The Oil Drum

You are correct in some respect. Engineers design to specifications. A good chunk of these specifications are written by third party organizations (Det Norske Vertias for much of the North Sea, American Bureau of Shipping for a good chunk of the world, Lloyd's for ship based structures, etc).

We design around those specifications all of the time. And they are not static. They are constantly being updated (which gives manufacturer's like me constant headaches).

Environmental conditions are ALWAYS a part of a rig specification. Temperature extremes for metallurgical consideration, humidity for corrosion consideration, ambient temperatures for cooling consideration, seismic conditions for equipment accelerations during a seismic event, it is all taken in to account.

A production platform will be most specific in their requirements, as they are for the most part a static structure so we can plan around those very specific environmental conditions.

Mobile rigs (MODU's) which include jackups, semis and drillships are built to specifications for the worst environment expected during the lifetime of the vessel.

Building to North Sea requirements is very expensive due to multiple overlapping governmental regulation agencies and the nature of the environment. South East Asia is a paradise compared to the North Sea. Sea conditions are relatively calm and temperatures are moderate.

A jackup built to SE Asia conditions would never be allowed to drill in the North Sea. Ever. But a North Sea rig can drill anywhere in the world. It all comes down to initial investment and expected return on capital which determines what type of rig a contractor orders from the shipyard.

Now let's venture back to the GoM. Some comments as what would it take to build a rig to Cat 5 standards. And there have been some informative responses. What has not been addressed is capital requirements.

Yes, we can build to Cat 5 standards. Ridiculously expensive. And most of that expense unnecessarily spent (it may never be required in the life of a rig or a platform). THose are valuable dollars that can be spent on exploration, drilling, and refining.

So the purchaser of a facility or rig builds to a certain level. A level sufficient to mitigate against a majority of environmental threat. Anything above and beyond that level is mitigated with insurance. That's why Risk Management is a career path.

An operator can build to Cat 5 specs which may never be used (inefficient allocation of capital) or they can build to Cat 3 and purchase insurance for anything above and beyond that state. A much more efficient use of capital.

Although right now, I'm sure the insurance companies are not very happy about their side of the deal.