Nigeria’s Department of Petroleum Resources (DPR) says it had novated the contract to the Drilling Contractor working on the re-entry of Ororo-1, a full month before the fire erupted on the rig on May 15, 2020.
The novation was made at the time of revocation order on the award of the Ororo marginal field on April 6, 2020.
Effectively, the Nigerian government is paying the contractor, bearing the cost of extinguishing the rampaging fire and in this particular instance, it has ordered that if need be, a relief well should be drilled.
A relief well, targeted at above or at the producing problem formation, is one of the most efficient ways to control a blowout.
Sarki Auwalu, director of DPR, specifically instructed that the contractor engage Boots & Coots Services, a Halliburton owned firm of well control specialists, to put out the fire.
Grace-1 HWU, a Hydraulic workover rig reportedly owned by Joeny Holdings, was contracted for the job of re-entry and completion by the Nigerian minnow Guarantee Petroleum.
The operations on Ororo-1, a highly pressured well located in Oil Mining Lease (OML) 95, in shallow water offshore Western Niger Delta, experienced a sudden rush of hydrocarbon fluids speeding up from over pressured reservoirs at depths deeper than 8,500 feet to the surface and forcing a blowout. The Blow Out Preventer (BOP) for the main well bore and the BOP for the annulus (the space between the pipe and the skin of the well), both failed. The reservoir pressure was 8,000 pounds per square inch (psi) and above, surface pressure was about 4,600psi as of the time of incident, according to field data.
The regulatory agency dismisses the claims of Guarantee Petroleum, that it engaged with DPR personnel before it took a Hydraulic workover rig to the conduct a re-entry and completion of a highly pressured well.
“If the rig was there, our people must know. You cannot mobilize any rig without informing the DPR Zonal office. You cannot even spud the well or start to drill without informing the DPR Zonal Office. You cannot have a workover without having your oil spill contingency activation documents with DPR so that in case anything happens, we will activate it. They all don’t have that”.
Novation is the process by which the original contract is extinguished and replaced with another, under which a third party takes up rights and obligations duplicating those of one of the parties to the original contract.
The DPR says it did not see the need to consult with either Guarantee Petroleum or its partner Owena Oil & Gas over the novation, as technically, they were no longer rightsholders to the well.
The Ororo field was awarded to both parties as a marginal field in 2003. The government revoked the award because the grantees had “failed to develop the field and bring it to full production before the expiration of the granted extension period which elapsed on April 30, 2019”, says the revocation letter.
Guarantee Petroleum has claimed that the rig was moved to site in October 2019 with the permission of the DPR and that the revocation order, made with immediate effect right in the middle of a well re-entry process, encouraged a sense of pandemonium which resulted in the fire incident on the Grace-1 HWU.
“Service providers became jittery when the announcement came”, the company lamented to Africa Oil+Gas Report.
The DPR disagrees. It contends that when it was conducting due diligence to determine the revocation, in March, the rig had not been moved to site. “By the time we implemented the revocation, the rig was onsite. And when that rig was onsite, we realized that technically that rig, and just to tell you that if they engaged us, we have to access the rig, the BOP and all that but they didn’t do that”, the agency says. “We know that that rig could not do what they wanted to do because of the history of that place”.
The DPR says that extant technical information on the well indicates that the hydraulic workover rig could not perform the service it was called up to do. “That was why they refused to contact DPR because they know that we would say no to that. We cannot allow that and so they refused to inform us. They are ware that revocation or no revocation, if they go with that rig, there is a potential that the well would collapse. There is that potential”.
In a letter it purportedly wrote to DPR on May 15, Guarantee Petroleum sought the regulator’s approval to use dispersants “and other needed materials “around the well and environs “to avoid loss of lives and further pollution of the communities affected”. Such a letter would suggest that Guarantee Petroleum was sure it was still in charge of operations.
The Regulatory agency denies receiving any such correspondence. “We have only two ways of receiving correspondences in DPR. It is either you bring it physically which we would stamp and give you a received copy, or you send it through [email protected] which also carries date and time. And as soon as you email it through [email protected] do you know what will happen? it will enter into our ERP and it will capture the subject and we will see it immediately”.
Source: Africa Oil + Gas Report