Appendix C - BP Development of Riserless Drilling

Following severe and expensive drilling problems experienced by BP in 2003 at the West Azeri template in the South Caspian (Refs. 1 to 3), a decision was taken to develop a system of riserless drilling in order to avoid such problems in the future. The company AGR Subsea developed a Tophole Drilling Package names Riserless Mud recovery System [RMR] which enables drilling the tophole section using weighted inhibited drilling mud, leading to improved hole stability, reduced wash outs, improved well control both with regard to shallow gas and shallow water flows [SWF]. A field trial was conducted in December 2004 following the establishment of a Joint Industry Project [JIP] was established funded by the Norwegian Research Council, Statoil-Hydro and AGR in order to qualify the RMR technology for use in up to 450 m water depths. The RMR system was used on 15 wells at the BP West Azeri problem site (see previous) and in Deepwater Gunashli and Shah Deniz in the South Caspian. By mid-2007, 28 wells had been drilled on BP projects in the South Caspian using this technique, as well as at Sakhalin offshore Russia, specifically to avoid potential problems related to geohazards. By 2007, Shell E&P and the BP America Production Company had joined the original Demo 2000 JIP, with the specific aim to develop, manufacture and perform a field trial of an RMR system for use in 5000 ft. of water depth in the GOM (see Refs 5 to 8). Subsequently a large-scale field trial was conducted from a deepwater semisubmersible offshore Sabah, Malaysia, in September 2008. A joint industry group comprising AGR Subsea, BP America, Shell and the Norwegian Research DEMO 2000 [the original RMR JIP] program and supported by Petronas undertook this work. The group set out to advance subsea mud return technology from its established commercial market of shallow-water applications, 1,800 ft (549 m) or less, to deepwater depths and drilling requirements. Novel equipment and deployment methods were designed, developed, delivered, tested and proven on a demanding schedule. The shallow water (< 450 m) version of RMR has been used commercially since 2003 on more than 100 wells worldwide. The most common reasons for using the system include: To maintain stability of shallow formations by allowing economic use of an inhibited water-base drilling fluid, which is returned to surface, treated and re-used. To control shallow water and gas by applying a quality weighted mud system and thorough volume monitoring, thus allowing detection and reaction via mud weight to control the influx. To extend depth of surface casing by improving the borehole quality through economic use of a more effective drilling fluid, maintaining appropriate borehole pressure by adjusting mud weight based on gains/losses observed, and reducing the logistical requirement to transport large volumes of disposable mud.

Conformance to environmental regulations by providing a practical alternative to a riser and pin

connector to meet zero discharge regulations. Statoil was the first operator in the GoM to adopt the RMR system, which has been used on the Discoverer Americas drill ship on the Statoil-operated Krakatoa prospect. The RMR system allows the circulation of mud, reducing the total consumption and discharges to sea to a quarter of the amount compared with conventional methods. The cost of mud and the transportation to the drill ship are significantly reduced and technology allows deeper drilling depths for shallow casing strings, again reducing the overall drilling time per well. Minimising the number of casing strings in deepwater drilling where you may run out of options. Statoil currently has two drilling units in operation in the Gulf of Mexico. RMR technology has successfully been used by Statoil on the Norwegian Continental Shelf in 19 operations over the past years. As a partner with BP in the South Caspian and with BP America a partner in the successful development of the RMR technique, the question must be asked as to why it has not been adopted in the GoM by BP in general and at Macondo specifically, in view of the known severe potential geohazard related drilling problems that might be encountered at location, specifically related to shallow water flows , a weak unstable formation and gas hydrates, all common to the South Caspian? If the RMR system was not considered to be available or suitable for use at Macondo (for whatever reason), when it was used extensively by BP in the South Caspian and at Sakhalin (Ref. 4) then it is arguable that the Macondo well should not have been drilled where and when it was, using much

riskier conventional almost outdated techniques. Could it be that BP in Houston were not fully aware of the RMR developments or rejected its use on cost grounds or as an unknown step -out for the GoM? BP are generally not as innovative as Statoil.

References
1. AGR Drilling (2009), RMR Case Study 1: BP Uses RMR to Solve West Azeri Hole Instability Problems, p.2. 2. AGR Drilling (2009), RMR Case Study 5: RMR to Set Deep 13-3/8 Surface Casing Below Massive Sand, p.2. 3. Alford, S.E., Asko, A., Campbell, M., Aston, M.S. and Kvalvaag,E. (2005), Silicate -Based Fluid, Mud Recovery System Combine to Stabilize Surface Formations of Azeri Wells, Proc. SPE/IADC Drilling Conference, 23-25 February 2005, Amsterdam, Netherlands, Paper No. 92769-MS. 4. Alford & Asko (M-I Swaco), Stave, R. (AGR Subsea), Riserless Mud Recovery System and High Performance Inhibitive Fluid Successfully Stabilize West Azeri Surface Formation, 2005 Offshore Mediterranean Conference, Ravenna, March 2005, Paper No. OMC 038. 5. Allen, J.D., Hampson, K., Vermeijden, C. And Clausen, C.J.F. (2005), Well Deformations at West Azeri, Caspian Sea, Proceedings of the International Symposium. on Frontiers in th Offshore Geotechnics (IS-FOG 2005), 19 21st September 2005, Perth, WA, Australia 6. Brown, J.D., Urvant, V.V., Thorogood, J.L., and Rolland, N.L., 2007. Deployment of a Riserless Mud Recovery System Offshore Sakhalin Island. Presentation 105212, SPE/IADC Drilling Conference and Exhibition, 2022 February 2007, Amsterdam, The Netherlands. 7. Cohen, J. (2009), Mitigation of Shallow Hazards Using a Riserless Mud Recovery System, AGR Drilling Presentation to American Association of Drilling Engineers, Deepwater & Emerging Technologies Group Shallow Hazards; January 27th, 2009, p. 20. [www.agr.com/OurServices/Drilling/RMR-Riserless-Mud-Recovery-System/] 8. Hannegan, D. and Stave, R., (2006), The Time Has Come to Develop Riserless Mud Recovery Technologys Deepwater Capabilities, Drilling Contractor, September/October 2006, p p. 50 54. 9. Hinton, A., Seim, K., Becker, G., Kvalvaag, E. And Jongejean, A. (2009), BP Egypt Uses RMR on a Jack-Up to Solve a Top Hole Drilling problem, SPE/IADC Drilling Conference and Exhibition, 17-19 March 2009, Amsterdam, The Netherlands, Ref. 119815-MS. 10. Integrated Ocean Drilling program [IODP], (2009), New Engineering Initiative Strives to meet Mohole Objectives, News release, August 2009 [http://www.iodp.org/index.php?option=com_content&task=view&id=491&Itemid=1135] 11. Myers, G. (2008), Ultra-Deepwater Riserless Mud Circulation with Dual Gradient Drilling, IODP Technical Developments Journal, Scientific Drilling, No. 6, July 2008 [http://www.iodp.org/iodp_journals/7_Ultra_Deepwater_Riserless_SD6.pdf] 12. Oil & Gas Next Generation (2006), Riserless Drilling Pushes Forward, Issue 1, October 2006, p. 2. [http://www.ngoilgas.com/article/Riserless-drilling-pushes-forward/] 13. Smith, D., Winters, W., Tarr, B., Ziegler, R., Riza, I. and Faisal, M. (2010), New Deepwater Riserless Mud Recovery System Opens Door to Deepwater Dual-Gradient Drilling, Drilling Contractor May/June 2010. [www.drillingcontractor.org/new-deepwater-riserless-mud-recoverysystem-opens-door-to-deepwater-dual-gradient-drilling-5313]. 14. Stave, R. (2007), Riserless Mud return Technology Solves Shallow Wellbore Instability Problem: A Case History, Presentation to American Assoc. Drilling Engineers, 2 3rd May 2007, p. 30. 15. Stave, R.; Farestveit, R.; Hyland, S.; Rochmann, P. O.; and Rolland, N. L. (2005) Demonstration and Qualification of a Riserless Dual Gradient System, Proc. Offshore nd Technology Conference, Houston, 2 -5th May 2005 OTC Paper No. 17665.