Nov. 11 (Bloomberg) -- Demand is surging for workers trained to fight oil well blowouts to show regulators and investors emergencies like BP Plc’s fatal blast can be handled before they erupt into billion-dollar disasters.
Well-control instructor Doug Shelley and other practitioners of a trade depicted in John Wayne’s 1968 film “Hellfighters” say they’re overwhelmed with applications for their two-and-half-day classes instructing roughnecks, roustabouts and drilling engineers.
Oil-well firefighters such as DXP Enterprises Inc., Superior Energy Services Inc. and RPC Inc. are outperforming the rest of the petroleum industry in the wake of BP’s blowout that led to the worst crude spill in U.S. history. Halliburton Co. yesterday estimated sales at the Boots & Coots Inc. well-control business it purchased in September will triple in three years, and said it’s on the hunt for more such acquisitions.
“The BP disaster was a real eye-opener for the oil industry,” said Shelley, who works for closely held Global Well Control Inc. in Memphis, Texas. “Now the oil companies are sending everyone through this kind of training, from the roughnecks all the way up to the drilling superintendents.”
RPC, based in Atlanta, more than doubled since BP’s April 20 rig explosion in the Gulf of Mexico that killed 11 workers. DXP of Houston jumped 41 percent. New Orleans-based Superior Energy advanced 23 percent. Superior’s Wild Well Control subsidiary was one of three U.S. outfits hired in 1991 to extinguish the Kuwaiti oilfield fires set by Saddam Hussein’s retreating troops.
During the same period, the NYSE Arca Oil Index, which includes Exxon Mobil Corp. and Royal Dutch Shell Plc, two of the world’s largest oil companies, was unchanged. The Philadelphia Oil Service Sector Index of drillers, equipment makers and subsea robot operators, advanced 3.3 percent.
Superior said on Oct. 27 that rising demand for well-control services contributed to a 14 percent increase in third-quarter revenue for its subsea and well-enhancement unit.
BP’s internal investigation concluded that the April 20 blowout of its Macondo well 40 miles (62 kilometers) off the Louisiana coast could have been prevented if crew members aboard Transocean Ltd.’s Deepwater Horizon rig had noticed pressure readings and other data that suggested disaster was imminent. The signs were obvious 40 minutes before the first of two explosions rocked the rig, Mark Bly, chief of safety for London-based BP, told reporters on Sept. 8 in Washington.
The catastrophe sank the $365 million vessel and damaged the well, which gushed 4.9 million barrels of crude before it was capped on July 15.
Halliburton, based in Houston, paid $280 million in September to acquire Boots & Coots, the well-control company founded in 1978 by Edward “Coots” Matthews and Asger “Boots” Hansen, protégés of legendary oil-well firefighter Paul “Red” Adair.
Adair, the inspiration for Wayne’s character in “Hellfighters,” learned the business from Myron Kinley, who in 1913 pioneered the use of dynamite to extinguish blazing wells. Adair quelled fires from Algeria to the North Sea to Kuwait before he died in 2004 at the age of 89.
Sales at Boots & Coots probably will rise to $2.7 billion from $900 million over three years, Paul Koeller, Halliburton’s vice president of consulting and project management, said yesterday during a presentation to analysts in Houston.
Foams, Pipes, Valves
Blowout-control techniques have come a long way in the 97 years since Kinley pioneered the use of explosions to deprive flaming oil wells of oxygen.
High-pressure jets of chemical foam and 90-foot columns of pipes and valves cooled by millions of gallons of water are commonly used to extinguish flames and divert raging streams of flammable hydrocarbons, Scott Dudenhoeffer, a DXP well-control specialist, said in an interview in Odessa, Texas.
Still, the enterprising spirit that drove Kinley to tinker with nitroglycerin is still alive and well in the industry. Rudimentary materials such as scrap rubber, shredded ropes and walnut shells may be used as a stopgap while waiting for sophisticated equipment to arrive, said Chris Spurgeon, a manager of DXP’s Indian Fire and Safety unit, who followed his father and grandfather into the well-control business.
The first time Spurgeon, 35, encountered an out-of-control well 15 years ago, he cut mud flaps off his truck and yanked engine belts from drilling gear to clog the hole.
“We stuffed the hole with whatever we could find,” Spurgeon recalled during an interview at the Permian Basin International Oil Show in Odessa.
It took three days of cramming debris into the well to halt the flow of oil and poisonous gases, he said.
BP used a similar technique, albeit unsuccessfully, in late May to try to plug the Macondo well about 5,000 feet beneath the surface of the sea.
The London-based company mixed golf balls and rubber scraps with drilling fluid to create a so-called junk shot intended to stop the flow of oil and gas from the 50 million-barrel reservoir.
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