Mark McAllister welcomed the group and chaired the meeting.

Transcription

1 UOSPRAG Meeting 3 rd August 2010 U9am 11:30am Oil & Gas UK s Offices, Aberdeen USummary of Meeting UOrganisations Represented: Oil & Gas UK CNR MCA SOSREP IADC Fairfield KCA Deutag Transocean ConocoPhillips HSE BP DECC U1. Welcome & Introductions Mark McAllister welcomed the group and chaired the meeting. U2. Matters Arising from Previous Meeting The actions arising from the previous meeting (07/07/2010) were reviewed. In addition to those covered by the agenda: It was confirmed that Total have been invited to join OSPRAG, and will be joining from the September meeting. It was also confirmed that Oil & Gas UK have reinforced their request for a seconded drilling engineer to the Board (as well as OSPRAG) and have still received no offers. Oil & Gas UK is still continuing to ask the industry for assistance with this, but has also started to look at the market in order to hire a consultant if necessary. It was agreed this was very disappointing, and the hiring of an external consultant rather than a seconded engineer was not the preferable option. Once again a plea was issued to OSPRAG operator members to volunteer a drilling engineer for secondment to support the work of the Technical Review Group. ACTION: Operator members are once again requested to please give serious consideration to providing a drilling engineer on secondment to support this work Members were also asked to note that the date of the September OSPRAG meeting has been brought forward to U1 st SeptemberU in order to allow adequate time to prepare for the House of Commons Select Committee hearing. U3. Update on GoM Incident The group were given an update on the GoM incident: Spill containment - The Macondo well was finally capped on 15 th July, since then there has been no evidence of leak or spill from the well. - The capping stack has held and is being monitored closely pressure tests indicate a current pressure of around 7000psi which is slowly rising indicating the continued integrity of the well. Page 1 of 8

2 - The amount of surface oil in the GoM is therefore decreasing, for example on 27 th July only one barrel was recovered on the surface. Containment work by the two surface vessels has therefore temporarily stopped. Relief Wells - The last string of casing for the relief well has been set the well is now only 4ft (laterally) from the Macondo well and at a total measured depth of 17864ft. - Preparations are now under way for the static kill which will see heavy mud pumped through the capping stack on the Macondo well. If the integrity holds this will be followed by cement. - Work on the relief well will be suspended whilst this operation is carried out, but the ultimate kill will still be via the relief well. Investigations & Response - The interim report from the BP investigation is now expected at the end of August and will be made publicly available. - Lamar McKay will be taking over the Response efforts from Bob Dudley, with 30,000 people and 4,500 vessels/rovs etc still working as part of the response effort. Since the incident began, a total of 1.8 million gallons of dispersant and 11 million feet of boom (containment and absorbent) have been used. - The Presidential Commission and Marine Board investigations are progressing but in relatively early stages. Indications suggest the Marine Board report will be released around January 2011, whilst the Presidential Commission is expected to take months before they release theirs. Further information can be found online at: HUhttp:// d= uh U4. Select Committee Hearing and Submissions The group were given an update on preparations for the Select Committee Hearing and submissions. Although the formal invitation has not yet been received the Clerk has indicated that this will be arriving shortly. The Committee will be taking evidence in three sessions: 1. Industry One hearing for BP, and one with representation from each of OSPRAG, Oil & Gas UK and Transocean 2. Regulators (DECC, MCA and HSE) 3. Companies operating offshore in West of Shetlands The inquiry will be public and a request has been made for evidence from any stakeholders, it is therefore expected that a number of NGO s will submit evidence also. The Committee have asked for evidence on five questions which seem to indicate the remit will be focussed on deepwater and WoS: 1. What are the implications of GoM oil spill for deepwater drilling in UK? Page 2 of 8

3 2. To what extent is UK safety and environmental regulatory regimes fit for purpose? 3. What are hazards and risks of deepwater drilling west of Shetland 4. Is deepwater oil & gas production necessary during UKs transition to low carbon economy? 5. To what extend will deepwater oil and gas resources contribute to UK s security of supply? The deadline for evidence is 13 th September, however the Committee have asked that the OSPRAG and Oil & Gas UK evidence be submitted sooner as it is likely the first hearing session will take place on 7 th September. It was reported that this will be difficult for the team at Oil & Gas UK, but a draft summary of the points to be raised will be submitted by 1 st September. The OSPRAG draft submission will be discussed and approved at the 1 st September meeting, so all members are asked to ensure a good, senior level attendance in person at this meeting. ACTION: All OSPRAG members are asked to ensure a good senior level attendance on 1 st September A request was made that DECC, HSE and any individual organisations submitting evidence share their responses with Oil & Gas UK as this would be helpful in ensuring aligned messaging. Wendy Kennedy confirmed that DECC have been asked to submit evidence by 13 th August for Ministerial approval. ACTION: All OSPRAG represented organisations submitting evidence to the Committee are asked to share this with Oil & Gas UK if possible The group were also reminded the group that, as well as the West of Shetlands, deep water drilling is also being carried out in the Faroe Islands. U5. Technical Review Group Update The group were given an update on the work of the Technical Review Group and its sub-groups. Capping & Containment Sub Group Following approval at the last OSPRAG meeting, the Sub Group went out to tender for the engineering design work. Three companies responded and the work was awarded to J P Kenny following consideration of a number of KPIs. The decision was primarily based on J P Kenny s recent work and experience in the Gulf of Mexico, the quality of their people and the efficiency with which they would operate. The work is expected to be completed in 7 weeks, and a kick off meeting will take place this week. The work will be overseen by a steering group made up of members of the Review Group. A key priority will be ensuring that any requests for information made by J P Kenny are dealt with quickly. Industry communication will continue but the work will focus on the three options outlined at the last OSPRAG meeting. The end deliverable will be a set of Page 3 of 8

4 drawings and costings for these options which will shape the recommendations to be taken to OSPRAG. Having these options in place will speed up the response to any blow out incident. The group will also be looking at commercial and maintenance issues related to the proposals, and will also look to the Norwegian sector for advice. These options will represent a short term measure the UK sector can take as a contingency measure against a blow out. Longer term measures will be considered once the full learnings from the GoM incident are known. It was pointed out that comparisons may be made by the Committee between the costs of this work and the recent announcement of the $1billion funding established by four majors in the GoM. It was agreed that the GoM project is not yet fully defined but is likely to contain a combination of capping and oil spill response measures so will also cover something similar to OSRL. It was also confirmed that the Board of Oil & Gas UK had authorised an additional 460k of funding towards the J P Kenny study and other work being carried out by OSPRAG. Other Sub Teams All five questionnaires have now been sent out to industry, and cover well intervention, verification, BOPs and competency. All are due back by 13 August, after which the information will be sanitised and all references to individual companies removed. The information will then be analysed by the sub group and used to develop recommendations to be brought to the Review Group and OSPRAG. The Drilling Manager s Forum will also be involved in the development of these recommendations, but it would also be ideal to have the drilling engineer previously requested in place by then. The aim is to have these recommendations ready for 1 st September in order to feed into DECC s interim report and the Select Committee evidence. The sub group looking at flowing well status is not yet up and running as clarification on the Terms of Reference is needed first. The plan would be to carry out a feasibility study and seek the approval of OSPRAG before any long term recommendations were made on this issue. Some concerns remain regarding whether the survey of flowing wells should prioritise those which could lead to a significant spill, or all should be included. Information on existing databases, including the HSEs, will be incorporated into the survey. The question of Norwegian participation in the Review Group and main OSPRAG group was raised, and it was agreed that the invitation to the Director General of the Norwegian Ministry for Petroleum and Energy ahead of the first OSPRAG meeting should be reissued. ACTION: OSPRAG to reissue invitation to Norwegian Petroleum Ministry U6. Oil Spill & Emergency Response Review Group Update The group were given an update on the Oil Spill & Emergency Response Review Group. Page 4 of 8

5 Oil Spill Scenario Modelling This group is working jointly with the Insurance and Indemnity Review Group to review the modelling used with the UK. There has been a suggestion that the Norwegian model (OSCAR) performs better than that used in the UK (OSIS), particularly with deep water release scenarios. A comparison has been undertaken between the two and two academics approached to carry out this work (Bangor University and MarLab). A preliminary meeting with the academics will be held on Thursday. In the short term, the UK model will be used to work up preliminary scenarios which will feed into the OPOL work. It was agreed that the scenarios used should include the use of dispersant both at surface and seabed. However, WK pointed out that it would currently be very difficult to get permission to use dispersant at the seabed within the UK. The scenarios will be re-run using the Norwegian model if the comparison demonstrates it is superior. Physical Response Capability Initial discussions with the MCA have been held to understand the UK strategy for dealing with oil spills currently it relies on the surface use of dispersants whereas the Norwegian strategy for example relies of ship borne at sea containment. The UK strategy is based on a short term single source spill (i.e. a tanker). A review of the UK strategy could be steered by a recommendation from OSPRAG but would ultimately be a Parliamentary / Department of Transport decision. ACTION: UK strategy to be discussed at meeting on 5 th August POST MEETING NOTE: the National Contingency Plan review is about to be undertaken (12 month programme), any input or concerns to current strategy should be addressed as recommendations fed into this review. OSPRAG will be invited as a stakeholder to this process. DECC recommended involving CEFAS and MarLab in any such discussions going forward, given their historic aversion to allowing the use of dispersants. The MCA pointed out that the logistics involved in changing the UK strategy are vast and would be very much a longer term solution. It was also suggested that, given the wide variety of response techniques used in the GoM, an objective view from those involved there could be helpful. A recommendation was made to seek information from research organisations like SINTEF. POST MEETING NOTE: MARINE SCOTLAND confirmed that they do not have a policy against using dispersants. It was also agreed that, in light of these discussions, links with OSRL needed to be strengthened, and it was suggested that the Chief Executive of OSRL be invited to join OSPRAG. ACTION: CEO of OSRL to be invited to join OSPRAG Page 5 of 8

6 Inventory of Response Equipment A questionnaire has been issued to operators as part of the inventory of physical response equipment available in the UK. The questionnaire included a question on company self assessments for oil spill response capability, as per the action from the last OSPRAG meeting. The questionnaire will also be issued to the MCA, UK Spill and Briggs Marine. Responses are due on 6 th August, and OSRL have offered one of their experts to analyse the results. ACTION: Questionnaire to be issued to Briggs Marine & UK Spill ACTION: MCA to bring information to meeting in London on 5 th August Sensitivity and protection mapping; Clean up and restoration An initial meeting of this group will be taking place this afternoon, with the intent being to develop a scope of work for a consultant, which will look at the coastal mapping in place for the UK (identifying areas of environmental sensitivity, boom-appropriate coastline etc) and whether it needs to be updated. Including the Government s Coastal Atlas in this work was also suggested. OPEPs The work in this area is on hold until the results of some of the other surveys are known. Oil Spill Exercise A preliminary meeting has been held and a further meeting of this sub group will take place on 5 th August. The MCA will be leading this work. The exercise will be coupled with a scheduled national contingency plan exercise and will take place in May The scenario will include a physical deployment and is likely to involve a drilling rig in the West of Shetland, so a host operator will be needed. Due to ongoing sensitivities with BP, it was agreed Chevron would be the best option, and Oil & Gas UK agreed to approach them. Funding for the exercise will be calculated once the scenario is finalised, but with physical deployment of vessels and possibly dispersant air craft this is likely to run into 100k s. ACTION: Oil & Gas UK to approach Chevron regarding the oil spill exercise U7. Insurance & Indemnity Review Group Update The group were given an update on the Insurance and Indemnity Review Group. The Review Group have spent time understanding the OPOL arrangements and what they cover, as well as broader liability laws. A meeting is scheduled for Friday 6 th August to focus on this in more detail and a briefing note will be issued afterwards. As an interim measure, it has been recommended that the OPOL limit be increased from $120million an incident to $250million. This will be voted on by OPOL members at the EGM on 18 th August. OPOL is also looking at how it would manage claims in the event that a party defaulted, which is a situation it has never dealt with in practise. Page 6 of 8

7 It was agreed that a major piece of work was needed to modernise OPOL and ensure that the organisation remains fit for purpose. The cover levels in particular were highlighted with comprehensive rather than third party cover being suggested as a possibility. As part of this a questionnaire will be sent out to industry to determine how companies arrange their cover. The group urged caution with regard to any recommendations or changes to OPOL that could lead to some companies being prevented from operating. DECC clarified that OPOL membership was not needed in order to be granted a license, provided other cover was in place. ACTION: Questionnaire on insurance and indemnity arrangements to be sent out The modelling work will be carried out in three stages, firstly using the models discussed previously to identify where oil would end up and how much there would be, then determine the costs for cleaning up this oil. Finally, the modelling issues will need to be addressed including how long a model is valid for. The modelling companies approached are very busy with work related to the GoM and as such this project needed to be started as soon as possible. It was agreed that the worst case scenario determined by the modelling should be tied into the physical deployment exercise. ACTION: Modelling worst case scenario to be tied into the physical deployment exercise scenario U8. European Issues Review Group Update The group were given an update on developments elsewhere on a European and International level. OGP met with API in Washington DC to discuss their work in light of the GoM incident. API have issued a number of recommendations regarding offshore safety and have established four main task forces (looking at similar areas to OSPRAG) through which they are working closely with the MMS (or Bureau of Ocean Energy Management, Regulation, and Enforcement). API have recently issued a report on the drilling moratorium (now called a suspension) in the Gulf, which affects deep water. This hasn t been clearly defined but at present in the USA this applies to anything over between ft. (Post Meeting Note: it is now clear this applies to anything over 1000ft) The Department of Interior s investigation into the GoM incident will be coming out with draft regulations in September, to be finalised and put in place by end API have indicated that they are happy to share any of the work they are doing. ACTION: Circulate documents received from API The group were also given an update on the EU Commissioner s investigation into offshore drilling and regulation. At the meeting with industry on 14 th July, the Commissioner expressed frustration at what he saw as a lack of cooperation and transparency from companies and is pushing for improved, Page 7 of 8

8 individual responses to his questions. A further meeting will be taking place between the Commissioner and national regulators in mid September, so it continues to be very important that the industry (through OGP) engage at the EU level. The group were advised that, in light of this, the Commissioner has been invited to send a representative to future OSPRAG meetings as an observer. The HSE reported that the approach they are taking is to impress the Commission with reassurance regarding the existing regulations in the UK anecdotal evidence would suggest that the Commission s key concerns seem to be around some of the Mediterranean states. OGP announced at the meeting in July that they have established a Global Industry Response Group which will ensure coordination and sharing between national responses to the GoM (i.e. OSPRAG, API etc). The four majors who recently announced the $1billion fund for oil spill response in the USA have been engaging with OGP in order for them to work with groups around the world. OGP will be meeting Chevron to discuss the initiative. The group expressed concern about this meeting and underlined that, at a recent meeting with the four companies involved, it had been made clear that there was a distinction between the GoM and UK, and the arrangements established were not appropriate for the UK. The group urged OGP to ensure that any discussions which took place would not undermine this position as the UK sector would not favour any sort of move towards the adoption of this initiative. ACTION: OGP rep to feed back to OSPRAG following discussion with Chevron U9. Any Other Business OSPRAG Letterhead It was reported that an OSPRAG logo and letterhead had been developed for the Commissioner s invitation. The letterhead listed the organisations involved in OSPRAG at the foot of the page, but going forward logos may be more appropriate. Two versions of the letter head will be circulated to OSPRAG members for their feedback and approval. A request was also made for some clarity regarding OSPRAG governance. ACTION: Letterhead versions to be circulated to OSPRAG members Date of Next Meeting The importance of full participation at the next OSPRAG meeting was once again underlined Glossary A request was made for a glossary of terms given all the acronyms being used within meetings. It was reported that one is being developed through the EU Issues Review Group and will be circulated along with a wiring diagram. ACTION: Glossary and diagram to be circulated Page 8 of 8