http://www.wsj.com/articles/new-worries-over-subsea-oil-well-gear-1467970202
Underwater Oil-Well Bolts Are Failing, Causing Alarm
Massive bolts used to secure gear deep in the Gulf of Mexico have
corroded and sometimes snapped
By Ted Mann
July 8, 2016 5:30 a.m. ET
General Electric Co. , oil drillers and U.S. regulators are scrambling
to determine why massive bolts used to connect subsea oil equipment keep
failing, prompting costly shutdowns and raising safety concerns about
hundreds of wells in the Gulf of Mexico.
Safety regulators at the Department of the Interior began investigating
the matter in 2013, officials said in an interview, after a GE
oil-exploration equipment business issued a global recall for faulty
bolts on one of its components. The bolts have corroded and sometimes
snapped, raising the possibility of a major oil leak.
But the U.S. investigation and two recent bolt failures convinced
regulators and industry officials that the problem goes beyond GE and
its blowout preventers—safety gear used to halt oil-and-gas flow during
a well emergency.
Flaws also have been found in bolts made by GE’s two main competitors
for blowout preventers— National Oilwell Varco Inc. and the Cameron unit
of Schlumberger Ltd. —and in bolts used in other areas on subsea wells,
said Interior Department officials.
“This is what we view as a very critical safety issue,” said Allyson
Anderson Book, associate director of the Bureau of Safety and
Environmental Enforcement at the Interior Department. “If your smallest
component fails, you can’t expect a sophisticated many-million-dollar
piece of equipment” to hold fast and prevent a leak.
The failures haven’t resulted in any oil leaks, the regulators said.
Like other equipment companies, GE said its bolts have come from
subcontractors, which it hasn’t publicly identified. The company said
the components are subject to rigorous safety testing before being
delivered to customers.
A spokeswoman for Fairfield, Conn.,-based GE said the company is working
with the Interior Department to address the problems and has supplied
replacement parts to customers who have requested them, declining to
further elaborate. A spokesman for Schlumberger declined to comment and
a spokeswoman for National Oilwell Varco didn’t respond to requests for
comment.
The review has found bolt failures stretching back at least to 2003,
regulators said. “This is a systematic industry problem that requires
immediate attention,” the chief of the BSEE wrote to the head of the
American Petroleum Institute, the industry trade group, in a Jan. 22 letter.
Regulators say they are working with drilling companies, manufacturers,
and the API to craft new standards for minimum hardness and coating of
subsea equipment bolts, as well as guidelines for assembly and installation.
The BSEE wants companies to replace existing equipment as soon as
possible. The API proposes replacing by the end of 2017 any critical
bolts that don’t meet the coming hardness standard. An API spokesman
said the industry is “working diligently with BSEE and other
stakeholders to enhance operations as necessary.”
The bolt issue could affect more than 2,400 platforms and oil rigs in
the Gulf of Mexico, as well as 23 off the coast of California, and one
active rig on the outer continental shelf in Alaska, a BSEE spokesman said.
One reason the scope of the issue remains murky: oil-lease holders
aren’t required under current rules to report equipment failures to the
enforcement bureau when they are discovered, except if certain
conditions are met, such as when oil leaks into the water.
That will change on July 28, when new rules crafted in the years since
the 2010 Deepwater Horizon spill go into effect, regulators said. Those
regulations will require greater reporting of breakdowns, including bolt
failures discovered during regular maintenance, and will require
information sharing among competitors about equipment failures.
Companies already have begun the process of finding and replacing
corroded bolts. The repairs are pinching drillers and U.S. producers,
who have been hard hit by the prolonged slump in oil prices.
Marc Edwards, chief executive of Diamond Offshore Drilling Co. , which
has a fleet of 30 rigs, told investors in June that the company had four
unplanned “stack pulls” in the second quarter, where the expensive
equipment that sits atop a subsea well must be raised to the surface and
repaired. Three of those repairs involved failed bolts, Diamond said.
Mr. Edwards estimates that his customers lose between $600,000 and
$800,000 a day during such repairs, and his own firm’s revenue from the
affected rigs drops to zero during the two to three weeks that drilling
is halted.
The interruption likely will affect second-quarter results. “Is that
material for me? Yes, it is,” Mr. Edwards said.
GE is affected, too, because Diamond recently switched to a service
agreement where it rents its blowout preventers from GE and pays based
on the amount of time the equipment is in working condition, Mr. Edwards
said.
Manufacturers and regulators say multiple factors could be driving the
bolt failures. A working group is studying metallurgical data to
determine if the alloys used in the heavy steel bolts are hard enough to
survive in the harsh underwater environment, and whether coatings used
on the bolts are appropriate.
They also are examining whether “over-torquing,” or excessive tightening
of the fasteners, by subcontractors who assemble the stacks of equipment
has caused them to weaken. GE has said that over-torquing likely is a
factor in its bolt failures.
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