∼∼≈∼∼≈∼∼ Deepwater 1 Horizon ≈≈∼≈≈∼≈≈∼∼≈∼∼≈∼∼≈≈∼≈≈∼≈≈

Deepwater Horizon was the name of the exploration rig owned by Transocean. The rig was operatingat the Macondo well, which was licensed to BP for drilling and production. Transocean’s rig and crew weredrilling BP’s Macondo well with some oversight from BP personnel.

Geography and Geology

Figure 1 shows Macondo well location in Block 252 of Mississippi Canyon. This location is 48 miles fromthe nearest land, 114 miles from Port Fourchon that services and supplies oil rigs and 154 miles fromHouma helicopter base used for transporting oil & gas personnel to the rigs in Gulf of Mexico.

Figure 1: Macondo well location. Source: Deepwater Horizon: Accident Investigation Report (2010).

Figure 2 shows the formations, casings and pressure levels at Macondo well. Formations are primarilyof two kinds: mudstone (shale) and siltstone (clastic rock including clay) mixed with mudstone and sand-stone. Casings get narrower deeper in the well and house the production string. The production stringgoes down to 18,349 feet from the rig floor. 13,282 feet of this is wellbore and is drilled starting from thesea floor. The remaining 5,067 feet is the depth of the water at Macondo well.

Figure 2 also has the pressure levels in the wellbore as a function of the depth. The pressure alwaysincreases with depth so all the graphs are going down and to the right. Pore pressure is the pressure of theliquids in the formations whereas the fracture pressure is the pressure that the formation can stand beforecracking. The mud in the wellbore is used to counter these pressures. If the mud pressure is less than thepore pressure, the liquids flow into the wellbore. If the mud pressure is more than the fracture pressure,

1 Keywords: Risk involved in complex exploration & production projects.This case is prepared for class discussion by Metin Cakanyıldırım. If you want to use this case, please get written permission fromMetin Cakanyıldırım by sending an email to metin@utdallas.edu.Compiled at 21:13 on Monday 6th February, 2017.

Deepwater Horizon by Metin Cakanyıldırım

Figure 2: Macondo well. A: formations, B: casings and possible flow of gas, C: pore pressure vs. fracturepressure; all in terms of the TVD (total vertical depth) in feet from the rig floor. Source: Hickman et al.(2010).

the mud cracks wellbore formations (unintentional fracking). At any given depth, the mud pressure mustalways be more than pore pressure and less than fracture pressure. That is, the mud pressure graph must liebetween black and red curves in panel C of Figure 2. Unfortunately, the gap between these curves is narrowin deepwater drilling wells of Gulf of Mexico. This makes the adjustment of mud weight challenging inthe drilling projects of the gulf.

Events Before and After Deepwater Horizon Disaster

As a background material, Ingersoll et al. (2012) lays out the events before and after the BP oil spill at theMacondo well on April 20, 2010.

After the spill, the US House of Representatives started an investigation led by congressman HenryWaxman, chairman of the Committee on energy and Commerce, and congressman Bart Stupak, chairmanof Subcommittee on Oversight and Investigation. The committee invited BP CEO Tony Hayward for histestimony to the US Congress on June 17, 2010 and sent a letter (Waxman and Stupak 2010) to him on June14 to hint at some questionable decisions made and actions taken during the drilling and completion ofMacondo well. The letter lists crucial BP decisions:

(1) the decision to use a well design with few barriers to [uncontrolled] gas flow [from thereservoir to the drilling rig];(2) the failure to use a sufficient number of ”centralizers” [that keep the casing/pipes stable,perpendicular to the seabed and at the center of the wellbore] to prevent channeling [air/gaspathway from reservoir to annulus and possibly all the way to the surface] during the cementprocess;(3) the failure to run a cement bond log to evaluate the effectiveness of the cement job;

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(4) the failure to circulate potentially gas-bearing drilling muds [sufficiently] out of the well;(5) the failure to secure the wellhead with a lockdown sleeve before allowing pressure on theseal from below.

BP conducted its own investigation and released a report to provide its own account of events, actionsand decisions (Deepwater Horizon: Accident Investigation Report 2010). This investigation report hasa chronology of events that led to the spill; see Section 3. These events are chronologically listed andexplained in Events sheet of the spreadsheet deepwaterHorizonEventsData.xlsx available from MERITwebsite.

Negative-pressure test was one of the critical events that took place on April 20. It started about 3pm and consisted of three different set ups to read wellbore pressure. A negative pressure test involvesemptying out the mud and liquids (water, spacer) in a certain sealed portion of the wellbore to see thatthe pressure in that portion can remain at zero for 10-20 minutes. If the pressure does not reach to zero ordoes not remain at zero, one should suspect from an underbalance: movement of hydrocarbons into thewellbore from the surrounding formations as a result of compromised well integrity.

The pressure can be read from the production line or from the kill line. These lines can be thoughtas two parallel pipes connected to the blowout preventer (BOP) at the sea floor and to the drilling rigabove the sea. The production line carries hydrocarbons during production and the kill line is narrowerthan the production line and is used for pumping in/out mud or other liquids directly to the BOP. In asuccessful negative pressure test, both lines connected to the same portion of the wellbore must show thesame pressure.

In the case of Deepwater Horizon, the crew had to work hard to get a reading of zero psi (pounds persquare inch) on the production line. They had to bleed off too much liquid out of the wellbore thinking thatthis would help reducing the pressure. This decreased the liquid level at the surface and the crew lookeddown the production line on the rotary table of the platform to see how deep the liquid went down. Thenthey added spacer (liquid barrier between mud and seawater) and pumped seawater with an attempt toreplace the mud with the seawater only above the BOP. This spacer is not commonly used in the industry.Its density is far higher than that of the water. When mixed with seawater, it can possibly fall below theseawater over enough time. The spacer was laid between the mud and seawater, these three had to bepiled up on top of each other in the order of the mud, spacer, seawater as the depth increased. The spacer,failing to separate the mud and seawater, probably unintentionally went below the seawater even belowthe BOP. This made it harder to compute the amount of mud or seawater to pump out/in and to interpretthe results of pressure tests.

When another negative pressure test was attempted by reading the pressure on the kill line, its pressurereading turned out to be less than that of the production line. For a while, the production line showedsignificant positive pressure while the kill line showed no pressure. The crew was confused with thisinconsistent reading. It is impossible to exactly know what might have caused this inconsistency. However,a credible theory suggests that the narrow kill line was temporarily clogged by the non-traditional spacer.Later the crew decided to open the kill line and to see if any mud came to the surface, which did notinitially. Consequently, the crew (or some of them) inclined to interpret the absence of the mud on the rigas a sign of a successful negative pressure test. The movie Deepwater Horizon (2016) showcases the tensedisagreement among the crew members as to how to interpret the negative pressure test results. It is hardto understand the steps of the negative pressure test from the movie, Chapter 4.6: Negative Pressure Testin the report titled Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling (2011) is far moreinstructive.

After the incident, through liquid flow modelling, it is determined that hydrocarbons broke into thewellbore at 20:52. In about 40 minutes, they passed into the riser (above the seabed). At 21:42, the mudunder the pressure of the gas overflowed onto the rig floor. In 7 minutes, rig lost the power and two

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Deepwater Horizon by Metin Cakanyıldırım

successive explosions happened. By 23:22, coast guard helicopters arrived and survivors were taken to theclose-by mud ship Damon Bankston. Deepwater Horizon sank at 10:22 in the morning of April 22.

Key Questions for the Case Discussion

1. List the key technical problems and issues that led to the oil spill.

2. List the key companies that played a role in drilling and completion. Associate each technical issuewith one or some of the companies which were responsible for the issue.

3. Put yourself into the shoes of three companies responsible for key technical issues and use yourempathy to explain why they did what they did.

4. Before the disaster, there were some conflicts among the companies and the people. Some people aremore risk averse than others. Some companies have risk management groups whose responsibilityis to monitor and control the risk. The steps and precautions used in risk control can slow downthe progress of a project. Put these general remarks into the context of Deepwater Horizon and giveexamples of who wanted to progress fast and who wanted to be more cautious.

5. Can you make suggestions as to how disasters like Macondo oil spill can be avoided? Note thatBP had a refinery fire a few years before the oil spill, it investigated the fire and made suggestions.Apparently those suggestions did not work. Why will your suggestions work?

6. From an ethical standpoint, which company or who is right or wrong in the retrospect? If you canidentify some unethical behavior, what would be a way to correct such behavior? What, if any, rolecan (university) education play in instilling strong ethical values to the members of our society?

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ReferencesDeepwater Horizon. 2016. Movie produced by Summit Entertainment, Lionsgate Company.

http://www.deepwaterhorizon.movieDeepwater Horizon: Accident Investigation Report. 2010. Prepared by BP, Sep 8.

http://www.bp.com/content/dam/bp/pdf/sustainability/issue-reports/Deepwater Horizon Accident Investigation Report.pdf.Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling. 2011. Report prepared by a US

Presidential Committee co-chaired by Senator Bob Graham and William K. Reilly.https://www.gpo.gov/fdsys/pkg/GPO-OILCOMMISSION/pdf/GPO-OILCOMMISSION.pdf

Hickman, S.H., P.A. Hsieh, W.D. Mooney, C.B. Enomoto, P.H. Nelson, L.A. Mayer, T.C. Weber, K. Moran,P.B. Flemings and M.K. McNutt. 2012. Scientific basis for safely shutting in the Macondo Well after theApril 20, 2010 Deepwater Horizon blowout. Proceedings of the National Academy of Sciences of the USA,Vol.109, No.50: 20268-20273.http://www.pnas.org/content/109/50/20268.full.pdf

Ingersoll, C., R.M. Locke, C. Reavis. 2012. BP and the Deepwater Horizon Disaster of 2010. Revised on Apr 3.https://mitsloan.mit.edu/LearningEdge/CaseDocs/10%20110%20BP%20Deepwater%20Horizon%20Locke.Review.pdf.

Waxman, H., B. Stupak. 2010. June 14 letter from the US Congressional Committee on Energy and Com-merce https://energycommerce.house.gov to British Petroleum http://www.bp.com.

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