Falling Oil, Failing Rigs: What Happens When the Boom Comes Again?

Goodway - Falling Oil, Failing Rigs- What Happens When the Boom Comes Again?Oil prices are finally looking up, with the Organization of Petroleum Exporting Countries (OPEC) now willing to make a deal. According to USA Today, in fact, oil saw its largest 3-day rally in a quarter century to land at just over $49.20 a barrel. But it’s not all good news: This is a far cry from the $100-plus per-barrel costs that sellers were charging less than a year ago. What’s more, as prices start to rebound and drilling rigs fire up again companies need confidence in operation—having walked away when oil tanked, are there rigs ready to perform under pressure?

Equipment Slump

As noted by Quartz, the sale of drilling equipment has “fallen off a cliff.” US imports of rig equipment were down 41 percent in May 2015 compared to the same month in 2014, while large companies like Haliburton have slashed more than 10 percent of their workforce while Schlumberger cut 20,000 jobs in the last eight months. The bigger problem? Many of these workers were the ones who shut down existing rigs when the numbers went south; depending on skill, seniority, and potential job security, they may or may not have followed procedures to the letter. And while the oil industry has always excelled at controlled shutdowns and quick startups, this particular price slump has been both steep and protracted, leaving the state of rigs more of a question mark than a certainty.

Failed Effort

So what happens if equipment fails? Fuel Fix dives into the problem when it comes to Arctic drilling efforts. Consider the case of the drillship Noble Discoverer. In 2012 the Coast Guard discovered than the oil-water separator on board had been improperly modified, leading to felony charges. And while the vessel was updated in Singapore, more recent tests also found the machinery lacking. When tested, the device was only able to process 6.4 cubic meters of liquid in a thirteen-hour period, a far cry from the 5 cubic meters it should have been able to handle per hour. Even after cleaning “severely clogged” filters, crew members were unable to make the separator perform as required. Worst case scenario? Oil-laden bilge water sent back out to sea, causing untold environmental harm.

Clean Oil

For oil companies, the rebound in price means it’s time to start re-opening rigs and getting back to business as usual. But when it comes to rigs that were abandoned mid-production with the thought that they’d be up and running “soon enough,” clogged hoses or dirty lines could mean the difference between a profitable quarter and money spent cleaning up an ecologic disaster. Best case scenario? Low cost and high speed. Goodway’s JCL-2030 Jetcleaner pneumatic hose cleaning gun is a good example: Using specially formulated foam projectiles which expand as they travel through fouled hoses, it’s often possible to clean lines in a single shot, saving a significant amount of time over traditional flushing methods and getting companies backup and running with less downtime.

Oil will rise again, and rigs must be ready to quickly meet new production quotas. Getting back in the game, however, means making sure that “fast” doesn’t mean “failure.”

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