Team 1 Bp Decision Tree

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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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"Preventing Future Oil Spills" - A Decision Tree Approach

Transcript of Team 1 Bp Decision Tree

Page 1: Team 1 Bp Decision Tree

“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

Page 2: Team 1 Bp Decision Tree

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 Hydrocarbo

n/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:

1) BOP pressure test will be done.

BOP will help to prevent

hydrocarbon channeling

2) Gas Detection System will alert in

case BOP of failure. Well Control

can be done

3) 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/STAG

ING/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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Page 18: Team 1 Bp Decision Tree

MERCI!

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