Remember Where the Offshore Rigs Are and What They Can Take?

This is the GSF High Island III, damaged last year.

Under the fold is a discussion we had last year with our friends at KAC/UCF (a site we'll probably be seeing a lot of if trends continue--and here is a link to their "Hurricane Impacts on Gulf of Mexico Oil Production" (.pdf warning)). The discussion was regarding the structural standards to which offshore rigs are built and their wind tolerances...interesting stuff.

Remember where the oil fields and the rigs are? They are here:

From one of our insiders, here's a couple of pictures of damaged rigs here (GSF Adriatic VII) and here (GSF High Island III). The insider reminded us that:

You might also point out that in order to beach one of these rigs, ALL THREE of their 150' legs must be broken off by the storm. So to fix these rigs, they would require 3 new legs, a new derrick, a new block and draworks, repair of everything is most likely that they will be scrapped or at a minimum, stripped to the hull and rebuilt. Rebuild will take longer than building a new rig because of inspections and removal of damaged stuff, but with material costs high, it may be viable.
From our KAC/UCF friends:
Thought I could shed a little light on design criteria for the offshore facilities.

As you pointed out you have to balance the design life of the structure, the raw replacement cost of the structure, and the cost of not having the production from the structure. Lets look at five sites in the GOMEX (map attached here).

All wind speeds are in knots, two minute average at 10meters above the surface, and are based on an analysis of hurricane activity since 1851 (see Watson and Johnson, "Hurricane Loss Models, an opportunity to improve the state of the art", Bulletin of the American Meteorological Society, Nov. 2004). Assuming a 10 year design life, what conditions should we expect? Here are the 10 year, 95% prediction limit values (in other words, in any given 10 year period there is only a 5% chance this value will be exceeded) for these sites:

10 Year

Site 1


Site 2


Site 3


Site 4


Site 5


Most engineers use a 100 year design criteria for major structures even if the design life is substantially less than that. Our comparable 100 year values are:

100 Year

Site 1


Site 2


Site 3


Site 4


Site 5


The 100 year values used in the GOMEX are a bit lower than this because most ocean engineering firms base their analyses on data since 1900, and missed the period of intense activity in the late 1800's.

It is important to keep in mind that very few sites actually exceeded a 100 year design event for Katrina or Rita. However, even if a structure is a 100 year design on commissioning day, after a couple years bathing

in warm salt air and the normal wear and tear of use it probably isn't anywhere near that level in reality, even with a PM program.

So how hard is it to build a better structure? Harder than you might think. This table shows the relative wind load and relative stress (which includes vibration modes) between the minimum wind speed for each Saffir Simpson Category:


Min Wind

Wind Load






















In Saffir/Simpson terms, most designs are for a Cat 3. If you wanted to build something to withstand a Cat 5, you would have to build it roughly three times stronger - a pretty tough thing to do without totally blowing out the economics of the structures. These are wind loads - designing for wave loads for an anchored structure get to be nightmarish for extreme events. A big air gap for waves means a big surface area for wind loads. The uplift forces, differential stress from waves coming from different directions (which happens inside hurricanes), combined with wind loads, makes designs above Cat 3 problematic.

The ultimate question is, do you pay some large amount up front in your design, or do you roll the dice and hope your less well designed structure is lucky? Most engineers try to split the difference and protect against most events, and hope the big ones don't show up during their watch.

While watching The Secret Life of Words, a question came to me with regard to oil rigs. It will likely be considered naive by people in the know but here goes: in storm-prone locations, wouldn't it make sense to build an underwater rig some 50 - 100 feet under the surface and just have a lightweight terminal floating above it? I know, the environment down there is more aggressive but also much more stable than the layers immediately above and below sea surface. Has this ever been considered?
I am not an engineer and cannot comment on the costs/benefits of various approaches, but I think there may be something in your idea because it resembles in some ways the strategy that sailing ships have used for five hundred years to survive hurricanes. When the winds go over a hundred knots your masts will go, and you have to cut away the rigging, but so long as your ballasted hull is reasonably water tight (and you do not capsize) you can survive most hurricanes--provided you have plenty of down-wind sea room and do not run aground. (Smaller sailboats, up to about a hundred feet long, can and have been designed to survive a capsize, but I doubt that this approach would be feasible for an oil rig.)

In other words, minimize the amount that is wrecked in a hurricane and have the capability of quickly putting up jury rigs after the wind stops howling.

BTW, Columbus's ships did not sail very well, but they were quite sea worthy and had probably a better than fifty-fifty chance of surviving a Category 3 hurricane and some chance even in a Cat 4 or if caught in the fringes of a Cat 5.

Too bad there is no feasible way to allow an oil rig to heel over, as sailboats do to minimize the damage from extreme wind gusts.

No, its not naive. Just technically and commercially very, very difficult. Why do it? - Ok a suface vessel is prone to storms, storms and waves that can occur as 1 in 50 years, 1 in 100 years and even 1 in 1000 years.

If you submerge a vessel, you have a whole bunch of other issues. Air, Air purity, Water Incursion, Pressure, etc etc. All of these require a new set of engineering solutions, exacting engineering standards, power generation, backup systems , backed up by more back up systems etc.

Why do it?. No point: law of diminishing returns and with increasing orders of complexity

Like the man says, it is cheaper to build a rig that can withstand a Cat 3, and hope a Cat 5 does not happen.

You must also perform a cost - benefit analysis: Cost of a complex new-build rig (eg Thunderhorse) compared with the benefit of oil in dollars recovered from the field.

As steel, yard costs, manpower costs all increase and as the cost of new deepwater rigs increases, sub sea rigs would be an untried and even more costly experiment.

The industry is faced with quite a few crunch points. Sure, oil is coming in at 70+, but the costs of sourcing rigs, people and essential material is keeping pace.

Finding and lifting costs for operators is becoming a serious issue. Projects are slowing, being delayed or subject to cost spiralling.

The whole industry just got caught on the hop.

Industry outsiders do not realise just how pared down the industry became between 1986 and 2004. The years of cheap oil almost killed off the oil industry. Few new built rigs, far too few deep water semis and drillships, Land rigs rusting in fields, Semis and jack ups cold stacked, oil industry personnel being shed at every opportunity.

We are ALL paying for it now.

All sections of the industry are on the critical list:

Pipelines: Who Would spend millions on pipeline maintainance with oil at 15 US / bbl? More than your jobs worth.

Refineries: Most were never close to capacity during this period and building a new one was fraught with exacting emissions and safety standards.

Rigs: Why build new ones when existing rigs were chartered at or below operating costs?

People: Why get up to your eyes in debt studying Geology, Geophys, Pet Eng when chances of secure employment were next to zero? There is a whole generation of missing specialists. In 2002, the US graduated 430 petroleum geologists and 43 000 lawyers. (Speech at Houston Oil Show IIRC)

And the worse is yet to come: There is a whole generation of oilfield specialists about to hit retirement.

This will impact every level. From rig electricians who joined a platform as a boy and know the platform intimately, to Exploration and Drilling Managers.
Even getting to work may be problematic: Chopper pilots and service crews have the same age profile.

The skills gap will worsen before it gets better. And who will join if we all know that we are at peak....

Watch out for Zimmer frame access on the new builds...

The problem isn't that the US industry shed skill staff, its that we didn't force a conservation program upon ourselves when we had the opportunity.  That's what we're paying for.
But now we need to find the stuff and its not there and we dont have the staff.

You are right though. A lack of Conservation is probably the biggest mistake in the history of western civilisation. Assuming that there are historians in a thousand years time, this is what they will nail us on.

Pity we couldnt see it coming when oil was 15 US a barrel...

Some people did see it coming, even when oil was a few dollars per barrel. They were universally ignored by those in power.
There has been some design work for deep water installations which are located on the sea bed and constructed and operated with robots. My area of expertise is onshore US landwork, so I know very little about the progress in this area of technology, but perhaps someone who reads this blog can enlighten me.
Hello Prof. Goose,

Big thxs for these photos and info--mind-boggling what Mama Nature can do!  No wonder that so much of the GoM is still not producing.  If Katrinas and Ritas are predicted to hit with any regularity in the next ten years-- my bet is that the Ins Cos. that underwrite Big Oil's offshore efforts will conclude that it is not worth offering coverage.

Bob Shaw in Phx,Az  Are Humans Smarter than Yeast?

Not to mention that AFAIK, the vast majority of glass-sheathed skyscrapers (curtain wall buildings) are designed for a maximum wind load of 100 mph and whatever psi/lb.sq.ft. that works out to. Imagine if you will the mess that could be Houston or any major coastal city with a large concentration of said buildings. Speaking of insurance companies saying- "heh, wait a minute here."
Wow, that is quite shocking. At least we are progressing with production of alternative fuels. Ethanol is growing rapidly but will it meet demands? Highly unlikely suprisingly it is said when mandates of 7.5 billion gallons of ethanol are met, it will only replace one-half of one percent of US oil consumption. Here is a nice list though tracking which companies lead in ethanol production...

If most have you been following the stock market, Pacific Ethanol is only to produce a small 35 million gallon plant, and it has been in the center of attention the whole time during this "Bubble." ADM is the only one holding up its weight.

As discussed previously on this-here forum, ethanol is in all probability a red herring -- since it will consume almost as many BTUs in NatGas, Coal, Diesel, etc., if not more BTUs, than you get out of the process.

If we were to undertake a crash program to get out of the fossil fuel bizniss,

  • Conserve; or to paraphrase Westexas, ELP!
  • Electrify; thank you Alan
  • Install wind, solar, wave power
  • Build nuke plants.
  • Attempt an orderly reduction in our population
This should be our logical response to the dual threats of fossil depletion and global climate change.
I once read an article comparing Chinese rockets with NASA rockets.  If I remember correctly, a chinese rocket will get your commercial satellite into orbit 90% of the time.  NASA has a 99.8% success rate (this is rockets not shuttles).  THe difference in cost for the additional 9.8% security: 10 fold!  The point of the article was that more and more companies were taking the risk and sending satellites up with the Chinese and taking out an insurance policy against rocket malfunction. Others were even paying for two satellites and booking two launches with the chinese (one satellite is redundant) bc/ the cost of two satellites and two launches in china was sometimes cheaper than one satellite and one launch with NASA.  It obviously doesn't make much sense to build really tough rigs for the GOM.  I wonder if even the looser definition of a 100 year structure is the best route economically.  Might it make more sense to build several even cheaper ones and just accept that your going to lose one or two a decade?
Or it might just turn out that you get half a dozen 100 year storms a decade these days, and that it really isn't economically viable to extract oil from the GOM.
"Or it might just turn out that you get half a dozen 100 year storms a decade these days, and that it really isn't economically viable to extract oil from the GOM"

Note the mass exodus of drilling rigs out of the GOM for the Middle East.

Also, this same argument applies to real estate along the coast, all the way from South Texas to Maine, as insurance companies raise premiums and deductibles and pull or pull out completely.

The comparison of odds vs cost got me to thinking about housing construction in hurricane areas. One thing to remember about housing is that hurricanes are as a rule going to be stronger at sea than over land, hence the higher probabilities of damage for oil rigs.

Florida, as I remember from building there some years ago, has fairly strict residential construction codes because of wind risk. However, the category of the storm is less important to insurers than the percentage of risk that the house will fall into a zone of high enough wind to exceed the structural criteria. With a cat 5 storm with 150mph winds around the eye at landfall, the odds are pretty good that a house in the larger storm swath will not have to tolerate more than a fraction of this wind.

I remember some carpenters sneering at the hurricane tie-downs we put on the trussed of houses with the remark that this wouldn't prevent a good-sized storm from ripping off the roof. It would prevent the damage, however, in the much larger odds category that the house would likely encounter.

It obviously doesn't take many instances of these actuarial odds being violated to make insurers back off.

you hit the nail on the head.

A regular annual CAT 5 event would seriously damage any operators desire to continue operations in the GOM.

So, either sit there and take it, or move your assets to calmer waters such as the KSA, West Africa. Especially when the ROCE is good.

Here's a nice ultra-highres wallpaper of where those calmer waters are
I suspect if that were that case, instead of abandoning the GOM, you'd end up with either government owned rigs or a new government backed insurance for rigs. It wouldn't make sense but these types of government programs rarely do.
Government Owned Offshore Rigs..

Don't forget, this is the Government that's supposed to be small enough to 'drown in a bathtub'..  Careful what you wish for, right?

Why drown it in a bath tub, when you can drown it in the GOM instead?

Thank you for saying that out loud.
There be unspoken elephants here.

Hi Prof. Goose,

Whatever happened to this site?

Seems it's not updated anymore.


I heartily recommend The Weather Underground,, for hurricane information, both Atlantic and Pacific (typhoons).

On all named tropical storms, Weather Underground has NOGAPS and the top four other computer modelings for five-day track predictions, previous history of the storm including both wind speed and track, landfall probabilities for different specific cities AND unnamed latitude/longitude combinations, discussions, and two blogs.

Plus, for general weather, Weather Underground is FAR better than The Weather Channel's website as far as international weather is concerned, especially in "Third World" countries.

AFAIK, it seems like they're making people pay for the oil industry stuff now.  I have an email in to them...we'll see.
I'm watching John Hofmeister on CSPAN right now. Original broadcast(live) was from Tuesday. This is rare. Anybody else see this? These conferences happen all the time. But now they are getting covered.
There is a great Australian TV documentary about peak oil available on the web at

It has interviews with Hirsch, Campbell and others. Highly recommended as an depth look at peak oil. You'll need Flash.

Thanks for this link. I've only watched first 5 minutes. Going back now. Excellent. Digital video quality on Flash is not so good. But production of actual "film" is excellent.

The interviews at Houston gas station are great. Completely real. I can assure you that the views expressed by these 20-something idiots are shared by pretty much most people in the US. Except me, Twilight, and Step Back. And Prodigal Son. I'm pretty sure the guy in the bandana is Matt Savinar.

No that was a goof. I meant most TODers. I actually wrote a much longer response to you, alan. It'll be on my blog tomorrow. Thanks again. Especially the Mad Max opening. Classic.

Great isn't it? There are also in depth interviews with Dr. Colin Campbell, Dr. Robert Hirsch, Dr. Peter Jackson (CERA) and Dr. Sadad Al Husseini. Pass it on.
Believe me, I'm passin'it. But not before I take a little toke myself. You're good in my book, Brother.
Look forward to your reply, Oil CEO. I don't think we can talk about the oil price without factoring in the (potential) demand side. And, of course, the 'market' is the standard cop out used by economists when it comes to any kind of finite resource. There shouldn't be shortages post peak but the cornucopians just don't have a feel for the scale on which the oil industry operates and our thirst for oil.

I've got a lot of respect for the oil industry. They were and are really good at finding and developing oil - and they've found it. If they found another Ghawar tomorrow, we would drain in in 3-4 years flat.

I live in England, by the way. My wife uses the car to drive for work and is buying a tank full (40 litres) of gas a week at $1.60 a litre! Lucky we've got two incomes.

Alan, UK average is now $1.80 per litre ($6.82 per US gallon) as calculated here.
Thanks for the correction. I was working from memory and my FX rate was off.
I totally agree with much of what you say. I'm trying to move away from responding here though. Throw me an email. I'm trying to set up a slightly different thing. Same basic format. Just better graphics and a bit crazier.

For now there's Oil Drum Canada. And it is already set up. I'm hoping for mass migration. Canadians are like Americans, but way smarter and ten times as "cool."

There are three things. Demand, Supply, and Price. Four Things. Add Balance. One of my first points ever on TOD covered this. Balance. I'm quite embarrassed by that post, yet interestingly will still stick with it.

I run a graph here on "supply." It is basically the same one Stuart runs except is it better. We call it production, but everybody who knows anything understands it is demand. Dave's pretty much the only one that won't agree. And that's fine. With me. I'll back Dave any day of the week. There are other times when I will need Dave's help.

Yeah, I take that back. This is really first rate. The section with Colin Campbell where they are mixing views of his computer screen with 3-D Flash images of individual production  profiles is super.

Khebab? If you and I collaborate, could we best this? I've got a  Hollywood digital guy who can consult us on any issue that we would be concerned with. I'll email you soon.

See how honest the head of Noble is? This guy is not fucking around. Does anyone need a second opinion? He is sleeping well mosts nights because he knows he is telling the truth. The nights when he doesn't, it's probably because he knows there are some people that don't GET IT! Hello?
Tonight Australian 60 Minutes had a 14 minute show on peak oil (after one on cryogenics and the singer Pink!). Interviewed local ALP (a la Democrat) pollie Andrew McNamara (ASPO Aust patron) who thinks peak will be in 2015 and Jeremy Leggett whose views are well known. On the other side they interviewed 2 oil men who have small finds (Roc Oil in the Perth basin is only 14 mill barrels) who use "the stone age didnt end..." Reg Nrelson from Beach Resources thinks we have sleep-walked into a problem but at $70 we will find a lot more oil in Australia. Transcript not up yet.
But I guess part of what I'm trying to say is that CEO's still have job to play. That is what they get payed for. So we absolutely must understand how to read between the pipelines.
A few months back Bodman announced that around 255.000 b/d of production capacity had been lost forever. Does anybody know if this is still the case? Or were these just preliminary and pessimistic figures?

What is also interesting to follow is the new subsea pumps that BP has installed at the king oil field in the Gulf of Mexico this year. Good development to keep the damage in check in case of potential hurricanes.

From the bbc: Chad orders foreign oil firms out

"Chad has ordered two major foreign oil firms to leave the country on Sunday in a row over taxes."

How much does Chad produce and how much will this affect short term production?

They didn't chase Exxon Mobile out.  Come to think of it when Venezuala chased out Agip and Shell, etc. they didn't chase Exxon Mobile out either.
Looks like offshore oil rigs will be spared if the TAOS model is correct:

(click for TAOS model details)

Wind is a very important factor but the real culprit is the accelerations due to heave, roll, and yaw. The acceleration to be applied to topside equipment vary from company to company since a standard is really not available. Heave alone can cause dead weight to increase two to three times. Spars resist heave very well due to the way the subsea hull is designed whereas TLP's such as Thunderhorse are less stable. Chevron's Typhon capsized. FPSO's can unhook and make a run for it.