Oil, Gas Industry Fears More Deep-Sea Leaks Killing Fields

 The corrosive fluids implicated in the leak at Total's Elgin field, such as calcium bromide, are commonly used in such deep-sea wells, and experts fear a recurrence as operators, under pressure to offset declining output from conventional reservoirs, turn to deeper, hotter and higher pressure fields.

A corrosive drilling fluid that triggered the North Sea's worst gas leak in 20 years could threaten similar deep-sea wells across the world, and operator Total has already warned Shell that its nearby Shearwater field may be at risk

Drilling engineers, equipment manufacturers and chemical experts say the long-term consequences of exposing well casings to bromide-based fluids are poorly understood, and some corrosive bromide fluids have already been banned.
"It's an operational well, and there are hundreds of thousands of those out there, and any one of them at any time potentially could suffer from the sort of problem Elgin has apparently had, so we need to know about it as an industry," said Liane Smith, founder of well integrity specialist Intetech, recently acquired by Wood Group.
The G4 well in the Elgin field leaked for a month and a half, creating a huge cloud of flammable gas above the platform about 150 miles (240 km) east of Aberdeen in Scotland.
The leak pushed up gas prices and cut UK supply by 7 percent. An air and sea exclusion zone was imposed as personnel were evacuated from the area. Had the gas cloud caught fire, the results would have been devastating.
Total has said the leak was caused by a corrosive reaction between calcium bromide used to complete the well and grease in the pipework, which under high pressure cracked the piping. The French firm described it as a "unique event".
Calcium bromide is not generally regarded as corrosive and is still widely used in the North Sea, but Reuters uncovered a number of historical cases in which chemically related fluids known as halides, such as zinc bromide and calcium chloride, have corroded pipework.
Halide fluids, known as brines, can react with oxygen, carbon dioxide or hydrogen to form a corrosive substance, particularly in deep wells such as Elgin where temperatures can reach 200 degrees Celsius.
"Bromide belongs to the same group as chloride, and so there is always the risk of halide cracking of susceptible steels. If the steels used are susceptible to chloride cracking, they will also be at risk of bromide cracking," said Paul Rostron, professor of corrosion chemistry at the Petroleum Institute in the United Arab Emirates.
In 1999 piping in a well on the HPHT Erskine field, operated at the time by Texaco and now by Chevron, cracked after calcium chloride reacted with air to corrode the steel.
Zinc bromide is also known to be increasingly corrosive at high temperatures and its use is banned in the North Sea because it is regarded as dangerous.
"Zinc bromide and other bromides are highly corrosive to any form of steel it comes into contact with," said consultant Downs.

Total has explained how gas got into the Elgin well, but the company has stayed silent on how it breached three further well walls after its initial point of entry.
Industry insiders want to see a wider discussion in petroleum journals and at conferences. If a scenario has been discovered in which calcium bromide becomes dangerously corrosive, the information must be shared, they said.
"They need to tell us what we need to keep out of our wells so that we don't stupidly go and do the same thing again," a corrosion engineer told Reuters. He declined to be named lest his comments affect his relationship with clients.
Total says it has shared the information with operators.
"Before we can publish scientific papers we want to reproduce what happened in a laboratory," Total's de Vivies said.
Total Chief Executive Christophe de Margerie said: "The final conclusion hasn't yet been released because it is not yet over, and there are talks to understand everything that happened and everything that could happen in the future."
Britain's HSE and Total have conducted separate investigations into what happened at Elgin.
The HSE investigation will soon be sent to authorities in Scotland where a decision will be taken on whether to prosecute Total over the incident. Until such time, the HSE investigation cannot be released, a spokesman from the watchdog said.
While the rest of the industry waits to find out what caused the leak, Total is taking pre-emptive action.
"In the light of the lessons drawn from the G4 accident, we have redefined the technical requirements our wells must meet, and the consequence is that a minimum of 10 wells will have to be killed," Yves-Louis Darricarrere, head of E&P at Total, told Reuters in March.
The process will take about three years to complete, and the replacement cost of each well is about 140 million pounds, said a source with direct knowledge of the abandonment procedure.
"Total took a very conservative approach to the remaining Elgin wells," said the source.

Oil Market Forecast & Review September 2013

Oil Market Forecast & Review September 2013

Crude oil prices fell since the market is dollar-denominated. Later in the session, a stronger than expected ISM Services PMI report sent the dollar even higher, but crude oil traders did not sell. This was further proof that investors were more concerned over a military intervention against Syria’s government rather than supply/demand issues at this time. October Crude Oil futures traded slightly lower on Thursday because of a stronger dollar, but bearish traders were unable to break the market because of concerns over an impending invasion of Syria by the U.S. 

Although the market remained lower for the session, investors continue to push the market away from the low of the day shortly after the government announced a decline in crude oil supplies last week. According to the Energy Department’s Energy Information Administration, crude oil supplies dropped by 1.8 million barrels to 360.2 million barrels. 

Although this number was above year-ago levels, speculators supported the market because of the possibility of military action against Syria late next week. Dallas and Houston's annual job growth rates ranked first and second among the largest metropolitan areas in July. From July 2012 to July 2013, local nonfarm employment in Dallas rose 3.7 percent, more than twice the national increase of 1.7 percent, reported the U.S. Bureau of Labor Statistics. That among the 12 largest metropolitan areas in the country, Dallas ranked the first in the rate of job growth, noted Regional Commissioner Stanley W. Suchman.

The Dallas-Plano-Irving Metropolitan Division, which accounted for 70 percent of the area's workforce, added 77,500 jobs from July a year ago, a gain of 3.7 percent. Houston closely followed, up 3.6 percent.
"Many sectors are showing renewed signs of life, as we see job growth across the board," said Perez. "But we have to do more to pick up the pace of this recovery. We are not satisfied with an economy performing at anything less than its full potential. President Obama has proposed a better bargain for the middle class that will invigorate the economy and create jobs at a faster clip."

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