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Foreign Ministers Discuss Lessons of Macondo Well Blowout

The blowout of BP plc's Macondo well and sinking of the Deepwater Horizon drilling rig nearly a year ago sent ripples around the globe, causing a number of foreign offshore producers to take a hard look at their safety practices, particularly with respect to blowout preventers (BOP), energy ministers and officials said Thursday.

The well blowout, which caused an explosion on the rig and the death of 11 workers, "was a terrible incident with tragic consequences. We in the Netherlands considered the Deepwater Horizon blowout as an opportunity to learn and to improve," said Jan de Jong, Netherlands inspector general of mines (see related story). He said the country, which is considered one of the largest natural gas producers in Europe, had to closely review its safety regulations following the Piper Alpha platform explosion in the North Sea in 1976, which killed 167 men.

"Looking at the official report in which the technical and managerial failures are identified that lead to the Macondo blowout, it is clear to us that this accident is neither unique for deep sea drilling in general nor BP nor for the Gulf of Mexico [GOM]. It could have have happened [anywhere]," he said at the Interior Department's ministerial forum on offshore drilling containment in Washington, DC.

"We must learn from the past to [prevent] future [offshore] accidents," said Per Rune Henriksen, Norway's state secretary of the Ministry of Petroleum and Energy. Norway also has had experience with offshore accidents. In 1977 a well blowout caused the Ekofisk Bravo platform to leak 80,000-126,000 bbl, making it the largest blowout in the North Sea.

A "central aspect of the Norwegian system is the dialogue established between the [regulatory] authorities, the oil industry and their employees' organizations. These parties work together systematically to achieve high levels for health, safety and environmental protection in our petroleum activities," he said. Henriksen further noted Norway has safety representatives at every offshore installation who "have the right to halt operations considered unsafe."

In May 2010, following the Macondo well blowout, the Petroleum Safety Authority in Norway set up a large project group to follow the investigations and define lessons from Macondo that could be relevant to the Norwegian shelf, Henriksen said. "No operations of the Norwegian shelf have been halted as a result of the Macondo incident.

"Nevertheless, we...need to address the issue of capping and containment. I find the prolonged inability to kill blowouts...highly unsatisfactory," he said, adding that this was an area where new standards needed to be established.

The United Kingdom has increased the number of regulators in the safety and environmental fields, and "we've worked with industry and trade unions in a newly formed group, which has been the focal point for the review of offshore practices in light of Deepwater Horizon," said Geoffrey Podger, CEO of the UK's Health and Safety Executive.

"The particular success of this group has been the procurement of [a] subsea capping device suitable for deployment anywhere in the UK continental shelf," he said. The United Kingdom also has raised the liability pool for producers operating in the North Sea to $250 million from $125 million. Moreover, Podger said an independent review of the UK's offshore regulatory regime is under way and is due out this summer.

Hector Moreira Rodriguez, Mexico's undersecretary for hydrocarbons, called the Macondo blowout a watershed event "for the oil industry, particularly but not exclusively concerning activity in deep waters." He said Mexico's state-owned Petroleos Mexicanos (Pemex) has drilled at depths similar to the Macondo well in the GOM, and it has plans to drill deeper wells in the coming months and years.

"It has done so under very strict operating standards following international best practices," Rodriguez said, who added that Pemex has a "spotless safety record" in the offshore so far.

"We believe that it is important for oil-producing countries to come together to develop similar standards of regulations so that industry can work around the world without incurring excessive compliance costs and minimizing the risks that differences in regulations might cause.

"One of the main lessons that we have learned from the Macondo blowout is the need for drilling and development plans to include the design of adequate contingency procedures," including the design of relief wells, Rodriguez said. He further said it was important for offshore operators to have sufficient financial and insurance capabilities in the event of a blowout.

Rodriguez lauded the containment systems created by Houston-based Helix Energy Solution Group and Marine Well Containment Co. LLC, saying they "are definitely steps in the right direction."

India's Oil Industry Safety Directorate (OISD) conducted a "total review" of its safety systems in offshore drilling operations following the Deepwater Horizon tragedy, with a special focus on BOPs, said R.P.N. Singh, minister of state for petroleum and natural gas.

Activity in India's deep waters is "very small" compared to the GOM, he said, but "as it progresses and more wells are drilled [in deep waters], complexities of operation are bound to increase." He said a memorandum of understanding signed between India and Interior's Bureau of Ocean Energy Management, Regulation and Enforcement, "has benefited OISD immensely" in its regulation of offshore safety.

The Macondo blowout "sent shock waves throughout the world, including in Europe," said Eero Ailio, deputy head of coal and oil policy for DG Energy, European Commission. "Our immediate reaction to the event was to offer coordinated assistance to the United States Coast Guard," and this resulted in "useful lessons" for both countries, he noted.

Last May the European Commission also launched an internal review of the health, safety and environmental issues governing drilling in European waters, Ailio said.

While much of the offshore had shut down following the Macondo well blowout, Max Ruelokke, chairman of the Newfoundland and Labrador Offshore Petroleum Board, said his board cleared the way for Chevron Canada Resources to spud an exploration well in "our offshore areas in 2,600 meters of water." It was the only deepwater exploratory well under way in North America at the time, he said.

"And it [Chevron] and we became the the target of intense scrutiny and much criticism for our decision to allow that well to continue," Ruelokke said. He added that the well was "successfully completed" without incident.

As a result of the Macondo blowout, the National Energy Board has begun a review of drilling in the Arctic. And there will be no drilling in Canada's Arctic waters until the review is completed, Ruelokke said.

An official for the Russian Federation said the Arctic would be "especially vulnerable" in the event of an oil spill, and "it would mean the death of the complete region." For this reason, she said the standards for overseeing offshore drilling are very tight in the region, and only a very select group of operators is allowed to work there.

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