Nexen completes accident investigations

CANADIAN oil sands producer Nexen Energy has revealed the cause of two accidents that occurred over the last year at its Long Lake facility.

The company also said it would cut 350 jobs due to a scale-down of operations. Production at the facility has been limited to 15,000 bbl/d since January, down from 50,000 bbl/d in July 2015.

The facility, located in Alberta, Canada suffered a fatal explosion at its hydrocracker unit in January, when two workers were killed. Nexen said in a press conference that the workers caused the accident as they were found to be working outside the scope of their approved maintenance duties at the hydrocracker – part of the facilities’ bitumen upgrader.

The explosion killed one worker at the facility, the other died in hospital later after succumbing to severe burns.

Ron Bailey, senior vice-president of Canadian operations, declined to offer details to reporters on what the workers did wrong and why they were not working on their assigned tasks. He said further investigations by government and regulatory authorities are not complete.

The company also revealed that the cause of a pipeline rupture which spilled 31,500 bbl of emulsion onto the grounds of its Long Lake site in July 2015 was due to the six-month old pipeline buckling when not moored properly in a marshy area.

Nexen faulted the poor design, construction and installation work of the pipeline which was conducted by unnamed contractors and sub-contractors. Bailey said Nexen was also at fault for not detecting the problem during routine maintenance one month earlier. The investigation found the pipeline was leaking at the time of maintenance.

“The delay in discovery was primarily the result of shortcomings in the pipeline’s automatic leak detection system and our ability to monitor this system,” Bailey told reporters.

Nexen, a subsidiary of Chinese oil company CNOOC, said the damaged processing unit will remain offline and will not be repaired until a long-term viability review of its oil sands operations is complete. There is currently no date to restart the unit.

Fang Zhi, CEO of Nexen, said: “The prolonged low price environment and unique operational challenges that Nexen has faced at our Long Lake facility have factored into this decision.”

The Canadian safety regulator Occupational Health and Safety (OHS) has completed the on-site portion of its investigation; however, it has up to two years to publish the full results of its inquiry.