In the late 1950s and early 1960s, Naked City, a popular, gritty TV police drama series set against a backdrop of New York City, would end its weekly episodes with a solemn voice-over narration: "There are eight million stories in the Naked City. This has been one of them."
In the Gulf of Mexico, there are nearly 6,000 active leases, each one with a "story" duly recorded in government documents. Mississippi Canyon block 252 is only one of them, but it is arguably the most famous. It's the tract containing the Macondo deepwater well which blew out two years ago and became the worst marine oil spill in US history.
The accident -- which leaked an estimated 4.9 million barrels of crude before being sealed -- also disrupted the Gulf's ecosystem and caused the loss of 11 lives when the Deepwater Horizon rig, which had drilled the well, exploded after the blowout.
The second anniversary of the April 20, 2010, Macondo oil spill has generated some look-backs and thoughts about lessons learned. But one thing generally not mentioned is that Macondo had a past -- albeit one that was more routine -- before its glaring jump into the history books.
So, of the 6,000 leasing stories in the Gulf of Mexico, this is one of them. The information is culled from records supplied by US offshore leasing agency Bureau of Ocean Energy Management (BOEM), oil companies and other documents.
- The block, located in 4,992 feet of water, was
previously leased by two sets of consortia before BP won it
in the March 2008 lease sale for $34 million. While
that amount was extraordinarily hefty, previous leaseholders
also paid higher-than-average sums for the tract.
- MC 252's first holders, a trio composed of Amoco
Production (which subsequently merged into BP), Conoco and
Exxon won the lease in 1986 for $1.2 million. The companies
apparently let the lease expire in 1996 without drilling, US
government records show. (Conoco is now called
ConocoPhillips; it will split off its refining arm, to be
called Phillips 66, on May 1 but keep the name
ConocoPhillips. Exxon is now called ExxonMobil owing to a
merger.)
- In 1997, Chevron and the former Texaco (which have since
merged) jointly captured MC 252 at an offshore lease sale in
March 1997. They drilled what they then called the Rigel
prospect on it in 1999, using Diamond Offshore's Ocean Star
semisubmersible rig. Eventually the pair of majors
transferred their interests to Dominion E&P, Mariner Energy
(later acquired by Apache Corp) and Newfield Exploration.
- Rigel exploration well results at MC 252 were
"disappointing," but appraisals by the Dominion-led group at
MC 296, a block immediately to the south, were "highly
successful," a Dominion executive told a Society of
Petroleum Engineers event in 2005. Calling MC 252 a
"marginal discovery," he said the MC 296 field was developed
as a one-well subsea tieback as part of a larger subsea
system. As a result, MC 296, a gas field, came online in
March 2006, Mariner said in a statement. Dominion sold its
Rigel operating interest to Italy's Eni in 2007. MC 252 was
relinquished to the government leasing pool in June 2007.
- BOEM records show MC 296 did not produce in May through
July 2010. Output resumed in August, but in fits and starts;
the last output recorded was in May 2011. BOEM records show
the lease was terminated in December 2011.
- When BP won the tract in 2008--during a record auction
that captured $3.7 billion in total high bids -- the major's
$34 million offer wasn't even one of the sale's highest. BP
kept a 65% stake in MC 252 and took in Anadarko (25%
interest) and Japan's MOEX -- Mitsui Offshore Exploration
(10%) -- as partners in February 2010.
- But BP wasn't the only company that bid on MC 252 in the
2008 sale. The tract was highly sought-after and BP
narrowly edged out privately held LLOG Exploration--which
offered $33.6 million -- and four other bidders. They
included Noble Energy, which offered $17.2 million; a
consortium of small privately held explorers Red Willow
Offshore, Deep Gulf Energy and Houston Energy, which
collectively bid $14 million; a group made up of Eni,
Newfield and Mariner, which bid $4.6 million; and Anadarko,
which offered $2.1 million.
- Even though by accident, oil did flow from MC 252, so
BOEM predecessor US Minerals Management Service created a
production report for the Macondo field. Despite Macondo
crude that gushed 50,000 b/d or more from the runaway well,
according to government estimates, the report listed
zero output from April through July 2010. The BOEM also
described the lease as showing one producing completion from
May to July.
- Notorious as MC 252 has been for BP, US government records show the major has not terminated the lease. It now owns 100% after Anadarko and MOEX turned over their interests to the major last year. If nothing further is done with it, and if BP does not terminate its lease early, MC 252 will expire automatically in May 2018.
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