We noticed you're blocking ads.

Keep supporting great journalism by turning off your ad blocker.

Questions about why you are seeing this? Contact us

Font Size

- Aa +

Tue 22 Feb 2011 12:00 AM

Font Size

- Aa +

Macondo impact

Lamprell’s Ian Anderson examines last year’s Macondo disaster and its effects on the world jackup market.

Macondo impact
The bill for last year’s Deepwater Horizon tragedy is expected to top US$30 billion.

On April 20th 2010 there was an incident in the Gulf of Mexico that would change the drilling world forever.
The location was the Macondo Prospect in the Mississippi Canyon Block 252, about 66 kilometres off the Louisiana coast.

The Deepwater Horizon, a nine year old semi-submersible mobile
offshore drilling unit, owned by Transocean and under lease to BP, was drilling
an exploratory well at approximately 5000 ft, when methane gas from the well, under
high pressure, shot all the way up and out of the drill column onto the platform
and then ignited and exploded.

The massive floating,
dynamically positioned drilling rig with a capability of operating in up to 8000
ft and drilling down to 30,000 ft was engulfed in a blazing inferno and eventually
sank to the ocean floor on April 22nd.

Eleven workers died and 17 were injured. On July 15th the wellhead
was finally capped and the leak stopped, but only after an estimated 5 million barrels
of crude oil had escaped into the ocean, contaminating surrounding coast lines,
marine and wildlife habitats as well as inflicting extensive damage to the local
tourism and fishing industries.

Thankfully in the Middle East
we rarely exceed water depths of 150 feet and our jackups sit firmly on the seabed
making for a safer, more controlled operation.

Much has been said as to the cause, the blame, the lessons learnt,
and new regulations. The sheer magnitude of this disaster has definitely had a knock
on effect throughout the global drilling community.

It is common knowledge that on a drilling rig, you can never
have too much space or too much power, these two vital elements result in a safer
operation, hence the recent spate of newbuild orders are for the larger, more capable,
high spec. units.

At the annual Pareto Oil & Offshore conference in Olso, Norway
last September, where we were reminded that one of the three new words in the drilling
industry was Macondo, the other two, incidentally, were Volcanic ash and Double
dipping.

The Macondo incident was the topic of everyone’s conversation
and various industry speakers (mostly bankers and analysts) all echoed the same
sentiments, that we must start stacking and scrapping the older, smaller units and
start a new order boom based on the larger high spec. more powerful, safer rigs.

Everybody nodded in agreement, especially the shipyards of course,
but the world was just recovering from a serious recession and financing new builds
seemed a distant dream for many of the drilling companies, most of whom had units
cold stacked around the globe.

So here we are today, with a worldwide fleet of around 470 jackups.
We see 75 older units stacked, 25 of those in the Middle East,
and orders for new high spec. jack ups being announced almost daily.

The Lamprell UAE Yards currently have seven high spec units under
construction with more orders under negotiation. Maybe we did learn something from Macondo after all.

Arabian Business: why we're going behind a paywall

For all the latest energy and oil news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Real news, real analysis and real insight have real value – especially at a time like this. Unlimited access ArabianBusiness.com can be unlocked for as little as $4.75 per month. Click here for more details.