OTC’s likely messages: Safety, cautious optimism

A year ago, when the Offshore Technology Conference came to town, BP’s Macondo well was still gushing thousands of barrels of oil a day into the Gulf of Mexico, and the weight of the disaster hung heavy in the air. On Monday, when this year’s show begins, the mood should be different.

Offshore officials say a sense of optimism is returning to the business after a tumultuous year, thanks in part to the recent resumption of drilling in the deep-water Gulf and $100-plus oil prices that are boosting the incentive to explore worldwide.

But at OTC, one of the world’s largest gatherings of offshore professionals, the Deepwater Horizon tragedy is still likely to loom large — in presentations, technical papers and sales pitches on the exhibit floor. The overriding message: The industry has learned from the crisis and has emerged the better for it.

“I think people are just really ready to get back to doing what we do best,” said Susan Cunningham, board chairwoman for the massive event, which runs through Thursday at Reliant Park.

That renewed sense of purpose, she said, may help explain why attendance at OTC is expected to be at near-record levels this year. Registrations are tracking ahead of last year, when attendance was 72,900, the second-highest ever. The record year was 1982, when an oil boom drew 108,000 people, she said.

This year, the throngs of engineers, technicians, executives, scientists and other offshore professionals from more than 100 countries will once again be in Houston to network, jockey for business and hold long panel discussions on even the most arcane aspects of offshore drilling and production.

But the highlight is always the trade show full of the hulking hardware that makes the business run. That includes tools that played starring roles in BP’s Gulf oil spill saga last summer, from giant blowout preventers to agile robot submarines that make fixes deep below.

Improving safety

One notable change this year: Presenting companies, in a sign of the times, say they will be putting greater focus on offshore equipment and services geared toward improving safety and reducing environmental impact.

Take Weatherford International. The Switzerland-based oil field services giant, with large operations in Houston, is featuring a “closed loop” drilling system it says will enable operators to respond more quickly to dangerous gas influxes in a well than conventional methods. It uses two technologies – called a rotating control device and microflux control system – that keep tighter control on drilling fluids and materials from the well that are circulated out while drilling.

“We essentially have our finger on the pulse of the well,” said Dave Pavel, director of business development at Weatherford’s drilling optimization services unit. “That gives us the ability to look at very, very minute fluctuations in normal drilling operations.”

If operators detect a problem, they can take action to secure a well after as little as two barrels of gas-laden fluid have entered, versus at least 25 barrels with traditional “open-air” systems, he said.

David Newman, director of oil and gas production for Emerson Process Management, said his company will be showing off a wireless downhole sensor for wells that are producing. It measures pressure and temperature in the outer ring of the well called the annulus, and sends the data back to the surface.

Not only is the wireless system less vulnerable to damage than wire-based systems, it can monitor well conditions continuously, eliminating the need to shut in a well twice a year for pressure tests required by law, he said.

“The more intelligent you can make it, utilizing the latest technologies out there, the more data you can get back onshore, the quicker you can respond to a potential incident,” Newman said.

Gestation period

While such products may be timely in the post-Macondo environment, most have been in development for some time.

“The gestation period for some of the technology we’re talking about here is at a minimum 18 months to 24 to 36 months,” said Mike Robinson, head of sales and marketing for Australia and New Zealand at FMC Technologies, a Houston-based maker of offshore equipment.

“That’s also a function of how conservative we are as an industry. We don’t just jump into things and say, ‘Oh, there’s a new shiny thing, let’s go try that right now.’?” FMC’s primary focus at the moment is on verifying designs and running quality checks, though new products are also in the pipeline, Robinson said.

The 2011 OTC is the first since U.S. regulators enacted a raft of new safety and environmental rules for offshore operators in the Gulf of Mexico. The rules were a response to the Macondo disaster in April 2010, which killed 11 Deepwater Horizon rig workers and launched the nation’s worst oil spill.

To receive drilling permits, companies now must prove they have plans and equipment in place to respond to worst-case well blowouts. Drilling projects must conform to new well-design, casing and cementing standards, and be certified by independent engineers. And operators must develop wide-ranging workplace safety plans.

Terrance Ivers, president of OTC exhibitor Amec Oil and Gas Americas, a Houston-based division of London’s Amec, sees opportunity in the regulations. He said the division, which provides offshore engineering and project management services, is starting to see more business from offshore operators facing a Nov. 15 deadline to implement what regulators call a Safety and Environmental Management System.

“We’re entering this OTC this year with a very optimistic mood,” he said. But, like others, he is quick to add that optimism is still tempered by the events of last year.

“There’s still so much we need to learn and know about what happened in the Gulf,” he said. “With a crisis, there’s a renewed and heightened sense of responsibility.”


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