NOV NOV Inc

By Ted Mann 

Federal regulators Monday warned subsea oil drillers and equipment makers that bolt failures in the Gulf of Mexico could result in an oil spill on the scale of the Deepwater Horizon disaster.

"Fortunately, as of today we've had no major catastrophes from bolt failures," said Brian Salerno, director of the Bureau of Safety and Environmental Enforcement at the Department of the Interior, which oversees the offshore oil industry. "We believe it may only be a matter of time before our luck runs out."

The warning came at a public forum Monday at the Interior Department in Washington convened by the BSEE. The agency's working group and a parallel task force set up by an oil industry trade group are trying to determine why critical metal fasteners have corroded and failed in recent years.

Regulators and makers of oil production equipment, including General Electric Co., Schlumberger Ltd. and National Oilwell Varco Inc., are trying to determine what is causing the failures, which have included premature corroding, stripping of threads or snapping outright. The problems have been found over the past four years on safety equipment in underwater oil production, including on blowout preventers, which are designed as a last defense against a major oil spill like the Deepwater Horizon incident in the Gulf of Mexico.

"We could have another Macondo or something similar from this piece of equipment," said Joe Levine, a BSEE official, referring to the name of the well that blew out in 2010, killing 11 workers and releasing millions of barrels of oil into the gulf over almost three months.

Dr. Marcia McNutt, the president of the National Academy of Sciences, compared the risk of a bolt failure leading to a major oil spill to the failure of an O-ring that doomed the space shuttle Challenger, which exploded after takeoff in 1986.

The American Petroleum Institute, a trade group that sets industry standards, has said it is working with regulators to determine the reason for the bolt failures. Equipment manufacturers say they too are searching for answers.

In 2013, GE recalled more than 10,000 bolts after a failure on one of its components, a blowout preventer connector, which led to a spill of more than 400 barrels of drilling fluid in the Gulf of Mexico.

The company and regulators have previously said that a variety of factors could have caused those failures, including metallurgical issues with the alloy used in the bolts themselves, as well as "over-torquing" of the fasteners during the assembly of the stacks of equipment that sit atop the subsea well.

BSEE officials said a new well-safety rule, passed in response to the Deepwater Horizon, that requires oil producers to report the failures to the government, even when an oil spill doesn't occur, will help the agency better understand the bolt problems.

U.S. regulators said they have contacted counterparts in other countries to alert them to their concerns about the failures. Troy Trosclair, a BSEE supervisor for the Gulf of Mexico region, said Brazilian officials reported that 56 rigs working for Petróleo Brasileiro SA, or Petrobras, that country's biggest oil producer, were affected by the 2013 GE recall.

Write to Ted Mann at ted.mann@wsj.com

(END) Dow Jones Newswires

August 29, 2016 13:18 ET (17:18 GMT)

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