Liability in oil and gas: what happened in the case of Deepwater Horizon?

2011 ◽  
Vol 51 (2) ◽  
pp. 668
Author(s):  
Leanne McClurg

Disasters such as the explosion of the Deepwater Horizon oil rig and the consequential pollution in the Gulf of Mexico have heightened awareness surrounding liability for such events. It is an opportune time for all companies—whether owners, operators or contractors—to closely examine their contracting regimes to ensure their interests are protected to the maximum extent possible. It is commercial reality in all industries that parties negotiating contracts seek to limit their liability. Unique to the oil and gas industry, contracts for services usually contain reciprocal indemnities, often referred to as knock for knock clauses, where each party is responsible for loss or damage to its own people and property, regardless of the cause. Such clauses have the effect of altering the common law position where liability is usually based on the cause of any loss or damage. In this session the speaker discusses some tips and traps for drafting reciprocal indemnity clauses, and looks at how they have been interpreted by the courts. Consideration is given to how an incident like Deepwater Horizon would be treated if it occurred in Australia and an update on the US Senate Committee’s inquiry into the disaster is provided.

2003 ◽  
Vol 41 (1) ◽  
pp. 159
Author(s):  
Alicia K. Quesnel

Practitioners deal primarily with two different methods of interpretation in oil and gas cases: the strict method of interpretation and the liberal method of interpretation. However, in recent decisions such as Bank of Montreal v. Dynex Petroleum and Taylor v. Scurry-Rainbow Oil, the courts refused to apply the common law, instead upholding long-standing industry practices that could not be easily classified into proper legal categories. Following a review of the strict interpretation and liberal interpretation methodologies currently used in interpreting oil and gas cases, this article looks more closely at the method of interpretation used by the courts in Dynex and Taylor. This method of interpretation will be referred to as the challenging method of interpretation. The article discusses the key analytical aspects of the challenging method interpretation, and examines its possible impact on the existing methods of interpretation used in oil and gas cases. Finally, this article concludes with some thoughts about the implications of these cases on oil and gas law.


2021 ◽  
Author(s):  
Ning Lou ◽  
Ezra Wari ◽  
James Curry ◽  
Kevin McSweeney ◽  
Rick Curtis ◽  
...  

This research identifies key factors, or safety culture categories, that can be used to help describe the safety culture for the offshore oil and gas industry and develop a comprehensive offshore safety culture assessment toolkit for use by the US Gulf of Mexico (GoM) owners and operators. Detailed questionnaires from selected safety culture frameworks of different industries were collected and analyzed to identify important safety culture factors and key questions for assessment. Safety frameworks from different associations were investigated, including the Center for Offshore Safety (COS), Bureau of Safety and Environmental Enforcement (BSEE), and the National Transportation Safety Board (NTSB). The safety culture factors of each of these frameworks were generalized and analyzed. The frequency of the safety culture factors in each framework was analyzed to explore commonality. The literature review and analysis identified a list of common factors among safety culture frameworks.


2020 ◽  
Vol 72 (12) ◽  
pp. 34-37
Author(s):  
Demetra V. Collia ◽  
Roland L. Moreau

Introduction In the aftermath of the Deepwater Horizon oil spill, the oil and gas industry, regulators, and other stakeholders recognized the need for increased collaboration and data sharing to augment their ability to better identify safety risks and address them before an accident occurs. The SafeOCS program is one such collaboration between industry and government. It is a voluntary confidential reporting program that collects and analyzes data to advance safety in oil and gas operations on the Outer Continental Shelf (OCS). The US Bureau of Safety and Environmental Enforcement (BSEE) established the program with input from industry and then entered into an agreement with the US Bureau of Transportation Statistics (BTS) to develop, implement, and operate the program. As a principal statistical agency, BTS has considerable data-collection-and-analysis expertise with near-miss reporting systems for other industries and the statutory authority to protect the confidentiality of the reported information and the reporter’s identify. Source data submitted to BTS are not subject to subpoena, legal discovery, or Freedom of Information Act (FOIA) requests. Solving for the Gap Across industries, companies have long realized the benefits of collecting and analyzing data around safety and environmental events to identify risks and take actions to prevent reoccurrence. These activities are aided by industry associations that collect and share event information and develop recommended practices to improve performance. In high-reliability industries such as aviation and nuclear, it is common practice to report and share events among companies and for the regulators to identify hidden trends and create or update existing recommended practices, regulations, or other controls. The challenge for the offshore oil and gas industry is that industry associations and the regulator are typically limited to collecting data on agency-reportable incidents. With this limitation, other high-learning-value events or observed conditions could go unnoticed as a trend until a major event occurs. This lack of timely data represented an opportunity for the industry and the offshore regulator (BSEE) to collaborate on a means of gathering safety-event data that would allow for analysis and identification of trends, thereby enabling appropriate interventions to prevent major incidents and foster continuous improvement. The SafeOCS Industry Safety Data (ISD) program provides an effective process for capturing these trends by looking across a wider spectrum of events, including those with no consequences.


2004 ◽  
Vol 44 (1) ◽  
pp. 761
Author(s):  
S.K. Dharmananda ◽  
N.A. Kingsbury

Force majeure clauses are particularly relevant to at least two types of oil and gas agreements: operating agreements and long-term contracts. Each type of contract is characteristically exposed to calamitous events that can take many years to manifest. However, force majeure clauses in each type of contract need to reflect the commercial realities and bargain represented by each type of contract.This paper considers whether the types of force majeure clauses that are used in the Australian oil and gas industry would adequately excuse a party relying on them from performing their obligations under a contract in light of some very real 21st century concerns. The beginning of the 21st century has seen remarkable technological development and the creation of a global village where an isolated event in one part of the world can have a significant effect on the entire world. Therefore, the increased likelihood of a terrorist attack against significant infrastructure (eg. an offshore oil rig or gas pipeline) and the emergence of natural phenomena, particularly widespread viral outbreaks such as the SARS virus can have a devastating effect on industry globally, as is being seen in the airline industry. There is some doubt whether standard contract clauses will automatically treat such circumstances as force majeure events.The paper suggests that certain drafting conventions ought to be adopted to address 21st century concerns, and particularly to provide practical solutions for these issues.


2020 ◽  
Vol 52 (37) ◽  
pp. 4112-4134 ◽  
Author(s):  
Hung Quang Do ◽  
M. Ishaq Bhatti ◽  
Muhammad Shahbaz

Author(s):  
Ashish Khera ◽  
Rajesh Uprety ◽  
Bidyut B. Baniah

The responsibility for managing an asset safely, efficiently and to optimize productivity lies solely with the pipeline operators. To achieve these objectives, operators are implementing comprehensive pipeline integrity management programs. These programs may be driven by a country’s pipeline regulator or in many cases may be “self-directed” by the pipeline operator especially in countries where pipeline regulators do not exist. A critical aspect of an operator’s Integrity Management Plan (IMP) is to evaluate the history, limitations and the key threats for each pipeline and accordingly select the most appropriate integrity tool. The guidelines for assessing piggable lines has been well documented but until recently there was not much awareness for assessment of non-piggable pipelines. A lot of these non-piggable pipelines transverse through high consequence areas and usually minimal historic records are available for these lines. To add to the risk factor, usually these lines also lack any baseline assessment. The US regulators, that is Office of Pipeline Safety had recognized the need for establishment of codes and standards for integrity assessment of all pipelines more than a decade ago. This led to comprehensive mandatory rules, standards and codes for the US pipeline operators to follow regardless of the line being piggable or non-piggable. In India the story has been a bit different. In the past few years, our governing body for development of self-regulatory standards for the Indian oil and gas industry that is Oil Industry Safety Directorate (OISD) recognized a need for development of a standard specifically for integrity assessment of non-piggable pipelines. The standard was formalized and accepted by the Indian Ministry of Petroleum in September 2013 as OISD 233. OISD 233 standard is based on assessing the time dependent threats of External Corrosion (EC) and Internal Corrosion (IC) through applying the non-intrusive techniques of “Direct Assessment”. The four-step, iterative DA (ECDA, ICDA and SCCDA) process requires the integration of data from available line histories, multiple indirect field surveys, direct examination and the subsequent post assessment of the documented results. This paper presents the case study where the Indian pipeline operators took a self-initiative and implemented DA programs for prioritizing the integrity assessment of their most critical non-piggable pipelines even before the OISD 233 standard was established. The paper also looks into the relevance of the standard to the events and other case studies following the release of OISD 233.


Author(s):  
Andre Albert Sahetapy Engel ◽  
Rachmat Sudibjo ◽  
Muhammad Taufiq Fathaddin

<p>The decline in production from of a field is the common problem in the oil and gas industry. One of the causes of the decrease in production is the decline of reservoir pressure. Based on the analisis result, it was found that SNP field had a weak water drive. The most dominant drive of the field was fluid expansion. In order to reduce the problem, a reservoir pressure maintenance effort was required by injecting water. In this research, the effect of water injection to reservoir pressure and cumulative production was analyzed. From the evaluation result, it was found that the existing inejection performance using one injection well to Zones A and B was not optimum. Because, the recovery factor was predicted to 29.11% only.By activating the four injection wells, the recoverty factor could be increase to 31.43%.</p>


mBio ◽  
2021 ◽  
Vol 12 (2) ◽  
Author(s):  
Angelina G. Angelova ◽  
Barbara Berx ◽  
Eileen Bresnan ◽  
Samantha B. Joye ◽  
Andrew Free ◽  
...  

ABSTRACT Hydrocarbon-degrading bacteria naturally degrade and remove petroleum pollutants, yet baselines do not currently exist for these critical microorganisms in many regions where the oil and gas industry is active. Furthermore, understanding how a baseline community changes across the seasons and its potential to respond to an oil spill event are prerequisites for predicting their response to elevated hydrocarbon exposures. In this study, 16S rRNA gene-based profiling was used to assess the spatiotemporal variability of baseline bacterioplankton community composition in the Faroe-Shetland Channel (FSC), a deepwater sub-Arctic region where the oil and gas industry has been active for the last 40 years. Over a period of 2 years, we captured the diversity of the bacterioplankton community within distinct water masses (defined by their temperature and salinity) that have a distinct geographic origin (Atlantic or Nordic), depth, and direction of flow. We demonstrate that bacterioplankton communities were significantly different across water samples of contrasting origin and depth. Taxa of known hydrocarbon-degrading bacteria were observed at higher-than-anticipated abundances in water masses originating in the Nordic Seas, suggesting these organisms are sustained by an unconfirmed source of oil input in that region. In the event of an oil spill, our results suggest that the response of these organisms is severely hindered by the low temperatures and nutrient levels that are typical for the FSC. IMPORTANCE Oil spills at sea are one of the most disastrous anthropogenic pollution events, with the Deepwater Horizon spill providing a testament to how profoundly the health of marine ecosystems and the livelihood of its coastal inhabitants can be severely impacted by spilled oil. The fate of oil in the environment is largely dictated by the presence and activities of natural communities of oil-degrading bacteria. While a significant effort was made to monitor and track the microbial response and degradation of the oil in the water column in the wake of the Deepwater Horizon spill, the lack of baseline data on the microbiology of the Gulf of Mexico confounded scientists’ abilities to provide an accurate assessment of how the system responded relative to prespill conditions. This data gap highlights the need for long-term microbial ocean observatories in regions at high risk of oil spills. Here, we provide the first microbiological baseline established for a subarctic region experiencing high oil and gas industry activity, the northeast Atlantic, but with no apparent oil seepage or spillage. We also explore the presence, relative abundances, and seasonal dynamics of indigenous hydrocarbon-degrading communities. These data will advance the development of models to predict the behavior of such organisms in the event of a major oil spill in this region and potentially impact bioremediation strategies by enhancing the activities of these organisms in breaking down the oil.


Author(s):  
Christopher Klarmann

ABSTRACT Cyber threats to the oil and gas industry have been existent in one form or another for as long as computing and networking systems have utilized to increase the efficiency of production and transportation operations. The number of systems that are utilizing internet-connected technology to aid the industry has risen dramatically over the past 20 years, seeing use on exploration, management of production systems, Supervisory Control and Data Acquisition (SCADA), and supply chain management. As the number of available exploits and attacks against these systems increases over time, it is more necessary than ever to ensure that cybersecurity is in facility and vessel plans. Incorporating cybersecurity measures into the existing security framework will be critical to ensuring that malicious actors do not impact communities and the environment through destructive attacks upon production and transportation. This paper will provide a look at the impact cyberattacks may have on the safe production, storage, and transportation of oil, as well as provide insight as to what industry standards and legal proposals exist to ensure that industry partners are operating securely throughout the US.


2019 ◽  
Vol 59 (2) ◽  
pp. 546
Author(s):  
Peter Cox

Project delivery technology is changing and developing at a rapid rate, and Australia’s oil and gas industry could do a better job of embracing change and getting to the forefront of advanced digital technology applied to developing onshore gas resources – particularly to our vast undeveloped shale reserves. Our shale deposits are in remote parts of our country, so present significant challenges, especially in relation to geographical distance away from local and international markets. This paper will focus on the use of automation and standardisation in the engineering design process combined with project execution strategies to significantly reduce both schedule and cost in delivering surface infrastructure required to get our gas shale reserves to both domestic demand centres and export facilities. The traditional project delivery models that have served us well in the past need to be challenged and a new paradigm adopted. Standardisation of the compression and dehydration facilities in the US market has been developed over many years, resulting in efficient project delivery, and enabling reserves to be brought to market on a fast track basis. This paper will work through practices in the US and how they can be applied to Australia. Australian standards and industry practice defines how we design our gathering and pipeline networks. This paper will present a combination of construction strategies and automation of engineering design to optimise life cycle cost in remote regions where construction mobilisation and logistics is a significant factor combined with changing priorities as further reservoir data is obtained from exploration wells.


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