2005 Offshore Hurricane Readiness and Recovery Conference July 26•27, 2005 InterContinental Houston Hotel Houston, Texas Welcome and Objectives Sandi Fury, Chevron 1 Conference Sponsers n Co Sponsors: – American Petroleum Institute – Offshore Operators Committee – Minerals Management Service – United States Coast Guard – United States Department of Energy – Office of Pipeline Safety – National Ocean Industries Association – Offshore Marine Service Association n Endorsed by: – International Association of Drilling Contractors Conference Expectations n This is a working technical conference designed to: – Advance our understanding of the metocean conditions possible from extreme storm events like Hurricane Ivan – Put Ivan into a historical context with regard to resulting environmental forces – Assess the performance of Gulf of Mexico infrastructure to Ivan: MODUs, platform rigs, production platfroms and pipelines – Identify gaps or opportunities for improvements to current design or operational standards that could improve the reliability and performance of infrastructure on the OCS to hurricane events n We don’t expect to have the answers to all of the questions by the end of the conference n We do expect to leave the conference with a path forward to complete the performance assessment and answer the question “are the current design standards adequate?” 2 Hurricane Ivan Industry Assessment n Industry performance during Ivan was not atypical to historical hurricane performance, despite Ivan’s severity n Minimal release of oil to the environment is a testimony to the performance of safety devices / factors considered in design as well as prudent operational procedures n Industry demonstrated the ability to move significant numbers of people from harms way through a timely and efficient evacuation n Good collaboration by Industry in prioritizing use of resources in responding to exposure post Ivan n Agency responsiveness to industry needs and requests facilitated return to normal operations 3 Industry Assessment n Business Impact from Ivan was significant but generally resulted from the failure of a few pieces of infrastructure n Opportunities have been identified for further consideration to improve reliability and performance of producing assets in the GOM to hurricane conditions Opportunities for Further Consideration Metocean –Closer look at metocean conditions in shallow water –Re•evaluate 100 yr and other return period wave heights –Evaluate platform damage versus hindcasted waves –Further validate deepwater currents 4 Opportunities for Further Consideration Structural – Sponsor a workshop to discuss structural damage caused by Ivan – Consider need for additional guidance in RPs regarding securing of equipment on platform decks and topsides – Consider air gap criteria for platform design and assessment – Review guidance on identification of mudslide prone areas Opportunities for Further Consideration Drilling –Consider establishment of reliability basis for GOM, including hurricane season –Consider enhancements to API RP 4F to address loading issues and tie•downs associated with drilling structures 5 Opportunities for Further Consideration n Pipeline –Better understand the factors contributing to pipeline performance during Ivan » Consider geo•technical issues (mudslides, silting, seafloor mapping) –Update industry recommended practices based on research findings Focus of Conference n Collaboration of Industry and Government technical experts – To better understand performance issues and high•grade opportunities for further review – Further discussion of JIPs / studies as appropriate to address areas of concern or value added research opportunities n Actively share derived information throughout industry 6 Today’s Agenda n Background – Work in progress –how did we get where we are? n Perspective of the regulators – Performance of the Industry – Opportunities for improvement n Grounding on the environmental conditions seen during Ivan – Metocean conditions and the relevance to current design standards – Advances in hurricane forecasting – Geotechnical issues associated with Ivan 7 2005 Offshore Hurricane Readiness and Recovery Conference July 26•27,2005 Chris Oynes MMS Regional Director Gulf of Mexico Region Minerals Management Service Topics ØThe setting • GOM as an asset ØWhy are we here • effects of hurricanes ØWhat is MMS doing ØChallenges • do we need to do more Minerals Management Service 1 TheThe SettingSetting •• GulfGulf ofof MexicoMexico asas anan AssetAsset Minerals Management Service Leases in the Gulf 20 Years 8,000 7,414 7,000 6,000 5,000 4,000 3,000 1,947 2,000 1,205 1,000 0 1985 1995 2005 Minerals Management Service 2 Gulf of Mexico Deep Water Oil Production 400 348 348 337 e. 350 315 300 271 250 225 200 159 150 100 55 50 ~ 0 ~ 1995 ~ 1998 1999 2000 2001 2002 2003 2004 Millions of Barrels Per Year As of 5/6/05 Minerals Management Service Gulf of Mexico Deep Water Gas Production 1600 1420 1420e 1400 1320 1180 1200 1000 1000 840 800 560 600 400 181 200 ~ 0 1995 ~ 1998 1999 2000 2001 2002 2003 2004 Billions~ of Cubic Feet (BCF) Per Year As of 5/6/05 Minerals Management Service 3 Future of the Gulf Total Gas Production 15 13.09 13.24 12.44 10 5 0 1995 2002 2011 Minerals Management Service BCF/day MMS report 2004•065 Future of the Gulf Oil Production is Exploding Total Oil Production 2.5 2.248 2 1.562 1.5 0.947 1 0.5 0 1995 2004 2011 Minerals Management Service Millions of Barrels of Oil Per Day 4 GOM OCS Deepwater Production (Percentage of total Gulf of Mexico) 90 80 77% 70 60 50 Oil 40 Percentage 30 26% 20 Gas 10 0 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 (estimated) Minerals Management Service Year WHYWHY AREARE WEWE HERE?HERE? Minerals Management Service 5 Path of Effects Minerals Management Service Ivan and Deepwater Facilities Minerals Management Service 6 Damage from Hurricane Ivan • Mobile Offshore Drilling Units •5 adrift • Platforms •7 fixed platforms were destroyed •31 platforms with serious damage • Platform rigs •1 leaning platform rig from Spar •1 missing platform rig from Spar Minerals Management Service Reported PipelinePipeline DamageDamage Reported Pipeline Damage Due to Natural Hazard Storm No. of Reported Pipelines 16” or No. of Pipelines No. of pipelines Pipelines Greater in w/Damage w/Damage Damaged Diameter Caused by Caused by Mudslides Mooring Drag Hurricane 448 12 11 0 Andrew Hurricane 2 0 0 0 Claudette Tropical 1 0 0 0 Storm Bill Tropical 2 1 1 0 Storm Isidore Hurricane Lili 112 4 1 0 Hurricane 102 12 17 1 Ivan Minerals Management Service 7 Before Hurricane Lili Minerals Management Service After Hurricane Lili Interpretation based on ROV survey Minerals Management Service 8 After Hurricane Lili Minerals Management Service Before Hurricane Lili Minerals Management Service 9 After Hurricane Lili Minerals Management Service Storm Comparison: Serious Damage Platforms Rigs Pipelines 40 600 36 35 500 448 30 27 400 Repairs Pipeline 25 20 300 17 15 Platforms and Rigs and Platforms 200 112 9 10 102 8 4 100 5 0 0 Andrew Lili Ivan Minerals Management Service 10 Storm Comparison: Highest Daily Shut•in Production Oil (bbls) Gas (BCF) 1,800,000 12 1,600,000 10 1,400,000 1,200,000 8 1,000,000 Gas 6 Oil 800,000 600,000 4 400,000 2 200,000 0 0 Andrew Isidore Lili Claudette Ivan Minerals Management Service Storm Comparison: Cumulative Shut•in Production Oil (bbls) Gas (BCF) 45,000,000 180 40,000,000 160 35,000,000 140 30,000,000 120 25,000,000 100 Gas Oil 20,000,000 80 15,000,000 60 10,000,000 40 5,000,000 20 0 0 Isidore Lili Claudette Ivan Minerals Management Service 11 WHATWHAT ISIS MMS DOING?DOING? Minerals Management Service MMS Studies ØAwarded 6 contracts totaling over $600,000 ØStudies will examine the impact of Hurricane Ivan on the Gulf of Mexico oil and gas infrastructure ØWill be used in assessing the adequacy of current design standards and regulations Minerals Management Service 12 NTL No. 2005•G06 Ø Hurricane and Tropical Storm Evacuation and Production Curtailment Statistics NTL effective May 26, 2005 Ø Requires operators to submit statistics regarding evacuation of personnel and curtailment of production because of hurricanes, tropical storms, or other natural disasters Ø Submittal of MMS Form MMS•132 Minerals Management Service MMS Form 132 •Submitted daily by operators who have any shut•in production or evacuation of any facility or rig •Form is either emailed or faxed •Required to be submitted by 11 a.m. Minerals Management Service 13 Previous Studies ØMMS is reviewing study results on Hurricane Lili –Stress Engineering report on pipelines ØMMS is reviewing previous studies on Hurricane Andrew Minerals Management Service ChallengesChallenges forfor IndustryIndustry andand MMSMMS –– DoDo WeWe NeedNeed toto DoDo More??More?? Minerals Management Service 14 Platforms Ø WHAT CAN WE DO TO MINIMIZE DAMAGE? – Is API RP 2A 21st Edition adequate? – Is the 100 year storm criteria sufficient? – Should we install platforms in mudslide areas? – How do we make platform rigs more secure? – Should MODU’sbe removed from the vicinity of high volume facilities prior to a storm event? – How do you secure your facilities in environmentally sensitive areas? – Are synthetic mooring systems used on floating facilities adequate? Minerals Management Service MODU’s Ø RIGS ADRIFT ARE NOT ACCEPTABLE! – Is the API RP 2SK Mooring Designs standard adequate? – What are the assumptions used in performing risk analysis for mooring near infrastructure? Are they sufficient?? – Are the current standards