there is always room for improvement. Anything that we learn from the Deepwater Horizon event that has applicability to the Newfoundland and Labrador offshore area will be implemented.”

“The East Coast is characterized with having the top producers in the world operating here,” says Barnes. The Exxons, Suncors,and Chevrons, for example . “These producers operate on the highest of safety standards. That gives us a big advantage over other basins around the world that might have more smaller or medium-sized operators.”