Hurricanes come with the territory

Gulf Rigs Have to Take Punches

American Association of Petroleum Geologists (AAPG)

The U.S. Gulf of Mexico has long been the mainstay of domestic oil and gas production, currently accounting for about 25 percent of the nation’s oil supply and 15 percent of domestically produced natural gas, according to the Minerals Management Service, the agency charged with offshore oversight.

But there’s a dark side to the GOM that can be incredibly challenging to the industry.

This is a region that might best be dubbed “Hurricane Central.”

MMS Gulf Scorecard, Early January
Districts Lake Jackson Lake Charles Lafayette Houma New Orleans Total
Platforms Evacuated 1 13 11 9 0 34
Rigs Evacuated 0 0 0 0 0 0
Oil, BOPD Shut-in 1,228 4,780 42,089 91,501 3,934 143,532
Gas, MMCF/D Shut-in 98 239 374 293 104 1,108

As the industry knows all too well, the highly productive hydrocarbon province is a frequent target for powerful hurricanes that create all kinds of turmoil for oil and gas interests.

For starters, damage/destruction of rigs and platforms is essentially a given. But there’s also the expense incurred by the industry to shut down production before anticipated hurricane-force winds, along with enormous waves and tidal surges move in with the potential to cause other kinds of damage, such as pipeline breaks, etc.

Perhaps to make up for a quiet storm season in 2007, Mother Nature socked the Gulf big-time in 2008 when Hurricane Gustav roared across the area in September, followed only a few weeks later by the exceptionally widespread Hurricane Ike, dealing a one-two punch to the industry and the coastal towns.

But ever since the infamous Hurricane Katrina and follow-up storm Rita created substantial damage to industry infrastructure in 2005 – yet causing nary a single significant oil spill – the companies have worked diligently to minimize the vulnerability of their Gulf operations.

Planning Pays Off

Despite encompassing darn-near the entire Gulf, Ike had a lesser impact than the ’05 storms for a couple of reasons:

  • It was less intense than Katrina.
  • Most of the facilities destroyed were smaller, older platforms in the shallow Gulf waters rather than in deep water, which is home to the bulk of the GOM production.
  • The oil industry has made significant improvements, particularly reinforcing offshore structures.

“We revised standards put in place for both new and existing structures,” said MMS public affairs officer Eileen Angelico. “It was a joint effort from MMS, API and other members of the oil and gas offshore industry who worked together to identify places where standards could be revised and updated.’

In reviewing the 2008 hurricane season, the MMS and others noted a definite success with mobile offshore drilling units (MODUs), in particular.

“MODUs that previously had to have eight mooring lines were now required to have 12 and, in some cases, 16 mooring lines,” Angelico said. “In ’08, 18 moored MODUs were in the path of hurricane force winds, and two went adrift, which represented 15 percent of the rigs out there. In Katrina and Rita, 63 percent of the rigs went adrift.’

Weathering the Storm

Recent information released by the MMS regarding Gustav and Ike confirms that the oil and gas industry proved itself an efficient business.

As of mid-December 2008, personnel were reported evacuated from a total of 45 production platforms, equivalent to 6.5 percent of the 694 manned platforms in the GOM, the agency noted. There are no longer any evacuated rigs.

As part of the evacuation process for approaching storms, the safety valves below the ocean’s surface are closed – either onsite or remotely – to prevent the release of oil or gas. During Gustav and Ike, as well as the earlier Katrina and Rita, the shut-in valves functioned 100 percent of the time, closing in production from the wells and preventing any major spills from the Outer Continental Shelf projects.

In its December 2008 Gustav/Ike activity statistics update, the MMS noted operators’ reports indicate that approximately 14.1 percent of the Gulf’s oil production is shut in – estimated oil production from the GOM was 1.3 MMbo/d as of June 2008.

The agency commented about 19.7 percent of the natural gas production is shut in – estimated gas production was seven Bcf/d effective June 2008. However, gas from the Independence Hub facility has increased, serving to bump current production up to an estimated 7.4 Bcf/d.

Shut-in production info included in offshore operators’ daily reports is based on what the operator expected to produce that day, the MMS noted. Therefore, the shut-in production figures are estimates, which the agency compares to historical production reports to ensure the estimates follow a logical pattern.

Final Scorecard

Effective August 2008, there were more than 3,800 production platforms in the Gulf, ranging in size from single well caissons in 10 feet of water up to a large, complex facility in 7,000 feet of water. The MMS estimates about 2,127 production platforms were exposed to hurricane conditions from Gustav and Ike, carrying winds greater than 74 miles per hour.

Final results of the agency’s assessment of destroyed and damaged facilities from these two storms indicate that 60 platforms were destroyed. These included some platforms that had been reported earlier to have extensive damage.

In comparison, 115 platforms were destroyed by the Rita-Katrina wallop in 2005.

The platforms designated as destroyed following Gustav and Ike produced 13,657 barrels of oil and 96,490,000 cubic feet of gas per day, or 1.05 percent of the oil and 1.3 percent of the gas produced daily.

The MMS noted that 31 platforms having extensive damage following Gustav and Ike could require three-six months to repair. “Extensive” damage could include underwater structural damage or major damage to pipelines moving the hydrocarbons to shore.

Ninety-three platforms suffering moderate damage, e.g., major topside damage to critical process equipment such as the platform’s compressor or damaged risers or flex joints where pipelines connect to the platforms, may require one-three months to repair, according to the agency.

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