Latest Posts

Four of the world's largest oil companies, Exxon Mobil Corp, Royal Dutch Shell PLC and ConocoPhillips, are forming a joint venture to design, build and operate a rapid-response system to capture and contain up to 100,000 barrels of oil flowing 10,000 feet below the surface of the sea. This is a bid to regain the confidence of the White House after BP PLC's Deepwater Horizon disaster.

The system, consisting of several oil collection ships and an array of subsurface containment equipment, resembles the one developed by BP during three months of trial and error after the Deepwater Horizon exploded April 20. The companies will make an initial investment of $1 billion in the non-profit venture, which they are calling the Marine Well Containment Company. The containment system is expected to be ready within 18 months. The primary aim of the system will be to keep oil from gushing into the ocean in the event of a catastrophic blow-out.

Despite significant technological breakthroughs that led to the exploitation of oil and gas thousands trapped of feet below sea level, the industry was caught without an effective response to the Deepwater Horizon oil spill. On July 12, U.S. authorities reimposed a deepwater drilling moratorium, which was opposed by the oil industry but which the government says is necessary to ensure safe drilling practices.

The oil giants' joint-venture is modeled after the Marine Spill Response Corporation, a national oil spill response company funded by the oil and shipping industry in 1990, after the Exxon Valdez oil spill prompted a major overhaul in petroleum pollution legislation.

First, responders would install a sealing cap that would have the ability to connect to the diverse systems of valves and casings in use in the deepwater Gulf. That cap would keep oil from escaping into the ocean, redirecting it towards flexible pipes or to a fixed riser located at an unspecified distance from the broken well. The pipes would connect it to ships modified to process large quantities of crude. One of the advantages of the system is that only two ships would be required to capture up to 100,000 barrels of oil, which would be offloaded onto shuttle tankers. In the case of a hurricane, the fleet would rapidly disconnect and let the oil flow. (WSJ, 7/21/2010)