PDVSA-hired gas rig sinks

pearl

Aw shit.

Aban Offshore Ltd., India’s largest private-sector offshore drilling contractor, lost the Aban Pearl drill rig off the coast of Venezuela last night, the country’s oil minister and president said. Aban didn’t have website information about the supposed wreck on the media or Aban Pearl pages of its website.

The rig tipped 10 degrees at 11:23 p.m. because of a failure in its flotation system, Venezuela’s oil ministry said on its Web site. An ensuing inspection found a “massive” water leak in the floating columns that hold up the drilling platforms, according to the statement.

The rig a week ago completed the second gas successful gas well in Petroleos de Venezuela SA (PDVSA) Dragon field in the Caribbean Sea.

Chavez tweet

We like transparency. We don't like shipwrecks.


The rig tilted and sank starting about 11:30 last night, Energy and Oil Minister Rafael Ramirez said today on state television. Quotes from the channel’s website:

“The contingency plan was exactly complied with. There are no workers affected. Everyone was successfully evacuated in accord with our security plans. All workers are safe in the Neptune drill ship.”

“We have the well stabilized and there is no risk of dry gas leaking.”

Caracas business newspaper El Mundo quoted him saying:

“Fortunately the well is without any risk of any kind for our environment.”

“We’re in contact with the company that’s owner of the rig, we’re in contact with them, the experts are now analyzing the causes of this regrettable incident.”

“We’ve relied on the support of the Bolivarian Armed Forces, with a frigate and support vessels in the zone.”

Ultimas Noticias also had him saying:

“At 1:30, the captain and his two assistants evacuated because the inclination of the platform had reached 45 degrees. Finally, at 2:20, the sinking took place. At this time, there is no sign to indicate that there was a platform there.”

“[Inspection company Bureau Veritas] said the rig was in optimal conditions, which is why we need to be very careful in the investigation.”

PDVSA planned to use the Pearl to drill 8 wells in the Dragon field and 8 in the Patao field, and another 20 wells in the Mejillones and Rio Caribe fields. The four fields make up the Mariscal Sucre project, a long-delayed effort to extract 1.2 billion cubic feet a day of natural gas to boost domestic supplies and feed a gas liquefaction plant in the city of Guiria.

Hopefully Ramirez is right that the well was secured — which would be better than the sinking a couple weeks ago of the Deepwater Horizon in the Gulf of Mexico. That sinking led to the worst oil spill in at least 30 years in the Gulf, and is likely to become the biggest maritime oil spill ever. Still, there will be some pollution from any shipwreck in the gorgeous waters of the Caribbean, as the Pearl is capable of carrying more than 8,000 barrels of fuel oil and more than 7,000 barrels of drill water. Venezuelan environmental authorities defer to Ramirez’s ministry on all topics related to oil and natural gas.

The bigger issue is what this means for the Mariscal Sucre project. The offshore fields were discovered and largely explored in the early 1990s, at which time they were known as the Christopher Columbus project. In the time it has taken for PDVSA to develop the field, amid changing partners and development plans, neighboring Trinidad has discovered and developed the hemisphere’s biggest liquefied natural gas (LNG) industry.

Other recent troubles in Mariscal Sucre have included:

  • The Neptune Discoverer (now the Petro Saudi Discoverer) drill ship was hired in 2008. It has completed one successful well in two years, and has spent months under repairs. Typical drilling time for a Trinidad offshore well is 30 to 45 days. PDVSA and the ship’s owner, Singapore-based Jasper Investments, have feuded over payments.
  • PDVSA had a semi-secret bid round for potential partners to help develop Mariscal Sucre. Nobody took part, Reuters reported at the time. An industry source told me the bid round’s rules were changed as late as two days before bids were due.
  • The pipeline to carry gas from Mariscal Sucre to Guiria was among the projects frozen when oil prices fell in 2008. It is now behind schedule.

The Pearl was working for PDVSA under a $513,750 a day contract, PDVSA said in the Feb. 8 edition of its Avance Socialista magazine. The contract was for five years, Aban said in a Sept. 16, 2008 stock exchange filing, according to its website.

5 thoughts on “PDVSA-hired gas rig sinks

  1. Pingback: PDVSA-hired gas rig sinks « Setty's notebook

  2. fernando concepcion

    As everything else in PDVSA the contract for this unit is in the name of a Singapore corp Petromarine that rents it from Aban India, Twitter has lots of info about it, @fpalomoc has lots of information and seems legitimate good luck., and for sure something smells bad with this contracts.

    1. sapitosetty Post author

      Thanks for the tips. I don’t know if there’s any scandal here, but it’s clear that PDVSA gets low-quality equipment for high prices, in part because most companies don’t want to put their machinery at risk by leasing it to PDVSA. I heard a couple months ago that Schlumberger had equipment stuck in Venezuela that it wanted to use in Mexico, but couldn’t get out of the country. I think that sort of problem is the most likely cause of PDVSA overpaying.

  3. Steve

    There are differences between (a) the Aban and Transocean rigs themselves, which can be compared using online information, and (b) the included services, which we don’t know. But as a rough comparison:

    Aban Pearl – constructed in 1977 (22 years old),
    working in 500 feet of water, rated to 1250 ft
    drilling to a depth of less than 8000 ft / capable of 25,000 ft
    Derrick capacity: 1,000,000 lbs
    Drawworks: 3,000 HP
    Day rate: published reports: $388,000 per day

    http://blogs.wsj.com/indiarealtime/2010/05/14/aban-offshores-rig-sinks-takes-stock-with-it/

    Rumors were that PDVSA was actually paying more, I was told $535K, but have no proof.

    http://www.rigzone.com/data/rig_detail.asp?rig_id=101

    For comparison:

    Transocean Deepwater Horizon – built in 2001 (9 years old)
    Operating in 5000 ft of water / rated to 10,000
    Drilling to 18,000 ft / capable of 30,000 ft
    Derrick: Capacity: 2,000,000 lbs
    Drawworks: Hitec 6,900 HP
    Day rate: less than $500,000 per day

    http://rigzone.com/data/rig_detail.asp?rig_id=153

    http://www.rigzone.com/news/article.asp?a_id=92866

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