Gulf rig on fire as natural gas flows from ruptured well

A shallow-water drilling rig in the Gulf of Mexico off the coast of Louisiana was on fire on Wednesday after natural gas flowing from a ruptured well ignited, authorities said.

The U.S. Bureau of Safety and Environmental Enforcement said the fire ignited on Hercules Offshore Inc's jackup rig shortly before 11 p.m. CDT on Tuesday (0400 GMT). The U.S. Coast Guard said it was still burning on Wednesday morning.No one was on board the rig when it caught fire, BSEE said.

Hercules said on Wednesday that the company was working to plug the well, which ruptured on Tuesday morning, and it did not know the extent of the rig damage. Neither Hercules nor BSEE yet knew the cause of the fire.

Hercules said it might drill a relief well, which would intersect the ruptured well and provide another avenue for cement to plug it.

Shares of Hercules Offshore fell more than 5 percent to $7.29 on news of the fire.
The company said it was working with the well owner, privately held Walter Oil & Gas, and regulators to find out why the rig ignited. 'Our immediate focus is on stopping the flow of natural gas,' Hercules said.

The rig had been preparing the well for production on Tuesday when it ruptured, releasing natural gas, but no oil. Hercules said 44 people were evacuated from the rig, and no one was hurt.
The rig is in 154 feet (47 m) of water about 55 miles (88.5 km) south of the coast of Louisiana.

BSEE has tightened safety regulations for offshore oil and gas operations since the BP Plc 2010 blowout and oil spill that spewed more than 4 million barrels of crude into the Gulf. It took BP nearly three months to cap that ruptured well, which was ultimately killed and plugged by way of a relief well.

The rig is a jackup rig, which has moveable legs that can be extended to move the hull above the surface of the water. Unlike floating rigs in deeper waters, the legs on jackups reach the sea floor.

Analysts at CapitalOne Southcoast in New Orleans noted that the jackup market remains very tight, so 'if the rig suffers major damage this should have a positive impact on day rates. They also noted that Hercules has rigs in storage that could be used to replace the damaged one.

Source:  XE News