team 1 bp decision tree
TRANSCRIPT
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“Preventing Future Oil Spills” – A Decision Tree Approach
Goh Peng Yang Davy
Deepa Radhakrishnan
Corina Ilmaniar
Somnath Kansabanik
Daniel Ilteris
Soumyak Sen
Phei Yee Tan
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Agenda
• Overview of the disaster• Aftermath of the disaster• Events & Decisions leading to the disaster• Current Risk Analysis Procedure • Proposed Risk Analysis Procedure• Optimal Decision & Sensitivity Analysis • Conclusions
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Overview of the Disaster
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Aftermath of the Disaster
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• Largest marine spill in history• 11 casualties &17 more injuries• 3 months to plug the leak which released 4.9 million barrels of crude oil
into the ocean
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Basics of Well Drilling
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Without proper centralization 90% chance of hydrocarbon channeling
Fresh water
Shale
Salt water Hydrocarbon/Oil
If cement does not set, 90% chance of hydrocarbon channeling
• Centralizer design & cement chemistry are estimated prior to drilling
• If cement chemistry and centralizer design are improved after obtaining real-time drilling logs, the probability of desired cement setting improves from 60% to 95% & probability of good centralization improves from 55% to 95%
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Decisions & Events Leading to the Disaster
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• On April 19, Jesse Gagliano, the Halliburton cementing engineer, informed the BP engineer Brian Morel that compressive strength analysis (Cement Bond Log Test) for cement job has not been completed
• Decision to be made on Apr 19, 2011: Wait for 3 additional days for centralizers to
arrive? Wait for total 5 days for complete lab test
result?
BP did not listen to Halliburton’s recommendation to wait for more centralizers and Cement Bond Log (CBL) test results
Brian Morel wrote an email to colleague Brett Cocales, saying:
"Who cares, it's done, end of story, we'll probably be fine".
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Decisions & Events Leading to the Disaster
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BOP can prevent leak with 80% reliability
Failure of BOP will activate Gas Detection. Well Control success rate is 60%
Failure of Well Control leads to Emergency Response with 65% success rate
Small, Minor or Major Oil spill with 30%, 31% & 39% chances of occuring
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Current Risk Analysis Procedure
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Mitigation Plans:Risk Management Plan:
4)BOP pressure test will be done. BOP will help to prevent hydrocarbon channeling5)Gas Detection System will alert in case BOP of failure. Well Control can be done6)Emergency Response Plan in place to reduce severity of catastrophic incident
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Proposed Risk Analysis Procedure
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Risk Mitigation Procedure
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Complexity of the Decision
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Optimal Decision
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95.0% 90.25%
0 -7500000
TRUE Chance
-3000000 -14803857.01
90.0%
0
5.0% Hydrocarbon Channeling
0 -153577140.3
10.0%
-1,000,000
95.0% Decision
0 -14803857.01
TRUE Chance
-4500000 -21592521.17
10.0%
0
25.0% Hydrocarbon channeling detected
0 -649537290
90.0%
0
90.0% Chance
0 -166696822.5
75.0% 3.375%
-1250000 -5750000
5.0% Hydrocarbon Channeling
0 -150577140.3
10.0% 0.5%
-1000000 -5500000
Decision
-21592521.17
• Wait for Centralizers• Wait for Cement Bond Log
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Sensitivity Analysis
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Sensitivity Analysis
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98% Reliability!
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Sensitivity Analysis
• Further sensitivity analysis keeping BOP reliability at 95%• Probability of Emergency Response to control fire needs to improve by 20%
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Insights for Oil & Gas Industry
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• Opportunity to improve the current business decision framework:
From “gut feel” decision making to a more structured framework that “forces” the decision maker to consider all factors and quantify the risks/damages and rewards/profits (Expected Monetary Value) associated with the decisions
• Reduce NPT (Non-productive time)
Improve Reliability of BOP from 80% to 95%– Possible Action includes improving design of BOP, improving maintenance schedule
Improve success rate of Emergency Response to control fire from 65% to 85%– Possible actions include training for personnel, conducting fire-drill exercises, etc
• The framework is a good starting point for the industry to start collecting real data hence improving the accuracy of the probability set for each variable over time
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References
• BP’s Investigation Report (Accessible at http://www.bp.com/liveassets/bp_internet/globalbp/globalbp_uk_english/gom_response/STAGING/local_assets/downloads_pdfs/Deepwater_Horizon_Accident_Investigation_Report.pdf)
• US Govt Report on GOM Disaster: “REPORT REGARDING THE CAUSES OF THE APRIL 20, 2010 MACONDO WELL BLOWOUT” (Accessible at http://www.boemre.gov/pdfs/maps/DWHFINAL.pdf )
• http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill • http://techcrunch.com/2010/06/21/bp-brand-value/• http://www.deepwater.com/fw/main/BOP-Video-1079.html • http://www.c-spanvideo.org/program/295154-107• http://www.youtube.com/watch?v=xi2K_BCPUec • http://www.youtube.com/watch?v=hj_r8vs2vmU • http://www.youtube.com/watch?v=zE_uHq36DLU
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MERCI!
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