Subsea Well Control and Oil Spill Response Industry Task Forces

Briefing Paper – 9.07.10

The oil and natural gas industry continues to cooperate fully with the Bureau of Ocean
Energy Management, Regulation and Enforcement (BOEMRE) and the independent
presidential commission as they consider the Gulf oil spill and potential changes in
industry oversight. We have formed four joint industry task forces to examine various
issues related to deepwater drilling, from offshore equipment and offshore operating
procedures to subsea well control and oil spill response capabilities.

The goals of these task forces are clear—to identify and learn from any gaps in
operations or practices that would affect safety; seek options to address gaps through
recommended practices, procedures, and research and development; and ultimately
improve the industry’s capabilities in safety, environmental performance and spill
prevention and response. In the last 60 years, our industry has safely drilled more than
42,000 wells, including 2,000 deepwater wells, in the Gulf without a major incident. The
recommendations from these task forces, combined with the continued cooperation of
government agencies and other stakeholders, should help ensure a similarly strong
industry record for the next 60 years and beyond.

On Sept.7, 2010, the industry released the preliminary findings of two of the four task forces:
a Subsea Well Control and Containment task force to review technologies and practices for
controlling the release of oil from its source, and an Oil Spill Response task force to review
existing spill response processes and technologies. Recommendations from the other two
task forces, covering industry operations and practices, were provided to the Department of
the Interior on May 17, 2010.

The Subsea task force is reviewing technologies and practices for controlling the release
of oil from its source, including equipment designs, testing protocols, research and
development, regulations and documentation.

The Subsea task force has identified five key areas of focus for Gulf of Mexico deepwater
operations: well containment at the seafloor; intervention within the subsea well; subsea
collection and surface processing and storage; relief wells; and continuing research and
development.

The Subsea task force has developed 29 recommendations on specific steps to enhance
the industry’s well control and containment capability, including 15 immediate action items:

1. Establish coordinated industry capability for owning and providing subsea well
containment technology and capability through a Containment Company (CC). The
CC will be responsible for building and deploying a rapid response system that will
be able to capture and contain oil in the event of a potential future underwater well
blowout in the deepwater Gulf. The CC will deliver a flexible, adaptable and rapidly
deployable tool kit of containment equipment designed and constructed for rapid
subsea containment; procure, construct, and test the needed equipment; and
research improved methods and equipment for subsea well control and containment.

1220 L Street, NW | Washington, DC 20005-4070 www.api.org

2. Ensure that a lower marine riser package (LMRP) can be removed from lower
blowout preventer (BOP) using a surface intervention vessel and remotely operated
vehicle. This will allow access to the mandrel on top of the BOP and the installation
of subsea containment assembly.

3. Ensure effective methods to release LMRP without riser tension.

4. Remove damaged or non-functioning BOP stack to allow installation of a new BOP

on the wellhead housing, or the subsea containment assembly (Note: this capability
is available now).

5. Regain full control of BOP stack by pulling and repairing the LMRP/pods and
rerunning the LMRP (Note: this can be done now). Research and develop ways to
regain control over all important BOP functions in the case where the LMRP is
damaged and cannot be removed and in cases where the LMRP is removed but
cannot be repaired and re-run.

6. Have CC acquire and maintain a full set of crossover spools, connectors and hub
combinations.

7. Have CC design and construct subsea connectors to fully seal, connect and contain
damaged connector profiles and casing stubs. Casing stubs will use BOP ram
technology for connection and sealing.

8. Coordinate with the Equipment Task Force to ensure methods and equipment are
providing effectiveness and reliability in delivery of control fluids and control to BOPs
and ROVs.

9. Coordinate with API RP 96 workgroup to ensure deepwater well design includes a

system evaluation of the design and material for subsea well head support and the
release control methodology of the LMRP.

10. Coordinate further with API RP 96 workgroup to ensure they incorporate the
importance of full shut-in capability into the containment capabilities.

11. Have CC deliver a modular solution for capturing, processing and transporting
production from subsea wells that need to be produced until well control is complete.
This system will be adaptable to water depths up to 10,000 feet and include free-
standing production risers to move production to the surface away from the area of
the well.

12. Develop a historical document of marine well control and containment.

13. Via focused workshops, determine and make a recommendation on the most
effective methods and information that should be included in well plans regarding
relief well drilling planning.

14. Undertake desk research to revisit published work on relief wells.

15. Develop a white paper on the feasibility and desirability of pre-drilling relief wells
(Note: this task is complete).

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The Oil Spill Response Task Force has produced an assessment of the industry’s entire
spill response system and identified areas for improvement and additional research. In
particular, it has made specific suggestions to improve the speed with which spill
response can be ramped up, improvements in spill response plan content and structure,
the role of federal and state regulatory agencies and improved training and exercises for
large spill events.

In the course of its deliberations concerning the state of our overall oil spill response
capability, the task force has examined a number of broad topical issues, including oil spill
response plans, dispersant use, in situ burning and shoreline protection and clean up.

In the end, we developed recommendations for 15 near-term actions that would be initiated
on or before April 1, 2011, and a number of long-term actions that would be initiated on or
before Oct. 1, 2011. They include the following:

1. Review lessons learned and develop additional recommendations from other reports
and, if necessary, reconcile those into our recommendations.

2. API will initiate the development of an API Recommended Practice on Oil Spill
Response Planning.

3. Industry will initiate contact with federal agencies to investigate increased mechanical
recovery as well the use of dispersants and in-situ burn capability in the Gulf of Mexico.

4. Industry will work with appropriate agencies to review and evaluate existing Effective
Daily Recovery Capacity calculations.

5. Industry will convene a meeting among industry partners to initiate the development of
an agreement for providing trained company personnel with expertise in specific areas of
oil spill response to a Responsible Party in the event of a federally declared Spill of
National Significance (SONS) level incident.

6. Industry will meet with major response co-ops to initiate the development of a pre-
approval agreement or process that facilitates identification, availability and commitment
of necessary resources to be made available to any Responsible Party in the event of a
federally declared SONS incident—without delay.

7. Industry will meet with appropriate federal and state agencies to initiate the development
of a policy statement and possible Memorandum of Understanding to facilitate the
cascading of resources and establish an alternative means of compliance for the “donor”
areas, including waiving U.S. oil spill liability exposure and pre-emption of state
requirements in the event of a SONS level incident.

8. Industry will continue to support the ongoing efforts by API and the Society of Petroleum
Engineers in the development of a standard or recommended practice for calculating
worst case and/or most likely discharge rates for loss of well control incidents.

9. To improve understanding regarding dispersants, industry will develop a series of simple

fact sheets and/or other communications addressing various aspects of dispersants and
review them with appropriate Government Agencies for concurrence.

10. A panel of experts will be chartered to review data collection efforts as part of a spill
impact assessment and evaluations of ecological recovery rates for offshore, near shore,
coastal and estuarine areas impacted by spills.
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 11. API will begin development of an API Recommended Practice on Personal Protection
Equipment for Oil Spill Response Workers.

12. Industry will initiate communication with the National Response Team (NRT) to
encourage publication of the Federal Volunteer Guidelines as soon as possible.

13. Industry will have in place a Source Control Branch identified in their Oil Spill Response
Plans.

14. Industry will develop a summary of how subsea injection was utilized during the
Deepwater Horizon response.

15. Industry will develop a program for modeling and scaled testing of subsea dispersant
injection to develop implementation criteria.

16. Industry will investigate whether non-solvent based dispersants can be used effectively
with this application mode due to rapid and uniform testing.

17. Industry will work in conjunction with the Marine Well Containment Task Force to
develop more efficient methods of applying the dispersants.

18. Industry will conduct a review of surface application techniques and protocols to further
safeguard response personnel while allowing for operational efficiency.

It is the industry’s intent to begin discussions with other stakeholders on these

recommendations as soon as possible. While industry has already taken steps to
address many of these issues, it will be important for government and other stakeholders
to work together to identify priorities for future improvements and develop necessary
cooperative mechanisms.

The ideas presented are offered as a first step in that process. Many, if not most, of our
recommendations will require the active participation and support of other stakeholders, and
building those relationships is an immediate priority.

Recommendations from all four task forces already have helped improve the industry's
safety and operations standards. This is vital, since offshore drilling in the Gulf of Mexico
plays a critical role in meeting America’s growing demand for energy.