Oil rigs in the North Sea are ‘falling to pieces’, with oil companies taking larger risks in the pursuit of profit during the recession, a safety inspector claims.
French oil major Total is battling to stem a 12-day gas leak at its North Sea Elgin platform after a series of technical failures.
Industry sources say the incident reflects wider lapses across Britain’s offshore industry, where safety checks and maintenance are regularly behind schedule.
The auditor, who was joined in his criticisms by an an engineer and a union official, said a range of measures designed to prevent a leak must have failed on Elgin, allowing gas to escape to the surface.
Danger: The leak from the Elgin rig, pictured, led to more than 300 workers being evacuated from that and surrounding oil and gas platforms
‘There is a worrying backlog of maintenance on safety-critical equipment, including release valves, pipelines and sub-sea fail-safe devices,’ said the auditor, an oil industry professional with more than a decade’s experience of safety systems and procedures, who has asked to remain anonymous.
He said some North Sea rigs designed in the 1960s and 1970s were ‘falling to pieces’ after exceeding their production lifespans, while more modern platforms were lagging well behind scheduled maintenance programmes.
He said: ‘My experience in this region is that if you scratch beneath the surface, things get quite scary quite quickly.’
Another source at a major oil company said safety still ranked high, but low gas prices – at about half their levels before the 2008 financial crisis – forced operators to weigh ‘loss of life risks against loss of production risks.’
Greenpeace released this image which shows the scale of the gas cloud from energy giant Total’s Elgin platform
The latest incident follows the Deepwater oil-spill of 2010 near the Coast of Mexico, which a White House panel blamed in 2011 on economy measures on the platform.
With rising operating costs and lower revenues, companies have put pressure on facilities to produce more fuel in order to break even, which means reducing the number of safety checks that could interrupt production.
The UK’s offshore regulator, the Health and Safety Executive, has previously identified maintenance backlogs in successive asset integrity reviews, noting that maintenance on safety-critical equipment was especially poor.
THE DEEPWATER DISASTER OF 2010
The Deepwater Horizon was drilling in water a mile deep the night of April 20, 2010, when an explosion and fire rocked the rig. It burned for two days before sinking.
An estimated 206million gallons of oil spilled out of the BP-owned Macondo well over several months, fouling sandy beaches and coastal marshes and shutting vast areas of the Gulf of Mexico to fishing.
BP has now agreed a £5 billion deal with more than 100,000 fishermen and others hit by the Gulf of Mexico oil disaster.
The oil giant, which has already written off at least £23 billion to meet claims, said the settlement was not an admission of liability.
It still has to resolve massive claims by its partners, the U.S government and states along the Gulf of Mexico following the explosion, which killed 11 men.
‘In some companies the decline in integrity performance that started following the low oil price has not been effectively addressed, and there appears to be an acceptance of this, knowing that the assets are likely to be sold,’ it said in 2009.
High-pressure, high-temperature (HPHT) reservoirs, like the one feeding the Elgin platform, exacerbate matters because they combine higher costs to drill and maintain with ‘the inherent risks associated with them,’ the auditor said.
Maintenance on systems critical to safe-guarding life in some cases has been pushed back by up to a year, he said.
‘I have seen things on some platforms that HSE would be extremely unhappy about,’ he said.
An engineer who designs rig equipment said the entire industry was ‘swamped by work’ so maintenance backlogs could also be down to limited resources as companies providing piping and valves were working flat out to meet demand.
Industry body Oil & Gas UK’s health and safety director, Robert Paterson, said: ‘All safety-critical systems on every installation are subject to regular and rigorous inspections. Offshore safety isn’t getting worse, it’s continually getting better.
‘Over the last 15 years … we’ve seen a 70 per cent reduction in major and significant hydrocarbon releases (and) a 66 per cent reduction in all types of injury.’
A spokesman for Royal Dutch Shell, which also operates in the North Sea said: ‘Asset integrity is a high priority for Shell. In 2011, we invested around $600million (£379million) in our North Sea assets, including maintenance.
‘We strive to operate all our assets, regardless of age or location, in a way that meets or exceeds both our global internal standards and relevant legal and regulatory requirements. We are confident that the maintenance plans for our North Sea assets are robust.’
Total did not return requests for comments to Reuters, and neither did BP, another major North Sea operator.
Flashback: The Piper Alpha rig, 120 miles off the Scottish coast, exploded on 6 July 1988, killing 167 men. There were 61 survivors
One offshore worker about to embark on three-week stint on a North Sea gas installation said maintenance backlogs were a common problem that could take years to clear.
‘I make repairs in designated safety areas … and the way things are, I’ll have a job in the North Sea for the rest of my life,’ he said.
‘There is a wide issue with the age of the platforms,’ said Oberon Houston, Petroleum Engineering Manager, with experience of working on a number of rigs in the North Sea.
‘People tend to think, “The platform only has 4-5 years left in it, so we don’t do anything to it”, but oil prices rise, or you find more oil, and suddenly you’re going for another 12, 15 years or more,’ he added.
Dick West, Operations Director of North Sea operator Xcite Energy, said ageing facilities did, however, need to prove their safety to have their life extended, and the HSE had been demanding more detail in the last 18 months.
The British safety regulator said there were about 70 major or significant hydrocarbon releases a year in the British part of the North Sea – ‘significant’ meaning it could cause multiple fatalities and escalate further. Norway had just eight in 2010.
‘It is lack of assessing risk, lack of control of the work, people cutting in the wrong pipework, people doing a shoddy job, making or breaking pipework, corrosion that should have been anticipated and monitored,’ Steve Walker, head of the offshore safety division at UK Health and Safety, told Reuters in October.
Total’s Elgin leak occurred above the water line on the rig itself, the auditor noted.
‘There are all kinds of safety mechanisms that should kick in and prevent a leak at that height … Quite clearly these fail-safes did not work,’ he said.
Total repeatedly reassured workers that safety systems would prevent a leak up to and including a few hours before the blowout that triggered the arrival of Royal Air Force and Norwegian helicopter evacuation teams, according to Jake Molloy, head of the RMT trade union’s offshore arm.
Workers had raised safety concerns beginning more than a month before the incident, he said.
The offshore industry’s safety regime operates on what is known as the ‘Swiss-cheese model’, building in layers of individually incomplete safety precautions that together should stop an emergency developing.
‘But all that depends on the number of layers of barriers and the rigour with which they are maintained,’ the source from an oil major said.
The extreme environment in HPHT reservoirs – which are increasingly common as maturing fields become less productive – raises the risks.
Total itself has identified such risks based on problems encountered during production.
The leak on the Elgin is believed to be above the water-level, which one inspector notes should not have been allowed to happen
In research papers, it has described how, as a well goes through gas pockets under different levels of high pressure, gas could leak inside the well and rise to the surface.
‘It was realised that conventionally cemented casings was unlikely to hold this gas back during the production lifecycle of the wells,’ it said in a 2005 paper.
That year a barrier in a well drilled in the West Franklin field failed, leading to an increase in gas pressure and the risk of gas from the reservoir escaping to the platform.
In the incident, described in a 2007 paper whose authors included Total engineers, the problem was difficult to fix because it required a ‘complex well-kill operation to resolve’.
This is what Total now plans for the faulty Elgin well.
‘From a production point of view, life extension of ageing assets is the name of the game. Operators are squeezing the last drop from the North Sea … so when production from normal wells dries up, they’ve got the HTHP to bring out of their back pocket,’ the auditor said.
Asked if it was investigating the possibility of equipment failures at Total’s Elgin rig, the HSE said: ‘It will not be legally appropriate for HSE as the regulatory authority to respond, as the answers given may prejudice the investigation or subsequent enforcement.’
Video report: Analysis of a leak
One grey Thursday at the end of April, a plane touched down in Fort McMurray, Alta., carrying four Achuar Indians from the Peruvian Amazon. They had flown 8,000 kilometres from the rain forest to beseech Talisman Energy Inc., the Calgary-based oil and gas conglomerate, to stop drilling in their territory. Talisman’s annual general meeting was coming up, and the Achuar were invited to state their case to chief executive officer John Manzoni in front of the company’s shareholders.
