Mr. Erik Milito - The House Committee on Natural Resources ...

48 API STANDARD 65-2
A.7 Studies of Annular Flows in Russia
A study by Krylov [34] reports an analysis of data on monitoring annulus pressures (AP) of wells at the Karachaganak
gas condensate field. Development drilling began in 1985. <strong>The</strong> analysis showed that AP is found in wells regardless
of their category—operating or shut-in. <strong>The</strong> percentage ratio of wells with AP to the total stock was calculated for both
well categories for the purpose of studying the dynamics of wells with AP. <strong>The</strong> data show an increase of the
percentage of operating and shut-in wells with AP from 45 % and 1 % in 1993 to 56 % and 33 % in 2000, respectively.
Assumptions about the causes for the increase of wells with AP are given in the study report.
A.8 LWC Insurance Database Studies
Studies by Adams [35] , Adams and Young [36] , and Jackson [37] (Willis Ltd.) provide information that helps explain
some of the causes, cause effects, and costs of LWC incidents. Adams states that “about 65 % of all blowouts are
UGBOs (underground blowouts).” and “Flows originating behind casing after cementing are perhaps the second most
common UGBO cause.” Adams and Young report the following.
— “UGBOs occur about 1.5 to 2 times more frequently than surface blowouts. Cumulative costs are believed to far
exceed that for surface blowouts.”
— “A common flowpath is a poorly cemented casing-openhole annulus.”
— “<strong>The</strong> danger associated with this flowpath (poorly cemented annulus) is the circumvention of the primary wellcontrol
hydraulic system of the hole, casing and BOPs.”
Adams and Young cited Willis Energy Loss Database [37] analytical reports for the costs of 1,224 LWC incidents all
with financial loss claims greater than one million U.S. dollars. <strong>The</strong> well loss incidents include blowouts (~90 % of
total), mechanical failure, stuck drill pipe, fire/lighting/explosion, heavy weather, design/workmanship, collisions and
others.
Table A.7 from Adams and Young’s World Oil article [36] shows LWC incident costs by the status of the wells. OEE in
the table means operator’s extra expense. <strong>The</strong> intent of the table is to identify where more focus should be placed
relative to blowout prevention measures in the future. Drilling operations (includes cementing) has the highest
number of incidents at 668 out of the total of 1,224.
Table A.7—Well Status at Time of the Incident
Status of well Incidents OEE actual US$
Average OEE
actual US$
Abandoned 3 45,383,105 15,127,702
Completion 17 106,722,607 6,277,800
Drilling 668 4,396,562,496 6,581,680
Plugging 3 11,165,400 3,721,800
Producing 82 1,045,737,073 12,752,891
Shut In 14 134,887,062 9,634,790
Workover 42 319,808,465 7,614,487
(Unknown) 393 2,029,815,203 5,164,924
Other 2 8,100,000 4,050,000
Total 1224 8,098,181,411 6,616,161