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May 12, 2015 11:42 PM

Plan OK'd to drill into BP's ill-fated Macondo reservoir

The Associated Press

NEW ORLEANS (AP) Deep-water drilling is set to resume near the site of the catastrophic BP PLC well blowout that killed 11 workers and caused the nation's largest offshore oil spill five years ago off the coast of Louisiana.

A Louisiana-based oil company, LLOG Exploration Offshore LLC, plans to drill into the Macondo reservoir, according to federal records reviewed by The Associated Press.

Harper's Magazine first reported the drilling plans late Tuesday.

LLOG's permit to drill a new well near BP's site was approved April 13 by the Bureau of Safety and Environmental Enforcement, an agency overseeing offshore oil and gas drilling operations. The company's exploration plan was approved last October following an environmental review by a sister agency, the Bureau of Ocean Energy Management.

The company, a privately owned firm based in Covington, Louisiana, will be looking to extract oil and gas deep under the Gulf of Mexico's seafloor, an undertaking that proved catastrophic for BP.

"Our commitment is to not allow such an event to occur again," said Rick Fowler, the vice president for deep-water projects at LLOG. "LLOG staff keeps the memory of what happened ... fresh in our minds throughout our operations, both planning and execution."

On April 20, 2010, a drilling rig owned by Transocean Ltd. and hired by BP to drill into the Macondo field experienced a series of problems that led to a massive blowout. Investigators later faulted BP and its contractors for fatal missteps.

The drilling rig, in waters about 45 miles off the Louisiana coast, was engulfed in flames. Eleven workers were killed, 17 were seriously injured and more than 100 had to be evacuated.

BP, its contractors and federal regulators struggled to contain the blowout and kill the out-of-control well over the course of the next 87 days. In all, the federal government calculated that about 172 million gallons spilled into the Gulf. BP put the number much lower, closer to 100 million gallons.

Richard Charter, a senior fellow with the Ocean Foundation and a longtime industry watchdog, said it would be cause for concern if a small company resumed drilling in the reservoir, which is located in a geographical area of the Gulf known as the Mississippi Canyon. The area, rich in oil and gas, is divided up into blocks used for drilling. BP's Macondo well was located in Mississippi Canyon Block 252.

Charter said drilling into that reservoir has proved very dangerous and highly technical, and raises questions about whether a company like LLOG has the financial means to respond to a blowout similar to BP's.

"BP had deep pockets," he said. "You don't want someone not particularly qualified and not fully amortized to be tangling with this particular dragon." He added: "When a company can't pay when something goes wrong, generally it's the public that pays."

Eric Smith, associate director of the Tulane University Energy Institute in New Orleans, dismissed those concerns. He called LLOG "an extremely well-financed and well-organized" company. He said it had an excellent reputation and was known for its veteran staff.

"If I were to pick anyone to go into that field after so many problems, I would pick LLOG," Smith said. "They have demonstrated their ability to drill in the area."

Since 2010, LLOG has drilled eight wells in the Mississippi Canyon area in "analogous reservoirs at similar depths and pressures," Fowler, the LLOG vice president, said. The company has drilled more than 50 wells in the Gulf since 2002, he said.

He said the company has studied the investigations into the Macondo disaster and "ensured the lessons from those reports are accounted for in our design and well procedures."

In 2014, regulators approved splitting up Mississippi Canyon Block 252. BP still owns 270 acres of the block around its disastrous Macondo well and the area where the drilling rig Deepwater Horizon and other heavy equipment lie on the seafloor. LLOG owns the block's other 5,490 acres.

BP spokesman Brett Clanton said the area owned by BP is an "exclusion zone" where oil and gas operations are off-limits both "out of respect for the victims" and to allow BP "to perform any response activities related to the accident."

John Filostrat, a spokesman for the Bureau of Ocean Energy Management, said LLOG would be the first company to attempt to tap the oil and gas reserves that BP had been seeking. He said regulators did extensive reviews of the company's drilling plans.

The exploration plan calls for drilling into Block 252 from an adjacent block by June, federal records show. The drilling will be done by the Sevan Louisiana, a semisubmersible drilling rig owned by Sevan Drilling ASA, an international drilling company based in Oslo, Norway.

LLOG's drilling plans estimate that an uncontrolled blowout from its well could cause 20,500 barrels of oil to be released each day for a total of 109 days, or the time it would take to drill a secondary well to cut off the flow.

In the event of a blowout, the company's plans call for the use of blowout preventers, containment systems and drilling a relief well to contain a spill measures that BP relied on to tame its well.


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