oil spill Archives - k999thailand

oil spill

July 5 2022

Major Controversies Impacting the Oil and Gas Industry

k999content Blog bribery, corruption, oil and gas, oil price, oil spill 0

Being one of the largest industries globally, developments in the oil and gas world have always received attention from the media. Whether it be various oil spills, new oil sources or oil price volatility as a result of geopolitical updates, oil and gas has been under the spotlight in most countries. As a result, controversies and scandals in this industry have been covered extensively over the years. This blog will deep dive into some of the biggest environmental and financial controversies which have taken place in the offshore industry and will look to analyse the resulting impact on the oil and gas sector.

Car Wash corruption row

Brazilian oil giant Petrobras has been the focus of corruption allegations as part of wider criminal investigations in a case known as Operation Car Wash. Named after the car wash that the operation was first discovered in in 2014, Operation Car Wash saw Petrobras accused of bribing politicians and political parties in Brazil and trying to conceal these payments from regulatory agencies and investors. The bribes were paid to secure contracts at inflated prices.

The US Department of Justice described the Car Wash scandal as “the largest foreign bribery case in history,” with $2.1bn siphoned from Petrobras in bribes and secret payments. In September 2018, the company reached a deal with the US and Brazilian authorities to settle longstanding investigations in the scandal. As part of the settlement deal, Petrobras agreed to pay $853.2m in penalties.

Shell-Eni Nigerian corruption case

In December 2018, Nigeria filed a $1.092bn lawsuit against oil companies Shell and Eni over alleged fraudulent practices and cases of corruption. Nigeria contended that Shell and Eni engaged in bribery and conspiracy against the country, claiming that the companies diverged billions of dollars of potential revenue from the Nigerian people.

The lawsuit relates to money Shell and Eni used to purchase interest in the OPL 245 block. It is alleged that this money was paid to Malabu Oil and Gas, a company owned by former Nigerian Minister of Petroleum Dan Etete, where it was then used for bribes and kickbacks. Reynolds Porter Chamberlain solicitor Tom Hibbert, who represented Nigeria, said: “This claim reflects the determination and ongoing efforts of the Federal Republic of Nigeria to recover the very significant sums lost to corruption and the unlawful activity of Shell and Eni in this transaction.”

The BP Oil Spill

The biggest oil scandal in recent memory is the Deepwater Horizon oil spill, better known as the BP oil spill. The explosion at the BP-owned Deepwater Horizon drilling rig offshore Mexico in 2010 killed 11 men and injured several others. The resulting oil spill is considered to be the largest in the history of the petroleum industry, releasing an estimated 4.9 million barrels of oil into the Gulf of Mexico.

Investigations following the oil spill revealed problems in BP’s administration that contributed to the disaster. In September 2014, US district judge Carl Barbier accused the company of wilful misconduct and gross negligence, ruling that BP had acted with “conscious disregard of known risks” and describing the company’s conduct as “reckless”.

Closing Comments

The above incidents are some of the controversies which have had an adverse impact on the major oil and gas players and how they function. While this has led to negative publicity for stakeholders involved, the environmental and financial costs incurred have hindered the growth of the oil and gas industry (and other industries like pipe fabrication, detergents, plastics etc.) over the years. With the rise in alternative sources of energy, oil and gas needs an image overhaul in certain areas going forward!

April 26 2022

Oil Spills and How They are Cleaned Up

k999content Blog cleaning oil spill, environment, ESG risk, oil and gas, oil spill 0

In January and February 2022, there were reports of major oil spills in Peru and USA respectively which caused substantial environmental damage. This is not new; oil spills have been occurring multiple times during a year across the world and in various forms. However, it makes sense to dig deeper into the impacts of an oil spill and how it can be cleaned up by various means. Cleanup and recovery from an oil spill is difficult and depends upon many factors, including the type of oil spilled, the temperature of the water, and the types of shorelines and beaches involved.

What is an Oil Spill?

An oil spill is a form of pollution where liquid petroleum hydrocarbon is released into the environment, especially the marine ecosystem due to human activity or error. Oil spills may also occur on land; however marine oil spills where oil is released into the ocean or coastal waters is considered to have much more serious consequences. It may be caused by the release of crude oil from tankers, offshore structural steel platforms, drilling rigs and wells, as well as spills of refined petroleum products (such as gasoline, diesel) and their by-products.

Environmental Impact of Oil Spills

Oil spills penetrate into the plumage of birds and the fur of mammals, reducing its insulating ability, and making them more vulnerable to temperature fluctuations and reducing their buoyancy in water. Oil can impair a bird’s ability to fly, preventing it from foraging or escaping from predators. As they preen, birds may ingest the oil coating their feathers, irritating the digestive tract and thus altering liver functions. Oil spills can blind marine animals and the ingestion of oil causes dehydration and impairs the digestive process. The spillage of oil can also harm air quality as the chemicals in crude oil are mostly hydrocarbons that contains toxic chemicals such as benzenes, toluene etc. These chemicals can introduce adverse health effects when being inhaled into human body.

Cleaning Up of Oil Spills

Some of the response methods used for dealing with oil spillage in offshore waters are described below: –

Skimming: This is a process that removes oil from the sea surface before it reaches sensitive areas along a coastline. Sometimes, two boats will tow a collection boom, allowing oil to concentrate within the boom, where it is then picked up by a “skimmer.” From whirring disks to floating drums, skimmers come in various designs but all basically work by removing the oil layer from the surface of the water.
In Situ Burning: This is the process of burning spilled oil where it is on the ocean (“in situ” is Latin for “on site”). Similar to skimming, two boats will often tow a fire-retardant collection boom to concentrate enough oil to burn. Burning is sometimes also used in treating oiled marshes. The success of burning oil is dependent on gathering a layer of oil thick enough to maintain a sustained burn. Any burn operation includes careful air monitoring to ensure smoke or residue resulting from the burn do not adversely impact people or wildlife.
Chemical Dispersants: Releasing chemical dispersants, usually from a small plane or a marine vessel, on an oil slick breaks down the oil into smaller droplets, allowing them to mix more easily into the water column. Smaller droplets of oil become more readily available to microbes that will eat them and break them down into less harmful compounds. However, using dispersants has its drawbacks, with potential adverse impacts to the marine life living in the water column and on the seafloor.

Conclusion

Over the decades, there has been immeasurable economic, environmental and social damages caused as a result of oil spills. While the effects of oil spills can be mitigated to an extent, it is clear that stiffer penalties need to be imposed on the culprits. With the growing awareness around ESG risks, oil spills are a real danger and steps must be taken to reduce, if not prevent, such incidents in the future!