Hurricane Isaac Costs Gulf of Mexico $500m to $1bn - Offshore Technology | Oil and Gas News and Market Analysis
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Hurricane Isaac Costs Gulf of Mexico $500m to $1bn

By Tony Hall, CEO Welaptega Marine

Hurricane Isaac has caused an estimated $500m to $1bn in damages to the offshore energy sector in the Gulf of Mexico.

According to the catastrophic risk modelling firm Eqecat this includes lost production and fixed platforms, floating facilities and subsea infrastructure.

Hurricane Isaac did not inflict the damage on the Gulf of Mexico offshore infrastructure that hurricanes Ike and Gustave did in 2008.

In that year, 60 offshore platforms were destroyed and more than 100 were damaged, this despite the fact that many damaged platforms were designed with hurricane forces in mind.

But Hurricane Isaac is yet another wake-up call to the offshore oil and gas sector, insurance companies, regulators and investors.

Huge costs of damage and lost production

Isaac brought offshore oil and gas production to a near standstill in the Gulf of Mexico. According to the Bureau of Safety and Environmental Enforcement, all US mobile offshore drilling units are keeping station.

The damage that occurred in 2008 and in the storms of 2005 were also wake-up calls for the offshore oil and gas sector in the Gulf of Mexico.

Design tolerances could not withstand those storms. The integrity of the infrastructure failed. Industry regulations and best practices did not protect the facilities.

Questions were asked about the safety, integrity and risk of offshore infrastructure.

The consequences of damage and lost production are huge. Failure of a subsea component such as a mooring line on a floating production facility could have catastrophic results for life, environment, offshore assets and reputations.

Lost production costs operators and insurers millions. Repair and maintenance to assets can take weeks or months and cost many millions more. Interruptions to oil and gas supply also impact the larger economy.

On floating assets, subsea components such as moorings, risers and flex joints were damaged during the hurricane seasons of 2005 and 2008. Vessel movements caused by wind and current impose excessive loading on subsea architecture, including risers, flowlines and flowbases.

Weather-driven loads add to on-going degradation mechanisms such as corrosion, cracking and fatigue.

These consequences impact not only on operators, but also on insurers, regulators and shareholders.

Post-hurricane regulations for floating structures

In 2009, the US regulator Bureau of Ocean Energy Management issued guidance for post-hurricane inspections for fixed platforms and moored facilities.

Operators are mandated to perform general visual inspections on mooring systems if there is a mooring line failure after a hurricane. Mooring lines, fairleads and all components connecting structure to seabed must be inspected.

For a TLP, inspections must be conducted on tendon fairings for damage and for loss of free rotation and connectors for indications of vertical or rotational movement at the pile and intrusion of debris into the tendon receptacle.

Moored mobile offshore drilling units (MODU)

Drilling units have more prescribed requirements based on levels of weather loading incurred and number of lines broken.

This inspection applies to all mooring components, including the lines that did not fail.

Operators are required to remove from service all components that do not pass inspection. Inspections must include chain, wire and polyester mooring lines. It must also cover connecting hardware (connecting links, kenters, shackles, swivels, etc.), subsea connectors and anchors. After retrieval, a visual inspection looks for potential structural cracks and noticeable deformations such as bending of the anchor shank or fluke.

Integrity inspection and management is an on-going process

Post-hurricane inspections and analysis provide limited data into the asset’s integrity after the weather event. In the case of a shut-in, production cannot restart until the operator has reported the results of inspections and met requirements.

But post-hurricane inspection is – by necessity – reactive. It is not a program of integrity management and it does not accurately verify risk on offshore facilities.

To truly understand risk, there must be an on-going program of integrity management beginning in the design phase and continuing throughout the life of the facility. This starts with baseline review and continues with a schedule of planned in-service inspections.

With a regular targeted program of integrity management, the operator can create a dynamic view of each component. This approach pinpoints problems such as corrosion, crack and wear areas on subsea components like moorings. It also enables operators to identify changes occurring over time, resulting from storms or other degradation mechanisms.

Risk-based integrity verification depends on quality data

Post-hurricane guidance is important to re-start production and drilling after a shut-in, but this does not constitute a program for risk verification.

In addition to a regular integrity inspection and analysis, the quality of the data itself is key to interpreting the condition of subsea components and predicting risk.

Reliable and dimensionally accurate data on stress, wear and other degradation mechanisms is critical. This can be achieved with technologies such as 3D imaging and finite element analysis to identify areas of increased stress on components.

Inspections can be scheduled or rapid-response for problems or emergencies.

Accurate data informs good operational decisions on the condition and integrity of offshore architecture. Without it, risk cannot be predicted, measured or verified.

This exposes personnel, assets, the environment, insurers and operational reputations to risk, both before and after a weather event offshore.

Tony Hall is the founder and CEO of Welaptega Marine, specialising in risk verification on subsea infrastructure.

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