A U.S. energy safety bureau said part of a drilling platform off the coast of Louisiana has partially collapsed after catching fire late Tuesday. No injuries were reported when a natural gas cloud ignited at the Hercules Offshore drilling rig. At least three firefighting vessels were on scene responding to the incident in a scene reminiscent of the 2010 oil disaster in the Gulf of Mexico. Though no sheen was reported during initial surveys, federal officials said it was time the industry takes offshore safety seriously.



The Interior Department's Bureau of Safety and Environmental Enforcement was able to confirm an explosion occurred on board the rig located about 55 miles off the coast of Louisiana. Operator Walter Oil and Gas Corp. said it lost control of the well Tuesday morning while it was making preparations for production. Hercules owns the rig and both companies said they were in close contact with the Coast Guard and the BSEE as they worked on a response.

The well is in shallow waters. By Wednesday afternoon, the BSEE said part of the rig had collapsed and the fire was still burning.

"There is no observed sheen on the water surface," the agency said. "As the rig fire continues, the beams supporting the derrick and rig floor have folded and have collapsed over the rig structure."

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The BSEE said Walter Oil & Gas was working under its direction to possibly drill a relief well to control the incident. That would involve a new avenue to get cement in to plug the well.

The Interior Department this week said it handed out 307 leases for energy work on 38.6 million acres offshore Louisiana, Mississippi and Alabama during a March auction. The government said it rejected some of the bids because they were "insufficient to provide the public with fair market value for the tracts." Last week, Apache Corp. said it had a "good run" in the Gulf of Mexico and subsequently unloaded 1.9 million net acres that it said matured to the point that they were too difficult to exploit.

Wednesday's incident in the Gulf of Mexico was the second for July. In November, a rig worker was killed when personnel onboard a Black Elk Energy rig sparked a blaze off the coast of Louisiana. Black Elk operated around 100 production platforms in the Gulf of Mexico and was cited for 156 violations last year, had 99 violations in 2011 and 60 in 2010, the same year 11 rig workers died in the Deepwater Horizon tragedy.

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Energy companies working in the Gulf of Mexico say safety is their No. 1 priority. BSEE directors and both companies involved in the incident haven't yet said what sparked the fire Tuesday evening. BSEE Gulf of Mexico Regional Director Lars Herbst said it was his agency that was focused on bringing the incident to a safe resolution.

"Offshore oil and gas operators need to re-affirm their aggressive approach to the safety of well operations in light of this event and other recent well control events," he said.

By. Daniel J. Graeber of Oilprice.com