[Leanan]

This is why I think Skrebowski and others who try to predict the peak by counting new projects coming online may be too optimistic. Unexpected project delays are all too common. You rarely see unexpected project accelerations.

[Geko45]

$this->bbcode_second_pass_quote('', 'T')ests over four months ``revealed metallurgical failure in components of the subsea system,'' which will now be retrieved and rebuilt, London-based BP said in a statement today.

[nth]

$this->bbcode_second_pass_quote('Leanan', 'T')his is why I think Skrebowski and others who try to predict the peak by counting new projects coming online may be too optimistic. Unexpected project delays are all too common. You rarely see unexpected project accelerations.

[Leanan]

$this->bbcode_second_pass_quote('nth', ' ')This puzzles me. Skrebowski maybe too optimistic, but if it is just delay in project rather than lack of oil, then Campbell, Deffeyes et al are too pessimistic as there seems to be more oil in the ground than what they claim as they are claiming it is lack of oil on the ground causing PO and not inability to ramp up production fast enough.

[FatherOfTwo]

$this->bbcode_second_pass_quote('strider3700', 'O')r BP realizes that 250,000 barrels/day will be worth far more 3 years from now then tommorrow and in the long run it's best to take their time

[DantesPeak]

$this->bbcode_second_pass_quote('seahorse2', 'W')hatever the reason, the problems with Thunderhorse should temper the optimism about getting oil out of the ground in this "new" deepwater Gulf of Mexico find, 27k feet below.

[seahorse2]

Funny how Lynch the economist, who believes oil prices are determined by politics and economics, not geology, is predicting a return to the low $40s in oil, while at the same time Opec is saying they want oil above $60.

In the end, if Opec wants oil above $60, they can keep it there by reducing production. Lynch knows this, so his saying oil will go down the the $40s is complete bs. It just goes to show he too has an agenda, he's not playing with the facts.

[nth]

$this->bbcode_second_pass_quote('Leanan', 'I') don't think you understand Deffeyes' work. I dunno about Campbell; I haven't read his stuff. But Deffeyes makes it very clear that what he is talking about when he says "peak oil" is peak production. How fast you can get it out of the ground.
Deffeyes believes that half the oil that ever existed is still in the ground. It's just that the second half is a lot harder to get out of the ground than the first half. Because the low-hanging fruit - the large, easy to find, easy to produce oil reserves - is picked first

[pup55]

Lesson: The bigger and more complicated the platform, the more vulnerable to a catastrophe like this.
I did some calculations one time on the Chinese rigs in the Bohai field, and the jist of it is that their strategy is: many more, much simpler operations. Less economically efficient in the short run, but maybe not in the long run.

[frankthetank]

YUp...they should've thought of KISS before building this beast...

I guess they could make it into and artificial reef or something? Maybe turn it into high end condos?

[Leanan]

$this->bbcode_second_pass_quote('nth', 'I') understand just fine, unless you are saying politics and natural disasters are also factored into his model, which from my understanding it is not.

[mekrob]

$this->bbcode_second_pass_quote('', 'P')oor Thunder Horse. Will it ever produce oil?

[DantesPeak]

Good technical story on Thunder Horse. Does anyone know if this hydrogen problem could also be creeping into other platforms?

A manifold at BP's Thunder Horse oil and gas platform is deployed in this file photo. One of the four manifolds on the ocean floor failed, possibly the result of corrosion.

$this->bbcode_second_pass_quote('', 'S')ept. 19, 2006, Thunder Horse still in the stall Corrosion could slow startup of BP Gulf platform
Corrosion may be to blame for yet another problem for oil giant BP, this time a lengthy delay in the startup of its already overdue Thunder Horse platform in the Gulf of Mexico. The company said Monday a key piece of undersea production equipment, called a manifold, failed during testing, possibly the result of a kind of corrosion that made the steel brittle.

The company plans to retrieve all four manifolds — equipment resting on the ocean floor that helps control the flow of oil and natural gas from multiple wells — for tests onshore. While testing of the equipment is still ongoing, BP and FMC officials believe the failures may have been caused by a process called hydrogen embrittlement.

Hydrogen embrittlement, a kind of corrosion, occurs when hydrogen atoms, the smallest of all atoms, become embedded in the pores of metal, said Larry Spears, a chemistry professor at the University of Houston-Downtown. "If enough hydrogen accumulates in the holes or voids, it can exert great pressure and push out and create small holes," Spears said, reducing the strength of the steel. "You usually don't think of a gas being able to do that, but it can weaken it from within."

Detecting hydrogen embrittlement can be particularly difficult and often isn't discovered until after a piece of metal has failed, Spears said. The manifolds were being tested using seawater at the time of the failure, but BP said it believes the failure occurred because of hydrogen in the sea- water outside of the manifolds.

[nth]

DantesPeak, Good article. From other sources, I can confirm it is corrosion. Not maybe. As for what caused it, I cannot confirm that. The break/corrosion is at the welding joint, so could this mean bad welding? I am not an expert, so no idea. BP's Thunderhorse is in a mess. They are not able to pass any of their tests without finding out more problems. This is the nth time they had to fix or replace bad pipes.

[nth]

Leanan, You missed my point. Deffeyes claimed his 2005 date is driven by geology and that no matter how politics or resources play out- we will never be able to produce more.

Are you saying I misunderstood Deffeyes and that he is simply claiming from his modeling/view point that we have hit PO in 2005 due to politics, geology and other human led constraints? If that is the case, then it is news to me.

[DantesPeak]

Thunder Horse after hurricane damage


Atlantis

Matt Simmons, among others, have been predicting a labor and equipment shortage that may stall the energy industry offshore.
$this->bbcode_second_pass_quote('', 'B')P Delays Atlantis, Thunder Horse Platforms Again(Update2)
By Stephen Voss and Maher Chmaytelli
Feb. 6 (Bloomberg) -- BP Plc, Europe's second-largest oil company, again delayed the start of production at the Atlantis and Thunder Horse platforms in the Gulf of Mexico, saying the postponements will crimp output this year and next. Atlantis will be running by the end of this year and Thunder Horse by the end of 2008, Chief Executive Officer-designate Tony Hayward told reporters today. Atlantis was originally scheduled to start last year and Thunder Horse in late 2005.

Competition for the skilled labor of oil service company workers is slowing the start-up, following earlier delays caused by storm damage and equipment failures. "The supply chain is stretched to breaking point,'' Hayward said at a press conference in London. "Thunder Horse will start up. It's just taking longer than we thought.''

The slowdowns will shave BP's 2007 production by 150,000 barrels a day and by 100,000 barrels a day a year later, Hayward said. The company today reported its lowest profit in two years because of declining output and falling energy prices. Before today, BP had said Atlantis would start in the second half of this year, with Thunder Horse beginning during the second half of 2008.

Atlantis, 44 percent owned by BHP Billiton Ltd., is planned to have the capacity to produce 200,000 barrels a day of oil and 170 million cubic feet a day of gas from 11 wells. Thunder Horse, designed to process 250,000 barrels of oil a day and 200 million standard cubic feet of gas per day, was originally damaged during Hurricane Dennis in July 2005, leaving it listing at a 20-degree angle. The platform is 25 percent owned by Exxon Mobil Corp.

Hayward named seven major projects that BP will start this year, including Atlantis and King Subsea in the Gulf of Mexico, Red Mango in Trinidad and the San Juan coal-bed methane expansion project in the U.S. The remaining three are in Angola; Greater Plutonio, Rosa and Kizomba A phase 2.
Last Updated: 6 Feb 2007

[pup55]

Poor Thunderhorse. So many questions:
a. Sounds pretty bad, which the viewers of PO.com were aware at the time. Were the stockholders informed of this appropriately at the time?

b. How sick would you be of paying interest/capital costs on this money to have this white elephant being worked on all the time, and not pumping oil?

c. If Gulf hurricanes are going to be more common, do we now budget in X number of months during the life of the project shut down due to hurricanes? If this is the case, does this effectively make some reserves off limits because it is too risky/expensive to get to them?

d. If you are building a new platform in the Gulf, in a place like the new field that was discovered last summer (which is directly in the historical path of the most severe hurricanes on record), do you build one humongous platform, like this one, or several smaller ones, like the Chinese do?

[seldom_seen]

If you will, let me tell you a story about a man named Jed; a poor mountaineer barely kept his family fed. Then one day he was shootin' at some food. When up from the ground come a bubblin' crude...oil, that is. Black gold. Texas tea. Those were the days.
When I see those massive oil platforms. I understand Simmon's point that oil is way underpriced. Imagine if we had to work that hard to get fresh water or coffee beans?

[DantesPeak]

$this->bbcode_second_pass_quote('pup55', 'P')oor Thunderhorse. So many questions:
a. Sounds pretty bad, which the viewers of PO.com were aware at the time. Were the stockholders informed of this appropriately at the time?
b. How sick would you be of paying interest/capital costs on this money to have this white elephant being worked on all the time, and not pumping oil?
c. If Gulf hurricanes are going to be more common, do we now budget in X number of months during the life of the project shut down due to hurricanes? If this is the case, does this effectively make some reserves off limits because it is too risky/expensive to get to them?
d. If you are building a new platform in the Gulf, in a place like the new field that was discovered last summer (which is directly in the historical path of the most severe hurricanes on record), do you build one humongous platform, like this one, or several smaller ones, like the Chinese do?

[seahorse2]

I like this quote about why Thunderhorse is not producing yet:
$this->bbcode_second_pass_quote('', 'T')hunder Horse is "something that hasn't been done before...We probably pushed the technology envelope a little bit too far," he added.