UK Lawmakers Question Deep Water Drilling Safety

[Joanne98]

Source: WSJ

LONDON (Dow Jones)--U.K. lawmakers Thursday raised serious doubts about whether the oil industry is prepared to tackle a similar to the Deepwater Horizon blowout should it occur in the North Sea, but they stopped short of recommending a moratorium on drilling similar to that imposed in the U.S.

Instead, the U.K. Parliament's Energy and Climate Change Committee called on the government and regulators to compel companies to improve their spill response plans, install extra failsafe equipment on rigs, and increase financial provisions for spill costs.

Major changes to drilling regulations could have a significant impact on the U.K. because its main deep water area, west of the Shetland Islands, is thought to be home to the bulk of the country's undeveloped oil and gas resources. For this reason, "a moratorium on deep water drilling off the west coast of Shetland would undermine the U.K.'s energy security and isn't necessary," said Tim Yeo, the Conservative member of Parliament who is chair of the committee.

Underlining the importance of the region, France's Total SA (TOT) Thursday announced a new gas discovery west of Shetland, called Edradour, that will be developed in conjunction with its Laggan and Tormore fields.



Read more: http://online.wsj.com/article/BT-CO-20110106-703597.html

[dipsydoodle]

1. A lot had already changed here over the past 35 years or so

following the Piper Alpha incident in which 167 died and for which Occidental were found liable.

Piper Alpha was a North Sea oil production platform operated by Occidental Petroleum (Caledonia) Ltd.<1> The platform began production in 1976,<2> first as an oil platform and then later converted to gas production. An explosion and resulting fire destroyed it on July 6, 1988, killing 167 men,<3> with only 59 survivors. The death toll includes two crewmen of a rescue vessel.<4> Total insured loss was about £1.7 billion (US$ 3.4 billion). At the time of the disaster the platform accounted for approximately ten percent of North Sea oil and gas production, and was the worst offshore oil disaster in terms of lives lost and industry impact.<5>

>

The Cullen Inquiry was set up in November 1988 to establish the cause of the disaster. In November 1990, it concluded that the initial condensate leak was the result of maintenance work being carried out simultaneously on a pump and related safety valve. The enquiry was critical of Piper Alpha's operator, Occidental, which was found guilty of having inadequate maintenance and safety procedures. But no criminal charges were ever brought against it.<14>

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The disaster led to insurance claims of around US$ 1.4 billion, making it at that time the largest insured man-made catastrophe. The insurance and reinsurance claims process revealed serious weaknesses in the way insurers at Lloyd's of London and elsewhere kept track of their potential exposures, and led to their procedures being reformed.<17>

http://en.wikipedia.org/wiki/Piper_Alpha