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From Fossil To Fuel™
From Fossil To Fuel™

Episode 23 · 2 years ago

Episode 22 - Offshore Platforms

ABOUT THIS EPISODE

A brief look into offshore platforms and deep sea operations.

My name is Brendan McDougall and I'm a professional engineer. Or the last decade I've worked in many different facets of the oil and gas industry. While I have a pretty solid technical background in oil to gas, I don't really know a whole lot about the other non technical departments that help run an oiling gas company. Recently I took a course to help develop my business acumen and better understand how the financial side of the business works. What a novel concept to educate the technical people on the business and financial side. I thought it would be a really cool idea to return the favor and educate the non technical people on the technical side. This is how the concept from fossil to fuel was born. Through these twenty four episodes, we will take a journey from how oil and gas was formed millions of years ago how it is refined into the fuel that runs our cars and heats our homes. Come join me on this adventure as we learn how the oiling gas industry operates from fossil to feel.

Pretty much everything that I've talked about so far in this podcast has been focused around what we call on shore operations or and operations. While there are a lot of similarities in the equipment and procedures for offshore oil and gas operations, it's another world entirely. The stakes are a lot higher, of course, when you're working offshore. Drilling platforms and other methods to operate offshore cost hundreds of millions, if not billions of dollars. Efficiency is therefore came and every second in every square foot matters, since you're likely working in an area far enough from shore that all you can see is ocean in every direction, or...

...at least ocean and maybe other oilery platforms. All people, supplies and equipment have to be shipped by boat or helicopter, and even that will be restricted by the harsh weather and storms. Because operations usually cost over a million dollars a day, planning and logistics are of the utmost importance. That's FORTYZERO dollars per hour. If something goes dangerously wrong with a well on land, you have the chance to run away or getting a vehicle and drive away. Offshore, you're getting into a life raft. If you try jumping into, say, the North Sea, without a survival suit, then you've probably got about ten to fifteen minutes to live. It's dangerous. You're drilling massive oil and gas wells with massive pressure in the middle of nowhere, with no immediate escape and the potential for deadly storms. So why do people do it? Well,...

...for some, I'm sure it's the excitement, and surely for some it's the challenge. Offshore work is highly sought after in this regard, but I'm guessing for most it's the money. Working offshore typically, I'm guessing, pays around double, if not more, what you'd make for doing the same job on shore. Having said that, offshore operations are statistically safer than on shore operations, meaning that they don't have as many accidents or injuries. And if you think about the cost of operations, it makes sense that they basically have to be safer. Otherwise there wouldn't be any incentive to do it. They would be cost would be way too high. So it's just that when something does happen, it's more often of the high consequence variety. I should also mention that while the drilling operations are very expensive offshore, the production operations are quite cheap in terms of the cost per barrel, and that's because of the...

...extraordinarily high production rates. I could do an entire podcast series on offshore operations, but to keep it somewhat straightforward, I'll stick to the drilling operations for offshore, as that's probably the most relevant and the most interesting to most people, and also I just don't have any offshore experience, so we'll try to keep it high level. When you're drilling on land, the drilling rig just sits there and as long as your construction crew level the ground under the rig properly, then you should be good to go. In offshore drilling, you've typically got several thousand feet, if not several miles, of water between you. In the sea floor, you've got to find a way to anchor the drilling platform so it doesn't get swept in the way in the waves of the tide or the current. I guess I should say if the water is shallow enough, you can anchor it to the sea floor. Or perhaps you're on...

...a drill ship and it has thrusters which are tied to a GPS system that operates in tandem to keep the ship in the exact same spot despite these waves are current. Let's take a look at the most common kinds of facilities from which offshore drilling takes place. You've got Jack Up rigs, fixed and floating platforms, semi submersibles and drill ships. The Jack Up Rig is kind of like a floating platform with adjustable legs. Because it can float, the whole assembly can just travel to where it needs to be and once it gets there, it can just lower its legs, which in effect Jack up the drilling platform. Fixed platforms are permanent, as they reside on top of usually concrete or steel legs. Imagine a structure that looks like a a wider Eiffel Tower that's under the ocean, with the platform sitting on top. Jack Up rigs...

...and flip fixed platforms are therefore used in only shallow water, which typically means less than a thousand feet of water. A floating platform is similar, but because the water is deeper, it's too expensive to build a giant support structure. Instead, the platform is tethered to the sea floor by long cables. Semi submersibles have pontoons under the platform. The pontoons are below the surface of the water, hence semi submersible, and they provide stability to the structure but provide enough buoyancy for the platform to float. Floating platforms and semi submersibles are typically used for mid, too deep water operations, and that's usually in that thousand to seven thousand feet of water. Drill ships are actual ships that have been designed or in some cases, retrofitted with drilling equipment. These are most...

...often used in very deep water, which would be say, greater than seven thousand feet, and you're used for exploratory drilling, but are common in shallow well say as shallow as about thirty five hundred feet, because of their versatility. As of this recording, the deepest offshore well was drilled by the Mare's drill ship in offshore Uruguay in over thirty four hundred meters, that's over elevenzero feet of water. Drilling operations started at the end of March in two thousand and sixteen, and this single well was expected to cost about two hundred million dollars to drill. Regardless of the depth of water, though, you're always dealing with similar challenges. Imagine a large offshore oil rig as a match box. Now imagine you take that match box and you put it on top of...

...a two story building, so the upper floor of the building is filled with water. That's your ocean and the lower floor is filled with rock, sand and, in some cases, salt. Striking an oil reservoir with drill pipe is like hitting a coin at the base of the building from your match box with a strand of human hair. That's how tight it is. If you miss, the costs are enormous and an industry rule of thumb is that drilling a deep water dry hole, dry hole meaning a well with no oil, is around a hundred to three hundred million dollars. If ninety percent of your wells that you drill or dry holes, you're actually doing quite well. But with advanced seismic and well data from exploration and appraisal projects, the chances of drilling a dry hole become extremely low. Fun Land, you can just walk...

...up and control the wellhead with your hands. A lot of the time. In offshore operations the wellhead is on the sea floor, so it has to be controlled remotely. On land you can easily dig a trench for a pipeline to move your product to market. In offshore operations it takes an enormous effort to lay a pipeline on the sea floor or coordinate ships and tankers known as floating production, storage and offloading, or FPSO's. I hope you can appreciate that elements like these add a significant layer of complexity to the planning and engineering. Finally, I wanted to wrap up, and I know there's probably some questions about this anyway. So I think it's worth spending some time talking about the deep water horizon offshore rig and the resulting spill that happened on April twenty two thousand and ten from the BP Macondo exploratory well in the Gulf of Mexico.

Almost everyone in the US is probably familiar to some extent with this event, as it resulted in the rig sinking, eleven people dying and, of course, the millions of barrels of oil spilling into the ocean. This one single incident was estimated to a cost BP nearly sixty two billion dollars, and I've actually heard numbers that were quite a bit higher than that, quite a bit. Anyways, Long Story Short, as BP was drilling this exploratory well on the Trans Ocean rig named deep water horizon, certain crucial mistakes were made. Recall, way back we were talking about drilling and how we use cement to isolate the casing from the oil and gas that's in the formation. It's essential to confirm the integrity of the cement because the cement is the main barrier that's preventing the oil and gas from blowing out uncontrollably to surface. Well on...

...the Macondo well, after the cement had been pumped, test came back showing that the cement job had failed. A test was done to confirm that the cement was set up properly, but was misinterpreted as successful. Obviously, eight this is a high level summery here. There's way more details than this, but we'll keep it at that. So, as a result of that, the cement was not able to hold back oil and gas and it became to migrate the well. By the time BP realized what was happening, attempts to secure the well and prevent a blowout also failed. The oil and gas was able to come to surface and a large bubble of gas burst through several seals and barriers and exploded. The explosion resulted in a fire that engulf the entire platform and burn for more than a day before the whole platform sank. Needless to say, it is one of the most expensive man made incidents ever,...

...and has changed the course of the oil and gas industry forever. If you haven't seen the movie named after the rig, the movies called deep water horizon. It Stars Malt Mark Wahlberg and I think last time I checked, it got eighty five percent on rotten tomatoes. It's a pretty good movie and not only explains what happened with the deep water horizon incident, but it gives you a really good idea of what it's like to work on an offshore rig. Hey, guys, if you like today's episode, make sure you subscribe to the podcast. Unlike most podcasts that release an episode every week or two, I did all twenty four at once, Netflix style, so you can listen to them all right now if you just hit subscribe. If you like today's...

...episode, make sure you leave me a comment or thumbs up, or you can email me at from fossil to fuel at GMAILCOM, or look me up on Linkedin. I'm Brendan McDougall.

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