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Industry Begins to Tackle Problem of Drifting Rigs During Hurricanes

The industry has to find a solution soon to the problem of drilling rigs being torn from their moorings and set adrift in the Gulf of Mexico during hurricanes. A football field-sized structure careening through the Gulf can cause billions of dollars in damage to production platforms and subsea pipelines, Doug Krenz, vice president of transportation for Enbridge, said in an interview with NGI last week.

Hurricanes Katrina and Rita sent at least 19 mobile offshore drilling rigs adrift, according to the Department of Energy. The need for a solution to this problem couldn't be more clear, Krenz said.

"It's one of the issues that the industry is going to have to get a handle on right away," he said. "We've tried to track on our map the path of all the drilling rigs that were afloat and it's very concerning. The potential for impact to structures and the damage that the anchors do dragging over pipelines [is tremendous].

"We saw some of it with Ivan," but more so with Katrina and Rita, he said. "The amount of value at the end of the day on what was destroyed or damaged due to the floating drilling rig situation is [significant]. As an industry we have to find a solution. We have to see some changes. It has caused the industry to make very costly repairs."

Onshore damage was extensive due to storm surge from the two major hurricanes this year, but offshore potentially billions of dollars in damage may have been caused by drifting rigs that were torn from their moorings. These 30-million-pound semisubmersibles were never designed to stay put for long, and drilling companies have even equipped them with global positioning beacons so they can find them when they break loose and drift many miles away.

The semisubmersible rig Transocean Marianas, which is about 264 feet long, 197 feet wide and 122 feet deep, was torn from its drilling location during Rita and blown about 140 miles off location before being grounded in shallow water at Eugene Island block 133. Transocean spokesman Guy Cantwell said the company was unaware of any damage done to other Gulf infrastructure from its drifting rig.

Transocean's semisubmersible Deepwater Nautilus, which sustained damage to its mooring system during Katrina and was undergoing repairs, was sent adrift again during Rita following the failure of a tow line, but the crew was able to steer it to safety using the onboard thruster-assist capabilities. The rig was finally grounded 40 miles south of Grand Isle, LA.

Four other rigs operated by Noble Corp. also drifted 75-123 miles off their original locations. "One floating structure, Chevron's Typhoon, was possibly hit by a drilling rig," Krenz noted. Chevron's $256 million state-of-the-art Typhoon facility began producing 40,000 bbl/d of oil and 60 MMcf/d of gas in 2001. The SeaStar Tension Leg Platform located in 2,100 feet of water in Green Canyon 237, about 165 miles south-southwest of New Orleans, was completely toppled and now rests on the sea floor. Chevron said a total of 14 of its offshore structures were toppled. Chevron spokesman Mickey Driver said the company has a team of investigators looking into the cause of the damage, but so far no cause has been determined.

Tennessee Gas Pipeline's system offshore Louisiana also may have suffered damage from drifting rigs that dragged their anchors or broken steel legs across its pipes. A total of 113 platforms and eight rigs were destroyed during the Katrina and Rita, and 52 other platforms and 19 rigs suffered extensive damage. At least 58 pipelines were damaged, according to the Department of Energy. It is unclear how much of the damage could have been caused by drifting rigs.

There are three major types of mobile offshore drilling units:

Jackup rigs do not require anchors in large part because they stand on retractable legs that are temporarily attached to the sea floor. A lot of damage can be done when the legs break off and drag across the sea bottom.

However, drilling companies say hurricanes develop so quickly there is scarcely time to evacuate offshore personnel in time, much less tow drilling rigs hundreds of miles to safety at five to 10 miles per hour.

Some observers believe that the rigs need to be better secured while on location, but drilling companies claim that takes away their flexibility to be on another site quickly.

In response to the many rigs that were adrift following Hurricane Ivan last year, many companies outfitted their mobile drilling units with global positioning beacons so they could be found after hurricanes. However, there have been no new regulations requiring anchoring that won't break loose under major hurricane conditions.

Transocean's Cantwell said drilling companies have been taking a closer look at the problem this summer and have been working with producers to find a solution. "In the last storm when the Marianas was set adrift, two other rigs remained on location. The question is why did that happen and that's what we are studying," said Cantwell. "That's what a planning committee and the consultants that it has hired are studying."

He said Transocean joined a joint industry study group earlier this year with BP, ExxonMobil, Chevron, Shell, Dominion, Noble Drilling, Global SantaFe, Diamond Offshore, MMS and others to examine the problem. The group intends to submit a report at an MMS conference on the issue scheduled for Nov. 17.

Tim Sampson, coordinator of drilling and production operations at the American Petroleum Institute, agreed that the mooring system issue is something the industry "definitely has to take a look at." However, Sampson said he believes that, considering the magnitude of the storms this year, the offshore industry handled the situation "fairly well and the strucutures that we lost, most of them were older.

"We have the lion's share of U.S. production in a very small geographic area and it just happens to be an area that has tropical storms on a regular basis," noted Sampson. "And when we have a storm, we shut in our facilities, which means production stops and supply of energy to the United States is disrupted. We need to work out a better plan from the U.S. perspective. That's much bigger than the issue of drifting drilling rigs or damaged pipelines in the Gulf of Mexico.

"However, we do have an industry research project that we are fixing to kick off to take a look at the issue associated with mooring." Sampson said the group held a conference in July as a result of Ivan but the two other hurricanes "gave us plenty additional information to look at for sure and certainly has stepped up our speed and direction as far as moving quickly to come up with the right technological and economically sound answers to all these questions.

"I think everyone, however, is holding a lot of information to the vest right now until companies figure out what the heck happened to their respective rigs," he said. "I've heard speculation all over the map on what happened in certain instances but after investigation it turned out it wasn't the case."

Krenz said that luckily none of the damage done to Enbridge's five offshore pipeline corridors was due to drifting drilling rigs, but some of the damaged upstream and downstream infrastructure may have been hit by drifting mobile units.

"We incurred fairly minimal damage," said Krenz. "We've got some electrical and control equipment to repair at Venice [at the tail end of Mississippi Canyon]. Obviously there was damage to both the upstream and downstream infrastructure, the production platforms and the processing plant. At this point in time there is no production flowing on that corridor at all. We do expect that probably two-thirds of pre-hurricane production will come back up sometime in the late November timeframe. The balance will be dependent on when the upstream and the downstream infrastructure is repaired adequately."

He said a major problem at Venice has been access. "We just got in there this week. The roads aren't even open to Venice yet. Both Enbridge and Dynegy have leased barges to provide housing and staging areas for our equipment to make the repairs. We are making them from the sea side rather than from the land side at this point in time, which obviously makes it a lot harder."

Enbridge's Garden Banks (Garden Banks and Magnolia pipelines) and Green Canyon (Nautilus, Manta Ray and Cleopatra pipelines) corridors are back up and running, with Green Canyon already near pre-hurricane levels. Garden Banks is still ramping up and should reach pre-hurricane levels next week or soon after that. In November, Garden Banks and Green Canyon are expecting to be transporting 400 MMcf/d and 290 MMcf/d, respectively.

Rita tracked right up the Stingray Corridor and while the offshore facilities are in good shape onshore structures are a mess. "We had a surge of five to seven feet of water come across the site. We had some damage to our office building, our control buildings and any of the electrical equipment or motors that were down at a low level are going to have to be replaced or repaired." Stingray has a dehydration facility, a liquids separation plant and a compressor station in Johnson's Bayou. Dynegy also has an adjacent processing plant.

"It's a real mess in that area. A lot of the houses on the beach are now up on our property in various pieces, under the slug catcher. There's about six inches of muck that is just layered over the site. We've brought rock in to reestablish the road to the site and at this point we have front-end loaders and equipment that is cleaning up all the debris.

"We'll have it repaired and running before the end of the year. Our facility at Venice is not nearly as substantial." However, he noted that major repair work at the Venice processing plant and other facilities there could limit gas flows even if Mississippi Canyon is ready to move supply. "If the gas quality isn't up to [dewpoint requirements] of the downstream pipelines, then we will have to wait. We think we can possibly do some blending or the shippers can work with the downstream pipelines and have their gas processed at a downstream location."

Prior to the hurricanes, Mississippi Canyon was transporting about 577 MMcf/d of gas and Stingray was transporting about 488 MMcf/d. By November, Enbridge expects Stingray to be transporting 200 MMcf/d and Mississippi Canyon to still be at zero. By January, Stingray is expected to be transporting up to 575 MMcf/d and Mississippi Canyon should be at 380 MMcf/d.

"There's a lot of new development offshore," Krenz noted. "Obviously one of the biggest ones that we expect will come on during 2006 is the Thunder Horse production facility (200 MMcf/d) that is managed by BP. BP also has a development in our Green Canyon area, Atlantis (180 MMcf/d), that is scheduled to start up next year. On the Stingray system there is quite a bit of deep Shelf activity that we're expecting will be coming on in the not too distant future.

"The focus right now is on repairing the infrastructure. We obviously have to do that before we can grow." But the industry also has to figure out how to handle the issue of floating drilling rigs, he said. Otherwise, it can continue to look forward to high offshore repair costs, big production delays and extended periods of high gas prices following hurricanes.

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