By Linda Hsieh, associate editor

Graduating with honors at the height of the boom in 1980 with a petroleum engineering degree, Kevin Lacy had his pickings. His five summer jobs had given him a taste of drilling, production and reservoir engineering, but he wanted to learn things first-hand, and he knew it was drilling that would get him into the field right away.

He ended up choosing Chevron because the company sends its drilling engineers to the rigs in a leadership capacity. “I had learned the field work and basics through summer and part-time jobs, and I was ready to take it to the next level,” he said.

Since it was 1980 and oil companies couldn’t get their wells drilled fast enough, Mr Lacy had no trouble finding responsibilities as quickly as he could handle them. In just two years, he had completed challenging operations both onshore and offshore. By 1984 he received an overseas assignment for China. By 1990 he was in Angola, leading production operations under tense civil war conditions. And by 1996 he was off to Aberdeen as general manager, operations covering engineering, drilling and production.

Together, these experiences gave him an international perspective of the business and taught him the value of being “global-minded and flexible,” he said.

Returning to the US in 1999, Mr Lacy held a series of positions before being named Chevron’s vice president – global drilling and completions in 2002. In 2006, seeking new challenges for the next phase of his career, he joined BP as head of discipline – drilling and completions. “Kevin has very quickly learned the agenda at BP,” said Mark Patteson, BP director of technology for drilling and completions. “And I’ve been impressed by the efforts he’s made to get to know the drilling leadership within the company so quickly.”

Barbara Yilmaz, technology vice president for drilling and completions at BP, also said: “Kevin’s passion and commitment to safety, people and performance are making a demonstrable difference.”

IMPROVING HSE

What legacy Mr Lacy will leave behind at BP is yet to be seen, but at Chevron, some of his proudest accomplishments have been in HSE.

For example, as VP of global D&C from 2002 to 2006, he oversaw the reduction of lost-time incidents by 70% in the company’s North American unit and 50% in the overseas unit. By putting a clear focus on leadership behaviors, “getting serious” about which drilling contractors it did business with, and working in partnership with contractors and service companies, Chevron went from “mediocre” to “a leader in safety,” he said.

Today, Mr Lacy is continuing his HSE efforts at BP. He’s promoting safety at industry events such as the 2006 IADC Annual Meeting — where he congratulated the audience on the improved market but then challenged them to improve their safety performance.

“Kevin has a real passion for the HSE agenda,” Mr Patteson said. “It’s a real personal issue with him.”

PathFinder providing Survivor SDNSC

PathFinder Energy Services is providing its new Survivor SDNSC (Slim-Density Neutron Standoff Caliper) as part of its Survivor Triple Combo service for LWD and formation evaluation to Saudi Aramco. The Survivor SNDSC is the first to use a Californium-252 source for an LWD neutron porosity measurement; this use of a lower energy, shorter half life chemical source is more environmentally friendly than other chemical sources. The Survivor SDNSC is the second addition to the Survivor suite of HPHT LWD tools and is compatible with PathFinder’s other modular LWD tools. Like its companion Survivor tools, it can be used in HPHT wellbores (350° and 25,000 psi).

Two-speed in-line planetary drive from Darwin

Darwin Industries has developed a two-speed in-line planetary drive capable of shifting while in motion, with an integral spring-actuated pressure-released brake option. Input speed is rated at 5,000 rpm. Maximum power limit and torque rating is 200 hp and 1,100 lb-ft, respectively.

By Greg Anderson, Randy Smith Training Solutions

Times are great, drilling activity is humming, but what about tomorrow? How will contractors, operators and service firms handle the squeeze of people and equipment that looms? On the other hand, will the current newbuild bonanza bust our business with oversupply? How can technology race to the rescue in an era of elusive hydrocarbons?

The 2007 IADC Annual Meeting may not have all the answers, but it surely will provide food for thought on these and other issues. Plus, the conference, 1-2 November at Moody Gardens in Galveston, Texas, will bring together the leading players in drilling, offering outstanding networking and social opportunities.

Transocean is our Platinum Sponsor for the Annual Meeting, while Pride International is the Gold Sponsor. The Marshall Islands Registry is Silver Sponsor for the event. Printing of the program brochure is sponsored by Varel International.

And what better way to start off than by honoring two of the industry’s finest. At the Keynote Breakfast, sponsored by Hydril on Thursday, 1 November, IADC will bestow its coveted Exemplary Service Awards to 2 outstanding individuals. IADC Exemplary Service Awards recognize individuals notable for outstanding contributions to the drilling industry and to IADC. Recipients have, in the course of their career, repeatedly demonstrated their commitment to improving the drilling industry and advancing its safety, training or technology.

This year’s recipients are:

• Kevin Lacy, head of discipline-drilling and completions, BP: Mr Lacy is a longtime stalwart of IADC whose contributions include development of industry best practices and enhancements in drilling safety. Mr Lacy generously shares his vision at IADC events and conferences.

• Gary Casswell, vice president Eastern Hemisphere operations, Pride International Inc: As chairman of the former IADC subsidiary Drilling Contractor Publications Inc (DCPI), Mr Casswell oversaw the transformation of IADC’s official magazine into the world-class publication it is today. He served on the Advisory Committee for the 2006 IADC/SPE Drilling Conference and is a director of IADC.

IADC has an outstanding keynote speaker lined up for the breakfast, as well – Per Haaland, vice president drilling & completions, Statoil. Mr Haaland is vice president of drilling and completions for Statoil, which late last year announced that it would merge with Norsk Hydro. The new company will be named StatoilHydro and have combined production of 1.9 MM bbls/day, along with proven oil and gas reserves of 6.3 billion bbls of oil equivalent. In mid-2007, Mr Haaland told Drilling Contractor that the company was working with 10 floaters and 13 platforms in Norway on the drilling side, with coiled tubing and wireline on well operations. Over the next couple of years, he expects drilling activity to ramp up further, as three new rigs arrive to work for the Norwegian operator.

Following a break with coffee service sponsored by CB Richard Ellis, Graham Brander, director worldwide drilling, Apache Corporation, will discuss Apache’s drilling strategy. Apache’s strategy is built on a portfolio of assets that provide opportunities to grow both through grassroots drilling and acquisition activities. The company operates in 7 core areas — two in the United States, in Canada, Egypt, the UK North Sea, Australia and Argentina.

Next, we explore a topic central to today’s business climate: personnel development. Speaker Dan Weinfurter, chief executive officer, Capital H Group LLC, points out that the best people are today’s only sustainable competitive advantage. Statistics, he says, show that “A” employees are 6-10 times more productive than average workers, dramatically increasing business effectiveness and visibly impacting revenue generation. This session will combine anecdotes and practical lessons on how to find and keep the right people that will ensure the future success and evolution of your business.

And then back to operating plans and activities. Steve Mamerow, director of worldwide drilling & completions, Pioneer Natural Resources, will discuss Pioneer’s North America-focused strategy. North American assets represented approximately 98% of Pioneer’s proven reserves and 93% of daily production in 2006. That year Pioneer drilled 1,100 wells with 96% success, adding 91 million barrels of oil equivalent proved reserve. The company also replaced an astonishing 200% of production at $18.36 per barrel of oil equivalent. The company increased production from North America by 12% and drilled 10 discoveries in 2 emerging growth areas in South Texas and Tunisia. Pioneer also has operations in South Africa.

At the Hughes Christensen luncheon. IADC president Dr Lee Hunt will recognize IADC’s officer nominees for 2008 and present the IADC Chairman’s plaque.

The featured speaker is David R Anglin, global drilling manager, ExxonMobil Development Company. Mr Anglin’s remarks are titled “Integrated Approach to Well Control Integrity Management.” As global drilling manager, Mr Anglin is responsible for the conduct of safe and effective operations worldwide for a program that averages 45-55 rigs and capital budgets in excess of $6 billion/year.

After lunch, IADC has a special treat that will get those post-dining cerebral juices flowing. Dr John H Lienhard is author and voice of “The Engines of Our Ingenuity,” the nationally syndicated public-radio program whose home station is KUHF in Houston. “Engines” explores the stories behind the history of technology and the people whose ingenuity made today’s world possible. Dr. Lienhard is M.D. Anderson professor emeritus of mechanical engineering and history at the University of Houston. Dr Lienhard’s presentation is sponsored by Ernst & Young LP.

Then, we hear the prognosis for drilling from the horse’s mouth in our always anticipated annual Drillers Outlook.

Three leading drilling contractors representing land and offshore with US and global scope will present their views on the strong outcome of drilling worldwide. Will demand continue? Will newbuilds saturate the market? Where will the people come from to man the units as the older, more experienced employees reach retirement? The panelists will consider the key issues facing the contract-drilling industry:

• Doug Wall, chief operating officer, Patterson-UTI Drilling Company LP

• Jon Cole, president & CEO, Scorpion Offshore

• David Williams, senior vice president & chief operating officer, Noble Corporation

The day wraps up with enlightening comments on two new IADC initiatives:

Linda Silinsky-Kephart will discuss IADC Career Connection, which was organized to pursue IADC chairman Robert Long’s vision to broaden the contract-drilling industry’s pool of potential recruits beyond traditional resources. Ms Silinsky-Kephart directs the program.

Sandra Mourton will give an update on the activities of the International Forum of Energy Centres and Museums (IFECM). IFECM was organized under IADC auspices, through the leadership of 2006 IADC Chairman Claus Chur to coordinate educational outreach among global energy centers. In addition, Ms Mourton, executive director of the Offshore Energy Center, will fill us in on our recent events at the OEC, Ocean Star and OEC’s Educational Outreach programs.

The IADC Board of Directors will then convene to discuss association business.

The day concludes with the Annual Meeting Reception at the Lone Star Flight Museum. Attendees will enjoy an evening of nostalgia among one of the finest collections of flyable World War II aircraft in the USA.

Musical entertainment will be provided by “Sparky Koerner” and his jazz ensemble. Drinks and snacks will be served. Shuttle buses will transport guests to and from the museum. The evening is co-sponsored by Caterpillar Inc and Security DBS, a Halliburton company.

Friday kicks off with coffee and refreshments sponsored by Tesco Corporation.

The first session is the Operator’s Outlook Breakfast & ReedHycalog Rig Census, sponsored by ReedHycalog. ReedHycalog president John Deane will present the 2007 census and associated contractor survey, one of the major statistical benchmarks on the land and offshore drilling industry.

IADC is particularly proud to introduce the morning’s featured speaker, Barbara Yilmaz, technology vice president for global drilling & completions for BP. Ms Yilmaz is a 25-year veteran of BP. Her prior roles include various line leadership roles such as business unit leader for North American exploration.

Next, we will learn about “Rigs of the Future/Wells of the Future” from those in the know:

• Rick Fontova, senior vice president, Enventure Global Technology: “The Well of the Future – Kiss Today Goodbye”: Whether in mature onshore basins or in ultra-deepwater, wells of tomorrow will have little resemblance to the wells we operate today. Hear what influences could cause every aspect of the well to change, from ownership, planning, design and construction to drilling, completion and abandonment.

• Pete Miller, chairman, president & CEO, National Oilwell Varco: “Blending the Future: Bringing Offshore Automation together with Land Efficiency”: The offshore drilling industry, Mr Miller says, has led the march to automated equipment on drilling rigs, while land drillers have markedly improved efficiency and drilling times. Blending offshore automation with land efficiency in the rigs of the future will yield ever improving economics for drilling around the world. This must be done in a manner that recognizes the unique economic profile of land and offshore drilling rigs.

John De Wardt, president, De Wardt & Company, will discuss “Real Business Growth in Today’s Oilfield.” Says Mr De Wardt, “It is easy to ride the wave of high demand; however, the true growth companies are those who have focused strategies, differentiate themselves and deliver products and services quickly as well as at lower cost.”

Last, but far from least, the highly regarded analyst Jim Wicklund, partner & chief investment officer, Spinnerhawk Capital Management, will provide perspective to current market trends and some guideposts to 2008 and beyond.

IADC chairman Robert L Long, chief executive officer, Transocean, will then adjourn the conference. ]]> http://www.drillingcontractor.org/iadc-annual-meeting-today%e2%80%99s-industry-hums-but-what%e2%80%99s-the-tune-for-tomorrow-1406/feed 0 http://www.drillingcontractor.org/wirelines-1405 http://www.drillingcontractor.org/wirelines-1405#comments Wed, 28 Oct 2009 21:18:19 +0000 admin http://briancparks.com/drillingcontractor/?p=1405 Australian government boosts E&P

The Australian government has announced a boost to petroleum exploration in Australian waters, with 11 new offshore permits awarded to exploration companies from the US, France, China, India and Australia. In total, the companies will invest more than AUD$800 million over six years, taking total investment in the 2006 offshore petroleum acreage release to almost AUD$2.2 billion. The exploration areas that these permits apply to are in waters off Western Australia, Tasmania and the Northern Territory and include four permits in Designated Frontier Areas.

MMS deep-gas rule criticized

IADC joined US producer associations to criticize MMS’ proposal to devise “incentives” for ultra-deep natural gas E&P. The proposed rule would actually deny or limit royalty relief for ultra-deep wells sidetracked from existing wellsites, or secondary wellsites on existing leases. The industry associations have urged MMS to reconsider the rule.

Biofouling risk management

IADC has contributed comments to Australia’s Hazard Analysis for Marine Biofouling in the Petroleum Industry, part of an effort to develop guidelines to manage biofouling risks. IADC’s letter pointed out that dry tows can provide a significant reduction in the risk of spreading alien marine species in less than the suggested four weeks. Report drafters recommended that the drying-out period remain unchanged for now but said it can be elucidated in a later phase of the project.

EPA to study coalbed methane effects

The EPA has decided to once again study the impact of coalbed methane operations on water resources despite a previous study finding no harmful effects of hydraulic fracturing procedures in coalbed methane E&P. EPA’s current investigation will examine basins in Appalachia, New Mexico and Wyoming. IADC is working with other associations to demonstrate that federal intervention is unjustified.

EU E&P transparency challenged

The European Commission has contacted representative associations of “extractive industries” listed on European stock exchanges to encourage them to “disclose payments to governments in their financial reports.” The governments contemplated are primarily in the resource-rich so-called developing world. The European E&P industry has responded to the query by highlighting its self-generated examinations of transparency and corruption. The formal industry response, led by OGP and endorsed by IADC, argues that there’s no reason to mandate unilateral disclosure for EU-registered companies.

GOVERNMENT AFFAIRS

The IADC government affairs office has continued to pursue a solution in the UK employment tribunals to application of the EU Working Time Directive in the UK offshore. “We believe the odds are strongly with us to prevail against unions there,” said Brian Petty, IADC senior vice president – government affairs. In the US, there has been success managing the government’s attempt to impose overly restrictive security regulations on offshore contractors. One result is that the industry has been largely exempted from onerous passport requirements for US offshore workers.

Looking ahead, Mr Petty said IADC will continue to fight to preserve and expand E&P access to federal lands in the face of a hostile Democrat-controlled Congress. In the EU, IADC will try to maintain the industry’s own “HSE best practices” instead of prescriptive legislation from the European Commission, and to keep the protection of critical infrastructure in the hands of Member States.

Some highlights:

• Despite fierce opposition from Florida legislators and Gov. Jeb Bush, the US Congress opened 8.3 million acres for lease in the Gulf of Mexico, much of which had been under development bans. The acreage mostly lies south of the “Sale 181” lease area straddling the central and eastern Minerals Management Service (MMS) planning areas.

• IADC was part of an intensive campaign to inform agency and congressional staff of the potential impact of the preliminary Western Hemisphere Travel Initiative (WHTI). The final WHTI rule reflected industry efforts, and as a result, the majority of drilling contractor employees working on the US OCS won’t have to obtain passports to continue working there.

Efforts by IADC and other groups were later recognized by the Offshore Operators Committee in an award presented at its Annual Meeting in June 2007. Among those recognized were Bill Hedrick of Rowan Companies; Bob Moran and Dave Thomas, both of Halliburton; Chuck Bedell of Murphy Oil; Mark Witten, now retired and formerly of Chevron; and Mr Petty.

• The SAFE Port Act gave the US Coast Guard (USCG) 180 days to complete a rulemaking requiring foreign-flagged vessels and crews to conform to the same notification procedures as US-flagged vessels. A campaign led by IADC, API, Halliburton and foreign offshore supply vessel interests thwarted an attempt to exclude foreign-flagged vessels from operating on the US OCS.

• IADC pointed out to the MMS that its proposal to implement OCS provisions of the 2005 Energy Policy Act was a disincentive to deeper drilling. MMS’ plan would deny or limit royalty relief for ultra-deep wells sidetracked from existing wellsites, or secondary wellsites on existing leases.

• Industry groups met with US government representatives to identify gaps in federal regulations affecting foreign offshore personnel. Inconsistencies in the interpretation of regulations often create difficulties for offshore drilling activities. The USCG, Department of Labor, Department of State, Department of Homeland Security, Customs and Border Protection and MMS attended.

•The UK Department of Trade and Industry (DTI) considered IADC’s concerns about possible offshore licence extensions. IADC had urged caution in granting operators extensions for work programmes on the basis of lack of rig availability. DTI said it would not consider extensions where completion of the work programme was prevented by unwillingness to pay the current market rig rates or by any need to conclude commercial arrangements such as the raising of funds or concluding farm out arrangements.

• IADC and other industry groups have communicated with the European Commission on several initiatives impacting the drilling industry. On the “Strategic EU Energy Review,” industry urged that access to resources be expedited and cost-effective regulations be promulgated to ensure continued investment in the mature, high-cost North Sea basin. On the “Towards a Future Maritime Policy for the Union: A European Vision for the Oceans and Seas” paper, industry noted that EU’s maritime policy must be consistent with the “Strategic Energy Review” and cited the use of seabed data and IMO’s Automatic Identification System to ensure the sustainability of the marine environment.

On the European Commission’s proposal to protect EU “critical infrastructure,” industry emphasized the primacy of Member States in the area of security legislation and urged the commission to calibrate its risk assessments on the basis of a likely threat, not on the basis of a multiplicity of events.

• A concerted lobbying effort, and efforts of the UK HSE, led to the EU Parliament removing the E&P sector from its proposed directive on the investigation of maritime accidents.

• The European E&P industry highlighted its self-generated examinations of transparency and corruption after the European Commission contacted representative associations of “extractive industries” listed on European stock exchanges to encourage disclosures of “payments to governments,” primarily those in the resource-rich so-called developing world.

• UK offshore joint industry employers groups decided not to appeal the Scottish court decision that UK working time regulations apply to the entire UK continental shelf. This will expedite proceedings on the merits of whether they are fully compliant with the EU Working Time Directive, a position disputed by trade unions. The employers had petitioned the court to find that the regulations applied only within 12 miles offshore.

• Industry offered testimony to the US Congress House Committee on Natural Resources to defend the “multiple use” of US public lands in the Mountain West. The testimony pointed out that leases on Bureau of Land Management (BLM) lands are subject to conditions of approval imposed by BLM to assure public access and to minimize environmental impact.

• The US onshore E&P industry testified in support of the “More Water, More Energy and Less Waste Act of 2007” encouraging a symbiotic use of western water resources associated with E&P operations. In particular, the bill provides for enhanced recovery and use of produced water from the borehole, which is often mischaracterized as “waste” water. A significant share of that water is already used for irrigation, livestock watering, etc. The bill would direct an evaluation of regulatory barriers to expanding such beneficial uses.

• A big headache for US land drilling contractors was cleared up when the Texas Legislature passed a bill allowing onshore drilling companies headquartered in Texas a choice for assessing their rigs for tax purposes. The prior Legislature had radically altered the ad valorem tax scheme by requiring such assessments to be levied at the “principal place of business” of Texas-based companies, instead of at the site where rigs were located on “tax day.” The result was that many companies faced significantly higher levies.

• IADC is working with API and other producer associations to once again demonstrate that federal intervention in coalbed methane E&P is unjustified. This follows a decision by the US Environmental Protection Agency (EPA) to study the impact of coalbed methane operations on water resources despite a previous study finding no harmful effects of hydraulic fracturing procedures in coalbed methane E&P.

• Industry objected to the World Bank’s proposal to ease government procurement standards for its country clients in the developing world. The World Bank was warned that opportunities for mischief and corruption would increase if the standards were lowered.

• In the continuing effort to clarify India’s service tax, a meeting was held in February 2007 among industry representatives and the Indian Finance Ministry. Drilling contractors believe the tax doesn’t include drilling services, and, if it does, then offshore operators must cover the tax. One consensus reached at the meeting is that the current system is a distinct disincentive to investment in new wells. IADC is still awaiting a decision from the Mumbai High Court over the issue.

• Coinciding with Vietnam’s accession to the World Trade Organization (WTO), US companies were granted better access to the Vietnamese energy market after Vietnam’s WTO negotiators agreed that joint ventures will not be required of foreign drilling companies.

ACCREDITATION AND CERTIFICATION

Primary issues concerning IADC’s Accreditation & Certification Department (ACD) in 2007 have consisted of responding to increased operator focus on SafeGulf compliance in the Gulf of Mexico, contractor interest in the Competence Assurance Accreditation (CAA) program, and the growing popularity of IADC’s Training & Operations Passport.

In early 2007, a number of SafeGulf operators enacted stricter compliance rules, which resulted in some rig employees being refused entry from shore bases. Though IADC had input RigPass records to the SafeGulf database since late 2005, the increased operator emphasis resulted in a large influx of RigPass records being submitted to IADC from employers and training providers seeking to ensure SafeGulf compliance. To date, IADC has processed more than 15,000 RigPass records into the SafeGulf database, with that number increasing on a daily basis. IADC conducted a SafeGulf workshop for RigPass providers in late September 2007 to assist RigPass providers with this process.

IADC’s Competence Assurance Program also gained momentum through the year. In addition to Noble Drilling Corp, the first contractor to apply under the CAA program, Pride International and Rowan Companies have submitted applications for CAA accreditation.

Interest in IADC’s Training & Operations Passport also reached new levels, with major orders from companies such as Weatherford Integrated Drilling Services, Saudi Aramco, Rowan Companies, Parker Drilling, Total Separation Solutions and @Balance. Many of these companies opted for special custom versions of the Passport with company logos and, in some cases, page inserts with safety policies and other information. ACD plans to make Spanish and Arabic versions of the Passport available before the end of the year.

IADC is gradually phasing in its Drilling Industry Training Accreditation Program in the second half of 2007. The program will offer a general form of accreditation for training outside of ACD’s existing WellCAP, RigPass, and Ballast Control & Stability programs. A primary goal for 2008 will be continued emphasis on this program to make it completely operational.

To accommodate the increasing activity levels and demands on IADC’s accreditation and certification services, three new staff members have joined the department over the past year, including a new assistant director and two accreditation coordinators.

“Our increased staff is a direct result of the success and popularity of IADC’s accreditation systems,” said Steve Kropla, vice president of Accreditation & Certification. “It shows IADC’s commitment to maintaining high levels of customer service and provider monitoring to ensure the credibility and integrity of these systems.”

Other ACD highlights include:

•The first annual periodic audit of IADC’s ISO 9001-2000 certified Quality Management System was completed in February 2007 with excellent results. The auditor, employed by Det Norske Veritas (DNV), noted no non-conformities in the department’s operations and was complimentary of the efforts made to ensure compliance. ACD first obtained its ISO certification from DNV in March 2006.

•An assessment is ongoing of whether innovations and new technologies warrant a revision of the IADC Deepwater Well Control Guidelines. Several IADC members, including Diamond Offshore, Transocean, Oxy and Maersk Contractors, plan to begin by reviewing the training chapter. The deepwater guidelines were first issued in 1998 and then supplemented in 2000 by a section on unplanned riser disconnects.

• More than two dozen WellCAP and HSE RigPass site visits of IADC-accredited training providers were conducted over the past year. IADC recently signed an agreement with DNV to utilize the organization’s international network to assist in audits of the more than 200 IADC-accredited training providers worldwide.

• IADC has agreed to assist the MMS in the development of “hands-on” testing parameters and procedures to help measure retention of well control training among rig employees. According to the MMS, shortcomings in Subpart O audits have led to an increasing number of Incidents of Non-Compliance. That, coupled with the increasing level of offshore rig activity and new personnel, is leading MMS to explore the possibility of hands-on testing. MMS training regulations currently provide for hands-on safety, simulator or live well testing to assess the effectiveness of training for field personnel.

• Liberia has joined Vanuatu and the Marshall Islands as flag States that have approved IADC’s Ballast Control & Stability Accreditation & Certification Program. The approval by the Liberia International Ship & Corporate Registry (LISCR) enables accredited providers to receive their own provisional approval by the Liberian registry.

Additionally, IADC is assisting the LISCR in updating its marine licensing examinations. The project – Exam and Training Standards Initiative (ETS 2010) – will bring the Liberian exams up to date with industry practice, to identify, define and propose new certifications for industry-specific positions such as high-voltage electronics officer, and to study and propose alternative career paths for degreed engineers desiring employment offshore.

OFFSHORE REGULATORY & TECHNICAL AFFAIRS

Several regulatory efforts have targeted offshore operations over the past year, and emerging efforts from groups such as the International Maritime Organization (IMO) will continue to challenge the industry in the near future. While there will be continued focus on safety, particularly in targeted areas such as lifting and hoisting equipment design and operation, Alan Spackman, IADC vice president of offshore technical and regulatory affairs, believes that the major challenges will be in the arena of environmental regulations.

• To assess the reliability of MODU moorings, a major joint industry project, including a metocean study incorporating learnings from the severe hurricanes of 2004 and 2005, was completed this year. API’s 2INT-MET provides updated metocean data for four regions of the Gulf of Mexico, including wind velocities, deepwater wave conditions, current information, and surge and tidal data.

“This RP will mean significantly more stringent mooring requirements for MODUs in the Gulf of Mexico but also will be a tool to help those rig owners avoid the level of hurricane damage that the industry saw after Rita and Katrina,” Mr Spackman said.

• The IMO Ship Design and Equipment (DE) Subcommittee is mid-way through its comprehensive effort to update the Code for Construction and Equipment for Mobile Offshore Drilling Units (MODU Code) to include the latest internationally accepted standards, in order to maintain the desired parity with the Safety of Life and Sea and Load Line Conventions.

IADC staff and members are actively engaged in this effort as work continues. A consolidated text of the draft revised MODU Code will be ready by November 2007 for consideration at the DE Subcommitte’s February 2008 meeting. The most significant changes proposed for inclusion in the revised Code involve physical access for inspection and maintenance and firefighting.

• As IMO’s Marine Environment Protection Committee works to set standards for the recycling of ships in a new international Convention, IADC is working to assure that the Convention attains an appropriate balance in the allocation of responsibilities and will ultimately be workable for MODUs that have reached the end of their economic lives. The final Convention should be completed in 2008-09.

• Monitoring the Australian government’s efforts to develop guidelines to manage biofouling risks, IADC submitted comments on the draft hazard analysis report. Comments pointed out that dry tows already provide a significant reduction in the risk of spreading alien marine species and that effective risk reduction by hull desiccation can be achieved in less than the four weeks postulated in current guidelines. Report drafters noted IADC’s comments and said the issue can be elucidated in a later phase of the project. Mr Spackman noted that the IMO has begun preliminary discussions of this issue with the view of developing international standards.

• Ballast Water Management will become ever more challenging, Mr Spackman said. While only six countries have signed on to the IMO’s Ballast Water Management Convention, numerous countries are demanding compliance with the IMO or similar standards as a condition of entry. The growing divergence of approaches burdens the industry, which in turn places greater pressure on flag-State governments to accede to IMO standards. A major hang-up is the lack of proven and approved technologies for treating ballast water to control potentially harmful or invasive species. IMO is clearly forcing the development of technology, Mr Spackman said.

• IADC is closely watching IMO’s preliminary consideration of methods for dealing with greenhouse gas emissions from ships. The overall strategy is expected to be completed in 2009. Carbon consumption in international shipping is highly efficient, but its existence outside of regulatory controls is vexing to those countries assuming the economic costs of imposing domestic controls on carbon consumption. To succeed in establishing IMO standards in this area, flag States – mostly developing countries – must be convinced that the imposition of controls on ships flying their flags is in their interests. How MODUs, the majority of whose emissions are attributable to the coastal State in which they operate (rather than the flag State), will be treated under IMO-developed regulations remains to be seen, but IADC will push for exclusive recognition of coastal State controls.

• IADC is participating in drafting international regulations under annex I of the MARPOL Convention to govern the transfer of oil between ships at sea. Early drafts have included the fueling of platforms and MODUs despite IADC’s objections. IADC remains hopeful that transfer of fuel to platforms and MODUs will ultimately be recognized as being appropriately controlled by the coastal State and excluded from the regulations.

• The Transportation Security Administration and the USCG adopted significant changes suggested by IADC for the Transportation Worker Identification Credential (TWIC) program. Improvements include provisions for non-resident aliens to obtain TWIC; clarification of the “secure area” definition; and flexible interpretations regarding escort for non-TWIC holders within secure areas.

IADC’s efforts have successfully kept most US drilling contractor personnel from being required to obtain a TWIC, Mr Spackman said. Nonetheless, for those operating in the US, the TWIC could become problematic as the USCG has issued final regulations that mandate its use, yet the TSA has not even begun accepting applications for the credential.

• The EPA issued its final rules establishing standards for cooling water intake structures in order to protect marine flora and fauna from harm associated with the mechanical processing of cooling water. While these new regulations do include MODUs, according to Mr Spackman, they could have been much more burdensome without IADC’s intervention. EPA’s Region 6 has included the new requirements in its NPDES permit for offshore oil and gas operations in the Central and Western Gulf of Mexico and, for the first time, owners of certain MODUs will need to apply for NPDES permits.

• IADC worked with the USCG to develop a simplified matrix that clarified the requirements for submitting reports of marine accident, injury or death and of chemical drug and alcohol testing. This matrix is available on the IADC website.

• A significant unknown for the US industry is the USCG’s Offshore Activities Regulations. This nearly 25-year-old project was re-invigorated in 1999 but was then deferred due to the focus on security-related issues. The most costly provisions of the proposed regulations would have little impact on MODUs as, unlike many fixed platforms, they already have substantial lifesaving and firefighting equipment; however, the proposed rules did include new requirements for occupational safety and health. Existing drilling contractor OSH programs are likely to need fine-tuning to meet the USCG’s prescriptive regulations, Mr Spackman advised.

EUROPENA OPERATIONS

It has been a challenging year for the European drilling industry. The availability of resources to meet increasing demands is limited, which in turn has necessitated a re-evaluation of issues requiring resolution in this region.

These constraints have focused attention on the region’s key priority issues, namely the HSE Case Guidelines and the Offshore Competency Training Programme. Both of the HSE Case Guidelines, one for MODUs and the other for land drilling, have necessitated an exceptional level of commitment to achieve their update and completion for their expected launch on 9 October 2007.

Additionally the European Offshore Competency Training Programme, a key factor in reducing the drain on resources and improving efficiency, has consumed significant effort in achieving mutual recognition of the IADC Basic Introduction to Offshore Safety Course in the region.

Apart from regular reviews and updates of the two HSE Case guidelines, continuing development of the European Offshore Competency Training programme and a risk-based approach to accident and incident reporting will be the most demanding issues requiring completion in 2008.

• Since its launch in October 2006, the IADC HSE Case Guideline for MODUs has received significant global support and praise from drilling contractors, regulators and clients alike. Its user-friendly style and useful outputs have made the document an important reference tool for those developing an HSE Case for MODUs. Workshops and presentations on its contents and use have been undertaken worldwide since its launch, and feedback from these sessions have been valuable in ensuring the documents reflect the requirements of all stakeholders.

This information enabled IADC to launch a revised and updated Appendix 4 – Legislative Index to this guideline. This first update reflects changes in coastal State legislation and incorporates the requirements of additional countries that require an HSE Case. It also provides additional information on the necessary compliance with coastal State regulatory requirements and the relevant review and assessment process undertaken by each country. The update is available to download for free from the IADC Publications Catalogue web page. A review of the technical contents within the main body of the guideline is planned for 2008.

• Following the successful launch of the IADC HSE Case Guideline for MODUs, land drilling contractors in Europe and elsewhere asked IADC to develop a land-specific document. Early this year, IADC brought together a group of contractors to start a land drilling version of the guideline based on the offshore version. The first draft, based on European requirements, was issued in May 2007. This was subsequently updated in June 2007 to reflect the growing needs of contractors and stakeholder requirements in other regions of the world.

Following extensive consultation with drilling contractors, government agencies and other stakeholders, especially Shell and Petroleum Development Oman, the HSE Case Guideline for Land Drilling Units was prepared for its formal launch on 9 October. The guideline addresses specific regulatory requirements in Europe, whilst also adapting to the needs of users and stakeholders elsewhere.

Like the offshore version, the land version is split into two parts, the main body of the document complete with Appendices 1 to 3 inclusive, whilst Appendix 4 – Legislative Index, will remain separate from the main document due to its likely continuous revision. This document is also on the IADC Publications Catalogue web page.

• Several milestones were achieved as IADC’s European Offshore Competency Programme continued to be developed over the past year. First there was the successful trial of the Basic Introduction to Offshore Safety course in March 2007; the programme’s formal launch was expected in October 2007. Second, the working group has seen increased interest in its activities from outside Europe, whilst enjoying the support and participation from new members and other local maritime trade associations over the past year. Third, regulatory agencies and oil industry associations in the region recognized that the IADC courses meet the competency requirements expected of candidates traveling and working offshore in Northwest Europe.

Although the programme will be launched in October 2007, it will continue to be developed and enhanced over the coming year to reflect member requirements for training and will include a robust quality assurance programme, overseen by DNV. IADC plans to run a fully certified course before the end of 2007 at a newly accredited establishment. Commencing in January 2008, IADC will begin to accredit more training establishments wishing to undertake courses based on the European Offshore Competency Training Programme.

The successful execution of IADC’s trial Basic Introduction to Offshore Safety (BIOS) course at the Falck Nutec training facility in Esbjerg, Denmark, was our biggest achievement to date. The trial was audited by DNV for IADC and evaluated by the Offshore Petroleum Industry Training Organisation on behalf of the UK Offshore Operators Association, now Oil and Gas UK. Observers at the trial included regulators from the North Sea Offshore Authorities Forum, the Norwegian Oil Industry Association, the Netherlands Oil and Gas Exploration and Production Association, as well as the North Sea Operators Committee – Denmark.

The six participants — two each from Maersk Contractors, Noble Drilling and Seadrill — along with one of the instructors can be seen in the photograph below. All participants successfully completed the two-day BIOS course and one-day Helicopter Underwater Escape Training (HUET) course. The participants, in survival suits, undertook both courses in realistic offshore conditions, with wind, waves, rain (water spray) and a combination of day and night time lighting to contend with during their sea survival training. It is a credit to their professionalism and courage that the six undertook such a course under the scrutiny of 16 observers watching their every move and performance.

The Helicopter Underwater Escape Training course was new to several participants. The pictures below depict the participants in a helicopter module that has landed on the sea surface, then making preparations as the helicopter becomes partially submerged. They then exit from a submerged helicopter that has not overturned, and finally exiting from a submerged and overturned helicopter. At all times, two divers were in the water to monitor activities, and an instructor was in the helicopter module with each group of three participants.

MIDDLE EAST AND ASIA

The extent and importance of IADC activities in the regions of Middle East and Asia have expanded substantially over the past year, said Ken Fischer, IADC vice president for the Middle East and Asia. Implementation of accreditation programs such as WellCAP and RigPass at companies throughout the Gulf continues rapidly. Key IADC conferences have been planned for Cairo, Egypt, in October 2007; Singapore in November 2007; Abu Dhabi, United Arab Emirates, in January 2008; Kuala Lumpur in February 2008; Jakarta, Indonesia, in August 2008; and Muscat, Oman in December 2008. “Companies across Asia and the Middle East have taken note of IADC’s programs and have shown significant interest in participation,” Mr Fischer said. “In turn, IADC has supported regional HSE initiatives and continues to explore opportunities to bring IADC’s knowledge base and services to these two regions.”

• IADC’s accreditation programs have experienced unprecedented growth in the Middle East over the past year, said Mr Fischer. RigPass, IADC’s accreditation program for safety orientation training, has become of primary importance as the number of inexperienced employees on rigs continues to multiply, and the region’s national oil companies and drilling contractors have recognized the need to properly prepare their newhires.

“Petroleum Development Oman (PDO) and Saudi Aramco are in the process of implementing a ‘RigPass for everyone’ policy on their well sites,” Mr Fischer noted. “The other producing companies, mindful of the importance of maintaining their safety performance, are expected to do likewise, making RigPass a regional standard for basic safety training.”

IADC’s new Competence Assurance Accreditation Program is also drawing strong interest in the Middle East. As national oil companies around the Arabian Gulf bring in new contractors to meet increasing demand, they require assurance that employees at all levels are competent to perform their tasks.

In order to define rig floor capabilities, many drilling contractors are turning to IADC’s “Knowledge, Skills & Abilities” (KSA) documents. The KSAs list the essential competence areas for each job on the rig. Each company can tailor the lists to suit different job requirements.

WellCAP-accredited well control training is gaining momentum in the Middle East as well. National oil companies and contractors alike are recognizing the importance of introducing well control training early in the competence development process.

WellCAP’s introductory and fundamental levels of training are being used to build well control knowledge in a step-by-step method, thereby ensuring true competence and not just the ability to pass a test at the supervisory level. Much of this training is being delivered in Arabic so the local workforce can be better prepared to respond to well control emergencies.

These accreditation programs received the greatest attention during IADC’s first Middle East Leadership Briefing in Muscat, Oman, in late 2006. It was hosted by PDO and was attended by representatives of member companies in the region.

“The meeting provided an opportunity for IADC members to discuss ways to apply IADC capabilities, activities and programs in the Middle East,” Mr Fischer said. “All in attendance agreed that this was just the first step and that future meetings should be held from time to time around the Gulf.”

• In the latest in a series of meetings held for the benefit of IADC’s Chinese members, the IADC Underbalanced Operations & Managed Pressure Drilling Committee held a UBO/MPD workshop in Urumqi, China, in August 2006. The workshop was attended by more than 100 professionals from China National Petroleum Corp, China National Offshore Oil Corp, Sinopec and China’s Petroleum University.

Since the workshop, CNPC has joined IADC as a producer member. CNPC is China’s largest oil and gas producer. “IADC has been cooperating with CNPC for many years through their various drilling subsidiaries and training centers,” said Mr Fischer. “As a producer member, CNPC drilling professionals will be able to take full advantage of our various activities and programs.”

LAND OPERATIONS AND HSE

The drilling industry’s worldwide lost-time incidence (LTI) rate reached a record low in 2006, an accomplishment that the entire industry should take pride in, said Joe Hurt, senior director for land operations.

• IADC continues to monitor OSHA’s proposal to modify its Hazard Communications Standard to make it consistent with the UN-adopted Globally Harmonized System of Classification and Labeling of Chemicals. This would involve changing the criteria for classifying health and physical hazards, adopting standardized labeling requirements and requiring a standardized order of information for safety data sheets.

IADC also is watching OSHA’s proposal to update standards for personal protective equipment (PPE) based on National Consensus Standards. Existing references to specific consensus standards would be replaced with performance language requiring PPE to be constructed in accordance with good design standards. The proposed revision includes guidance for determining what is a good design standard.

• A meeting with US Congressman Mike Conaway, R-Texas, and representatives from DOT Federal Motor Carrier Safety Administration (FMCSA) was held to discuss the Department of Transportation’s Hours of Service (HOS) regulations. Many attested to the operational problems and safety concerns that were created by lumping oilfield haulers in the same category as over-the-road drivers. Mark Cullifer of Patterson-UTI and Leroy Peterson of Patriot Drilling spoke on behalf of IADC. Issues they brought up include an increase in accidents since the new HOS rules were implemented and a significant loss of rig hours while waiting for trucks.

• The FMCSA released its much-anticipated proposal addressing the use of electronic on-board recorders (EOBRs). New performance standards would be mandated for EOBRs installed in commercial motor vehicles manufactured two years following the effective date of the final rule.

• The IADC HSE Committee Task Group has established guidelines for collecting environmental data and providing it to operators and other entities. Use of the guidelines is voluntary.