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Blowout Preventers - Axon Type U Double BOP, 7 1/16" 15,000psi Flanged Top and Bottom, 4 - 2 1/16" 15,000psi Flanged Side Outlets, Stainless Steel Lined Ring Grooves More Info

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The five-story-tall valve that failed to stop the biggest offshore U.S. oil spill is heading toward a $4.5 billion surge in orders as deep-water oil explorers seek to minimize costs on the world’s most expensive drilling rigs.

Cameron International Corp. and National Oilwell Varco Inc., the two top makers of blow-out preventers, are racing to meet the biggest wave of investment in the 90-year history of the 400-ton fail-safe device that attaches to the well head on the ocean floor. The surge comes as growing demand for deep- water rigs has spurred record rental rates and safety concerns put greater emphasis on time-consuming maintenance.

Blow-out preventers, known as BOPs, are used by oil companies as insurance against explosive blow-outs such as the one that destroyed BP Plc’s Macondo well in the Gulf of Mexico two years ago. Some drillers have begun doubling up on the $45 million machinery to minimize maintenance delays and shorten drilling time for the most modern rigs that can cost more than $600,000 a day.

Blow-out preventers monitor pressure levels during drilling, and are designed to pinch off the well in the case of an uncontrolled blast of oil or gas. The device used on BP’s Macondo well in 2010 failed to work after being jammed by drill pipe in an explosion that sunk the rig and forced BP to set aside $38 billion to cover oil spill costs.

The expanding search for oil is sending explorers into offshore waters where they require the newest rigs engineered to handle greater depths, higher pressures and more extreme temperatures. A total of 88 deep-water rigs are expected to be delivered between 2013 and 2019, the fattest pipeline of orders since the advent of deep-water drilling in the 1970s, according to IHS Petrodata. That compares to 39 rigs ordered from 2003 to 2009.

Each new rig will require a new blowout preventer — most provided by National Oilwell and Cameron and General Electric Co.’s Hydril Pressure Control unit — and as many as half of the new rigs will get a second device. The backup valve can be immediately lowered to replace the one brought up for maintenance, allowing drilling to continue.

All three of Rowan’s new rigs under construction will feature dual blowout preventers on board the drillships. Doubling up on BOP’s may allow the rig operator to charge a higher premium, she said. Rowan recently announced a three-year lease for one of its new rigs with dual BOPs to producer Repsol SA at a rate of about $624,000 a day, one of the highest rates ever.

Other rig contractors, including Seadrill Ltd. and Diamond Offshore Drilling Inc., are putting backup BOPs on more than one of their rigs, while Noble Corp. is designing its new rigs to hold the extra equipment if customers request it. Anadarko Petroleum Corp. recently signed a contract to rent one of Noble’s new rigs with a second BOP onboard.

Manufacturers are about halfway through a roughly two-year surge in orders for the machinery that may amount to as much as $4.5 billion, including about $1.5 billion for double-orders if half of those rigs want spares, according to estimates by James C. West, an analyst at Barclays Capital in New York. Those double orders would mean about 29 cents per share in extra profit for Cameron and 21 cents for National Oilwell Varco, he calculates.

The number of new rigs requesting a second BOP may be closer to 25 to 30 percent, said Brian Uhlmer, an analyst at Global Hunter Securities LLC in Houston.

Lost drilling time for BOP maintenance cuts into rig owners’ operating profits by raising costs and reducing revenues, as producers aren’t always charged during downtime, Uhlmer said.

Older rigs may be another source of new business for BOP makers. Most of the world’s existing rigs weren’t built to hold a second BOP, which can weigh about 800,000 pounds, National Oilwell Varco’s Williams said. As older deep-water rigs come back to the shipyard for major servicing every five years, some may be upgraded to accommodate a backup BOP. Or an old device may be swapped out for a newer one, he said.

Cameron and National Oilwell Varco also are seeing more requests from rig operators who want to use the original manufacturers to service their equipment. That so-called after- market business could represent $1 billion a year in sales for Cameron alone, Barclays’ West said.

Rig operators are still assessing the value of having a backup blowout preventer on each rig, David Williams, chief executive officer at Noble, said July 19 on a conference call with analysts.

National Oilwell had the greatest market share of BOPs sold for deep-water rigs in 2011 with 44 percent, West wrote in a May 10 note to investors. Cameron was second with 31 percent, followed by Hydril with 25 percent.

National Oilwell Varco opened a research and development office in Houston about a year ago dedicated to improving blowout preventers. The facility, with 13 test bays, can research the effects of the safety equipment in harsh environments.

Cameron will invest roughly $100 million this year to improve its after-market business for blowout preventers, which includes recertifying blowout preventers, as required by federal regulators, and continuously servicing them as they get older.

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If not properly monitored, changes in pressure that can occur while the well is being drilled can cause combustible hydrocarbons to flow unchecked and at high pressures and flow rates. If this flow of hydrocarbons is not stopped in time, the hydrocarbons can ignite into a deadly firestorm called a blowout. Because of the immense cost and danger associated with oil well blowouts, the bulk of the well control industry revolves around the prevention and avoidance of blowouts. Unfortunately, because a blowout only takes a brief moment to occur, it is necessary that there be methods in place to combat them when the need arises.

In a nutshell, "a blowout is an uncontrolled flow of gas, oil or other formation fluids into the atmosphere or another zone," explained Barry Cooper of Well Control School, an organization, which has offered well control training programs to the oil and gas industry for more than 25 years.

"Blowouts are the most tragic and expensive accidents in the upstream petroleum industry," said Cooper. "They endanger life, the environment and future production from the lost well." On an economic level, an oil well gushing thousands or even millions of barrels of oil is costing a company not only in short term production, but also the long-term profitability of the well itself. It is vital to the profitability of the well that the blowout is stopped and the well put back online as quickly as possible.

Because of their intensity and the very particular circumstances that set blowouts and oil well fires apart from regular conflagrations, unique and specially trained firefighters must be employed to fix them. Myron M. Kinley, the father of blowout control and oil well firefighting, founded the MM Kinley Company in 1923, which set the trend toward an industry devoted to oil well firefighting. By 1946, the famous oil well firefighter Red Adair had joined the company, and by 1959, he had founded the Red Adair Company.

Today, companies like Boots & Coots, which variously spun off from the Red Adair Company, continue in the same tradition. While the technology has improved significantly over the past 85 years, the basic methods and strategies employed to battle blowouts have remained the same.

Most commonly, when a well is lost to a blowout, the drilling package will have collapsed around the well, making proper assessment of the situation difficult. Firefighters arrive as quickly as possible and use machinery to remove the damaged rig and associated debris so they can assess the situation and choose the best method to fight the blowout.

In the early days of fighting oil well fires, the most common technique to smother a blowout was to snuff it with a dynamite blast. Pioneered by Myron Kinley, the intention is to blast fuel and oxygen away from the flame, effectively eliminating the fuel source, similar to snuffing out a candle. Although the first instance of this method dates back to 1913, dynamite blasting continues to be one of the most frequently employed methods.

A more complicated method for bringing a blown-out well under control involves carefully capping the well with a new blowout preventer, or "BOP." BOPs are essentially large valves on the surface of the well that quickly shut off the well as a last ditch precaution to prevent a blowout from occurring.

In this procedure, the detritus of the collapsed rig is carefully removed and a high-pressure abrasive cutter is used to sever the damaged BOP and wellhead for removal. A long boom assembly - at the end of which is a replacement BOP - is maneuvered into position. Large amounts of water are sprayed on the replacement BOP to combat the flames and to keep the replacement BOP from getting too hot. The BOP is quickly lowered onto the well and bolted into place, thus capping the blowout.

Not all blowouts necessarily ignite into towering infernos. Sometimes, the hydrocarbons merely blow into the air, which can actually be more dangerous. Often, firefighters will deliberately ignite the blowout as a precaution.

In addition to other safety issues, concerns for the effects on the environment have become increasingly important over the last 30 years. Companies must be careful to prevent the blowout from leaking hydrocarbons. This is another reason firefighters deliberately ignite a blowout that is blowing hydrocarbons: a burning blowout will consume the leaking hydrocarbons rather than allowing them to blow into the environment.

Blowout control and oil well firefighting are based on tradition and apprenticeship. Advances in technique and technology only underscore the inherent consistency in the industry.