A Review of the Nigerian Energy Industry

Hercules rig fire ‘decreases’

Hercules 265 225 July 2013, News Wires – A blaze onboard a Hercules-owned jack-up rig in the Gulf of Mexico has been significantly reduced following a gas well blowout earlier this week.

The flow of natural gas from the ruptured well in South Timbalier Block 220 in the Gulf of Mexico has also stopped after the well “bridged over”, a statement from the US Bureau of Safety and Environmental Enforcement, BSEE, said Thursday.

“The fire has decreased to a small flame fueled by residual gas at the top of the well,” the BSEE said. “Bridging is a well condition where small pieces of sediment and sand flow into the well path and restrict and ultimately stop the flow.”

The remaining small fire is being fueled by residual gas at the top of the well, BSEE said.
A fire has been raging on the Hercules 265 cantilever jack-up rig 55 miles off Louisiana since Tuesday evening following a loss of well control incident which was reported by operator Walter Oil & Gas that morning.

Shares, initially battered by the incident, were trading up more than 5% in New York in the late morning after news of the diminished blaze.

Investment bank Tudor Pickering Holt noted that the market was “justifiably anxious” and the fire was an “unfortunate incident” but maintained a strong outlook and its “Buy” rating for the company in a tight Gulf of Mexico market.

It estimates the incident will represent a 5% hit to 2014 EBITA if the rig is a total loss, as is apparently expected.

The rig has already suffered significant damage as a result of the blaze with BSEE saying earlier that the derrick and drill floor structure “has collapsed over the rig”. A light sheen has also been spotted on the water but has been dissipating quickly.

BSEE said Wednesday night that Walter Energy was expected to submit a relief well permit shortly.
“BSEE and Coast Guard will continue overseeing response efforts until the event has come to a complete and safe resolution which includes securing the well,” the agency added.

A total of 44 people were evacuated from the rig after the blowout was reported and well before the fire erupted.

Earlier on Thursday BSEE had said it was expecting Walter to submit a plan for the drilling of a relief well in an effort to halt the leak and fire. Walter has hired Wild Well Control to help regain control of the gas well.

The bureau also said a water curtain is being applied by a fire-fighting vessel, not intended to extinguish the blaze, but “to provide heat protection to the rig”.

Hercules said on Wednesday its inspection revealed debris near the well site. US regulators and officials of Walter and Hercules are continuing to assess any potential environmental damage, Hercules said.

Hercules also said it has contracted an outside environmental expert to monitor currents, wind direction and wave height “for the potential trajectory of any conceivable environmental spill”.

– Upstream

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