Posts from ‘December, 2011’

By Pierre Bertrand | December 22, 2011 2:07 AM GMT

Alaskan environmentalists are sounding the alarm bells this week, responding to two major oil industry victories in a state that has been a recurring flash point between environmental groups, legislators and the giants of petroleum exploration.

* “Less than 40,000 barrels of oil” leaked – Shell

* Field produces 10 pct of Nigerian oil exports

* Shell says oil flow now halted

By Emma Farge

LONDON, Dec 21 (Reuters) – Royal Dutch Shell is shutting down its huge 200,000 barrels per day (bpd) Bonga oilfield off the Nigerian coast after a leak occurred while loading a tanker on Tuesday, the firm said in a statement.

The Anglo-Dutch oil major said “less than 40,000 barrels of oil” had leaked into the ocean. The flow of oil had now halted, a spokesman said.

The leak occurred while a tanker was loading oil from Shell’s Bonga facility, about 120 kilometres off the coast of the West African nation, according to the statement.

Shell’s pipelines in Nigeria’s onshore Niger delta have spilled several times, which the company blames on sabotage attacks and oil theft.

Bonga accounts for around 10 percent of monthly oil flows from OPEC member Nigeria, the continent’s largest exporter of crude oil, according to Reuters data.

“We are sorry this leak has happened. As soon as we became aware of it, we stopped the flow of oil and mobilised our own resources, as well as industry expertise, to ensure its effects are minimised,” said Shell Nigeria Country Chair Mutiu Sunmonu.

“It is important to stress that this was not a well control incident of any sort, and to make clear that no one has been injured. Our focus now is on a speedy and effective clean-up,” he added.

BP’s Macondo well ruptured in April last year, causing nearly 5 million barrels of oil to spew into the sea in what was the worst U.S. marine oil spill.

Shell Nigeria Exploration and Production Company is 100 percent owned by the Anglo-Dutch oil major.

FLOW HALTED

A Shell spokesman said the flow of oil had been halted on all three of the platform’s export lines where it is believed that the leak occurred.

An investigation will be launched into the reasons for the leak, he said, without giving a timeframe for the restart of production.

The company had not declared force majeure, a legal clause allowing a company to miss deliveries due to circumstances outside its control, he added.

Shell’s share price fell during the day by more than 1 percent on Wednesday to 2,274 pence by 1405 GMT. Brent oil prices were up 63 cents at $107.36 a barrel by the same time.

Oil traders and analysts said the Bonga closure could be supportive both for Brent oil futures and other Nigerian crude streams, where demand is expected to increase.

“Given the current sensitivity to potential supply disruptions and rising geopolitical tensions it just adds to the uncertainty in 2012… It will limit the downside on Brent should broader market sentiment turn,” said Andrey Kryuchenkov of VTB Capital.

Bonga was due to load around 161,000 bpd on five tankers in January, according to oil loading programmes.

SOURCE ARTICLE

December 21, 2011, 5:39 AM EST

By Eduard Gismatullin

Dec. 21 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company, shut its 200,000 barrel-a-day Bonga field off Nigeria after oil leaked during a tanker loading.

An export line from the field’s floating production, storage and offloading vessel was the likely cause of the leak, estimated at less than 40,000 barrels of crude, Shell said in a statement today. The oil flow has been halted.

“We are sorry this leak has happened,” Mutiu Sunmonu, the company’s Nigerian chairman, said in the statement. “It is important to stress that this was not a well-control incident of any sort, and to make clear that no-one has been injured.”

Shell, the largest foreign oil producer in Nigeria, has been operating in the African nation since 1937 and has been criticized by the local population and international institutions for numerous spills in the country at its onshore fields. Bonga, Nigeria’s first deepwater discovery, lies 120 kilometers (75 miles) off the coast and produces almost 10 percent of the country’s crude.

Shell planned to export five cargoes of 1 million barrels each of Bonga crude every month from December to February, according to loading programs obtained by Bloomberg News.

Shell’s shares pared gains in London trading and were up 0.8 percent at 2,296.5 pence at 8:45 a.m. local time.

The company yesterday said a drilling operation will stop for weeks in the Gulf of Mexico after spilling 319 barrels of drilling fluid.

–With assistance from Sherry Su in London. Editors: Will Kennedy, Stephen Cunningham

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

SOURCE ARTICLE

John

Oops these sort of things only happen to BP!

Our dear friend Mr Voser will no doubt be miffed that in the Gulf even a well designed to his`Utopian‘ Shell standards can dare to leak.  The report today on your website states that Shell wasn’t involved in the Deepwater Horizon spill last year in the Gulf of Mexico.

But the Deepwater Nautilus rig it is currently using has the exact same design and is considered a “sister” rig of the Deepwater Horizon.

This so called sister rig that Shell is using will by implication have the same design flaws as the Deepwater Horizon. Nothing has been done by the Industry as far as I am aware to remedy this situation.

Some examples

• the unwillingness of the operators to isolate all power supplies during a gas leak, mentioned in the previous Congressional report – because this by implication isolates the dynamic positioning thrusters and means that the emergency disconnect needs to be operated as the vessel drifts from the riser – has not been tackled by the Regulator with the implication that gas released from a well kick will enter areas where sources of ignition exist on Deepwater Nautilus as it did on Deepwater Horizon
• the technical investigation found that there was insufficient geographic separation of the air inlets to non hazardous areas from the moon pool or drilling facilities such as the mud treatment skid
• In 7,200 feet of water even if the BOP operates perfectly if gas from a kick has reached the surface before it is detected and is not directed overboard via the surge diverter (as was the case with Depwater Horizon) there is still sufficient gas escaping from the riser at the surface to ingress into the ventilation ducts of power generation modules et al
• the design of the gas detection systems on Deepwater Horizon were medieval when compared to North Sea standards
• Depwater Horizon, and by implication Nautilus, did not have what we in the North sea would recognise as a safe haven or Temporary Refuge and in general protection of safety critical systems from explosion overpressure’s was completely inadequate including escape routes to lifeboats.

To quote the latest report covered on your web-site from the New York Times re lessons learned from Deepwater Horizon.

The search for new oil and gas reserves must be part of a balanced energy policy. But the enduring lesson of the Deepwater Horizon is that complacency can easily lead to disaster. The cost of the Deepwater Horizon blowout has been huge in both lost income and natural resource damage. The ultimate tally to BP and its partners could run as high as $40 billion, with civil penalties. The inescapable bottom line is that if industry wants to keep drilling, it needs to commit fully to doing things differently. As do the regulators.

In my book it is incredibly complacent that a quarter of  century after the lessons were learned on Piper Alpha to prevent as far as was reasonably practicable gas from being ignited on the limited confines of an offshore installation Shell and others continue to use vessels which are intrinsically dangerous due to the lack of mitigation against this major accident event although they are now perfectly aware that these hazards exist. A commitment to doing things differently would be to adopt at least some of the salutary lessons learned from the deaths of 167 souls all those years ago.

Bill Campbell

RELATED ARTICLES

A Look at Deepwater Horizon: Were the Risks For Those On Board Reasonable?

Shell’s North Sea Reputation sunk by severe corrosion

Deepwater Horizon Regulatory Failures

BILL CAMPBELL REFERENCE TO THE PIPER ALPHA DISASTER

EXTRACT FROM “PAYING FOR THE PIPER“

Violation of this court order, Shell warned, could result in the families and survivors concerned being ‘subject to bodily imprisonment: Faced with such legal harassment, even case-hardened lawyers involved in the proceedings reeled in disbelief

(SEE: Shell’s North Sea history of safety violations, blackmail and blacklisting)

Daniel Fisher, Forbes Staff

12/20/2011

For nearly 200 years, the Alien Tort Claims Act lay dormant, a one-sentence law passed by the first Congress that gave federal courts jurisdiction to hear any lawsuit brought by “an alien” for torts committed “in violation of the law of nations.” Then around 1980 inventive lawyers rediscovered it as a tool for international human-rights enforcement. One judge dubbed the long-neglected law a “legal Lohengrin,” after the knight in the Richard Wagner opera who magically appears in a boat drawn by a swan.

Early next year the Supreme Court will decide whether this law can be the legal vehicle for pressing multibillion-d0llar claims against corporations that lawyers believe are responsible for human-rights violations. One case, Kiobel v. Royal Dutch Petroleum, asks whether Nigerian villagers can sue the oil giant in U.S. court over the actions of government troops they say were acting on Shell’s orders to protect its valuable installations in Nigeria. It is paired with another case involving the 1993 Torture Victims Protection Act. In both, the court is being asked to sort out a dispute among the federal districts about whether these laws apply to individuals only, or can be extended to organizations like Shell and the Palestinian Liberation Organization.

The stakes are huge for corporations, which theoretically could be held liable for any actions of the government in nations where they do business, pay taxes, and rely on local forces to protect their assets.

“There have been plenty of cases where the theory is, basically, the corporation has aided and abetted the human rights violations just by doing business with the violators,” said Meir Feder, an appellate lawyer in Jones Day’s New York office who is active in international corporate law. “It’s been a real growth industry.”

Lawyers really embraced the 1789 law after the U.S. Supreme Court decided  in 2004 that a Mexican national could not use the ATS to sue the Mexican agent who abducted him on instructions of U.S. officials. It was a defeat for the plaintiff in that case, but the high court flashed “an ambiguous green light” to other lawsuits by suggesting the ATC could be used to allege torts that didn’t exist when it was written in 1789.

The main question before the court when it hears the Shell and Torture Protection cases, probably in February, will be whether the laws can be applied to organizations instead of individuals. The Second Circuit Court of Appeals in New York rejected the Shell case in December 2010, saying “corporate liability is not a discernable—much less universally recognized—norm of customary international law.”

The decision offers a lengthy diversion into 18th century law and politics, when pirates were a major foreign-policy concern and large parts of the world had no formal government at all. The majority concluded that while enforcing human rights was the “singular achievement” of international law after World War II, it has never been stretched to include lawsuits against corporations. The ATC applies to the actions of states and individuals,the court ruled, since ultimately only people in a position of governmental authority can bear moral responsibility for acts so heinous they rise to the level of “international crime.”

Even the ever-sympathetic Ninth Circuit signed off on this view,deciding in 2010 that Chevron couldn’t be sued under the ATS for the actions of Nigerian security forces when they retook an offshore oil platform that had been occupied by protesters.

But the 11th Circuit ruled the other way in 2008 in a lawsuit by Colombian villagers allegedly abused by paramiliaries in the employ of a U.S. corporation. And in July of this year the influential D.C. Circuit ruled that ExxonMobil could be sued for allegedly allowing government security forces detailed to its facility in Aceh, Indonesia to commit murder, sexual assault and other crimes against villagers.

The court rejected ExxonMobil’s argument that the Supreme Court had eliminated aiding and abetting liability in its pivotal Central Bank case in 1994. It still applied in the world of international crimes, the court held. None less than George Washington had issued a proclamation in 1793 warning U.S. citizens they’d be found liable for “aiding, or abetting hostilities” against any power involved in fighting in Europe.

Judge Brett Kavanaugh, a conservative favorite, issued a strongly worded dissent.  The ATC was intended to “avoid conflicts with foreign governments” by providing redress to aliens who suffered injuries within the U.S. Extending it to actions on foreign soil creates rather than avoids conflicts, and itself conflicts with the Torture Prevention Act which only protects U.S. citizens. If the ATS works the way the majority would have it, he wrote, then an alien could bring a lawsuit against a corporation in U.S. court that was barred by a U.S. citizen.

The Torture Victims Statute case seems a simpler proposition, since the law gives the right to sue to “any individual” who under “actual or apparent authority” of government authority tortures another individual. Congress considered, and rejected, using the word “person” which is understood to include corporations and other organizations, said Feder, who not surprisingly represents corporate clients who say they are not “individuals.”

“I don’t have a problem predicting it is quite likely the Supreme Court is going to say corporations are not subject to suit,” he said.

The Roberts Court is also likely to trim the sails of plaintiff lawyers who want to use the 1789 Alien Tort Claims Act to pursue 21st-century class actions, Feder said.

“At the end of the day, the current Supreme Court is likely to take a much more restrictive view of what kind of cases will be allowed to go forward than a lot of lower courts have allowed,” he said. The ATC was designed for situations where aliens had no way to get redress and failing to deal with their complaints would lead to “serious military and diplomatic problems,” Feder said.

“The current Supreme Court is going to look at that and say `We’re not going to extend that as a sort of general right of action for human rights violations all over the world.’”

ExxonMobil, Chevron, Shell and other corporations doing business in dangerous parts of the world will certainly be pulling for the legal Lohengrin to disappear into the mists again.

SOURCE ARTICLE

By Eduard Gismatullin – Dec 20, 2011 3:23 PM GMT

Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, said a rig will stay shut for weeks after spilling 319 barrels of drilling fluid into the Gulf of Mexico.

The company suspended work at the Appomattox discovery, which leaked synthetic and biodegradable drilling mud from a booster line, Shell said. The leak was isolated, stopped and remedial action has been approved by the regulator, it said. The company temporarily abandoned the well.

Drilling will resume when Shell and relevant government agencies “are confident that the necessary repairs have been made and the operations can continue safely, which is likely to be in a matter of weeks,” Jonathan French, a London-based spokesman at the company, said in an emailed statement.

The Anglo-Dutch company was drilling the development well following approval from the U.S. government of its two exploration plans in May, the first since BP Plc’s spill in the Gulf of Mexico in 2010. Shell holds 80 percent of the Appomattox prospect with Nexen Inc. (NXY) of Canada holding the rest.

Shell and Nexen announced the discovery in the deepwater eastern part of the Gulf in March 2010. The partners have partly appraised the field and estimate that it holds more than 250 million barrels of resources, according to Nexen estimates.

To contact the reporter on this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

SOURCE ARTICLE

By DANIEL GILBERT

HOUSTON—Royal Dutch Shell PLC on Monday said it had temporarily abandoned a deepwater well in the Gulf of Mexico after it spilled 319 barrels of fluid used to drill the well.

A company spokeswoman said the leak on its Deepwater Nautilus rig occurred Sunday while drilling the well in about 7,200 feet of water southeast of New Orleans.

Shell has stopped the leak and will temporarily abandon the well while it makes repairs, said spokeswoman Kelly op de Weegh. She didn’t have an estimate of how long the repairs would take.

The company said federal regulators have approved its plan, which involves removing underwater pipeline that connects the rig to the blowout preventer on the seafloor.

Shell wasn’t involved in the Deepwater Horizon spill last year in the Gulf of Mexico, but the Deepwater Nautilus rig it is using has the exact same design and is considered a “sister” rig of the Deepwater Horizon.

SOURCE ARTICLE

(Reuters) – The U.S. Coast Guard was investigating a 13,000-gallon spill from an oil rig leased to Shell, operating about 26 miles southeast of last year’s BP Plc Macondo oil well disaster, a Coast Guard spokesman said on Monday.

The spill of either drilling fluid or oil mixed with drilling fluid was reported Sunday by Transocean Ltd’s Deepwater Nautilus rig, which was drilling a well at Shell’s Appomattox discovery.

“Shell can confirm it has a loss of 319 barrels of drilling fluid,” Shell spokeswoman Kelly op de Weegh said by email.

The leak was from a booster line, which provides additional drilling fluid and is separate from the well, she said.

“The leak was isolated, stopped and remedial action has been approved by BSEE (the U.S. Bureau of Safety and Environmental Enforcement), which includes temporarily abandoning the well, and making appropriate repairs,” op de Weegh said.

The Coast Guard was attempting to determine what material was spilled, Coast Guard spokesman Steve Lehmann said.

“An overflight from New Orleans spotted a very light sheen in the vicinity,” Lehmann said.

He did not estimate the sheen’s size.

The initial report filed with the U.S. National Response Center described the leak as a discharge of base oil mixed with synthetic-based (drilling) mud with an oil content of 180 barrels.

“Everything’s pretty up in the air as to what the actual substance is and what the cause of it is, but that’s what we’re going off of right now,” said Coast Guard spokesman Lehmann, referring to the report.

“The ‘oil’ referenced in the report is referring to the synthetic fluid,” op de Weegh, the Shell spokeswoman, said. “The remaining amount in that discharge is water-based.”

The BP Macondo well blew out in April 2010, killing 11 workers, sinking the Transocean Deepwater Horizon drilling rig and spilling nearly 5 million barrels of oil into the Gulf.

(Reporting by Bruce Nichols; editing by Erwin Seba, Gary Hill)

SOURCE ARTICLE

First Posted: December 19, 2011

NEW ORLEANS — Royal Dutch Shell says it has shut down an offshore drilling rig off the coast of Alabama following a leak of drilling fluid.

Shell says 319 barrels of the synthetic and biodegradable fluid leaked from a booster line. The Coast Guard says the leak was reported Sunday and that the line was connected to a vessel supplying the drilling fluid.

The Southern Environmental Law Center says the drilling is part of an exploration plan challenged in federal court by several environmental groups.

Shell says the incident had nothing to do with the wellbore at the site, located in the Gulf’s Mississippi Canyon region where the 2010 BP oil spill occurred. Shell says the federal Bureau of Safety and Environmental Enforcement approved a plan to temporarily stop drilling and make repairs.

SOURCE ARTICLE

A version of this editorial appeared in print on December 19, 2011, on page A28 of the New York edition

The latest investigative report on the Deepwater Horizon disaster in the Gulf of Mexico, released Wednesday, is an important reminder of industry’s past carelessness and a summons to vigilance in the future. It could not have been more timely, coming just as the Interior Department was concluding its first auction of new drilling leases in the gulf since the spill.

The report was prepared by the National Academy of Engineering and the National Research Council. It concluded — as had an earlier study by a presidential commission — that the explosion resulted from a series of poor decisions by BP and others, including a major miscalculation involving the ability of the well to withstand sudden increases in pressure. The study criticized both the industry and federal regulators for “misplaced trust” in the ability of blowout preventers to seal off wells in an emergency, and called for industry to redesign these devices to make them more reliable in the future.

More broadly, the report said that industry was far more focused on drilling and profits than it was on the need for preparedness and oversight. It said “the lack of a strong safety culture” was not unique to BP but was shared by its contractors and its regulators in the Interior Department’s former Minerals Management Service.

Since the disaster, the Interior Department has put in place a whole new regime of safety regulations that companies must follow. The minerals service has been renamed and reorganized, and its inspection capabilities have been beefed up. Its new leaders have vowed that its mission will be to protect the public and the environment, not the industry it is charged with regulating.

Donald Winter, a former Navy secretary who directed the new study, said that because of these and other improvements, drilling in the gulf could safely proceed “at this point in time.” But he warned, rightly, against overconfidence, especially now that drilling in the gulf has resumed and the Interior Department has started leasing new tracts that will lead to further exploration.

The search for new oil and gas reserves must be part of a balanced energy policy. But the enduring lesson of the Deepwater Horizon is that complacency can easily lead to disaster. The cost of the Deepwater Horizon blowout has been huge in both lost income and natural resource damage. The ultimate tally to BP and its partners could run as high as $40 billion, with civil penalties. The inescapable bottom line is that if industry wants to keep drilling, it needs to commit fully and completely to doing things differently. As do the regulators.