US Halts Drilling on Gulf Wells With Flawed Bolts
By Joe Carroll, Tim Catts and David Wethe
Deep-water oil exploration has been disrupted from the Gulf of Mexico to Brazil by the discovery of faulty bolts used in safety equipment less than three years after the worst-ever U.S. maritime crude spill.
Energy explorers such as Chevron Corp (CVX)., Royal Dutch Shell Plc and Transocean Ltd (RIG). said they have been directed by U.S. regulators to suspend work aboard rigs that employ General Electric Co (GE). devices connecting drilling tubes to safety gear and the seafloor. The equipment must be retrieved so defective bolts can be replaced, the U.S. Bureau of Safety and Environmental Enforcement said in an alert issued on Jan. 29.
Installing new bolts and resuming drilling may take as long as three weeks for each rig, Credit Suisse Group AG said. For oil companies paying upwards of $600,000 a day to rent the most- sophisticated deep-water vessels and another $500,000 a day to staff and supply each of them, the delays may be significant, said Craig Pirrong, director of the University of Houston’s Global Energy Management Institute.
“This certainly will be costly for the industry,” Pirrong said in a telephone interview yesterday. “This is a result of increasing government scrutiny of deep-water activities. The question is, will the increased costs be so onerous that they discourage some companies” from searching the deep oceans for crude.
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