In fact, she said she ended up picking economics as her major because it provided a variety of different career options. “It seemed like it would open up a lot of doors and would be so flexible in doing lots of things with it,” she said.

Perhaps it was just coincidence then, that after she got her degree in 1990, Ms Browne still ended up going into the oil business after all.

“The market was not great at the time, and I really wanted to go back to Tulsa,” she recalled. After sending out her resume to the few companies that were left in Tulsa at the time, it was Helmerich & Payne that called back.

Going to work for H&P as a drilling analyst, Ms Browne described her first job as “a little bit of everything,” from sales to contracts to invoicing to communicating with customers. “Back then, H&P was a pretty small drilling contractor. And the job was a good way to get a taste for how a drilling contractor company actually worked.”

She added that her older sister had also gone straight into the oilfield after graduation, though, like their mom, her sister went into the downstream segment as a crude scheduler. Although she was able to see how successful both of their oil industry careers were, Ms Browne still had never had any direct contact with drilling contractors – or any expectations of what the drilling industry would be like.

Those first two years at H&P were definitely an eye-opener, and Ms Browne recalled loving the work she did there.

In 1993, when a family move to Houston led her to take a job with Enron as an engineering technician, the new job made her quickly realize that she wanted to go back to the drilling contractor industry.

“At the time, Enron was the company to work for, and the work was interesting, but I missed all the things I was learning about the drilling contracting business. I had only been at H&P for two years, but I just knew that was what I wanted to do,” she said.

She got her wish a year later, taking a job at Sonat Offshore Drilling (now Transocean) as a contract analyst, focusing on sales and marketing for the company’s offshore fleet. In 1998, she went to ENSCO as a marketing analyst and has been serving as senior account manager since 2006, handling outside sales for the company’s North and South America Business Unit.

Ms Browne said that to this day, she still thoroughly enjoys the drilling contracting industry and the customer interaction that is vital to her job. “It’s very rewarding when you feel like you’re doing something that’s really valuable to the company. If we weren’t out there finding work for the rigs, they would be stacked and nobody on the rigs would have a job,” she said.

GOM challenges

As of August 2008, ENSCO had 13 jackups located in the Gulf of Mexico, plus one each in Mexico and Venezuela. Ms Browne said she believes Hurricanes Rita and Katrina have significantly impacted the region’s shelf market – definitely making her job a bigger challenge.

“There were a couple of years when operators didn’t want to drill in the Gulf during hurricane season,” she said. Dealing with the regulatory changes imposed after the hurricanes has been another challenge, as well as finding prospects when reservoirs on the shelf continue to deplete. “I think the Gulf of Mexico shelf is really going to be a challenge from here on out,” she said, but added that demand appears to have picked up in this hurricane season compared with the last couple of years. “We’ve had plenty of demand especially for our smaller 250-ft jackups,” she pointed out.

A woman in a man’s world

There’s no denying that men still dominate the oil industry, but Ms Browne said she must have been lucky because she’s never really had to struggle with that. “I think you still need to have a good understanding about the market and this business and be on top of your game in order to get where you want to be,” she said. “But it’s gotten a lot better now than when I first got into this business. You see many more women in sales, not just on the drilling contractor side but in the overall industry.”

And for the young women who are either new to this industry or considering joining it, Ms Browne said: “Don’t ever let anyone tell you that this is a male-dominated business and you won’t ever amount to much, because that’s not true.”

Hercules Offshore has appointed John T Rynd as the company’s chief executive officer and president, succeeding Randall D Stilley, who has resigned as CEO, president and a director. Mr Rynd also has been appointed as a director.

He has served as executive vice president and chief operating officer of the company since July 2007. He joined the company in September 2005, serving as senior vice president of Hercules Offshore and president of Hercules Drilling Company. Previously, Mr Rynd spent 15 years at Noble Drilling Services and worked on offshore drilling rigs for Rowan Companies for 10 years.

Schlumberger acquires depth imaging technology provider

Schlumberger has acquired Staag Imaging, a Houston-based provider of depth imaging technologies for seismic data processing. Staag will become part of the Schlumberger WesternGeco business unit. The company is one of the first providers of a commercial Full Waveform Inversion (FWI) technique, which promises to revolutionize the building of earth velocity models. Staag’s FWI is an automatic, data-driven tool that uses the two-way wave equation method to build velocity models of the subsurface, including complex geology formations such as salt bodies. This FWI technology can automate a large part of the velocity model building workflow. The accurate models it produces can then be used to exploit the power of WesternGeco’s complementary high-resolution Reverse Time Migration capability.

Greg Bailey is new VP engineering, technology at Enventure

Enventure Global Technology announced the appointment of Greg Bailey as vice president of engineering and technology. He is responsible for leading and managing the SETÂ solid expandable technology and service lines. With more than 20 years of engineering experience, Mr Bailey will lead Enventure’s engineering and research and development divisions in producing solution-based technology. Prior to joining Enventure, Mr Bailey worked for Grant Prideco, where he served as the company’s vice president of engineering in the tubular technical division. He has also served in various management capacities with Hydroil and FMC, and was president and owner of a technical services business for several years.

Boots & Coots signs Libya deal

Boots & Coots International Well Control has signed a multi-service contract with Libya’s Harouge Oil Operations Company. The new contract, valued at close to $15 million for a two-year period with optional one-year extensions, provides for one hydraulic workover unit and a Safeguard prevention well control specialist for Harouge’s Amal field.

LTI to supply 9 new land rigs

Rowan Companies subsidiary LeTourneau Technologies has entered into a contract to provide major components for nine new 1,500-hp land drilling rigs. The contract is with Nomac Drilling and is valued at approximately $90 million. Each of the rigs will feature AC drive technology and incorporate key LTI drilling equipment, including mud pumps and drawworks. Delivery of the rig components is expected to be completed by mid-2009.

New account manager at WCS

Well Control School has appointed Tom Bailey as an account manager for the Houston area. He will be responsible for consulting with clients relating to their competency-based training requirements along with presenting various options of integrated well control training programs offered by WCS.

Wärtsilä-Hyundai JV gets order

Wärtsilä-Hyundai Engine Company, a joint venture between Wärtsilä and Hyundai Heavy Industries in South Korea, has received an order for 16 Wärtsilä 50DF engines for four FPSOs to be built by Samsung Heavy Industries. The contract also includes an option of four more engines for a fifth vessel. The first engine will be delivered in February 2010.

Weatherford, Petrowell to join on reservoir completion technology

Weatherford International and Petrowell have entered into an exclusive, worldwide manufacturing and distribution arrangement aimed at bringing emerging reservoir completion technology to the market place.Under the agreement, Petrowell and Weatherford will develop innovative completion tools and systems that Weatherford will manufacture, sell and service. Core to the agreement is a shared belief in the value of reliable open-hole completion practices and the potential for radio frequency identification (RFID) to radically improve completion installation operations.

Medco Energi appoints 4 VPs

Medco Energi US has appointed four new vice presidents as a part of the company’s realignment of executive positions. The new executives are Daniel Frugé, vice president and CFO; Steve Goff, vice president of petroleum engineering; Gary Johnson, vice president of production operations; and Ted Russell, vice president of drilling and capital projects. Medco Energi recently began a multiple well drilling and redevelopment program onshore Louisiana and acquired a large acreage position in the Ouachita thrust in southwest Texas.

Ensign to use TrigPoint system

Ensign US Drilling will use TrigPoint Solution’s PROMPTT SYSTEM to track and manage assets across its drilling rig fleet and yard operations. PROMPTT uses RFID technology to automate asset tracking and preventative maintenance, to minimize human errors and to improve safety.

PRESENS to supply pressure, temperature transmitters

PRESENS was awarded a frame agreement with FMC Technologies to supply pressure and temperature transmitters to their subsea production trees. The contract is estimated to be worth between NOK100-125 million over five years, with deliveries beginning in Q3 2008. PRESENS released its new subsea pressure and temperature transmitter, the ASTERIX, at the 2008 Offshore Technology Conference. The ASTERIX subsea production tree pT/TT transmitter has a FS pressure range of 0 to 1380 bar, a total accuracy better than ±0.025%FS and one-year drift better than ±0.02%FS. The construction is extremely robust and resistant to shock and vibration. However, the most striking features are the transmitter’s size and weight. The ASTERIX has a total weight of approximately 6.5 kilos, which is a 70% reduction compared with other current solutions on the market.

Weatherford acquires surface logging provider

Weatherford International has acquired International Logging Inc (ILI),  a provider of surface logging, or “mud logging,” and of formation evaluation and drilling-related services at the well site. ILI’s technologies are designed to improve operational efficiency by supplying more reliable and more accurate geological and drilling engineering information at the well site in order to enhance formation evaluation and reduce operating time and risk.

PRODUCTS

The iFinder Density Imaging Service, which produces borehole images of bulk density, photoelectric index and ultrasonic standoff, has been successfully tested and commercially deployed. The primary measurement of the iFinder Service is bulk density imaging.

Bulk density images are a graphical representation of the variation of bulk density around the circumference of the borehole. Imaging of this measurement is possible due to the collimated source and detectors of the density tool, which focus the density measurement on the formation directly in front of the sensor. As the tool rotates, data is collected around the entire circumference of the borehole.

PathFinder Energy Services’ bulk density measurement uses a patented stand-off weighting technique to select a sub-set of the rotating data with minimum stand-off. Similarly, its imaging algorithm employs a weighting technique to focus the density measurement on discrete azimuths, or sectors, around the borehole.

Since the algorithm does not “bin” data, there is no technical limit to the number of azimuths that can be imaged; however, the practical limit derived from the azimuthal resolution of the detectors is 32 sectors for memory images, while images of up to 16 sectors can be transmitted up-hole in realtime.

Density images are mainly used for geosteering because of the ability to determine the direction from which a particular bed is entered or exited.

Halliburton offers WellLife III cementing service

Halliburton is offering WellLife III cementing service, a comprehensive solution to increase the economic life of wells. The solution incorporates three synergistic components: 1. Diagnostics tools that provide the ability to analyze specific wellbore conditions and operational activities that exert stresses on the cement sheath; 2. Cement systems engineered with resilient components to withstand stress and endowed with the ability to react and respond to both predictable and unpredictable wellbore conditions. The latest of these systems is LifeCem cement; 3. Zonal isolation assurance tool, based on Halliburton’s proprietary Swell Technology materials, provide a resilient mechanical barrier at strategic points in the annulus. The service is an interventionless react-and-respond solution designed to help address the industrywide challenge of the loss of zonal isolation due to changes in the wellbore that can stress the cement sheath and lead to destabilization at any point during the life of the well.

Veristic’s Rig Walker allows rigs to be moved laterally

Veristic Technologies’ Rig Walker allows a drilling rig to be moved laterally easily and in a safe manner. Often rigs are disassembled, transported and re-assembled on an adjacent well. The Rig Walker eliminates the time-consuming process of rig-down. It uses hydraulics to lift and transverse the entire rig with control, stability and precision to its new drilling location safely. Key features include: 2.4 million-lb lift capacity provides ability to not only skid the rig but also transport full stands of setback; skids 10 ft in 15 minutes; no rig-down means less wear on the structure, less time to relocate the rig and more time spent drilling.

‘Only dummies don’t wear harnesses on booms’

The International Powered Access Federation (IPAF) has released a video that shows the dangers of not wearing a full body harness on a boom type access platform. It features a live demonstration in which a crash dummy fitted to a specially modified Skyjack boom shows the effects of driving over a low-lying obstacle. For safety reasons, the crash dummy is suspended at the top of the basket. The dummy is not wearing a harness, in order to show the consequences of the catapult and jolting effects when the boom goes over an obstacle. The video can be viewed and downloaded at the Publications/Film section of www.ipaf.org or on www.drillingcontractor.org.

L&M Radiator tests BOSS

L&M Radiator has released field and laboratory test results on its BOSS engine radiator (Brass Off Shore Service). The radiator was designed for offshore use and features brass finning brazed to brass tubes in a stainless steel framework. The radiator features a design common to all MESABI heat exchangers: individual cooling tubes held in headers with flexible rubber seals.  The seals absorb shock and vibration, which can crack rigid soldered seams, and allow tubes that might be damaged to be replaced in the field and, often without removing the radiator from the equipment in which it is installed.

According to the L&M test report, the first BOSS radiator was put into service in June 2004 on an ocean-going nitro vaporizer used to cool a DC 60 Series engine. A month later, a second BOSS radiator was installed on an offshore rig with a Cat 3412C engine. Since those installations, 145 engine radiators, along with a few oil-to-air coolers, have been installed as of May 2008.

Most installations were on offshore rigs, and, according to L&M service and warranty records, to date, all have performed without failure attributable to galvanic action. In addition to those radiators installed, 18 units have been shipped to Singapore for use on ocean-going cementers. As of March 2008, four had been installed.

Formal lab tests on the BOSS from conceptual designs to development of a prototype took place from early 2003 to January 2004. Much of the testing tested the materials of a BOSS against the standard MESABI radiator tube, which uses a solder (lead-tin) composition to hold copper tube finning to both sides of flattened copper tubes.

When exposed to an accelerated salt air environment, the solder joint failed within a week as a result of galvanic action. An attempt to coat the copper finning and tubes with a variety of protective materials was not successful.  Only brass finning brazed to brass tubes defeated galvanic action, which can be attributed to the similarity of materials used in the finning and tube components.  Production BOSS cooling tubes have been tested for more than two years in a hot water, high-salt concentration bath with no evidence of deterioration of metal properties.

Oilfield calculations on Drillers.com

For drilling staff, calculations are part of their daily work. The average driller or toolpusher probably has available three choices when it comes to rig maths:

• 1. Calculator, together with formulae to use.
• 2. Generic software like Excel.
• 3. Specialist software, usually commercial.

There is now another way. With Internet access and a web browser, standard drilling calculations can be done using web-enabled Mathcad worksheets, which document all of the formulae and intermediate calculations. They are also optimised for small screens, such as the iPhone or other web-enabled PDA.

On www.drillers.com, you can see the Tonmiles worksheet, Audit version (Drilling Tools, Online Calcs).

In the figure at left, notice that the first data entry box is a pick list, which allows choices for the operation being calculated for. These include round or short trips, one-way trips, drilling with or without reaming, running casing or tubing. This applies a factor to the round-trip tonmile calculation.

The remaining data entries comprise boxes for entering numbers, but each box has to its right a pick list so that the unit entered can be chosen. Mudweight can be entered in one of six units, such as PPG, SG, kPa/m, psi/ft. Each data entry has a choice of units.

There are three main versions of the Tonmiles worksheet, all identical mathematically but formatted differently. The Work version hides all intermediate calculations, but the Audit version allows you to follow what’s going on.

Mathcad does internal calculations using metric figures. It also can work with units and enforce those units, so if a quantity of kilograms is entered and the user tries to subtract a quantity of metres, Mathcad doesn’t allow it. The results in each worksheet are always given in both Metric and Oilfield units.

As these worksheets reside on a web server, only the latest version can be seen, avoiding potential confusion with outdated versions.

Steve Devereux is CEO of Drillers.com and author of the Mathcad worksheets on the site.

For NOV, the answer appears to lie in training, which will be critical not only to the company itself but also to its customers. “The industry must push hard on training. As the new deepwater rigs come out, the demand for service people and experience will only increase,” NOV chairman, president and CEO Pete Miller told Drilling Contractor for its Jan/Feb issue earlier this year. The company will spend around $30 million on training employees in 2008, “and it’s money well spent,” he said.

In 2007, NOV established the Technical College program, with the primary focus on growing its capability to meet demand from the new rig construction backlog.

As part of the program, the first training center was opened in Kristiansand, Norway. A second location followed in Houston, with an open house held on 2 June 2008. A third location is planned for Singapore later in the year.

According to NOV, enrollment in the college is multinational, addressing cultural and geographic industry demands. Training for customers is also part of the program plan.

In Houston, the 33,600-sq-ft facility will house customer training courses for product operations and maintenance class, which trained more than 2,000 customers in 2007 and is forecast to train more than 3,000 customers in
2008. According to the company, it is
the single largest facility devoted to training of both internal and customer students within the drilling equipment market.

The facility’s simulation area has been expanded to include products such as Cyberbase, Amphion, Electronic Drilling System (EDS) and Crane Controls.

Simulation equipment allows for realistic training, and troubleshooting techniques and equipment are being added to the simulation model to improve the experience.

Core curricula at the NOV Technical College include:

• Basic service technician.
• Industrial practices.
• Electrical and electronics training.
• Communication and soft skills training.
• Product training and hands-on experience.
• Mobile training facility. This classroom can take the training into the field – rig yards, rig location or shipyard. It features 10 computer stations for students and offers courses ranging from foundation courses for new personnel to general maintenance to simulator training for the EDS.

Shell announced it has achieved another milestone in the Ursa/Princess Waterflood project. First injection of water occurred on 3 July 2008 and is planned to continue for the next 30 years. With a listed volume enhancement capacity of 30,000 bbl/day of oil equivalent, the waterflood is expected to extend the life of the field by 10 years.

“The Ursa/Princess Waterflood project represents a significant investment by Shell and the other interest owners in one of the most prolific areas in the Gulf of Mexico — the Ursa-Mars basin. Ursa-Princess has produced nearly 400 million bbl of oil equivalent to date, and we believe potential exists for continued development of material oil and natural gas within this basin,” said Russ Ford, vice president technical, Shell Americas.

The Ursa/Princess Waterflood is one of the largest construction projects on an existing platform in the Gulf of Mexico. This presented challenges of very high activity levels and simultaneous construction, commissioning, maintenance and well servicing activities, while performing production operations on a large facility located 100 miles offshore. The relentless focus on hazard management and emphasis on reducing risk exposure resulted in strong safety performance over the entire project.

Waterflood is a method of secondary recovery in which water is injected into the reservoir formation to displace additional oil. The water from injection wells re-pressurizes the formation and physically sweeps the displaced oil to adjacent production wells. The Ursa/Princess Waterflood topsides injection system injects filtered and treated sea water via two separate flowlines to three subsea sites – one to an existing well site northwest of the Ursa Tension Leg Platform (TLP), one to an existing well site southeast of the Ursa TLP and one to a new well site northeast of the Ursa TLP. Producing wells will include three Princess subsea wells and as many as six Ursa TLP wells.

Ursa is located in 3,800 ft of water and encompasses Mississippi Canyon Blocks 808, 809, 810, 852, 853 and 854. Princess is located in Mississippi Canyon Blocks 765 and 766, in approximately 3,650 ft of water.

Shell is operator of this project with 45.39%; BP has 22.69%; Exxon Mobil and ConocoPhillips each have 15.96%.

VetcoGray converts mudline exploration system to wellhead subsea system

VetcoGray, a GE Oil & Gas business, applied its latest technology to convert an exploration well to full production service at Agiba Petroleum’s West Ashrafi hydrocarbon facility in Egypt’s Gulf of Suez, Red Sea. The project marks the first time that VetcoGray has converted a mudline exploration system to an SG-1 wellhead subsea system for production duty. The newly converted well entered service in April 2008.

“The new conversion system removed the need for Agiba Petroleum to re-enter the reservoir from a new wellhead, as this had proven difficult during the exploration phase. This solution therefore removed significant cost and risk from the project,” said Willie Bryson, VetcoGray’s product line manager for Tree on Mudline.

“When the West Ashrafi well conversion was first envisioned, a number of technical challenges were identified that could have affected the viability of the project,” he added. VetcoGray and Agiba worked together to complete a feasibility study, which concluded that all of the challenges could be overcome. VetcoGray subsequently executed the engineering and construction of the conversion system.

Additional challenges for the project included the distance between the beach-mounted topside equipment (umbilical termination and hydraulic power units) and the master control station, which was located 1 km away. A separate communications and power system was used to achieve the subsea communications, while fiber optic communications were utilized between the HPU/TUTU and the MCS.

2 million-plus ft of inflow control completions system installed

Baker Oil Tools (BOT) has installed more than two million ft (609,600 m) of inflow control completion systems to achieve successful production rates in horizontal wells in more than 20 oil and gas fields around the world. The EQUALIZER Reservoir Optimized Completion System has helped maximize hydrocarbon recovery for numerous worldwide operators, according to Brad Baker, director of sand control systems for BOT.

“We are very proud of reaching two million feet in ground with no reported sand control problems. This outstanding track record is made possible through strategic project management and the application of advanced technology – an extended-longevity well screen and a specially designed inflow control device,” Mr Baker said.

“Optimal reservoir drainage presents a growing challenge when producing from extended-reach horizontal and multilateral wellbores, even in formations with uniform permeability,” he explained. “When alternating high- and low-permeability strata are penetrated by a long wellbore, or when high permeability exists at either the heel or toe of a lateral section, the tendency to lose production through various parts of the reservoir becomes even greater.

“Optimal production from long, low-drawdown, high-rate horizontal wells often requires more than sand control, so the EQUALIZER System also provides production optimization,” he said. “The system balances, or equalizes, longitudinal inflow along the entire length of a wellbore. A uniform production profile ensures reduced influx of water or gas into the wellbore.”

To delay water or gas coning in horizontal wells, the system uses an extended-longevity well screen and an inflow control device as a restrictive element. The well screen provides sand control and resists plugging and erosion with three concentric layers of media – a protective shroud, a single-layer vector filtration membrane and an inner jacket.

The outermost layer of the screen is a durable vector shroud that provides erosion protection under turbulent flow conditions. Within the shroud, the single-layer vector membrane has uniform pore throat openings and an inflow area of about 30%, ten times that of a typical pre-pack screen. The inner jacket and drainage layer protects the overlying vector membrane layer against high differential pressure. These features combine to extend screen life to eight times that of a standard pre-pack screen.

The inflow control device uses a restrictor element to distribute pressure along the entire length of a wellbore. This allows local production rates at any point along a wellbore to be controlled as a function of both the average drawdown pressure and the average productivity of a well.

BOT uses operator-supplied formation data to conduct mathematical modeling and to configure individual systems that attain optimal pressure drop and flow rates.

The system is applicable for a variety of wellbore conditions, including those that require viscous fluid, kill pill clean-up, or multiphase flow.

Since 1998, the system has attained individual lateral installation lengths of more than 13,000 ft (4,000 m).

Shell selects Cameron’s MARS technology for first North Sea application

In June 2008, Shell UK successfully installed the first of three subsea MARS (Multiple Application Re-injection System) interfaces on its Bittern field in the North Sea. The system has been described as an “USB port for wellheads” and is being adopted by Shell as part of its extended oil recovery strategy for the region.

Following the commissioning, Shell is now able to complete reservoir stimulation/scale squeeze operations from a ROV support vessel without the need for MODU or diving support. The MARS system is a Cameron technology supplied by DES Operations of Aberdeen.

“Until now, operators have been using MARS for multiphase pumping and metering operations, but this is a world-first for reservoir stimulation,” said Ian Donald, managing director of DES. “For Shell, MARS offers safer, faster and cheaper operations, with options to extend the functionality for further subsea processing operations.”

The remaining two MARS systems are due for installation later this year and, when installed, will enable Shell to undertake multiple well stimulation campaigns from a single ROV vessel.

John Anthony, Shell project manager, said, “We approached DES two years ago to see if their technology could be adapted for our scale squeeze operations, and have worked with DES since then to this successful conclusion.”

In addition to use in the Bittern field, MARS has also been successfully used by BP King in the Gulf of Mexico and has been selected by TOTAL for use in subsea multiphase metering in West Africa.

Sonangol E.P. has authorized BP and its co-venturers to develop a series of deepwater oil discoveries in offshore Angola’s Block 31. The program is based on a standardized development concept intended to reduce cycle time, optimize capital and maximize operating efficiency through standardized design, fabrication and commissioning.

The first project in the program will comprise the Plutão, Saturno, Vênus and Marte (PSVM) fields, which lie in the northeast sector of Block 31, in a water depth of approximately 2,000 m, some 400 km northwest of Luanda. Construction work is expected to start during 2008, with first oil planned in 2011 and building to a plateau of about 150,000 bbl/day by 2012.

BP and its co-venturers have announced 15 discoveries in Block 31 to date. Full development will comprise multiple hubs similar to the PSVM development. The second development will be in the southeast area of Block 31 and is in the planning phase.

Maersk Resolute jackup delivered 3 days early

Keppel FELS has delivered the Maersk Resolute jackup to Maersk Contractors three days ahead of schedule. It is the second in a series of four high-efficiency jackups being built for Maersk. The rig has been contracted to Dong Energy for operations in the Danish part of the North Sea for three years.

The rigs have a maximum operating depth of 350 ft and are suitable for drilling deep, high-temperature, high-pressure wells up to 30,000 ft. They are also highly automated for safe operations.

Deliveries of these rigs are scheduled at half-yearly intervals. The first rig, Maersk Resilient, was delivered in February 2008 and has commenced operations for Dubai Petroleum.

Production starts from Nigeria’s large Agbami Field

Chevron’s Nigerian affiliate Star Deep Water Petroleum has commenced crude oil production from the Agbami Field offshore Nigeria. First oil from the Agbami Field was achieved on 29 July 2008 from a FPSO. Initial production is expected to be more than 100,000 bbl/day and is projected to increase to 250,000 bbl/day by the end of 2009.

The Agbami Field, discovered in 1998, is the largest deepwater discovery in Nigeria and is estimated to hold potentially recoverable volumes of 900 million bbl.

“Chevron and our partners have reached an exciting milestone for a major project 10 years in the making. Production from Agbami will now bring new energy supplies to the world market and help provide long-term, sustainable returns to our shareholders,” said Ali Moshiri, president of Chevron Africa and Latin America Exploration and Production.

“Agbami is a world-class project, and I’m particularly proud that Agbami represents the industry’s largest-ever support of Nigerian content.” The Agbami project set a new benchmark for Nigerian local content, including the largest module ever fabricated in Nigeria.

Chevron is the operator and has a 68.2% interest. Its partners include the Nigerian National Petroleum Corp, Famfa Oil, Petrobras and Statoil.

Samsung sets sights on hot Latin American shipbuilding market

Samsung Heavy Industries (SHI) has announced in that it is “out to dominate the Latin American marine market.” It is buying a stake in EAS (Estaleiro Atlantico Sul), a Brazilian shipyard that SHI has been providing technology support for since 2006. According to SHI, EAS is the largest shipyard to be built in the Latin American region.

SHI is making a US$12.8 million acquisition for 10% of EAS Shipyard. The company believes the deal will enable SHI “to hold a dominant position in terms of receiving orders for the total of USD 30 billion worth of drillships and semisubmersible drilling rigs that Brazil intends to demand.”

Construction of the EAS Shipyard began in April 2007 at the Suape complex in Eastern Brazil, and the yard has a size of 1.65 million sq m. Camargo, Queiroz and PJMR, all from Brazil, invested a total of US$220 million into this shipyard. SHI’s acquisition will allow Camargo and Queiroz each to hold a 40% stake, while SHI and PJMR will hold a 10% stake each. The shipyard will boast a dock that is 400 m long and 73 m wide. Upon completion in September 2009, it will have a ship production capacity of 160,000 tons.

Petrobras to operate 63 offshore rigs by 2017

Petrobras CFO Almir Barbassa announced that the company intends to put new offshore drilling rigs into operation and to close 2017 with 63 units in use in deepwater and ultra-deepwater. This is nearly double the amount of drilling rigs currently in operation. Mr Barbassa said Petrobras is encouraging foreign companies to install activities in Brazil, particularly in partnership with Brazilian companies, on driving the entrance of new companies and boosting productive capacity in highly competitive sectors.

“Money is no object” – for technology to deliver wells efficiently, say operators hungry for practical, groundbreaking tools for well construction. “If it’s something that will deliver wells and deliver them fast, (funding and development) will happen,” declared an operator to whom, clearly, new and effective technology is near and dear to the heart.

Field trials for new tools have been a struggle to achieve, service firms say. But with today’s pressure to produce, word is that some operators will lend wells for testing new equipment. “If you want to try something in a few wells, come on,” said Morris Keene, director-drilling engineering for Occidental Oil & Gas Central Drilling Group (Oxy), and Chairman of the Drilling Engineering Association (DEA). The caveat is that Oxy must be assured that whatever goes beneath the rotary table “has a high probability of coming back whole.”

DEA, in particular, is encouraging service companies to trot out lingering, yet promising, R&D projects for operator funding or field tests. DEA is at pains to point out that completion projects are cordially included. DEA’s remit is the entire spectrum of well construction.

The next meeting of DEA is the morning of 18 September at Chevron’s Briar Park facility in Houston. Registration and directions are on www.dea-global.org.

First, let’s define the technical silver bullets of interest. We posted this question to the real experts – readers of Drilling Contractor, of course. Survey says that extended-reach and horizontal drilling and completion techniques will be the most influential technologies over the next 20 years. In this snapshot opinion poll, slightly more than four out of 10 readers (41%) singled out these technologies.

Managed pressure drilling (MPD) won the Silver in the survey. (Sorry: Still suffer a lingering Beijing hangover.) 16.3% of respondents thought MPD would prove most influential over the next two decades. Tied for third are drilling with liner/casing and real-time downhole data (10.6% each). Fourth was also a tie – 6.5% each for HPHT technologies and expandables. Finally, about 1 in 20 readers (4.9%) thought fluid technologies would prove the key. We must not have omitted much of moment, since only 3.3% of respondents selected our ubiquitous friend “other.”

The truth is that breakthrough technologies in any and all areas above could help deliver wells quicker, more safely and with higher productivity. Operators want help, are willing to pay and have test wells.

The message? Call now: Operators are standing by!

You can reach Mike Killalea at mike.killalea@iadc.org.

The Oil Chaplaincy Trust and the Anthony Nolan Trust have been selected as charities that will receive funds collected at the North Sea Chapter (NSC) Annual Safety Awards. A total of £4,660 was raised through personal and company donations and with the chapter’s pledge to match all funds raised. NSC chairman Steve Rae of Seawell led a cheque presentation at UK Oil and Gas Chaplaincy offices. Ex-officio NSC vice chairman Roger Hodgson of KCA DEUTAG and John Davies of Odfjell Drilling were also present. The Rev Andrew Jolly of the Oil Chaplaincy Trust expressed his thanks to the IADC and all those who contributed at the awards dinner for their continuing support.

IFECM meets at Norwegian Petroleum Museum

Stavanger, a critical operations base for Norway’s buzzing drilling industry, was the host city for the third gathering of IADC’s International Forum of Energy Centres and Museums (IFECM) on 16-17 June. Delegates from eight energy centers representing five countries – Azerbaijan, Canada, Germany, Norway and the United States – convened at the Norwegian Petroleum Museum to share ideas on improving public perception of the drilling industry.

Participants discussed ongoing projects, as well as possible future collaborative efforts such as the digitization/preservation of historical oilfield documents. However, the central theme of the forum remained public outreach, and the group shared ideas such as brown-bag lunches, career days, discovery days, “pre-visit packs” and family activity days. In the end, the group decided that its next project would be to produce an educational short film, as that was seen as the most versatile medium to educate the public.

The film, to be 12- to 15-minutes in length, will provide an overview of the energy industry with an emphasis on oil and gas drilling. It will target an audience with at least a 5th-grade educational level. “Ideally, the video will be easily understood by children and entertaining for adults as well,” said IADC vice president – membership and publications Jason McFarland, who represented IADC at the meeting.
The film will be featured in energy centres and museums around the world and will be made available to teachers for use in classrooms. Production cost is estimated to be $100,000 to $500,000, and the IFECM group plans to reach out to energy companies for industry funding.

The mission of IFECM is to share ideas on educational programs that will better educate the public, ultimately improving public understanding of the petroleum industry and its role – past, present and future. IADC started the forum in 2006, with an inaugural meeting in Amsterdam in February 2006. A second meeting was held in March 2007 at the Wiess Energy Center in Houston and the Ocean Star Offshore Drilling Rig and Museum in Galveston.

European Operations Forum to focus on 21st-century needs

As part of its continuing effort to promote HSE commitment and advances in drilling technology, IADC is forming the European Operations Forum (EOF). The EOF will build on the achievements of the European Working Group and develop a stronger IADC regional body focusing on policies that effectively meet drilling contractors’ 21st-century needs.

The EOF will provide overview and guidance for IADC offshore and onshore activities in the region. Coordinated with the various IADC operations departments and government affairs office, it will be the focal point for dialogue with regulatory agencies across Europe while also being responsible for the execution of activities and projects for drilling contractors operating in the region.

The Forum Steering Committee is made up of Joep Beyer, KCA DEUTAG; Jørn Madsen, Maersk Contractors; Eelke Strikwerda, Noble Drilling; Sveinung Lofthus, Seadrill; and Paul King, Transocean.

The inaugural meeting of the EOF will be held on 8 September 2008 at the Dylan Hotel in Amsterdam.

More information about the EOF can be found on IADC’s website at www.iadc.org.

The US Environmental Protection Agency indicated it’s on the path to formulating national regulations for coalbed methane (CBM) operations under the Clean Water Act. IPAA and five other major national trade associations, including IADC, joined by 38 state producer trade groups, have vigorously protested this initiative as unwarranted, and reiterated opposition in an 8 August comment to the docket.

Industry cited the fact that EPA has not demonstrated that there is an environmental problem warranting national regulations. Moreover, the long-established National Pollutant Discharge Elimination System (NPDES) provides a reliable and tested framework, structured to delegate the permitting process to state regulatory agencies.

IADC group, Indonesian tax reps meet

An IADC delegation, led by Lane Martin of Transocean, met with representatives from the Badora II office of the Indonesian Tax Administration in Jakarta to share information about offshore operations of drilling contractors and to express IADC’s concerns about backsliding in the application of settled tax agreements between IADC and the Indonesian government. IADC has long-established understandings with the government in the area of “deemed profits,” which have enabled relatively smooth relations between drilling contractors and tax authorities. Recently, however, as Indonesia faces fiscal problems, it has put increased tax pressure on oilfield contractors. An encouraging outcome of this meeting was the number of new faces in the crowd unfamiliar with the drilling business who were genuinely interested in learning about how a rig works and what role drilling contractors play in the overall E&P process. The head of the Badora II office committed to take IADC’s message to his superiors and counterparts about how important a reliable, transparent and simplified tax system is to the drilling industry.

Supreme Court rules on EXXON Valdez spill

In its recent term, the US Supreme Court rendered a milestone decision in the case of the 1989 oil spill in Alaska by the Exxon Valdez oil tanker. IADC submitted an amicus brief in the case as it had implications for the liability of vessel owners for punitive damages in federal cases of crew malfeasance causing injury to persons and the environment.

ExxonMobil, joined by IADC and others, argued that settled maritime law forbids the award of punitive damages against a vessel owner, who nevertheless remains liable for actual compensatory damages. The court didn’t accept that argument but did break ground by limiting punitive damages to no more than compensatory damages. The decision establishes a “bright line” for punitive damages in maritime cases, which now cannot be left to the whim of a jury.

We’re also pushing ahead with vital initiatives such as Career Connection, the Environmental Policy Advisory Panel and the newly set-up Well Servicing Committee and Advanced Rig Technology Committee. And, as always, issues of health, safety and environment remain at our core. We’re carrying on traditions such as the annual ASP program and, at the same time, advancing new global efforts such as the HSE Case Guideline. The following are operational highlights from the past year.

Brian Petty, senior vice president – government affairs

EXXON VALDEZ appeal

The US Supreme Court rendered a milestone decision in the case – pending for nearly 20 years – of the 1989 oil spill in Alaska by the EXXON VALDEZ oil tanker. IADC had submitted an amicus brief in the case, as it carried implications for the liability of vessel owners ­­– including MODUs. ExxonMobil, joined by IADC and others, argued that settled maritime law forbids the award of punitive damages against a vessel owner, who nevertheless remains liable for actual compensatory damages.

The court didn’t accept that argument but did break new ground by limiting punitive damages to no more than compensatory damages. The decision establishes a “bright line” for punitive damages in maritime cases, which now cannot be left to the whim of a jury.

UKCS working time rules

After hearing testimony by industry groups, including IADC, the Aberdeen Employment Tribunal rendered a decision on the EU Working Time Directive that industry counted as a substantial victory. The “Jaeger” argument – that all time offshore is working time – was rejected. However, the tribunal decision also mandated two additional weeks of paid leave; therefore, the decision will be appealed.

In the EU as well, significant progress has been made on the long-delayed new Working Time Directive (WTD). The current draft would solve the “Jaeger” issue, and a compromise on an “opt-out” from the 48-hour weekly maximum appears reachable. This EU proposal, however, does not affect the Scottish Tribunal appeal.

Texas Jones Act appeal

IADC offered an amicus brief in a suit brought in Texas by an offshore worker under the Jones Act against Noble Drilling. The amicus brief before the Texas Supreme Court was joined by Frontier Drilling, Premium Drilling, ENSCO International, Transocean Offshore Deepwater Drilling and SeaRiver Maritime, the ExxonMobil marine transportation subsidiary. The case is on appeal from a lower court’s decision holding Noble to a different standard under the Jones Act for alleged personnel injury than has been established under settled jurisprudence. The court has taken preliminary steps to accept the appeal. The facts of the case turn on whether the offshore worker was made to handle unreasonably excessive loads in “slinging” operations as directed by the drilling company.

EPA CBM proposal

IADC and other industry associations are fighting the Environmental Protection Agency’s plan for assessing potential damage to water resources from wastewater discharge in coalbed methane operations. Industry’s position is that the states already use delegated authority under the federal National Pollutant Discharge Elimination System to manage such discharges.

EPA justifies its new study of CBM operations as permitted under the Clean Water Act. However, EPA already commissioned an outside study concluded in 2004 finding no harmful effects of hydraulic fracturing procedures in CBM E&P. The new investigation will examine basins in Appalachia, New Mexico and Wyoming.

EPA SPCC rule

The EPA’s overly broad definition of “navigable waters,” as contained in its July 2002 Spill Prevention, Control and Countermeasure (SPCC) rule, was shot down by the US District Court for DC, marking a significant victory for the E&P industry. IADC had joined IPAA in providing comments to the docket, questioning the SPCC rule’s scope and cost.

The rule had defined “navigable waters” as not only waters that a craft may be sailed on, but all waters with a past, present or possible future use in interstate or foreign commerce, including all waters subject to the ebb and flow of the tide, as well as intrastate waters. That definition would have forced the industry to prepare SPCC plans for facilities that were not previously subject to the SPCC rules, or maybe not even subject to Clean Water Act jurisdiction.

Gulf of Mexico marine sanctuaries

Industry has met with the US National Oceanic and Atmospheric Administration (NOAA) as it considers adding Gulf of Mexico acreage to the national Marine Sanctuary Program beyond the currently designated Flower Garden Banks in the US Minerals Management Service (MMS) western GOM planning area.
The additional designations could further limit oil and gas exploration throughout the GOM, and industry hopes to illustrate the value of its information-gathering efforts in determining shallow hazards, deep current regimes, and undersea pipeline routing, along with associated oil and natural gas gathering systems.

GOM lease suspensions

IADC represented the drilling contractor industry at an MMS workshop held to let Gulf of Mexico operators make their case for “suspension of operations” on the claim that technology to exploit offshore leases isn’t available.
In its formal comment to the docket, IADC observed that the so-called technological barriers found in the deepwater GOM have been surmounted elsewhere in the world. Individual companies’ commercial decisions don’t justify lease extensions or suspensions, the association argued.

Meeting with UK’s BERR

To emphasize the importance of directly involving IADC in key policy formulations affecting UKCS E&P, IADC met with the UK Department for Business, Enterprise and Regulatory Reform (BERR). IADC pointed out that it solely represents the collective interests of drilling contractors, in the UK and the rest of the world, and that its members’ interests are often, but not always, aligned with the legislative and regulatory agendas of operator associations.

Indonesian tax scheme

Noting concerns that regulatory authorities in Indonesia may not be observing settled agreements with IADC on its tax regime, the association has written to the Indonesian director general of tax. The letter urged the consistent application of Indonesia’s “deemed profits” regime for offshore drilling contractors. It emphasized that IADC has enjoyed a long history of cooperation with the Indonesian Tax Administration, with a positive and open path of communication between the parties. It also asked authorities to consider a contractor’s appeal of its audit in light of the “long-standing agreement between IADC and the Tax Administration” and its “vital importance to our industry group and therefore other member companies.”
Following the letter, an IADC delegation met with tax authorities in Jakarta on 6 August to further discuss the issue (For details, please see “Wirelines” on Page 177).

Nigerian content

IADC, joined by Halliburton, have met with the US State Department and the Nigerian Embassy to object to legislation requiring “Nigeria content” in oilfield services. The legislation would make it virtually impossible for foreign service providers to supply necessary materials and labor. IADC and Halliburton representatives pointed out practical problems such as local hire capacity and the lack of infrastructure. IADC also pointed out the sophistication and cost of offshore rigs and that personnel must be selected based on expertise to manage the rig asset, not nationality.

EU industry transparency

In response to an European Commission request for extractive industries to “disclose payments to governments in their financial reports,” the European E&P industry highlighted its self-generated examinations of transparency and corruption. The formal industry response, led by the International Association of Oil and Gas Producers (OGP) and endorsed by IADC, argues that there’s no reason to mandate unilateral disclosure for EU-registered companies. In fact, several companies already voluntarily disclose payments to governments under the Extractive Industries Transparency Initiative. The governments contemplated are primarily outside the EU, especially in the so-called resource-rich developing world.

Law of the Sea

IADC continues to promote ratification by the US Senate of the Law of the Sea Treaty, to which upwards of 150 countries have acceded. The association is still working with API and the National Ocean Industries Association (NOIA) to provide various testimony on behalf of the industry. Additionally, IADC participated in a debate on the topic in April 2008 before the District of Columbia Bar Association. The oil and gas trade community supports accession because it would expand US sovereignty over frontier deepwater areas beyond the OCS and would enhance rights of navigation for mobile offshore units.

Geothermal opportunities

IADC is serving as a link to the drilling industry for the US Department of Energy (DOE) as the government renews its push for geothermal drilling – a green and renewable energy source. IADC hosted and facilitated a meeting between the DOE and drilling contractors in June 2008 to discuss geothermal and potential drilling opportunities. The DOE outlined its funding ($90 million over the next four years) and project plans and encouraged industry participation.

World Bank policy change

IADC joined the US National Association of Manufacturers, Chamber of Commerce and National Foreign Trade Council to object to a proposal by the World Bank to ease government procurement standards for its country clients in the developing world.

For IADC members operating in many areas of Africa, Latin America and Asia where the World Bank wields considerable leverage, the Bank has suggested that those governments can use a lesser standard of transparency and bidding for government contracts, including with state-owned oil companies. The opportunity for mischief and corruption would certainly increase if the standards were dropped to “country systems,” which often lack adequate advertising, requirements for public bid openings, and international arbitration options, in contrast with established OECD-sanctioned best-practice contract standards.

MMS deep gas rule

IADC joined US producer associations to criticize MMS’ proposal to implement OCS provisions of the 2005 Energy Policy Act. The act instructed MMS to devise incentives for ultra-deep natural gas E&P via further royalty reductions in the Gulf of Mexico and offshore Alaska.

The proposed rule would deny or limit royalty relief for ultra-deep wells sidetracked from existing wellsites, or secondary wellsites on existing leases. The anomaly is that deep wells with 15-25 BCF produced at 15,000-18,000 ft would enjoy royalty relief under current regulations, but new wells going deeper from sidetracked or secondary development wouldn’t enjoy any royalty relief — clearly contradicting Congressional intent to encourage the opening of new ultra-deep reservoirs.

The industry associations urged MMS to reconsider the rule in light of its inconsistency with Congressional intent and the significantly declining replacement ratio of US natural gas reserves.

US energy legislation opposed

Nine E&P industry associations, including IADC, sent a letter to US House leadership strongly opposing Title VII of the “Energy Independence Act,” which would roll back most oil and gas production incentives passed by Congress in 2005 and signed into law by President Bush. The letter notes that Title VII ignores the predicament of restricted natural gas and oil supply.

“Instead of promoting production, this policy establishes further bureaucratic hurdles and penalties that punish exploration and production on federal lands in the United States,” the letter said. Other concerns include unnecessary bureaucratic hurdles, such as redundant statutes on water resources, surface owner protection and environmental analyses, and prohibition of certain production in the Gulf of Mexico and Roan Plateau of Colorado.

UK Revenue & Customs conference

IADC attended the annual UK Revenue & Customs Large Business Service, Oil & Gas conference covering issues important to operators and drilling contractors active on the UKCS. Topics included the current and future fiscal regime for UKCS exploitation, including an “environmental tax” on operators to offset carbon emissions. A range of R&D tax credits was also considered.

IADC was invited by the UK government in 2003 to join its Offshore Contractors Forum, initially established to open a routine dialogue between the offshore production industry and UK tax authorities. Since then, UK Revenue & Customs has, in turn, sent representatives to IADC’s annual international tax seminar.

Energy in WTO agenda

World Trade Organization (WTO) director-general Pascal Lamy, in a speech in Rome before the World Energy Congress, declared that “energy stands explicitly on the (WTO) agenda” and that “for the first time, members are discussing energy as a specific services sector.”

IADC has been a leader in pursuing this objective, which would liberalize global trade in energy services, including drilling services. IADC senior vice president – government affairs Brian Petty co-chairs the Energy Services Coalition, comprised of 60 energy companies and trade associations promoting this goal at the WTO.

Drilling suspensions in Colorado

2008 IADC chairman John Lindsay of Helmerich & Payne IDC joined a group of producer representatives in a Denver meeting with Colorado Gov. Bill Ritter in May to express concerns about proposals of the Colorado Oil and Gas Conservation Commission (COGCC) to limit E&P activity in the state.

Specifically, Mr Lindsay took issue with draft regulations that would suspend drilling operations for three months each year, allegedly in the interest of wildlife protection. He argued that not only would that discourage contractors from working in the state, but the drilling suspension could actually be as long as five months, considering the time needed for rig mobilization and de-mobilization.

IADC submitted a formal comment to the COGCC docket reinforcing these arguments. With approximately 122 rigs operating in Colorado, mostly in the western slope Piceance Basin, IADC argues that the draft regulations could have a catastrophic impact on production and, thus, to revenue for Colorado. IADC is working closely with the Colorado Oil and Gas Association in challenging the COGCC proposals.

US ocean resource management

IADC has joined oil trade groups API, AXPC (American Exploration & Production Council), IPAA, NOIA and USOGA to oppose HR 21, which purports to establish a sweeping overhaul and streamlining of US government ocean resource management. Proponents of the legislation have falsely claimed that the oil and gas industry supports HR 21. Consequently, a letter signed by leading E&P trade associations was sent to the Democratic chairman and ranking Republican of the House Natural Resources Committee denying that claim.

The letter illustrated the flaws of the bill in terms of offshore energy development. For example, the bill mandates a “National Ocean Policy,” which must be implemented according to principles that are vague and that would open up a floodgate of litigation.

Steve Kropla, group vice president – operations & accreditation

IADC’s operations group remains at the forefront of a myriad of activities designed at increasing rig safety, personnel competency, and technical expertise through its various standing committees, regional operations and accreditation programs. IADC’s offshore division is actively engaged in revising the IMO MODU Code, marine engine rules, permitting for US waters and other key environmental issues. IADC also continues its work with industry groups related to the mismatched hammer union issue and regulatory alliances. Among the accomplishments of IADC’s numerous technical committees were revised definitions for underbalanced and managed pressure drilling.

IADC’s Offshore Competency Training Programme has achieved major steps in harmonizing training requirements for offshore workers in Europe, setting standards that will eventually have global implications. The Drilling Industry Training Accreditation System has introduced a system of review and audit for previously unaddressed training programs. Regional operations continue to address contractor needs in Europe – such as through the European Operations Forum – and in the Middle East and India, with plans under way for an increased IADC presence in Asia.

Brenda Kelly, director – accreditation & certification

Drilling Industry Training Accreditation System

The Drilling Industry Training Accreditation System (DIT) has been officially launched and is fully operational. It is being offered as a general means of industry review and accreditation of training courses that are not accredited through IADC’s specialized accreditation programs.

The DIT accreditation system assures that similar courses meet minimum standards and provide quality delivery of training. Custom-designed courses, whether for corporate in-house use or for commercial training provider delivery, may be accredited in instructor-led and electronic course formats.

Components of the IADC Offshore Competency Training Programme, such as the Basic Introduction to Offshore Safety (BIOS), Helicopter Underwater Escape Training (HUET) and Further Introduction to Offshore Safety (FIOS) refreshers are accredited through DIT. Falck Nutec’s facility in Esjberg, Denmark, was the first program accredited under DIT, as well as the first accredited for IADC BIOS/HUET/FIOS courses.
During DIT’s first year of operation, 32 courses were submitted for accreditation by companies located in Denmark, Oman, Saudi Arabia, the United Kingdom and the United States.

Competence Assurance Accreditation

Noble Drilling Land Support and Rowan Drilling UK were the first companies accredited under IADC’s Competence Assurance Accreditation (CAA) program. Both were granted conditional accreditation in February 2008 and received full accreditation after follow-up audits later in the year. Pride International, Nabors Arabia and Saudi Aramco’s Drilling and Workover Unit are awaiting accreditation.

CAA ensures that corporate employee competency programs follow accepted practices to develop and ensure the skills of their personnel. An organization that applies for IADC accreditation will be reviewed to ensure that the following are in place:

• Training policy and procedures document.
• Identification of job positions to be deemed competent through the program.
• Training resources and methods to support the training and development process.
• Assessment system, a means to assess an employee’s competence.
• Records system, a means of documenting satisfactory completion of training and assessments.
• Quality assurance, a formal means of self-directed auditing for adherence to the published policies and procedures and reporting on a periodic basis.

Companies can couple programs accredited by IADC under the DIT as integral components of their internal competence assurance systems.

WellCAP/WellCAP PLUS

WellCAP PLUS continued to gain wider recognition in the industry as an enhanced alternative to existing WellCAP Supervisory Level instruction. The program uses a facilitated learning approach to improve participants’ critical-thinking and problem-solving skills.

A record number of WellCAP Plus courses were delivered in 2008 in Thailand, Saudi Arabia and the US. Increased industry interest led to two WellCAP PLUS Facilitator Certification Courses being held in July and August, with 23 participants.

Additionally, the first versions of the IADC WellCAP well control worksheets are available for surface and subsea applications in US Customary, metric and SI units of measurement. The Wait and Weight Method worksheets are available; the Bullheading killsheet draft is under review.
Work on revision of the WellCAP Snubbing Curriculum also made major advances during the year, as did refinement of the revised WellCAP Instructor

Qualification Guidelines.

WellCAP issues will be among the items discussed at an IADC Middle East Well Control Roundtable scheduled for 4 December 2008 in Muscat, Oman, immediately following the IADC Middle East Well Control Conference.

Cooperation with MMS

In 2008, Joseph Levine, MMS chief of the operations & engineering division, requested the assistance of IADC’s Well Control Committee in developing formalized well control drills for the “hands-on” testing of rig personnel. Rig personnel drills will be used by MMS during rig visits to test the skills and training retention of those responsible for responding to a well control incident.

Hands-on testing is part of MMS’ implementation of current US regulations requiring assessment of well control training effectiveness.
IADC, through the Well Control Committee, responded to MMS’ request by developing practical drills that can be run with minimal interruption to a rig’s ongoing operations. Drills applicable during drilling, tripping, cased hole, and logging operations were developed for hands-on testing of the toolpusher, driller, assistant driller, derrickman and floorhand/shakerhand.

The hands-on testing program will undergo a three-month pilot program during Q4 2008. A trial run will be conducted on 2 September 2008; five MMS staff members are scheduled to visit Diamond Offshore’s Ocean Endeavor and test key rig personnel. Diamond personnel will undergo a written test and hands-on testing. They will then be given opportunity to provide feedback to MMS.

MMS will collect comments received during the trial run and pilot program and make modifications. Full implementation of the hands-on testing program will occur in January 2009.

RigPass Course-to-Go

IADC will release the newest enhancement to the venerable RigPass program, HSE Rig Pass Course-to-Go, in Q4 2008. It features a fully accreditable pre-packaged HSE RigPass orientation program, ideal for small- to medium-sized training providers or as a traveling course. Training providers need only add qualified instructor(s), a suitable training facility and follow RigPass administrative procedures. The course is then ready for delivery.

The course offers interactive learning exercises through the point-and-click Mind Map system of delivery, which makes it ideal for training providers wanting updated training materials with this innovative system.

The HSE Rig Pass Course-to-Go package includes all instructional materials needed for training delivery, including instructor’s manual, instructional aids, participant workbooks and tests. The IADC Health, Safety & Environment Reference Guide is an optional part of the package. The offshore endorsement component is

SafeGulf-compliant. RigPass

The newest refinement to IADC’s HSE RigPass orientation for 2008 was adding the provision for accredited providers to print RigPass cards of their own design, a feature previously available only to WellCAP providers.

IADC continues to hold annual workshops to assist RigPass providers in complying with RigPass data-reporting requirements and the additional reporting requirements to satisfy the operator-initiated SafeGulf program. The workshops answer frequently asked questions and assist providers in avoiding common pitfalls that delay the data entry process. IADC is also an active participant in the parallel SafeLand program.

Ballast Control and Stability

Two new providers were added in 2008 to IADC’s Ballast Control and Stability program. Transocean received conditional accreditation in June, and Diamond Offshore received full accreditation in August. The Ballast Control and Stability program is currently approved in three flag states – Vanuatu, Marshall Islands and Liberia. Panama and the Bahamas are reviewing the program. In addition, Harry Teh of Seadrill Brunei Darulssalam became the first recipient of IADC’s individual

Ballast Control accreditation. Training & Operations Passport

IADC’s Training and Operations Passport sales surpassed 10,000 in 2008. Passports, available in English, Spanish and Arabic, are being used by companies worldwide, with Weatherford, Saudi Aramco, XTO Energy, Maersk and Total Safety – North Africa among the largest users, with more than 1,000 passports issued by each company. Weatherford was the launch customer for the Spanish and Arabic versions and is using the passport in all three languages for operations around the world. The Spanish Passport experienced the greatest increase in sales in 2008, following enhanced marketing efforts in Spanish-language industry publications.

DNV alliance

To aid the global expansion of IADC’s accreditation and certification efforts, the association has signed an agreement with Det Norske Veritas (DNV) to use its worldwide network of auditors to assist in monitoring accredited training providers.

This cooperative effort has removed one of the biggest restraints on IADC’s responsiveness to accreditation service requests. It is estimated that DNV will perform approximately 50 audits a year for IADC, adding to the 25 or more audits IADC has performed annually in the past. This expanded audit capability helps to assure continued quality delivery among IADC’s 200-plus accredited training providers worldwide. Need for DNV’s audit services will expand as IADC responds to the increasing number of new program applications received each year. Currently, 69 applications are pending review, site visit and accreditation.

IADC also continues to utilize contract and member volunteer auditors who have participated in previous audits.

The IADC Accreditation & Certification Department is certified by DNV for ISO 9001:2000 Quality Management System.

Alan Spackman, vice president – offshore technical & regulatory affairs

Biofouling

The biofouling issue has pushed to the forefront over the past year, with one semisubmersible in Australia highlighting the significant impact – both financial and operational – these regulations can have on drilling contractors.

In this case, the rig owner was told it must clean New Zealand green-lipped mussels from the rig’s hulls before it would be allowed entry to Australian waters. The last-minute clean-up resulted in $5 million in cost overruns for the drilling contractor, as well as lost revenue for the 23 days the rig was out of commission.

However, this was only one case in what could be many more in the future. Not all consequences and applications of biofouling regulations are fully understood yet, but the concern is certainly great.

Additionally, biofouling is unlikely to stay a regional issue specific to Australia. A mandate to perform studies to assess biofouling as potential vector for invasive species has been included in legislation introduced in the 110th session of the US Congress. It is still under consideration.

On the international arena as well, the issue has attracted the attention of the International Maritime Organization (IMO). The 56th session of the IMO’s Marine Environment Protection, 9-13 July 2007, approved a new work item for its Sub-Committee on Bulk Liquids and Gasses (BLG) on the “development of international measures for minimizing the translocation of invasive aquatic species through biofouling of ships.” This comes after consideration of a proposal by New Zealand, Australia, the UK, Friends of the Earth International and the World Conservation Union, urging IMO to address the issue.

A target completion date of 2010 has been assigned, giving the sub-committee three sessions to complete the work. BLG has already given preliminary consideration to the issue and formed a correspondence group to review research, consider best practices, consider the practicality and feasibility of various options for international measure for control and make a recommendation to the sub-committee. The group also will begin developing interim guidance for minimizing the transfer of invasive aquatic species through biofouling. IADC is participating in the correspondence group.

BLG will consider the correspondence group report at its next session, scheduled for 2-6 March 2009.

This is a critical issue that IADC will continue to remain engaged with regulators worldwide to make sure its impact on drilling contractors’ business stays to a minimum and assure that drilling contractors are informed of new developments as they occur.

TWIC

Acceding to a long-standing recommendation by IADC, the US Transportation Worker Identification Credential (TWIC) rules have been amended to expand eligibility and to codify the final fees. Non-resident aliens are now considered eligible for a TWIC.

NOPSA

IADC and the IADC Australasia Chapter continue efforts to communicate and cooperate with Australia’s National Offshore Petroleum Safety Authority (NOPSA), which has implemented significant changes since it began operations in January 2005, on a variety of issues related to the management of HSE.

On the NOPSA-commissioned Hart Aviation review of offshore helicopter operations, IADC pointed out that the report is “cursory and lacking in relevant information” regarding the industry’s ongoing standards and guidance development. IADC asserted that drilling contractors and other operators of mobile offshore units (MOUs) typically don’t independently contract for aviation support — that is usually provided by the oil and gas development company. Therefore, personnel onboard MOUs are dependent on the planning of those companies for safe and efficient downmanning of their units.

IADC also reminded NOPSA that the report fails to mention the International Civil Aviation Authority (ICAO) and its standards for international civil aviation. Australia is a member State of the ICAO, and its standards should have been offered as an alternative to the consultant’s recommended adoption of the UK Civil Aviation Authority’s CAP 437.

Additionally, IADC pointed to the report’s sweeping and inaccurate generalization about the adequacy of helideck markings in the Gulf of Mexico. IADC noted that MODU helidecks in the GOM are regulated by the US Coast Guard, which applies standards either in the Code of Federal Regulations or the IMO’s MODU Code.

IADC noted that a new edition of the MODU Code is under development and specifically seeks to harmonize its provisions with CAP 437. However, despite being made aware of this work, NOPSA has neither given any comments to IADC on proposed changes to the MODU Code nor has Australia submitted any information to IMO identifying deficiencies in the MODU Code or its proposed changes.

Separately, the IADC Australasia Chapter made a submission to Australia’s Department of Resources, Energy and Tourism (DRET) as part of a government-mandated independent review of NOPSA. Major findings discussed in the submissions to DRET are:

• NOPSA’s recognition of drilling contractors as the operator is a radical departure from pre-2005 interpretation of the oil and gas company as the operator. Drilling contractors should not be held responsible for aspects of the operation that are outside of their control. Moreover, NOPSA should recognize that health and safety responsibilities are shared by several stakeholders; roles and responsibilities must be better defined.
• The Safety Case revision process is distracting drilling contractors from efforts to improve safety performance. This includes the disproportionate number of Safety Case revisions required, in comparison with other facility operators; the significant resources that are deflected away from the actual management of offshore operations; and drilling contractors being forced to take responsibility for areas where they lack expertise or have no operational control.
• NOPSA’s regulatory regime, which utilizes guidelines, is subject to differing interpretation – and even ongoing re-interpretation – and therefore is open to inconsistent application.
• There is a lack of clear definition of NOPSA’s role and jurisdiction. Industry continues to face expansion of regulation applications, standards/codes of practice, reporting requirements, and jurisdiction from Australian waters to the construction/contracting of rigs while overseas.

The report of the independent review team was tabled in the Australian Parliament in June 2008. The recommendations of the review team address a number of the issues the chapter raised in its review. DRET has written to the chapter seeking its involvement in the process of developing the appropriate response to the recommendations. IADC hopes this will allow changes to be made to NOPSA’s operations that address the concerns raised by the chapter.

IMO SPS Code

The 84th session of the IMO’s Maritime Safety Committee in May 2008 adopted amendments to the Special Purpose Ship (SPS) Code. The amendments included provisions introduced by IADC, which clearly indicate that the SPS Code should not be applied to units having a valid MODU Code certificate. Attempts by regulatory bodies to apply both Codes had been a sporadic and recurrent problem in some operating regions.

IMO MODU Code

The 51st session of the IMO’s Ship Design and Equipment (DE) Sub-Committee, in Bonn, Germany, in February 2008 largely finalized draft amendments to the Code for the Construction and Equipment of Mobile Offshore Drilling Units (MODU Code).

IADC began working with the Liberian, Marshall Islands and Vanuatu registries in March 2005 to develop amendments to the MODU Code to bring it in line with current needs and to improve consistency with the Safety of Life at Sea Convention.

Almost every section of the MODU Code is affected, with major changes affecting fire safety, electrical equipment in hazardous areas, helidecks, means of access, single-compartment flooding and jacking system standards for jackups, and training. Details of the proposed changes are available on the IADC website. Not entirely satisfied with the current draft, IADC will submit additional recommendations, particularly with respect to electrical equipment in hazardous areas.

After additional considerations by the Sub-Committee on Fire Protection at its 2-6 February meeting, the draft revised MODU Code is expected to be finalized at the 52nd session of DE at its 16-20 March meeting and considered for adoption by the Maritime Safety Committee in late 2009.

Numerous IADC members have contributed to the effort, but the sustained contributions of Jim Gormanson and Tracy Royce (Noble Corp), Warren Weaver (Transocean) and Bill Hedrick and Mike Marcom (Rowan Companies) are especially noteworthy.

Marine diesel engine rules

On 14 March the US EPA released new regulations aimed at reducing emissions of particulate matter and nitrogen oxides from marine diesel engines, including those installed on MODUs. The new regulations:

• Require existing engines (1973 or later, through Tier 2), as they’re remanufactured, to have certified remanufacture systems installed on them once such systems are available, possibly as early as this year.
• Set near-term (Tier 3) standards for newly built engines that reflect currently available emission reduction technologies. These standards phase in starting in 2009.
• Set long-term (Tier 4) standards for newly built engines that are based on the application of high-efficiency catalytic treatment technology. These standards phase in beginning in 2014 and are dependent on the availability of ultra-low sulphur diesel (ULSD), with sulphur content capped at 15 ppm, as well as an infrastructure to supply reductants (typically urea) to the vessel. It is estimated that the volume of urea/water solution carried onboard will need to be at least 5% of the diesel fuel capacity.

EPA recognizes that vessels equipped with Tier 4 engines will face difficulties in areas where ULSD and reductants may not be available and has provided a means to request a temporary exemption to allow non-conforming fuel to be used and control equipment to be altered or bypassed.

These regulations affect only US-flag vessels; standards for foreign vessels will be addressed in a future rulemaking that will take into account the results of ongoing negotiations at the IMO regarding changes to its MARPOL Annex VI Air Pollution Regulations.

Environmental operating permits for US waters

On 17 June the US EPA issued a draft National Pollutant Discharge Elimination System (NPDES) Vessel General Permit (VGP) for Discharges Incidental to the Normal Operation of Commercial and Large Recreational Vessels. The draft permit, which, under court order, could apply to vessels (including MODUs and MIDUs) within US territorial waters beginning 30 September 2008, would establish control over more than 25 identified “discharge streams” that have the potential to result in pollutants entering the water as the result of normal vessel operations.

While IADC has urged EPA to continue to pursue legal action to overturn the court order necessitating the proposed permit, recognizing that this may not be possible, or timely, IADC submitted extensive recommendations seeking to improve the proposed permit while making compliance, particularly for vessels that are only temporarily within the territorial waters, less burdensome. Early on, IADC had identified the need for EPA to authorize an additional discharge stream to permit use of lubricated wire rope and machinery that may be immersed.  IADC has also asked EPA to clarify how the proposed permit will interact with other EPA regulations governing cooling water uptake and restricting transporting materials outside of US waters for discharge.

API updates – offshore and onshore

API has published API Specification 4F, 3rd Edition — Specification for Drilling and Well Servicing Structures. It states requirements and gives recommendations for suitable steel structures for drilling and well servicing operations for both onshore and offshore drilling and well servicing structures, provides a uniform method of rating the structures, and provides two product specification levels.

Among other changes, this edition significantly updates the wind load design requirements. The wind force is now based on the forces on individual members in the drilling structure.

This edition also introduces a “structural safety level (SSL)” to offer design requirements for differing environments. The SSL changes the design requirements based on the consequences of failure.

Drilling contractors’ confidence in drilling structures built to the new API Spec 4F wind loading design should increase, commented Robert Urbanowski of Grey Wolf Drilling Company, who participated in the drafting of the new edition. He pointed out that possible areas of concerns may be:

• Drilling structures being moved to different geographical regions will need to be checked to ensure the design wind loading are adequate for the area it is planned to be used in.
• Modifications to existing structures built to previous versions of API specifications may cause engineers to perform additional analysis using the new Spec 4F methods and recommend structural modifications.

API also has published API Specification 7-2, 1st Edition – Specification for Threading and Gauging of Rotary Shouldered Thread Connections. It specifies requirements on rotary shouldered connections for use in petroleum and natural gas industries, including dimensional requirements on threads and thread gauges, stipulations on gauging practice, gauge specifications, as well as instruments and methods for inspection of thread connections. This action reflected the US national adoption of ISO 10424-2.  Spec 7-2 replaces threading and gauging previously covered by API Spec 7.

Mike Killalea, group vice president/publisher

Advanced Rig Technology Committee

The new IADC Advanced Rig Technology Committee held its inaugural meeting during the 2008 IADC/SPE Drilling Conference in Orlando, Fla., on 5 March. The group is working toward guidelines and best practices for automated drilling systems, as well as examining standard methods of reporting reliability problems with advanced rig equipment.

Steve Richards, Key Energy, was elected as chairman. Jeff Swain, Chevron, is vice chairman-operators, and David Reid, National Oilwell Varco, is vice chairman-service. Five subcommittees also have been established:

• Reliability, organized to collect statistics on top-drive reliability.
• Control motions, which seeks to define critical control motions for key systems, including primary safety systems and control chairs.
• Software Interface, which seeks to harmonize software interfaces and ensure that systems can communicate readily.
• Guidelines, to develop decision matrices on when automation is appropriate and guidelines for training, HSE and operation.
• Future Technology: Looking at desired and possible advances in rig technology in the future.

Well Servicing Committee

The new IADC Well Servicing Committee held its first meeting at IADC headquarters in Houston on 10 April, to develop a mission that would better serve the well-servicing segment of the industry. Some 106 of IADC’s 380 contractor member companies report owning or operating well servicing rigs. In total, IADC members operate 2,385 well-servicing units of all types.

Members of the committee determined at the first meeting that IADC expertise in certain key areas, including well control, training and worldwide scope, would be highly beneficial to the well-servicing industry when applied to the special needs of production rigs. The committee determined that it would work collaboratively with other organizations, including the Association of Energy Servicing Companies.

Joe Eustace, president of Pioneer Production Services, was elected as committee chairman.

The mission of the IADC Well Servicing Committee is to advance the interests of IADC’s well-servicing members in HSE, well control, training, regulation/legislation and other areas where IADC’s expertise proves advantageous. The IADC Well Servicing Committee will pursue initiatives both independently and in collaboration with other key industry organizations.

Jason McFarland, vice president – membership & publications

Ethics/corporate compliance

The new IADC Ethics and Corporate Compliance Committee held its inaugural meeting on 25 September 2007.  Chaired by Brady Long, chief compliance office & deputy general counsel for Pride International, the committee’s mission is to foster the understanding and compliance with US and international laws, including but not limited to laws pertaining to corruption, bribery and import/export.

The committee also promotes the highest standards of ethics within the drilling industry by providing a forum for sharing strategies designed to promote ethical behavior. Through shared best practices, the committee works to educate its members on developments in principles of ethics and applicable laws, as well as trends in enforcement.

Since the inaugural meeting, the committee has met on a quarterly basis with featured speakers who are experts in the ethics arena. To date, speakers have included Alexandra Wrage, president of Trace Inc; Matt Kelly, editor-in-chief of “Compliance Week”; and Christine Savage, partner, King & Spalding.
The committee is seeking CLE/CPE qualification for future meetings.

Technical publications

The IADC Technical Publications Committee (TPC) continues its work to publish a comprehensive, practical and readily understandable series of peer-reviewed books on the petroleum drilling industry in order to educate and guide industry personnel at all levels. With one book (“Casing and Liners for Drilling and Completion”) under its belt, the TPC is focusing on publishing several additional works, including waste management, managed pressure drilling, drilling fluids and formulas and calculations for drilling. The TPC is chaired by Leon “Doc” Robinson.

New phase in Career Connections

Returning Military Campaign (RMC), the second phase of the IADC Career Connection (ICC) program, was launched in 2008. To help facilitate the program IADC established a working relationship with the Army Career Alumni Program (ACAP), which provides job assistance to returning military as they transition to civilian life.

With support from ACAP, IADC organized the first RMC job fair at Fort Hood in Killeen, Texas, on 9 January. More than 250 soldiers were greeted by representatives from 17 drilling companies. Due to the success of this inaugural RMC event, IADC returned to Fort Food on 14 May for a second job fair, which more than 2,000 soldiers attended. In total, approximately 20 drilling contractor companies participated in these two events.

IADC is hosting a third RMC job fair at Fort Carson in Colorado Springs on 18 September and is considering an RMC event in Europe.

The goal of ICC is to assist the drilling contractor industry to develop non-traditional sources of recruiting in Europe and North America to help find the future workforce needed to operate the world’s drilling rigs. IADC is not taking on a recruiting role but acts as a liaison between its member companies and potential employees in the industry’s search for talented workers.

IFECM holds 3rd meeting

Stavanger was the host city for the third gathering of IADC’s International Forum of Energy Centres and Museums (IFECM) on 16-17 June. Delegates from eight energy centers representing five countries – Azerbaijan, Canada, Germany, Norway and the United States – attended. Participants discussed ongoing projects, as well as possible future collaborative efforts and public outreach. The group also decided to produce an educational short film to be featured in energy centres and museums. For more information on the IFECM meeting and project, please see “News Cuttings” on Page 178.)

Dominic Cattini, senior director – European operations

European Operations Forum

As part of its continuing effort to promote HSE commitment and advances in drilling technology, IADC has formed the European Operations Forum (EOF). The EOF builds on the achievements of the European Working Group and is a stronger IADC regional body focusing on policies that effectively meet drilling contractors’ 21st-century needs.

The EOF provides overview and guidance for IADC offshore and onshore activities in the region. Coordinated with the various IADC operations departments and government affairs office, it is the focal point for dialogue with regulatory agencies across Europe while also being responsible for the execution of activities and projects for drilling contractors operating in the region.

The Forum Steering Committee is made up of Joep Beyer, KCA DEUTAG; Jørn Madsen, Maersk Contractors; Eelke Strikwerda, Noble Drilling; Sveinung Lofthus, Seadrill; and Paul King, Transocean.

More information about EOF activities can be found on IADC’s website.

HSE Case Guideline

The International Regulators’ Forum awarded IADC the Carolita Kallaur Award in recognition for its outstanding contribution to offshore safety with the IADC HSE Case Guideline for Mobile Offshore Drilling Units in December 2007. The IRF citation reads, “This excellent achievement has great potential for enhancing the safety of offshore drilling operations worldwide, and member countries of the International Regulators’ Forum greatly appreciate the work the International

Association of Drilling Contractors has performed in developing this document.”

Since the launch of the HSE Case Guideline in October 2006, IADC has received significant global support and praise from drilling contractors for the user friendly style of the offshore version of this document and its outputs.  Likewise for the land version, which was launched in October 2007. Many now see both documents as the two most significant HSE reference documents available for global drilling operations.

Workshops and presentations on the content and use of both HSE Case Guidelines (offshore and land) have been undertaken worldwide since their launch.

Feedback from these sessions have been valuable in ensuring that both documents reflect the requirements of drilling contractors and other stakeholders.

This information enabled IADC to launch a revised and updated Appendix 4 – Legislative Index to the offshore version of this guideline in October 2007. This first update reflected changes in Coastal State legislation since the original launch and incorporated the requirements of several additional countries that now require an HSE Case. This appendix also provides information on the necessary compliance with Coastal State regulatory requirements and their individual review and assessment regimes.

All documents are available for complimentary download from the IADC Publications Catalogue web page.

With more experience gained from their use, drilling contractors have identified areas in both the offshore and land versions of the guidelines that could benefit from enhancement and updating.

Likewise, they feel that additional guidance is now necessary in three specific areas: risk management, especially the “Bow-Tie” methodology; combined, concurrent and simultaneous operations; and the development of bridging documents. With this in mind, a programme of review, enhancement and updating of both versions of the guidelines is now under way.

It is anticipated that new releases of both sets of guidelines will be available in September 2009.

HSE Case Users Groups

In view of the work necessary to update and enhance both of the HSE Case Guidelines, it was felt that the original IADC reference group for peer review required improving. Consequently, IADC has established users groups for both the onshore and offshore versions of its HSE Case Guidelines. The new users groups provide for four levels of participation:

• Policy level, which is restricted to representatives of IADC member drilling contractors having policy-level responsibilities for HSE management systems (from either an HSE or operations perspective) at corporate, regional or national levels.
• Development level, which includes drilling contractors, consultants and others, responsible for developing HSE Cases.
• Implementation level, which is intended to serve as a mechanism for exchange of information for rig managers and others with direct responsibility for HSE Cases developed using the IADC Guidelines.
• Regulatory level, which is aimed at staff of regulatory bodies and oil companies with interest in HSE management systems, particularly those who mandate HSE Cases for rig operations.

Offshore Competency Training Programme

The IADC Offshore Competency Training Programme has taken several big steps over the past year as it went from regional to global and became the “de facto” standard for drilling crew competency and training, commencing January 2008. The programme aims to help offshore personnel to freely move across national borders by providing a training matrix acceptable to all nations. By undertaking courses according to this matrix, marine and rig crews will demonstrate a sufficient level of competency.

The North Sea Offshore Authorities Forum (NSOAF) was the first to recognize IADC’s programme as a framework that lays “the foundation for efficient movement of personnel working on mobile units” at its 2007 annual meeting. So far, three oil industry associations (NOGEPA in The Netherlands, NSOC-D in Denmark and OLF in Norway) and five government agencies (Denmark, Germany, The Netherlands, Norway and the UK) have agreed to accept the IADC programme.

In December 2007, the first fully certified Basic Introduction to Offshore Safety (BIOS) and Helicopter Underwater Escape Training (HUET) course was held at the Falck Nutec facility in Esbjerg, Denmark. Six participants – three from Maersk Contractors, two from Noble and one from Seadrill – undertook the three-day course. It was witnessed by the Danish Maritime Authority, Norway’s OLF, the Danish Oil Industry Association, Oil and Gas UK / OPITO and audited by DNV.

The course, given in English to participants of five nationalities, was a great success. All participants undertook the OLF “e-learning” package prior to arriving and passed the written examination on the first day. After course completion, all participants were issued four-year validated certificates allowing offshore travel in all North West European Countries (Denmark, Germany, Norway, The Netherlands and the UK) and further afield.

Then, in February 2008, continuing to promote wider awareness and understanding of the programme, IADC held an industry symposium in Amsterdam. The event covered historical developments in training harmonisation dating from the early 1990s, along with the content, testing and acceptance of the current programme.

IADC’s process for assuring the quality of both the training providers and the IADC standard courses that they intend to teach was outlined, along with the proposal for ongoing verification of competence of drilling crews.

Representatives from all sectors of the offshore oil and gas industry in Canada, Europe, Russia and the United States attended the interactive event.

The European Operations Forum Training Workgroup is aiming to develop this programme further with the active participation of our social partners in the region.

Resolution of the issues affecting widespread recognition have been addressed, enabling the Training Workgroup to focus more attention on specialist and function / trade courses for inclusion in the programme. Although it is likely to take 18 months or more to complete this programme, by virtue of its modular nature, it is possible to roll out new courses as they are developed, thus expediting its take-up and use.

European reference note

In an effort to streamline information being distributed by e-mail within the drilling industry, a series of consolidated reference notes are being developed for members operating in Europe. These reference notes, issued on a periodic basis, bring together notifications from various organizations of recently published consultation, guidance, safety and operations notices and other documents that may impact offshore and onshore drilling activities, especially within Europe but also potentially beneficial worldwide.

The reference note will be produced periodically when additional information is made available. It can be downloaded from IADC’s European Operations Forum web page.

Ken Fischer, regional vice president – Middle East & Asia

Regional activities

The mission of IADC’s Middle East & Asia office is to maximize the value of all IADC activities and programs for the benefit of member companies operating in those regions. During 2008, this effort has focused on the proliferation of accreditation programs, particularly RigPass and WellCAP. In addition, participation of members in Southeast Asia, China and India continued to increase.

The increase in rig activity in and around the Arabian Gulf has strained the region’s limited supply of suitable equipment and experienced people. Long lead times for additional rigs and replacement parts and supplies have impacted drilling performance. The need for additional personnel, combined with the drive to nationalize the work force, has created a strong demand for effective training and, hence, IADC accreditation programs.

RigPass and WellCAP, as well as the Drilling Industry Training Accreditation Program and the Competence Assurance Accreditation Program, are being adopted throughout the Gulf region. These programs ensure the quality of training while providing a benchmark against which contractors and service providers new to the region can be measured.

Increasingly complex and challenging wells have caused companies to focus not only on entry-level training but also on more advanced programs. Rapid advancement of less-experienced personnel has also brought attention to programs such as IADC’s WellCAP PLUS. In 2008, Saudi Aramco, whose internal programs are already accredited by RigPass and WellCAP, conducted its first WellCAP PLUS training program, with other Gulf Cooperation Council oil companies expected to follow suit.

IADC maintains two active chapters in the Middle East; the Northern Arabian Gulf Chapter and the Southern Arabian Peninsula Chapter. These groups meet regularly to address challenges common to members in their areas. The chapters also serve as a focal point for distribution of IADC materials and provide a reservoir of volunteers for conferences and other headquarters-managed initiatives.

IADC continues to provide a forum for information sharing in India’s E&P industry, with the 19th IADC Technology Meet held in December 2007 in Mumbai attracting about 500 delegates. ONGC, the country’s largest oil and gas company, continues to provide strong support for IADC through the South Central Asia (SCA) Chapter and programs such as WellCAP and the Drilling Industry Training Accreditation Program. This year marked the 10th year since the Well Control School of the ONGC Institute of Drilling Technology (IDT) was accredited under WellCAP. According to IDT, the incidence of blowouts has decreased by 90% in that time.

2008 saw China continue to expand its role in the global drilling marketplace.  Chinese-manufactured rigs have helped to satisfy operators’ demands for additional capacity, while the contribution of Chinese drilling contractors has helped to achieve drilling targets in most key operating regions, including the Middle East. With this growth in activity, Chinese companies have turned to IADC as a source of information and programs useful in all aspects of the drilling business.

For example, there are currently nine Chinese well control training centers accredited under WellCAP, with one additional school pending.
Southeast Asia, too, is growing in importance as that region’s national oil companies strive to develop their country’s natural resources. More and more, these companies turn to IADC as the leader in drilling-related activities and tools.  IADC will be a valuable partner as these companies build their own drilling competency and as more and more drilling contractors enter the region.

UBO & MPD Committee

Revised definitions have been adopted for the terms “managed pressure drilling,” “underbalance,” “underbalanced drilling” and “underbalanced operations.” The IADC Underbalanced Operations & Managed Pressure Drilling Committee ratified the new definitions as part of an effort to clarify these operations, which are sometimes confused by industry decision-makers.

Last year, the UBO & MPD Committee completed its “best practice” document for underbalanced operations. The document was submitted to API’s Executive Committee on Drilling and Production Operations and adopted as API RP 92U, Recommended Practice for Underbalanced Operations, 1st Edition.  Work has since begun on the partner document for managed pressure drilling which will also be submitted to API as an RP.

In May, the MMS issued a “Notice to Lessees and Operators” (NTL) providing guidance for conducting MPD projects in the Gulf of Mexico. The NTL specifically addresses the constant bottomhole pressure variation of MPD as defined by IADC. Under this approach, MPD is limited to maintaining an overbalanced state in a closed system through the use of mud density and annulus friction pressure, using either equivalent circulating densities and/or casing back pressure with a statically underbalanced mud system.

MMS acknowledged the “input and cooperation” of the IADC UBO & MPD Committee in the NTL, which is seen as a significant step toward bringing MPD technology into the mainstream, according to former committee chairman Joe Kinder of Secure Drilling.

The IADC committee is now drafting guidelines for fluids for underbalanced operations. Additionally, a task group is updating the committee’s “standards gap analysis” to reflect current operating practices and newly adopted standards such as API Spec 16RCD, for rotating control devices, and Spec 7NRV, for non-return valves.

Contracts workshops, conference

To provide members with the most up-to-date information on the practical and legal aspects of oil and gas drilling contracts, contracts workshops have been held in Texas and Colorado over the past year. The events focus on the principles of contracting using the IADC model contract form as a guide. Topics have included risk/reward and market strategy; indemnification and risk of loss; and managing liability.

Additionally, the 2008 IADC Contracts & Risk Management Conference is being held in October addressing a wide range of issues. Topics include anti-indemnity agreements, challenges of international contracting and, for the first time, ethics and anti-corruption compliance practices.

Joe Hurt, regional vice president – North America and lead staff land HSE issues

Annual ASP Report

The drilling industry set another record with the lowest ever lost-time incidence (LTI) rate of 0.53 in 2007, a 5% improvement over 0.56 in 2006. The number of fatalities decreased as well, from 29 in 2006 to 23 in 2007. The largest percentage of the fatal incidents – 10 of the 23 – involved employees who had less than one year of service with the company. For a full summary of results from the ASP Program, please see Page 100.

OSHA alliance networks

OSHA continues to rapidly expand its industry outreach effort through regional alliance networks that began with the STEPS Network (South Texas Exploration & Production Safety Network). The collaborative effort helps OSHA to make alliance efforts with HSE professionals in the upstream oil and gas industry. Participants include operators, drilling contractors and service companies.

Since the South Texas network was formed a couple of years ago, four others have been added in the Permian Basin, the Four Corners area, Oklahoma and ArkLaTex. Three more are in the planning stages – in Colorado’s D-J Basin, in Western Colorado and in Wyoming.

OSHA PPE standards

OSHA updated its standards for personal protective equipment (PPE). Existing references to specific consensus standards were replaced with performance language requiring PPE to be constructed in accordance with good design standards. Guidance for determining what is a good design standard was included. In addition, OSHA added non-mandatory appendices that list standards constituting good design standards.

OSHA’s final rule requiring employers to pay for PPE required in the workplace became effective in February 2008, with implementation in May 2008. IADC had opposed the rule when it was published in 2004. The final rule requires employers to pay for all PPE other than non-specialty safety-toe protective footwear and non-specialty prescription safety eyewear, provided that the employer permits such items to be worn off the job site. The employer has to pay for specialty footwear, non-prescription safety glasses, specialty prescription safety glasses, goggles, hard hats, all types of work gloves and other PPE required to protect workers in the work place.

HOS limits

Under a final rule announced by the Federal Motor Carrier Safety Administration (FMCSA), there will be no changes to the 11-hour drive time and 34-hour restart provisions in the US federal hours-of-service rule for truck drivers. This rule regarding commercial driver hours of service (HOS) regulations came after a protracted court challenge. It allows motor carriers and drivers to restart calculations of the weekly on-duty time limits after the driver has at least 34 consecutive hours off duty (34-hour restart). Oilfield operations retained the exception, the 24-hour restart for 7/8 day duty periods, but must comply with 10-hour consecutive off duty, 11-hour driving limitation and 14-hour on-duty limitations.

Mismatched hammer unions

An API task group led by Shell has completed a document aiming to improve the design and safety of hammer unions, with one part targeting users and one part targeting manufacturers. IADC staff and member representatives continue to participate and is reviewing the document before it goes to API Subcommittee 8 for a ballot vote later this year. The issue of mismatched hammer unions has been a concern with IADC members going back to 1998, with several Safety Alerts having been issued on this topic.

CDL training requirements

The FMCSA proposed revising the standards for mandatory training requirements for entry-level operators of commercial motor vehicles (CMVs). This proposed rule does not apply to those who currently hold a commercial driver’s license (CDL) or those who obtain a CDL at least three years before the final rule goes into effect.

Starting three years from the rule’s effective date, those applying for a new or upgraded CDL will have to successfully complete specified minimum classroom and behind-the-wheel training from an accredited institution or program. This proposed rule could affect IADC member companies that seek to promote employees who do not have a CDL to positions that require one.

Upstream industry injuries

The National Occupational Research Agenda (NORA), a subgroup of the National Institute for Occupational Safety and Health (NIOSH), established a council to study upstream oil and gas industry injuries and recommend ways to improve safety. The NORA Sector Council will represent all stakeholders in the upstream industry.

At its meeting on 28 July in Denver, Colo., four groups were set up to conduct research and make recommendations on developing industry standards to improve safety in the upstream sector. These groups will cover operations, information-regulatory/industry associations, education/training and workforce issues. IADC plans to participate on the first three groups.

The next NORA meeting is scheduled for 5 February 2009, in conjunction with the 2009 IADC HSE & T Conference in Houston. However, before that, each research group plans to hold online meetings every six weeks to discuss its progress.

Environmental data collection

The IADC Executive Environmental Policy Advisory Panel held its opening meeting in March 2008, with discussion centered around what environmental data drilling companies collect for internal or public use. A survey of drilling contractor members on the measurement of environmental performance was then conducted, and its findings were presented at the advisory panel’s second meeting in June 2008. The panel is now working on internationalizing IADC’s guidelines for collecting environmental data, originally created by the IADC HSE Committee.

Hazardous materials

Companies that transport or offer for transport hazardous materials must register with the US Department of Transportation. This includes drilling contractors, and the Pipeline and Hazardous Materials Safety Administration proposed increasing the registration and fee assessment program from $975 to $2,475 starting in 2009. The purpose is to gather information about the transportation of hazardous materials and fund the Hazardous Materials and Emergency Preparedness grants program.

If you have not seen the TV series “Black Gold” (broadcast on the TruTV channel on American television), you may have heard about it. Based on online reviews and trailers, the show appears to have attracted quite a following:  Variety: “It’s undeniably entertaining.” Dallas Morning News: “… You’ve got a show that’s at once an amalgam of every good-ol’-boy cliché and utterly authentic.”

To the average person unfamiliar with a well-run drilling operation, the show is captivating and interesting. However, it is also wrong on so many levels. In the view of the American Association of Drilling Engineers (AADE), this show is a disgrace to our industry. “Black Gold” does not represent the efficient, safe and environmentally responsible drilling operations conducted by the majority of oil and gas operators and drilling contractors, but rather panders to the stereotypes of our industry that have been invalid for decades.

First, the basic premise of the show is incorrect: Three adjacent rigs competing against one another to reach the same reservoir first. This is nothing more than false drama. Competition for leases is conducted during the planning and lease-purchasing phase of exploration and development, not actual well operations. This confirms the view many of us hold about a portion of the media – any premise is justified to develop a sense of urgency and interest to maintain the viewer.

However, what is more disturbing is the program’s utter disregard for health, safety and the environment (HSE) exhibited on so many levels. If left unchallenged, this disregard for HSE becomes the dominant view the public holds of how we, the oil and gas industry, run our operations.

On the environmental side, images of mud spills resulting from careless and improper operating practices give the impression that all drilling operations inflict a high level of environmental damage. For dramatic effect, the crews on the show do not use a mud saver valve on the kelly, nor do they even use a mud bucket to divert the mud back to the circulating system. I started my drilling career in 1981 as a mud engineer in the over-thrust belt of western Wyoming. Even then, the mud saver valve and mud bucket were standard equipment on all rigs for safety and to prevent the loss of expensive mud. For this TV show to continuously show no mud management while tripping and the failure to use technology that is over 30 years old, suggest the producers are paying the crews to intentionally engage in unsafe acts for dramatic effect. This, unfortunately, reinforces common stereotypes about the dangers and dirty nature of drilling.

The show also comes up way short on safety and health. Safety meetings and the use of basic job safety analysis (JSAs) are non-existent. The crews routinely neglect to use proper personal protective equipment (PPE). In most scenes, the crews wear only hard hats, no safety glasses, no gloves and no hearing protection.

The rig equipment is pre-1980s, without even basic automation.

The show portrays an over-emphasis on getting the job done quickly, with no emphasis on body placement and only generic references to working safe. Repeated viewings of such a disregard for the use of PPE, coupled with little to no safety culture on these rigs, make a knowledgeable viewer question whether operators and contractors such as those depicted on “Black Gold” even have a viable HSE department. Does their management even understand the basics of safety management or safety systems? If this is a “true” reality show and the program is an honest portrayal of these contractors’ operations, the answer is no.

Actions displayed on the show would bring immediate dismissal from any reputable operator or drilling contractor. For example, new crew members are allowed to work alone with no supervision while hoisting pipe to the rig floor. If any JSAs were completed prior to operations, it is not evident in the actions of the crews and, more disturbingly, not evident in the actions of rig site management. Many activities seem staged for the camera to reinforce old stereotypes rather than to provide an accurate representation of the working environment on the majority of drilling operations onshore or offshore.

The show’s announcer repeatedly reminds the viewer that when the rig is behind schedule, safety takes a backseat. This is entirely counter to the “Stop the Job,” “Goal Zero” and “One Accident is Too Many” culture that is endorsed and utilized by the majority of operators and contractors.

Among reputable operators and contractors, HSE culture is based on the belief that accident-free operations are not only possible but expected. Statistics from IADC and OSHA show a consistently improving accident rate in rig operations. In safety, the E&P business is actually one of the safer industries, with an overall total recordable incidence rate (TRIR) of 2.0 (OSHA 2006). TRIR is meant to reflect how many incidents occur in a work force of approximately 100 people over a full year.

For rig operations specifically, the TRIR is 5.1 onshore and 1.4 offshore and averages 2.1 worldwide (IADC, 2007 YTD). This compares with 5.1 for construction and 6.0 for manufacturing. To really put safety in perspective, the average 2.1 TRIR for rig operations is lower than the 3.3 TRIR for real estate!

IADC records show there are rigs onshore and offshore that go years without a recordable accident. In our industry, we have rigs that have never had a lost-time accident. Accident-free operations are not only possible, they should be the expectation. The mindset displayed on “Black Gold” that “people will get hurt,” “accidents will happen,” and “you have to be crazy to do what we do” is unacceptable and inaccurate.

It is the position of AADE that operator and drilling contractor management is responsible for providing a strong HSE culture for crews to work safely. We recognize that some elements of “Black Gold” do portray the oilfield spirit, and it is not our intention to belittle those individuals not fortunate enough to work on an operation managed by the majority of reputable operators and contractors. It is our opinion that these employees are entitled to work in a supportive HSE culture where accident-free operations are encouraged, supported and expected. The bottom line is, there are risks associated with our operations; however, that does not mean accidents will happen. We can perform our work accident-free.

Sadly, the operational environment depicted in “Black Gold” does exist in pockets of our industry. Fortunately, such an environment does not exist among the drilling contractors and operators that make up the majority of our industry. Many companies refuse to do business with contractors that operate with the disregard for HSE seen on “Black Gold.” It is the view of AADE that more industry leaders need to speak out and reinforce the opinion that operations such as those depicted on “Black Gold” are unacceptable and should be stopped.   The program is a disgrace to the industry; it is more of a “Black Eye” than “Black Gold.”

Joe Leimkuhler is the offshore well delivery manager – Americas for Shell E&P based in New Orleans, La. He is also the 2007-2009 president of the American Association of Drilling Engineers (AADE). More information about the AADE can be found online at www.aade.org.