Oil rig explodes in Gulf of Mexico

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An oil and gas platform in the Gulf of Mexico exploded on Thursday in an accident that recalled the worst offshore oil spill in history, though there appeared to be no injuries.

Some agency reports, quoting the U.S. Coast Guard, said that a mile-long oil sheen is spreading from the site off Louisiana. The site is west of where BP’s massive spill occurred.

All 13 crew members on the burning rig were evacuated to another offshore platform, the Coast Guard said.

The fire has been contained but is not yet extinguished, it said.

The crew did not suffer any injuries, said the owner of the rig, Mariner Energy Inc. An initial flyover showed no evidence of hydrocarbon spilling, Mariner said.U.S. officials are investigating the cause of a fire yesterday on a Mariner Energy Inc. oil and natural-gas platform in the Gulf of Mexico that initially drew parallels with the BP Plc spill disaster.

The U.S. Department of the Interior and Coast Guard will look into what triggered the fire that burned for several hours and forced the evacuation of 13 workers, Coast Guard Chief Petty Officer John Edwards said yesterday.

The fire started on or near upper-deck living quarters and was not caused by an explosion, Patrick Cassidy, a spokesman for Mariner Energy, said in an e-mail. The company said oil and gas production from the wells controlled by the platform, known as Vermilion 380, has been shut down.

“I don’t know what kind of work they were doing that may have caused it,” Coast Guard Captain Peter Troedsson said yesterday at a press conference in New Orleans. Coast Guard vessels and aircraft are scanning the sea around the platform about 90 miles (145 kilometers) off the Louisiana coast for signs of oil, he said.

A mile-long (1.6-kilometer), 100-foot-wide sheen of oil was sighted near the platform, which stands in less than 400 feet of water, the Coast Guard said earlier yesterday, citing a report from Houston-based Mariner.

Dashed Hopes?

The fire may dash oil-industry efforts to resume deep- water exploration less than five months after the BP rig explosion killed 11 workers, triggered the biggest offshore oil spill in U.S. history and prompted a moratorium on deep- water drilling, said Gianna Bern, president of Brookshire Advisory & Research Inc.

“This incident will increase pressure on the federal government to prolong the moratorium,” said Bern, a former BP crude oil trader whose Flossmoor, Illinois, firm provides risk-management advice to oil producers.

While there are differences between the Mariner fire and the BP disaster — no loss of life, the blaze was on a production platform not a drilling rig, and is in water 15 times shallower — regulators will be concerned, Bern said.

“I don’t think it’s going to matter much to regulators that this wasn’t a deep-water installation and that nobody got hurt. Scrutiny of the whole industry will intensify.”

Mariner, which agreed in April to be acquired by Apache Corp., tumbled as much as 16 percent in New York trading yesterday in the hours after the accident.

Oil futures rose yesterday on concern the incident will prompt a federal crackdown on offshore production. The Gulf supplies 30 percent of domestic oil output and 13 percent of U.S. gas production.

Platform v Drilling

Production platforms tend to be less prone to blowouts or spills than drilling rigs because they’re tapping into geological formations that have already been tamed with steel piping, concrete and pressure-control devices, said Arthur Berman, a consultant and geologist who lives near Houston.

Rigs drill into unexplored layers of rock, salt and sand laced with pockets of high-pressure, explosive gas. The only methods drillers have for holding unexpected pressure surges at bay are heavy drilling fluid and a stack of valves on the seafloor, Berman said.

Lee Hunt, president of the International Association of Drilling Contractors in Houston, said the differences between the BP and Mariner incidents won’t prevent the latest fire from “fueling the passions” of people who oppose oil exploration.

“I think we’re very close to restoring some imagery of the safety of drilling operations, and now we have an event that points to the production operations,” Hunt said. “It’s just a different set of circumstances. One’s an automobile and one’s a truck.”

Apache Proceeds

Apache intends to proceed with its $2.4 billion acquisition of Mariner, said Bill Mintz, a spokesman for the Houston-based buyer. The cash-and-stock deal was announced five days before BP’s April 20 rig explosion.

Mariner operates seven wells in the Vermilion 380 field. Proved reserves were estimated at 33.2 billion cubic feet of gas equivalent at the end of 2009 and were about 47 percent oil and 53 percent gas and gas liquids. Production last year was equivalent to 1.1 billion cubic feet of gas, Mariner said in a public filing.

Mariner dropped 60 cents, or 2.6 percent, to $22.75 as of the 4 p.m. close of New York composite trading yesterday after trading as low as $19.62 earlier yesterday. The stock had more than doubled in value this year before yesterday. Apache, the largest independent U.S. oil and gas producer, fell 1.3 percent to $91.30.

BP lost more than half its market value in the weeks after the explosion aboard Transocean Ltd.’s Deepwater Horizon rig, which the oil producer leased to drill the Macondo well.

Helicopter Rescue

Crude oil for October delivery rose $1.11, or 1.5 percent, to $75.02 a barrel yesterday after declining as much as 1.1 percent before the Mariner fire. Gas futures fell 0.3 percent.

Bristow Group Inc., a helicopter company that shuttles workers and equipment to offshore rigs and platforms, spotted the fire during a routine flight earlier yesterday, Kade Monlezun, a manager at the Houston-based company, said in a telephone interview. Bristow alerted the Coast Guard and Mariner to the fire, he said.

The rescued workers were transported to Terrebonne General Medical Center in Houma, Louisiana, Monlezun said.

The Coast Guard dispatched seven helicopters, two airplanes and four cutters to Mariner’s platform, which began production in 1982, according to the U.S. Bureau of Ocean Energy Management.


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