Abstract:

The Deepwater Horizon well, located 48 miles offshore in the Gulf of Mexico, Mississippi
Canyon Block 252 (MC252) was one of two exploratory wells planned by oil operator BP.
Production is from mid-Miocene age sandstones which BP had purchased mineral rights to in
2008 (DHSG 2011). Figure 1 represents the location of the Macondo well in the Gulf of Mexico.
As evening set on April 20, 2010 an explosion occurred on the rig deck killing eleven workers
and causing the evacuation of the remaining 115 crew members. The platform sank after two
days of intense fire which was fueled by the hydrocarbons flowing up pipe. BP immediately
initiated measures to contain and stop the flow of oil and other fluids into the Gulf of Mexico.
Multiple capping devices were attempted and two relief wells were drilled to stop the flow of oil.
In total, estimates state that 4.9 million barrels of oil flowed into the Gulf over an 87 day period
until the well was effectively capped. The well was further killed once the relief wells
established communication with the existing wellbore and cement was pumped down.

Figure 1: Location of the Macondo Well within the Gulf of Mexico (Parson, P., 2010)
This report intends to examine four key areas of the Macondo blowout determining what
signs or measures could have been accounted for to prevent the blowout from occurring, and
what should be performed in the future to prevent another Macondo incident. The first area starts
with a geologic and geomechanic understanding of the events, which led to the blowout. Next, an
examination of the capping devices and relief wells will be performed to understand the
technology available to BP and if other operations may have been more successful. The
economics of the differing workover situations to cap and control the well will be modeled in a

Monte Carlo simulation to compare the greatest influences on cost and duration of the operation.
Finally, an analysis of the risk management and public relations performed by BP will be
analyzed to see determine areas of good practice and shortcomings. All aspects investigated will
be compiled into a final recommendation to help companies better prepare for incidents such as
Macondo.
Timeline of Events:
Major oil operator BP purchased the mineral rights to the Mississippi Canyon Block 252
(MC252) in 2008 with intentions to drill two exploration wells into the formation of interest. BP
contracted the Deepwater Horizon semi-submersible drilling rig from Transocean Ltd. to drill the
exploration well designed to reach a TD of approximately 19,650ft. Drilling operations began on
October 6, 2009 spudding in water with a depth of approximately 5,000ft. The drilling operations
were designed to last 51 days and cost $96million (DHSG, 2011). The well was designed to have
nine casing strings with a 9-7/8in. production casing, see Figure 2 of the intended and actual
casing design implemented.
Drilling operations encountered a few kicks throughout the duration of operations, one
such at 13,305ft TD resulting in stuck drill pipe and logging tools, requiring the well to be sidetracked. This well control event did prompt BP to revise the casing design to account for the
higher formation pressures observed. Operations also had to be shut down due to the impending
hurricane Ida. Some damages to the rig were sustained and had to be transported to a dry dock
for repairs. The well reached a total depth of 18,304 ft. on April 14 , 2010 where sever lost
circulation occurred due to weak formations. Pumping lost circulation material into the
formation stabilized the well.
The Macondo well was switched from an exploration well to a production well on April
15, 2010. A final production casing was run to a depth of 18,304ft. and an attempt was made to
circulate the well. Standard pressures for circulation range between 400-700psi, pressure had to
be increased to 3,142psi to circulate the well. It was concluded that these high pressures were a
result of a blockage in the well. There was a decision made to note fully circulate the well before
cementing, rather roughly half the volume was circulated out. By April 20, 2010 all the cement
had been placed, with monitoring confirming there was little to no losses into the formation. BP
did not run a cement bond log and on April 20, 2010 ran a positive pressure test to determine any
leaks. The pressure up portion of the test, at 2,700psi, was run prior to the 48 hours which
Halliburton indicated necessary for the foamed cement to develop sufficient strength. A negative
pressure test was performed, and concerns were raised that the mud trip tanks were being
cleaned, changing levels of the liquid, making it difficult to monitor if the well was flowing.
Results from the test showed backflow. Pressure in the drill pipe rose from 273psi to 1,250psi in
only six minutes. The reason for the increase in pressure was unsure, so it was concluded to run a
second negative test.
Results from the second negative pressure test were not as expected, though were deemed
alright due to annular compression and Bladder effect. The internal blowout preventer (IBOP)
was opened and seawater was pumped down to displace all the mud of the riser. Once
completed, pumps slowed so that trip tanks readings were expected to lessen, though they
actually were increasing. This event is deemed to be the first sign of a flow into the well. Further,
drill pipe pressure increased 100 psi with the lighter seawater going down hole, which should
have decreased pressures. Pumps were shut down to perform a sheen test, however drill pipe
pressures continued to increase. After performing the sheen test, both pumps were turned on and
a spike in pressures was observed. Actions of the senior toolpusher indicate that the crew was
th

unaware that the well was flowing as they stated the displacement was going fine. Over the next
few minutes dramatic decreases then increases in drill pipe pressure was observed.
At roughly 9:40pm on April 20, 2010 seawater and drilling mud started to flow
uncontrolled onto the rig floor. Hydrocarbon gas was diverted to the gas separator, however it
was not designed for the large volume of gas flowing. Drill string pressures rose from 1200 to
5,730psi. Gas quickly flooded the rig floor, and soon after rig power was lost. It is assumed that
the automatic function of the blind shear rams in the BOP could not be activated due to the
power loss. Attempts to operate the BOP failed, also attempts to activate the emergency
disconnect system which would have allowed the Deepwater Horizon to separate from the BOP
failed. The first explosion occurred shortly after the power loss, followed by a second explosion.
A mayday call was made by the Deepwater Horizon at 9:52pm, at which point the Macondo
blowout was well underway. The blowout left 11 people dead and injured 17 others. The
Deepwater Horizon now sits on the sea floor.

Figure 2: Stratigraphic column along with the planned casing design with designed and actual
set depths (BP, 2010).

Introduction:
Initial exploration of the mid-Miocene age turbidite sands in the Gulf of Mexico, roughly 48
miles off the coast of Louisiana, showed a promising hydrocarbon reservoir located between
depths of 13,000ft. to 15,000ft. below seafloor (Combellas-Bigott and Galloway, 2006). BP oil
operator purchased the mineral rights and planned two exploratory wells to evaluate the
formation. The Deepwater Horizon drill rig was contracted from Transocean Ltd to drill the
Macondo well. The fate of the well is well known, an estimate 4.9 million barrels of oil flooded
into the Gulf of Mexico, damaging fragile ecosystems and greatly harming business which
depend on fishing and tourism. The repercussions from the poor engineering decisions have
forever changed oil field operations.
From investigative work performed by multiple industry members it is the goal of this report
to perform an investigation into the geology and geomechanics which were problematic in lost
circulation, capping techniques, drilling of relief wells, economics, and the public relations
commitment by BP. There were multiple signs of weak formations throughout the drilling
operations. On multiple occasions there was substantial volumes of mud lost into the low
strength shale formations and the producing sandstone formations. Once the blowout occurred
there were multiple methods used in attempt to control the well. Many failed with success seen
with the removal and installation of a new BOP, and finally controlling the well once cement
was pumped through the first relief well.
Multiple capping methods were used in attempted to control the well with great expense to
BP with every failed try. A Monte Carlo simulation of the economics for the capping and
workover methods is performed to isolate the areas which most influenced the expense of
operations. Also, options to drill the relief wells is looked at both in an economic standpoint as
well as a time to better understand the differences if bringing a rig to drill the wells, or the use of
drill ships.
Geology and Geomechanics:
BP believed there to be hydrocarbon-bearing sands from examining extensive 3-D seismic
data, offset well data, and other geologic information. The specific geologic areas of interest
were mid-Miocene age turbidite sands buried between 13,000ft to 15,000ft beneath the seafloor,
18,000ft-20,000ft below sea level. The middle Miocene is considered one of the most prolific
hydrocarbon-producing intervals in the Gulf of Mexico (Combellas-Bigott and Galloway, 2006).
The deposition of these sandstones were controlled by a high rate sediment supply, low to
moderate wave energy influx, high-frequency sea level changes, and salt tectonics (Hilterman,
Sherwood, et al 1996).
Above the hydrocarbon-bearing sandstone formations are layers of poorly consolidated
shale, mudstone, siltstone, sandstone, and marl of Pleistocene deposited through the late Miocene
age. These deposits were rapid, comprised of fine-grain, low-permeability sediments which
created an overpressure zone, common to the Gulf of Mexico. Coupling the high pore pressure
with low rock shear strengths leads to a thin margin separating the fracture gradient and pore
pressure for drilling fluid design as seen in Figure 3 (Hickman, Hsieh, Mooney et al 2012). This
low fracture gradient of the producing reservoir and other formations above caused multiple
problems with fluid loss during drilling operations, and when trying to kill the well. One
hypothesis for why the initial top kill failed is due to damaged casing above total depth (TD)
which allowed the kill fluid to flow out of the well, fracturing and penetrating into the upper
formations.

Figure 3: (left) Schematic of the wellbore and location of possible damage. (right) Pore pressure
and fracture gradient for casing the Macondo well (Hickman, Hsieh, Mooney et al 2012).
Due to the weak upper formations the wells integrity was of major concern, such that a
specialized team was developed to analyze the wells integrity; appropriately named the Well
Integrity Team (WIT). The WITs main purpose was to determine whether a shut in of the
Macondo well could be safely performed due to the weak geologic formations surrounding the
well, after the blowout occurred. Of major concern is the event of a blowout which breaches the
sea floor, leading to an uncontrollable large volume release of hydrocarbons or other fluids
directly into the sea. This situation would occur if a fracture, caused from well fluid
overpressure, propagates upward until it is stopped by shallower, stronger geologic sections, or it
runs all the way to the sea floor unhindered. If a fracture as described occurs it would act as a
highway for oil and other fluids to flow freely into the Gulf of Mexico, creating a much worse
disaster.
An initial attempt to top kill the well failed following the blowout. BP theorized that
rupture disks in the 16in. well liner had burst during the initial kick and explosion. This damaged
area enabled mud to flow out of the well and into the surrounding formation, not killing the well.
Figure 3 represents the location of the damaged casing string. The importance of this failure is
high because if the casing had failed then any other attempt to kill the well from the top could

result in fracturing of the reservoir, potentially breaching the seafloor as mentioned above. Also,
fault mapping of the area surrounding the wellbore showed extensive natural fractures which
could intensify fracturing from wellbore fluids, and act as natural pathways for hydrocarbons.
To determine the integrity of the well the WIT proposed a limited-duration well integrity
test. Accurate pressure gauges installed in the capping stack were used to measure the pressure
loss during a short shut-in procedure. The WIT and other BP engineers agreed that if pressures
dropped below 6,000psi the well had significant ruptures and was unsafe to hold fluid at
pressure. However, if the well could hold pressure above 7,500psi for over 48 hours the well was
deemed safe to shut in and kill from the top. The well integrity test began the afternoon of July
15, 2010 and pressure in the wellhead rose to 6,600psi within a few hours, and slowly continued
to rise, but never reached 7,500psi. BP engineers agreed that due to the large fluid release into
the Gulf of Mexico due to the initial blowout, reservoir pressures would not rise to the expected
7,500psi.Therefore, if the well could hold the 6,600psi pressure for a minimum of 24 hours the
well could be shut in. The US Government officials agreed with the assessment, though they
worried the pressure increase may create an underground blowout, so as a precaution they
reopened the well to the Gulf of Mexico to relieve pressures. The WIT would perform further
analysis to see if the reservoir pressure had dropped as they suggested due to the fluid release
from the blowout. If they were correct, then the well could be shut in and stop the flow of fluids
into the Gulf.
The US Geological Survey model MODFLOW was used by the WIT to analyze the
reservoir pressure losses. Original intent of the MODFLOW model is for ground water flow,
though it had been deemed accurate to model single phase, isothermal reservoir conditions. As in
all engineering disciplines certain assumptions had to be made to create the model. For the
Macondo well it was assumed that the lateral extent of the reservoir was to occupy one square
mile, centered on the Macondo well, and bounded by impermeable geologic sections. The
reservoir and fluid properties such as porosity, permeability, compressibility, viscosity, etc. were
not reported as they are considered proprietary data. The model discharged 55,000bpd of
reservoir fluids for 86 days, consistent with estimates, and then underwent the same shut in
procedure performed for the well integrity test. Results for the reservoir pressure losses and what
was measured during the shut in were very similar. Figure 4 details the model and actual
pressure data measured at the wellhead. As can be seen in the Figure, the model of well head
pressure loss due to the flow into the Gulf closely matched the pressures measured in the capping
device.
After reviewing results from the model with the recorded data the US Government
allowed the well to be shut in for 24 hours with constant monitoring. Reevaluation of the well
occurred again after the 24 hour period, and the well was deemed safe to remain shut in. After a
further 2 day shut in period with the well under constant monitoring, a revised pressure model
was created from new data of the reservoirs extents. A more accurate depiction of the reservoir
was a long, narrow channel which had continuing iterations performed until the model output
closely matched the wellhead pressure data. The well remained shut it through August 3, 2010
when well kill and cementing procedures began to permanently plug and abandon the well.

Figure 4: Macondo wellhead pressure measured during and immediately after shut in procedure
compared with the MUDFLOW model wellhead pressure (Hickman, Hsieh, Mooney et al
2012).
Other geophysical monitoring of the wellhead occurred to independently assess the
Macondo well integrity during the shut in period. Key monitoring methods used were
multichannel 2D seismic, seafloor and water-column sonar surveys, wellhead visual monitoring,
and wellhead acoustic/seismic. Using seismic profiling to monitor for sub-seafloor leaks was
possible due to fluid movement creating density changes, reflecting sound waves at different
rates than if it were water saturated versus oil saturated. Studies show that oil and gas filled sands
decrease P-wave velocities. If hydrocarbons propagated from the casings string it would be
visible in the seismic profiles as accumulations or an upward migration of hydrocarbons. Figure
5 is an example of two seismic sections, (A) taken before the blowout occurred and (B) taken
after the shut in as to monitor for any leaks. An additional 28 2D seismic lines were recorded to
monitor the potential leaking; as many as four seismic lines were recorded at a time due to the
urgency of the situation. Processing and interpretation was expedited, being performed in only
24 hours after the data was received.
As can be seen there is no obvious migration of hydrocarbons in this seismic section.
Other seismic sections were taken, as seen in the figure outlining the profile of the varying
seismic sections in Figure 5. BP reported that after detailed investigation into all seismic
sections, taken after the shut in procedure, showed no evidence of leakage from the wellbore.

One caveat to the seismic sections is that small volumes of oil would not be detectable. The
minimum volume of oil which could be detected, as determined by industry experts, was
estimated to be between 6,000bls to 14,000 bbls. As no evidence of hydrocarbon leakage was
observed that meant a leak rate could be no more than 1,300bpd after an eleven day period. As
time passed with no leak detection, the leak rate decreased.

Figure 5: Seismic sections of the Macondo well. (A) Taken before the blowout occurred, (B)
taken four days after the shut in procedure was performed. The yellow vertical represents the
wellbore with the triangles representing the liner/casing shoes (Hickman, Hsieh, Mooney et al
2012).
The work performed by the WIT ensured the safety of both the well and the environment
of the Gulf of Mexico. Performing and implementing engineering problem solving, modeling,
and subsea imaging enabled the BP team to shut in the well without creating a fracture which
could have propagated to surface, causing a subsurface blowout. Many times non-engineers do
not understand the complexities of a crisis and the societal push to shut in the well may have led
to improper decisions, resulting in an even worse catastrophe. Only after intense modeling and
investigation did the WIT, BP, and the US Government allow the well to be shut in. With the
shut in, it enabled drillers time to intersect the Macondo well with two relief wells, which were
used to pump substantial volumes of cement to P&A the well.
Well Completion Emerging Technology and Techniques:
The Macondo mishap highlighted the importance of improving existing technology and
procedures to deepwater well issues. Multiple organizations, like the Research Partnership to
Secure Energy for America (RPSEA), were formed in the aftermath to address improving
responses to potential future problems. These organizations combined with industry innovation
have identified several areas for improvement. This paper focuses on the most relevant industry
changes that would have made an impact on the Macondo well.

Issue: Difficulties in deepwater well control when existing wellhead or blow-out

prevention equipment (BOPE) malfunctions or fails. At depths greater than 1,500 feet, the
ability to cap or divert fluids from an uncontrolled well are inhibited by an assortment of factors
including emplacement of additional equipment, remote operating vehicle (ROV) capabilities,
debris removal, and prevention of hydrate formation.
Solution: To address these issues, Total created the subsea emergency response system
(SERS). The SERS is a multi-component, integrated response that includes a dynamic killing
system (DKS), a diverter system, a dispersant kit, and a debris cleaning tool set. These
components are designed to work independently or in conjunction depending on the
situation. Regardless of the circumstances, the entire SERS system should be deployed to meet
any emerging contingencies.
The DKS (Figure 6) is capable of handling a 750 GPM flowrate of kill fluid through a 3
hose with a 10,000 psi pressure rating. This piece of equipment is employed via drill ship or
drilling platform and is integrated into the existing riser system. The system is set into place via
a standard 3 ROV (Bourguignon, Ryan, Bretenou, Total. 2014.).

Figure 6: Totals Dynamic Killing System (Bourguignon, Ryan,

Bretenou, Total. 2014.).

The diverter spool assembly (Figures 7 and 8) is approximately a 9ft x 9ft x 9ft choke
that is set by wireline from a light well intervention vessel and connected via ROV. This
assembly is used with a subsea accumulator and is capable of producing 100,000 BPD at depths
from 1,910 to 7,950 feet (Bourguignon, Ryan, Bretenou, Total. 2014.). In addition, dispersants
and methanol can be injected directly into the spool by ROV.

Figure 7: SERS Diverter Spool System Employment (Bourguignon, Ryan, Bretenou, Total.
2014.).

Figure 8: Totals Diverter Spool Assembly (Bourguignon,

Ryan, Bretenou, Total. 2014.).

Initially in the Macondo scenario, the diverter spool assembly would be preferable to the
DKS because of several factors including the low shale formation strength and a poor initial
casing cement job. These factors made the possibility of pressure build-up in the Macondo well
less desirable because wellbore fluids could still migrate to the surface using alternate and
unanticipated flow paths via an underground blow-out.

Issue: Inadequate technology made subsea monitoring difficult and effectively nonexistent.
Solution: As previously discussed, the RPSEA identified several areas for improvement
including a Robotic Magnetic Flux Leakage (MFL) Sensor and a High Resolution 3D Laser
Imaging ROV. While these items are still in development, the RPSEAs goal is to merge these
existing technologies into a commercially viable monitoring program to prevent future
deepwater problems.
The Robotic MFL Sensor is a non-destructive technique to provide real time data on riser
performance. Currently, risers are visually inspected prior to deployment and riser tension
is periodically and indirectly measured by potentiometers and load cells. The Robotic MFL
Sensor is an independent robotic crawling device that moves along the length of the riser sensing
drops in the magnetic field indicating pitting or corrosion. This data is directly transmitted to the
rig floor providing real-time riser integrity data (Pappas, Richardson. 2012).
High Resolution 3D Laser Imaging has been developed and tested on ROVs at depth
with excellent results. At a distance of 16 feet, the ROV can accurately model wellbore
equipment and locations within an error of 3 mm. This technology is vital to routine monitoring
and accurately assessing the condition of wellbore equipment after a blow-out. (Pappas,
Richardson. 2012).

Figure 9: 3D Laser Imaging of Subsea Pipeline (Giliham,

2014).

Issue: Discussion of Oil Removal Best Practices and Procedures. ExxonMobil completed
a comprehensive study of current oil removal practices to compare the techniques effectiveness.
Currently, oil removal is categorized between surface and subsurface removal with surface
removal being further categorized by mechanical, dispersant, and burn-off techniques. Surface
oil removal operations are limited by weather and confined to daylight only for safety reasons.
Discovery: Surface recovery efforts include mechanical collection by skiff watercraft,
burn-off and the use of chemical dispersal via surface or aircraft. Mechanical efforts at oil
collection are severely limited by watercraft capabilities and account for a 3% recovery of the
total spilled volume. The reason skiffs or other ships perform poorly is because these transports
have relatively slow transit speeds (12 -35 knots), require sufficient storage capacity, and must
slow to 1 knot when collecting well fluids. In addition, as water currents shift the oil slicks,
these ships are forced to identify the new slick location and redeploy (Nedwed, Coolbaugh,
Demarco, ExxonMobil. 2012).
In-situ burning requires relatively thick concentrations of oil (2-3 mm) in order to sustain
the burn-off. This method can remove greater than 50% of the surface oil and burn residue
testing has demonstrated low toxicity. This toxicity is further mitigated by dissipation because
of the geographical isolation of rig platforms from the shore (Nedwed, Coolbaugh, Demarco,
ExxonMobil. 2012).
Chemical dispersants are easily employed by ship or aircraft and have excellent
effects. In Macondo, 25,000 barrels of dispersant were deployed on the surface. If deployed
from a seacraft, the same limitations associated with collection apply. However, if employed via
aircraft (C-130 or equivalent), oilslick identification and targeting becomes much easier. At 250
knots and carrying a payload of 150,000 lbs of dispersant, a C-130 can perform the same mission
as one to three skiffs in a fraction of the time.
Subsurface oil removal is currently limited to chemical dispersal only. In Macondo,
18,000 barrels of dispersant were used subsurface. This method injects surfactants at the source
of the well control issue and reduce the interstitial fluid pressure allowing the oil to form smaller
droplets improving natural biodegradable processes. The initial toxicity of these chemicals is
high due to larger concentrations 50ml/L, but typically drops within a couple of hours as
dispersion occurs (2ml/L). In addition, chemically dispersed oil is approximately 50% less toxic
than crude oil.
During the Macondo incident, all methods were used in conjunction to provide the best
response to the large volume of oil released. During Macondo, significant opposition to
chemical dispersants gathered support from multiple environmental groups concerned about the
GOMs ecosystem. Despite this concern, chemical dispersal remains the most effective method
to remove large amounts of oil.
Issue: Improper mixing of cement additives included surfactants that degraded nitrogen
foam mixed with the slurry contributed to the loss of well control. In addition, due to low
temperatures (35 F) at ocean depths, the Macondo cement never fully set and may have suffered
from improperly centered casing. Despite these shortcomings, deepwater cements must account
for lower temperatures and other non-optimal conditions like low fracture gradient formations.
Solution: The obvious solution is to follow accepted cementing practices and procedures,
however, testing of new and improved cement slurries have resulted in several
innovations. Halliburton has developed resin-based cements that display excellent density
control. This density control is critical to controlling effective circulation density and preventing
fracturing of weaker formations. In addition, these cements have a 3,500 psi compressive

strength, and minimal shrinkage in 90 - 220 F environments (Morris, Deville, Jones,

Halliburton, SPE. 2012). Resin-based cements remain expensive, but extremely effective in
bonding casing to formation and limiting the creation of micro-annulus while protecting
formations.

Figure 10: Halliburtons resinbased Cement (Morris, Deville,

Jones, Halliburton, SPE.
2012).
Additionally, the China University of Petroleum has developed an eco-friendly cement
slurry to designed specifically for the harsh environments of deepwater wells. Sulfur Polymer
Cement (SP-C) uses calcium sulfoaluminate (C4A3S) to improve cement hydration and create
early strength in colder environments. SP-C also incorporates a new environmentally safe
lithium salt accelerator (LS-A) and a biodegradable fluid-loss control agent (BD-L) capable of
controlling a 50 mL loss per 30 minutes (Wang, Wang, Bu, Zhou, SPE, China University of
Petroleum. 2012). The cement gelatin dispersant GSP is 64% biodegraded after one month
(Figure 12).

Figure 12: Biodegradation Rate of SP-C

Dispersant(Wang, Wang, Bu, Zhou, SPE,
China University of Petroleum. 2012).
Figure 11: SP-C Compressive Strength
Comparison to Class-G Cement (Wang, Wang,
Bu, Zhou, SPE, China University of Petroleum.
2012).

Economic Analysis
In order to perform the following economic analysis, a few assumptions have been made.
It has been assumed an estimated time to achieve the expected results of eight to twelve weeks.
As for the cost structure, it has been divided in to two sections, all sort of maritime equipment
and all sort of drilling equipment needed to complete the number of wells required. Also, due to
the short notice that an event like this implies, it has been assumed a twenty per cent extra cost
for all the maritime equipment and a fifteen per cent extra cost for all sort of drilling equipment.
For the maritime costs, it is believed drilling units are going to be needed, not only to
drill the main well but to also drill several potential relief wells in case of emergency. For all
these, a well control drilling ship units is going to be also needed. ROVs are believed to be
helpful for this case. Control ships are believed to be necessary to achieve the expectations
safely. The air support by the helicopters has also been taken in to consideration. In order to be
able to accumulate all that sudden production, it is believed tankers support will be needed as
well. Finally, the last cost assumed for maritime equipment has been the top hat containment
system sourcing, which will be one of the most expensive, if not the most, components of our
cost model.
As for the Drilling equipment costs, it is believed to be necessary to subsea chokes, as
well as the crucial parts to complete the relief wells. All these will need support ships to run the
operations. Should an emergency occur, the emergency response center would be crucial to
overcome this sudden challenge. Since it is very difficult to account for all the possible cost, a
miscellaneous has been also assumed, which is believe to cover all reasonable unforeseen costs
while completing the well.
The cost model here proposed is supported by three main pillars that allow making a very
smart guess about the completion costs for this project. The first one is the hourly cost of all the
variables above mentioned. The second pillar is the duration of each variable along the project
duration. And Accounting with the require quantity of each variable to perform this task would
our third pillar. The program used to perform this cost model has been the excel powered @risk.
Each pillars input has three categories, a minimum value, a maximum value, and a most likely
value, which for this model is the random between function from excel, which will pick a rand
value between the maximum and the minimum value for each variable. The purpose of this
random function was to give the model a more realistic approach.

Figure 12: Hourly cost estimation inputs.

As it can be seen on Figure 12, the main hourly cost on our model is the top hat
containment system sourcing, which means that a change on the hourly rate will have a heavier
influence on our hourly cost estimation. It is worth mentioning that the second largest cost per
hour is precisely the twenty per cent extra cost due to the short notice that sudden catastrophes
like this one would cause in the projects budget. In figure 13, a more graphical description is
suggested on the comments just mentioned. It has been determined by using a Monte Carlo
simulation from the excel powered software @risk.

Figure 13: Monte Carlo simulation for hourly costs.

Figure 14: Duration estimation inputs.

For the second pillar of the model, which is the duration estimation of each variable, it is
worth mentioning that the duration for the drilling equipment should not be taken into
consideration without acknowledging that the relief well and subsea chokes will be needed since
time zero until the end of the completion. Having said this, the most volatile variables are the
drilling ships units, which its duration depend on multiple variable that vary between not being
available at the moment to some unforeseen events when drilling the well. Thus, trying to
shorten the usage duration of these units will lead to substantial shorter task duration. In figure
15, a more graphical description is suggested on the comments just mentioned. It has been
determined by using a Monte Carlo simulation from the excel powered software @risk.

Figure 15: Monte Carlo simulation for duration estimation.

Figure 16: Completion cost estimation inputs.

As for the final completion cost estimation, (see Figure 16) the most optimistic scenario
accounts for a sixty two million dollars completion cost for this task, while the worst case
scenario would require an over four hundred million dollars budget in order to accomplish this
mission. The simulation proposed suggested an estimated cost of a few million dollars below two
hundred million dollars budget to achieve the required expectations. Also, combining all time
duration and hourly cost variables to see what the most volatile variable on our model is, we can
see on Figure 17 that the main two will be the hourly cost of the well control units as well as the
top hat containment system sourcing. Notice that most of the volatile variable are hourly cost,
which leads to believe that should be the target area to try to shorten the projects expenses.

Figure 17: Monte Carlo simulation for combined variables.

Safety and the Post-Macondo World:

The Macondo well was the very definition of high risk, at least compared to other oilfield
operations. To begin with the well was a deepwater well being drilled in just short of 5,000 feet
of water in the Gulf of Mexico. The water depth alone was enough to elevate this project to high
risk, but on top of that this was also an exploratory well being drilled. Since the Macondo well
was a deepwater exploratory well BP needed to be extremely cautious during operations. In a
risk operation such as the Macondo well many things can go wrong and BP needed to be
prepared.( US Chemical Safety and Hazard Investigation Board)
The drilling of the Macondo well ceased on April 9, 2010 as BP decided to temporarily
plug the well because the well was losing circulation. At the time BP did not have a company
standard for temporary abandonment plans, so the engineers on the project spent a week or so
designing the abandonment plan. While not having company standards already developed is a
poor practice, numerous reports including the CSBs(US Chemical Safety and Hazard
Investigation Board) report believe that there was no glaring fault in the abandonment design.
The main problem was the methods used to test the integrity of the cement. At the time the US
regulations only required that a positive pressure test be conducted on the cement plug. The
Macondo well easily passed the positive test which indicated that the plug held pressure in one
direction. The problem with only running a positive pressure test is that a positive pressure test
does not prove that the cement plug is successfully sealing off the hydrocarbon bearing zone. A
negative pressure test is needed to check if the cement plug has achieved hydraulic isolation in
both directions and at the time regulations did not require the negative pressure test. BP was
aware of the uncertainty associated with the Macondo well so the company conducted a negative
pressure test. Unfortunately, the Deepwater Horizons crew determined that the well passed the
negative pressure test when in reality it is believed that the well should have failed the test. This
vital mistake by the crew stemmed from their lack of training in how to properly test the cement
plug. (US Chemical Safety and Hazard Investigation Board)
There are a few take aways from the mishandling of the cement plug testing. To begin
with it is vital that companies realize and are willing to go beyond the basic benchmark of
regulation. Government regulations are in place to help protect all stakeholders in a project, but
the regulatory agencies are no where near as informed about what is needed for safe operations
in a project as the companies are. BP was in the right in this situation, they had followed all
required regulations and gone beyond the basic regulations to ensure the safety of all
stakeholders involved in the project. The true cause of the failure of the cement plug was
communication between the rig crew and the engineers involved in the project. The lapse in
communication was two-sided, the engineers needed to make sure that the rig crew had the
proper instruction and training to perform each type of test and the rig crew needed to ask for
clarification if they were not sure exactly what needed to be done. In the Macondo well and
many other oil and gas projects companies are pushing as hard as they can to complete the
project quickly and under budget, this can cause the engineers and other management positions
to overlook details, like proper training, to ensure that the project does not fall behind. Many
managers have a whats the worst that can happen or it will be fine attitude and move forward
with plans that may not be fully understood. In the majority of these cases everything runs
smoothly and nobody gets hurts, but when the worst does happen it will be a disaster for all of
the stakeholders involved. Companies must stop thinking, it is not going to happen to us and
instead ask what are we going to do to make sure it does not happen to us. If all companies and

managers had this mindset many disaster in Oil and Gas along with other industries would be
avoided.
In order for a blowout to occur many barriers must fail. It was previously discussed how
the first barrier, the cement plug, failed, and now the failure of the most important barrier in
oilfield operations, the BOP(Blowout Preventer), will be discussed. The BOP is used as a means
to control the well, in the case of Macondo it did not operate properly. When the kick was
detected the crew combated it by closing the annular preventer. Data from the incident shows
that the annular preventer failed and did not close off the well. Since the annular preventer failed
hydrocarbons continued to rush up the riser and onto the rig floor. When the annular preventer
was activated the diverter was shut at the top of the riser and flow was diverted to the MGS,
Mud-Gas Separator. It is believed that the MGS was quickly overwhelmed and hydrocarbons
began spewing out of the MGS and onto the rig floor. Next, the crew tried closing the pipe ram,
which did successfully seal off flow into the riser but at this point there was still hydrocarbons
flowing up the riser onto the rig floor. Soon after the pipe ram was shut the first explosion
occurred on the Deepwater Horizon. The crew acted quickly and one member of the crew
activated the EDS, Emergency Disconnect System. If the EDS had worked correctly it would
have closed the shear ram, sealing the well, and then disconnected the rig and riser from the BOP
on the seafloor. Data shows that the EDS never activated most likely because it was damaged
during the series of explosions. Even Though the EDS did not work the AMF/deadman system
should have activated. The deadman system is designed to activate the shear ram and seal off the
well as soon as communication with the rig is lost. The CSB believes that the shear ram failed to
shear the drill pipe and seal off the well because the drill pipe buckled inside the BOP and was
not centered in the middle of the shear ram. Since the shear ram failed to operate properly the
Macondo well was not sealed properly and hydrocarbons continued to leak for months.( US
Chemical Safety and Hazard Investigation Board)
Many would like to blame operate error by the crew for the Macondo disaster, but all
reports that the rig crew acted to their best of their abilities to solve the problem and seal off the
well. If the reports are correct the reason Macondo well blew out and remained uncontrolled was
because of equipment failure. In this section the changes industry has implemented to make
offshore BOPs more reliable will be discussed.
The first major improvement made to BOPs was Depth Compensated Accumulators.
The depth compensated accumulators drastically reduce the number of accumulator bottles
needed to shut the BOP. Figure 12 below shows the basic design of these improved
accumulators.

Figure 12: Accumulator with Depth Compensated Bottle.( Baugh, Vozniak, Schmidt,
SPE 22407-MS-OTC)
In a traditional accumulator used offshore the nitrogen must be charged to high pressures to
allow the accumulator to operate. In an improve depth compensated accumulator the area of the
piston in the nitrogen chamber is larger than the piston in the working fluid chamber. This means
that the nitrogen pressure never has to exceed the pressure of the working fluid to operate the
accumulator. The accumulator also has a couple of other benefits. The valve will work just like a
surface valve would so no calculations need to be made to compensate for depth. The nitrogen
also does not need to be emptied and recharged every time it is run in and out of position.
One of the other most important improvements made by the industry is shearable drill
collars. In an emergency situation the driller will not have time to make sure that the drill collars
are out of the BOP. If shearable drill collars are used in a well it insures that the shear ram can
drill the pipe no matter what. These drill collars are made shearable by thinning the inner skin of
the drill collar and replacing the center wall steel with lead. The outer wall of steel provides the
strength needed for the drill collar and the inner lead provides the weight needed for the drill
collar. Figure 13 shows a picture of a shearable drill collar after it has been sheared.

Figure 13: Drill Collar after Shearing ( Baugh, Vozniak,

Schmidt, SPE 22407-MS-OTC)

These new drill collars are an important improvement in offshore drilling safety. Now the driller
does not have to worry if the drill string is shearable or not if the crew is forced to activate the
shear rams on the BOP. (Baugh, Vozniak, Schmidt, SPE 22407-MS-OTC) These safety upgrades
have increased the safety of offshore drilling allowing crews to perform their jobs safely and
reliably.
Another important technological improvement is the improvement of offshore well
containment systems. After the incident 10 companies that operate in the Gulf of Mexico met
and formed the MWCC, Marine Well Containment Company. The MWCC is a not for profit
company that works closely with regulatory bodies to improve the safety of offshore drilling.
One of the most important accomplishments of the MWCC was the design of a new and
improved offshore containment system. The new and improved system can cap a well and handle
pressures up to 15,000 psi in up to 10,000 ft of water. The system also has the capacity to contain
up to 100,000 BPD of liquid and 200 MMSCF/D of gas. This system will help to ensure if
another blowout does occur offshore the industry will be able to move quickly to cap the well
and avoid a massive discharge of hydrocarbons into the environment. (Beckwith)
The Macondo incident lead to a whole new level of cooperation between companies.
Projects like the MWCC and the Helix Well Containment group would never have come into
existence in the pre-Macondo world. Cooperation between companies, industry groups, and
regulatory bodies is at an all time high and this has drastically increased the safety levels
offshore. Changes like this have come into fruition because of an overall change in industry
culture. The post-Macondo world has seen a shift to a true safety culture within industry. With a
true safety culture in place the public can be much more confident in industry activity. When
safety comes first from the lowest level roustabout all the way to top management offshore
drilling activities will continued to be performed safely for generations to come and if an
incident does occur the industry will be ready to act quickly and insure that the damage is
minimized.

References:
Baugh, B. F., Vozniak, J., & Schmidt, N. (2011, January 1). Post-Macondo BOP Safety
Upgrades. Offshore Technology Conference. doi:10.4043/22407-MS
Beckwith, R. (2012, May 1). The Post-Macondo World: Two Years After the Spill. Society of
Petroleum Engineers. doi:10.2118/0512-0036-JPT
Bourguignon, Jean-Claude., Ryan, Michael., Bretenou, Michael, Total. 2014. Subsea Emergency
Response System (SERS): Optimized Response for Subsea Production Well Incidents in the Gulf
of Guinea. Prepared for the International Petroleum Technology Conference in Kuala Lumpur,
Malaysia, 10-12 December 2014. IPTC-18222-MS
BP, Deepwater Horizon Accident Investigation Report, September 8, 2010
Combellas-Bigott, Ricardo and Galloway, William. 2006. Depositional and Structural Evolution
of the Middle Miocene Depositional Episode, East-Central Gulf of Mexico. APPG V.90, No. 3.
PP: 335-362. DOI:10.1306/10040504132
Deepwater Horizon Study Group (DHSG). 2011. Final Report on the Investigation of the
Macondo Well Blowout. Berkeley University, California, USA.
Giliham, Jason. Subsea Pipeline Inspection via Underwater Laser Scanning. Marine Technology
(2014): n. pag. Marine Technology Reporter. 01 April 2014. Web 18 April 2015
Hickman, Stephen., Hsieh, Paul., Mooney, Walter., Enomoto, Catherine., Nelson, Philip., et al.
2012. Scientific Basis for Safely Shutting in the Macondo Well After the April 20, 2010
Deepwater Horizon Blowout. National Academy of Science, USA.
DOI:10.1073/pnas.1115847109
Hilterman, F.J., Sherwood, J.W.C., Schellhorn, R., Bankhead, B., DeVault, Bryan. 1996.
Identification of Lithology in Gulf of Mexico Miocene Rocks. Prepared for annual OTC in
Houston, Texas, 6-9 May, 1996. OTC-7961-MS. DOI:http://dx.doi.org/10.4043/7961-MS
Hsieh, P. A. (2011), Application of MODFLOW for Oil Reservoir Simulation During the
Deepwater Horizon Crisis. Groundwater, 49: 319323. doi: 10.1111/j.1745-6584.2011.00813.x
Morris, Kay A., Deville, Jay P., Jones, Paul., Halliburton, SPE. 2012. Resin-Based Cement
Alternatives for Deepwater Well Construction. Prepared for SPE Deepwater Drilling and
Completions Conference in Galveston, TX, 20-21 June 2012. SPE-155613-MS.
National Commission on the BP Deepwater Horizon Oil Spill and Off-shore Drilling. Chief
Counsels Report.
Nedwed, Tim., Coolbaugh, Tom., Demarco, Greg, ExxonMobil. 2012. The value of Dispersants
for Offshore Oil Spill Response. Prepared for the Offshore Technology Conference in Houston,
TX on 30 April-3 May 2012. OTC-23359-MS

Pappas, J. M., Richardson, D. A., Research Partnership to Secure Energy for America. Overview
of Subsea monitoring and Inspection Technologies Development in RPSEA. 2012. OTC-23183MS
Parsons, P. The Macondo Well, Energy Training Resources LLC, 2010
US Chemical Safety and Hazard Investigation Board. Explosion and Fire at the Macondo Well.
Rep. no. 2010-10-I-OS. Vol. 1. Washington, DC: CSB, 2014. Print.
Wang, Chengwen., Wang, Ruihe., Bu, Yuhuan., Zhou, Weidong., SPE, China University of
Petroleum. Design and Performance Research of a Unique Deepwater Cement Slurry. 2010.
Prepared for CPS/SPE International Oil & Gas Conference and Exhibition in Beijing, China, 810 June 2010. SPE-130266-MS