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To: koan who wrote (81725)6/23/2010 9:49:00 AM
From: stockman_scott  Read Replies (2) | Respond to of 89467
 
Hedge fund veteran eyes commodities in looming forex crisis

reuters.com



To: koan who wrote (81725)6/23/2010 2:50:18 PM
From: tejek  Read Replies (1) | Respond to of 89467
 
BP Spill May Be Less Than Doomsayers Think

By Tadeusz W. Patzek - Jun 22, 2010

Two months have passed since the blowout of the BP Plc exploratory Macondo well in the Gulf of Mexico. Much more is now known about a string of fateful decisions taken in the course of drilling this well.

Individually, none of BP’s decisions would have caused the blowout, but their confluence led almost inevitably to the largest oil-related tragedy in U.S. history. Eleven people have died, a whole coastal region of the Gulf of Mexico has been devastated and it is uncertain that BP will survive the ordeal.

There is some good news, however: Most of the oil and gas spewing from the failed well is now being captured by BP engineers. Here is why.

On June 17, video feeds showed oil and gas to be still escaping from the containment hat attached to the failed blowout preventer (BOP) on top of the well. The brown part of the plume consists of oil droplets, while the white bubbles are gas encapsulated in hydrate ice skins. These ice-gas bubbles eventually dissolve in seawater, thus they never reach the ocean surface.

I have watched the BP video feeds for weeks. The plume currently overflowing the top hat is significantly smaller and less violent than the initial oil and gas plume emanating from the broken riser. This suggests that a large portion of the well flow is now being produced in a controlled fashion.

On June 16, BP finally managed to connect the choke and kill lines below the BOP to a surface collection system onboard the Q4000 vessel. Both production lines (the top-hat riser and the choke-and-kill line riser) are capable of collecting around 25,000 barrels of oil and 30 million standard cubic feet of gas daily. Correcting volumes for the pressure difference between the sea bottom and the surface, the total flow of oil and gas through the BOP should be about 35,000 barrels a day, not 60,000 barrels a day as some claim.

Increased Flow

There are two reasons why the oil flow rate from the failed BP well may have increased from the initial 9,000 to 22,000 barrels a day, the amount estimated to have been leaking in May. First, the partially closed rams and rubber rings functioning as flow barriers in the BOP may have been eroded by oil and gas, and perhaps sand. Second, “wormholes,” or meandering flow tubes that connect the reservoir and the well, may have formed.

“Wormholes” are created when sandstone crumbles and washes away because either the oil and gas flow rate is high, or the reservoir oil is highly viscous, like cold molasses. The combined effect of rock and well erosion might have increased oil flow from about 20,000 to 30,000 barrels a day.

Soil in the Rain

The physics of this phenomenon, akin to washing soil away by rain, is nicely described on The Oil Drum website. Gas is an additional 50 percent of the total flow and is often conflated with the oil flow. As I indicated at the beginning, gas dissolves in the seawater at depth and doesn’t reach the ocean surface.

For the sake of perspective, consider the BP Thunder Horse platform, the world’s largest semisubmersible facility. Prior to the disastrous spill it was also the most productive platform in the Gulf of Mexico, located in water that’s about 6,050 feet (1,844 meters) deep. As of March 20, 2009, daily production at this platform was approximately 260,000 barrels of oil and 210.5 million standard cubic feet of natural gas a day from seven wells, an average of 37,000 barrels of oil and 30 million standard cubic feet of gas per well.

The former Minerals Management Service reports that the majority of ultra-deepwater wells in the Gulf of Mexico produce around 20,000 barrels of oil a day, with the best well in the entire region producing 41,000 barrels a day.

Failure Not Likely

Unless there has been a complete failure of the central 7- inch production casing -- which I don’t believe has occurred -- then no reason exists to believe the failed Macondo well is producing 60,000 barrels of oil a day.

Based on the available information and calculations, it is highly probable that the failed BP well is producing oil at a rate that is closer to 20,000 or 30,000 barrels of oil a day. If BP is currently collecting 25,000 barrels a day, then only some 5,000 barrels of oil are being spilled in the Gulf waters.


Based on the evidence presented thus far, it seems quite unlikely that 60,000 to 150,000 barrels of oil a day will ever flow from the Macondo well. By controlling the spill rate, BP has gained the breathing room required to successfully complete the bottom kill using the relief wells. I anxiously await the good news that the Macondo well has ceased flowing.

(Tadeusz W. Patzek is chairman of the petroleum and geosystems engineering department at the University of Texas- Austin. The opinions expressed are his own.)

bloomberg.com



To: koan who wrote (81725)6/24/2010 5:54:09 PM
From: stockman_scott  Respond to of 89467
 
BP Puts Gulf Well Manager on Leave Pending U.S. Investigations

By Joe Carroll

June 24 (Bloomberg) -- The BP Plc manager who oversaw the well that erupted in April has been placed on leave while at least four federal agencies probe the disaster that killed 11 workers and triggered the worst oil spill in U.S. history.

Donald Vidrine, the well site leader aboard the Deepwater Horizon drilling rig that exploded and sank nine weeks ago off the Louisiana coast, said in an interview yesterday that he has been on administrative leave since the incident.

Vidrine was the top-ranking BP decision-maker on duty aboard the rig when it was rocked by a surge of gas from beneath the sea floor, Chief Executive Officer Tony Hayward told a House panel last week. Just hours before the disaster, Vidrine overruled objections from representatives of rig owner Transocean Ltd. about how to finish the well, Douglas Brown, the chief mechanic on the vessel, told U.S. Coast Guard and Interior Department investigators in May.

“I can’t talk about it,” Vidrine said during the interview outside his red-and-black brick home in Lafayette, Louisiana, about 130 miles (209 kilometers) west of New Orleans.

Vidrine, 62, declined to say if other BP employees involved in the April 20 catastrophe in the Gulf of Mexico have been placed on leave. Vidrine shrugged when asked if and when he expects to return to work.

When asked if he had been placed on leave as a result of the disaster, he said, “Yes, but I really have nothing at all to say.” Vidrine, dressed in a t-shirt, jeans and brown work boots, spoke in his driveway, beside a blue Ford F-150 pickup truck and a cast-iron fleur-de-lis nailed to a fence.

Numerous Probes

“That’s a private matter and we wouldn’t comment on any individuals,” Mark Salt, a spokesman for the London-based company, said in a telephone interview.

The Justice Department, Coast Guard, Interior Department, U.S. Chemical Safety and Hazard Investigation Board and several House and Senate committees are each probing what went wrong as BP and contractors that included Transocean and Halliburton Co. worked to seal the Macondo well with cement plugs.

BP estimated the well, which lies under almost 1 mile of water about 40 miles from shore, tapped a field holding 50 million barrels of crude, Hayward said during a June 17 hearing before a House panel.

‘Company Man’

Vidrine, whose face and arms are deeply tanned from years spent aboard offshore drilling vessels, declined to say whether he was injured when the Deepwater Horizon exploded and caught fire with 126 people on board.

He also declined to discuss the events and decisions that preceded the disaster.

Douglas Brown, Transocean’s chief mechanic on the rig on April 20, last month told a joint Coast Guard-Interior Dept. panel that “the company man” from BP had a disagreement with senior Transocean personnel over how to proceed with the well during a planning meeting several hours before the blast.

“There was a slight argument that took place and a difference of opinions and the company was basically saying, ‘Well, this is how it’s going to be,’” Brown told the Coast Guard-Interior investigators during a May 26 hearing. Brown said he didn’t remember the details of the dispute because his job wasn’t directly involved in drilling the well.

Hayward confirmed last week during his House testimony that Vidrine was “the company man” referred to by Brown.

Ban Overturned

Under pressure from President Barack Obama, Hayward and his chairman, Carl-Henric Svanberg, agreed last week to have BP deposit $20 billion in an independently managed account to cover cleanup costs and compensation claims.

BP, the largest oil and natural-gas producer in the Gulf of Mexico, has lost almost half its market value since the catastrophe. Last week, Representative Bart Stupak, a Michigan Democrat, said a five-year string of accidents and deadly disasters at BP-operated facilities could justify banning the company from doing business in the U.S.

Interior Secretary Ken Salazar imposed a six-month moratorium on all deep-water exploration in U.S. waters to give a presidential commission time to review safety procedures.

The ban was overturned on June 22 by U.S. District Judge Martin Feldman in New Orleans. The administration vowed to appeal the ruling and Salazar yesterday told a Senate panel that new rules may be issued that may allow some drilling to resume.

To contact the reporters on this story: Joe Carroll in Lafayette, Louisiana, at jcarroll8@bloomberg.net

Last Updated: June 24, 2010 00:01 EDT