Mexican plan for Gulf deepwater wells sparks new worries

The Gulf of Mexico looks pristine, should this area be at risk yet again?

The Gulf of Mexico looks pristine, should this area be at risk yet again?

Originally published by the Miami Herald.

BY TIM JOHNSON, MCCLATCHY NEWSPAPERS

MEXICO CITY — Two years after the worst offshore oil spill in U.S. history, Mexico’s state oil company is about to test its hand at drilling at extraordinary depths in the Gulf of Mexico.

If all goes as planned, Petroleos de Mexico, known as Pemex, will deploy two state-of-the-art drilling platforms in May to an area just south of the maritime boundary with the United States. One rig will sink a well in 9,514 feet of water, while another will drill in 8,316 feet of water, then deeper into the substrata.

Pemex has no experience drilling at such depths. Mexico’s oil regulator is sounding alarm bells, saying the huge state oil concern is unprepared for a serious deepwater accident or spill. Critics say the company has sharply cut corners on insurance, remiss over potential sky-high liability.

Mexico’s plans come two years after the Deepwater Horizon catastrophe, the worst oil spill in U.S. history. On April 20, 2010, a semi-submersible rig that the British oil firm BP had contracted to drill a well known as Macondo exploded off the Louisiana coast, killing 11 workers and spewing 4.9 million barrels of oil in the nearly three months it took engineers to stop the spill.

BP has said the tab for the spill — including government fines, cleanup costs and compensation — could climb to $42 billion for the company and its contractors.

Pemex’s plans to sink even deeper offshore wells underscore Mexico’s pressing need to maintain sagging oil production — exports pay for one-third of government operating expenses — along with oil companies’ desire to leverage technology and drill at ever more challenging depths.

Carlos A. Morales, the chief of the Pemex exploration and production arm, which employs 50,000 people, voiced confidence that his company has to the ability to sink wells in ultra-deep water.

“Pemex is ready to undertake the challenge and to do it safely,” Morales said in an interview in his 41st-floor office at Pemex headquarters in this capital city.

“You have to bear one thing in mind,” he said. “Pemex is the biggest operator in the Gulf — including everyone — both in production and in the number of rigs we operate. We are operating more than 80 rigs offshore.”

Sometime in May, Morales said, Pemex will move the Singapore-built West Pegasus semi-submersible oil platform, owned by the Norwegian company Seadrill, over a seabed formation known as the Perdido Fold Belt and drill a well named Supremus. At nearly the same time, a South Korea-built platform known as Bicentenario, owned by the Mexican company Grupo R, will drill the slightly shallower Trion well, a little to the west of Supremus.

The area where the two wells are to be sunk is some 30 miles south of the maritime boundary in the Gulf between Mexico and the United States.

Morales said the rigs are both “sixth generation, which means they are the most modern. They have all the safety devices that rigs should have.”

Still, the technological challenges of ultra-deepwater drilling — anything more than 5,000 feet of water — are significant because of the high pressures and complex seabed extraction systems, akin even to launching spaceships into orbit, experts said. The Deepwater Horizon was drilling in about 5,100 feet of water when it exploded.

Since Pemex decided in 2004 to expand from shallow offshore wells into deep water, it’s drilled 16 wells at increasing depths, with two in ultra-deep waters, Caxa and Kunah, the latter at 6,500 feet.

Mexico’s nationalist constitution bars Pemex from operating joint ventures with oil companies that already are experienced at very deep water. It can contract only with global oil service companies, ordering them to perform functions.

“This requires managerial expertise that Pemex lacks,” said Miriam Grunstein Dickter, an oil expert at the Center for Research and Teaching of Economics, a Mexico City institute in the social sciences. “When you contract a service company, they perform the work that you command them to perform. Here, Pemex does not know how to command the service company.”

“Like rocket science, you can find the people. They are out there to be hired,” added Kirk Sherr, the head of North American operations for Regester Larkin Energy, a global consulting company. “But who’s going to coordinate?”

It’s when disaster strikes that the resources — or lack of them — come into stark relief for an oil company or even a nation.

After the Deepwater Horizon disaster, BP, the U.S. Coast Guard, and state and federal officials mustered some 3,000 vessels to help set booms, clean marshes and gather spilled crude.

Mexico has nowhere near that fleet of vessels at its disposal. Its navy has 189 ships. Pemex itself contracts around 180 boats.

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