by Linda Hsieh, assistant managing editor

Jindal Drilling & Industries, part of Jindal Group, one of India’s largest business houses, is brewing and implementing ambitious growth plans – newbuild jackups, deepwater drilling, directional drilling, global expansions, to name a few. But Naresh Kumar, managing director of Jindal Drilling, doesn’t take growth lightly. Along with group chairman DP Jindal, Mr Kumar wants to take their drilling business to new heights – but only with sure-footed steps.

Like many big corporations, Jindal Group had humble beginnings. It was started in the 1950s by five Jindal brothers as a very small pipe manufacturing company in Hissar, Haryana State. Over the years, it went from one mill to two to 10, then expanded into other businesses like steel manufacturing. By 1985, the group was large and respected enough that it was invited by the Indian government to join the drilling business.

At the time, though, the company had no idea what drilling was, or even what a rig looked like. “There was a brochure of a land rig and it said, this is known as a rig, and that’s how we started in 1985,” recalled Mr Kumar, who was able to use his mechanical engineering background to quickly get a handle on the business’ more technical side.

That was more than two decades ago. The company certainly knows drilling now, and has been continuously operating rigs in Indian waters for such long-time partners as Noble Drilling.

And, in late 2008, Jindal Drilling became rig owners themselves, with the delivery of two jackups – Discovery I and Virtue I – owned under joint venture companies. The rigs, which costs a total of approximately $400 million to construct, were built when ONGC ran into an acute shortage of offshore rigs in 2005. Not only that, but ONGC wanted only the best rigs with state-of-the-art technologies, Mr Kumar said. “So we took the lead at that time and immediately searched for the right shipyard and right design.”

They ended up selecting the KFELS MOD VB design and incorporated modifications to make it more suitable for the Indian drilling environment. And because they were supported by great teams, Mr Kumar said, both rigs were operational within hours of reaching their locations offshore Mumbai. There were small teething problems, he acknowledged, but nothing big enough to put the rig down.

Now, Deepwater

With this positive growth experience under their belt, Jindal Drilling is on the alert for additional expansion opportunities. One market they’re aggressively exploring is deepwater “because that is another area that India needs,” he said.

India is believed to have significant untapped hydrocarbon potential offshore, especially in deepwater. And in recent years, New Exploration Licensing Policy (NELP) bidding rounds held by the government have made more and more offshore blocks available for exploration. That’s paved the way for such discoveries as Reliance Industries’ huge gas find in 2002 offshore India.

“We are looking for the right opportunities to collaborate with various international companies in different ways, maybe joint venture, maybe an operational arrangement… There are different options depending on the project,” Mr Kumar said.

Jindal Drilling also began providing directional drilling services in the early 2000s when they detected a trend in deviated and horizontal wells. They became the first Indian company to enter that market, and are working to introduce new technologies to Indian clients whenever possible, according to Mr Kumar.

Professional service

According to Dr Lee Hunt, IADC president, Mr Kumar has been a longtime supporter of IADC, serving as the first vice chairman of the South Central Asia Chapter when it was created in 1998. This year he’s also serving on the IADC Executive Committee, the first Indian to be nominated for the committee. “IADC is fortunate to have the leadership caliber of Naresh Kumar as we grow into the 21st century,” Dr Hunt said.

Currently he is chairman of the Oil and Gas Services subdivision of India’s Confederation of Indian Industries. He’s also a founding member and current president of Petrotech Society, which holds one of Asia’s largest conferences every two years.

Van Diemen, Linkin join Pacific Drilling management

Pacific Drilling announced that Cees Van Diemen has joined the company as vice president of operations and that Paul Linkin has accepted the role of vice president QHSE. Mr Van Diemen brings 32 years experience in the offshore drilling industry, including 25 years with Noble Drilling and with Neddrill, prior to Noble’s acquisition. He holds a BSc in automotive engineering from the University of Apeldoorn. Mr Linkin joins the company after nearly 20 years in operations and QHSE management roles at Schlumberger. He has extensive experience developing and implementing management systems in both field and office environments. He holds a bachelor’s degree in electrical engineering from the University of Portsmouth.

M-I SWACO adds to products catalog with CHEMTECH deal

M-I SWACO has expanded its offering of production chemicals and related technologies with the acquisition of Broussard, La.-based CHEMTECH. It supplies oilfield production chemicals and supporting services, with products in all major production treating application segments, including emulsion control, corrosion inhibition, scale prevention, paraffin control, gas hydrate inhibition and solids dispersion.

The company also has a customizable reporting software package, WELLTRACK, and a patented chemical injection pump system, ECO-PUMP.

New executive VP, VP manufacturing appointed at Deepflex

Deepflex has appointed Michael C Kearney as executive vice president and chief financial officer, and Donald N Bockoven Jr as vice president of manufacturing. Previously CFO of Tesco Corp, Mr Kearney will be responsible for all financial reporting, accounting services, mergers and acquisitions, information technology, and investor relations. Mr Bockoven will be responsible for all aspects of pipe production. DeepFlex designs, manufactures and installs premium composite flexible piping. It is the only manufacturer of Flexible Fiber Reinforced Pipe, a corrosion-resistant, unbonded, nonmetallic pipe designed for deepwater applications.

Doyles VP business development to be based in Dubai

Doyles recently hired Bruce Terrill for the newly created position of vice president, business development to be based in Dubai, UAE. Among other duties, he will manage the company’s alliance with Weir Oil & Gas, the company’s authorized service facility in the UAE.

Senior VP at Key Energy

Key Energy Services has hired T.M. “Trey” Whichard III as senior vice president and chief financial officer. He previously served in various financial capacities with BJ Services, most recently as vice president and CFO.

Enventure opens Beijing office

Enventure Global Technology’s subsidiary Enventure Global Technology Trading opened its first office in Beijing to support the market China. KJ Tan is the company’s China country manager.

Dynamic Equipment adds Houston location

Dynamic Equipment of Aberdeen has opened an operating, sales and marketing office in Houston. It will be managed by Michael J Jurenko, president and CEO of Dynamic Equipment USA, and will service North, South and Latin America.

Jacob joins Goober Drilling as president, CEO

Goober Drilling has selected Ed Jacob III to serve as president and chief executive officer. He will also serve as a member of its board of directors. Mr Jacob previously served as senior vice president of Grey Wolf, responsible for implementing standardization to assure consistent operational performance. He has 36 years of industry experience, including management positions at Helmerich & Payne IDC, Bayard Drilling Technologies and The National Supply Company.

Mr Jacob has served as a director of IADC since 1989 and held the position of VP land division from 1998-2000. He served on IADC’s Executive Committee from 2004-2006.

Moody acquires EDN

Moody International announced the acquisition of The Enterprise Development Network (EDN), an HSE consulting and training company based in Australia. The company hopes to enhance its ability to provide HSE solutions to large projects.

Woolslayer names new CEO

Woolslayer Companies has named Thomas L Wingerter as CEO and member of the WCI board of directors. He previously has been with Pinpoint Drilling and Directional Services and Parker Drilling and will be based in Dallas. Dewayne Vogt remains WCI president and chief engineer.

Logan buys DDS

Logan Oil Tools has acquired Diamant Drilling Services (DDS), which is based in Belgium and focuses on the design, manufacture and application of fixed cutter diamond drill bits. The acquisition will provide Logan entry into the high-tech diamond bit manufacturing market.

Executive VP named at Superior

Superior Energy Services has named Patrick J Campbell as executive vice president. He had been president and chief operating officer of Superior subsidiary Wild Well Control since 2000. He joined Wild Well Control in 1990 and served as its executive vice president until 2000.

New Murchison logo on the way

Murchison Drilling Schools will introduce a new corporate logo during OTC, 4-7 May, to reflect the full scope of its training – both land-based and offshore.

Expro to provide completion landing string technology for BP

Expro has been awarded a multi-year contract from BP for the provision of equipment and services on Block 31 in Angola. The company will provide the Expro Landing String Assembly (ELSA) to enable BP to employ the well barrier philosophy implemented on the Greater Plutonia project. This allows the control of isolation valves, which eliminates the requirement to set and retrieve wireline plugs providing well commissioning efficiencies. ELSA valves will be controlled by the Express Electro-Hydraulic control system, which allows dual-bore completions to be deployed using a monobore landing string, allowing the wells to be flow-tested to the rig prior to installing the production trees.

The contract covers the delivery of landing strings for use on PSVM (Plutao, Saturno, Venus, Matre), the first of up to four planned developments for the block.

Sub-drill improves on traditional mud bucket

Sub-drill will showcase its MS-V2A 5 ½-in. Mud Bucket at OTC. The design uses two simple changes to make the mud bucket more user friendly and efficient. Pneumatic power is best for a drill floor tool, but it has always been a problem to be able to provide enough mechanical force from the pneumatic pressure at the right time. Sub-drill overcame this by using leverage coupled to a type of over-centre mechanism in which the mechanical advantage is obtained when the bucket is fully closed on the pipe. The mechanism is positioned within a strong outer frame, which also acts as a barrier in two ways. It protects the bucket shells and mechanism from damage and consequent leaks, while protecting crew from the working parts.

Moyno system for multiphase pumping

The Moyno Tri-Phaze System offers a progressing cavity solution for multiphase pumping applications. It allows all fluids produced at the well site, including oil, water and gas, to be transported simultaneously through one pipeline to a central processing station. Its abrasion resistance allows for smooth transfer of sandy fluid. The unit is capable of generating flow rates up to 60,000 BFPD with suction pressures up to 900 psi and discharge pressures up to 1,200 psi. Additionally, the system features a stator elastomer formulation that exhibits exceptional resistance to aromatics.

Texas company offers protection package for idle rigs

Dallas-based Protective Packaging Corp (PPC) is providing a comprehensive rig protection package designed to prevent equipment inactivity problems such as corrosion, clogged fuel lines and destroyed rubber gaskets and tires. The package includes volatile corrosion inhibitors (VCIs) to treat the inside of the engines and pumps to prevent rust. Externally, customized barrier bags protect rigs from damaging UV rays and the gauges and panels from everyday dirt, bugs and animals. Desiccants are put in place to provide additional protection against moisture, mold and mildew.

CaliberXD uses advanced PCD technology for more durability

Atlas Copco Secoroc has released the CaliberXD, a drill bit incorporating advanced PCD technology that laboratory and field tests have shown is significantly more durable than conventional diamond inserts. The bit also features a patented tapered foot valve for deep hole applications. Configuration options include fishing threads, retrieval head and a QL shank.

SideWinder PDC bit eliminates gage pads entirely

The SideWinder PDC drill bit from Encore Bits eliminates the gage pads entirely in favor of making the cutting structure as active in the lateral aspect as it is in the vertical. Additionally, the cutting structure blends smoothly and uninterrupted into the flank of the bit and even upwards into the relief back to the shank. This upwards component allows the bit to be pulled while rotating through the tight curves, similar to a keyseat mill, and to ream the upper side of the curve to enlarge the radius as much as possible for casing clearance.

According to the company, an operator recently ran a 6 1/8-in. SideWinder in Oklahoma, drilling horizontally through the Woodford Shale. Running on a 1.5° motor offset, the bit averaged 10-11°/100 ft build rate in the curve while increasing rate of penetration by 25%. In the lateral, the bit drilled 30% more footage 30% faster than average offsets and reduced sliding time in the lateral by 50%. The SideWinder was said to average 80% faster than rock bits (12 to 20 ft/hr).

There’s a high demand for quality training in the industry, said Scotty Hughlett, Aker manager of drilling life cycle services USA. New people unfamiliar with the drilling industry are being brought in to staff the many offshore rigs under construction. And when they go to work, the equipment and technologies can be extremely complex.

The facility has two classrooms and one simulator room that houses a rig-specific simulator. This means students can train in realistic training environments that are set up to look exactly like the rig where the student will be working, down to specific pieces of equipment.

The simulator uses advanced software and high-quality animation technology to provide 3D visualization. CAD models are imported directly from engineering systems and connected to the actual control system, providing an innovative method to optimize the production and quality assurance of drilling equipment, according to Aker.

The simulator also can connect students to E-concept, live monitoring of equipment and operations onboard the rig. That is expected to help improve the company’s life cycle services.

The same simulator has been used in the company’s training centers in Singapore and Kristiansand, Norway, to help students gain the technical understanding they need of every piece of equipment on the rig.

And simulator-based training is not all their training does. According to Aker training manager Torleif Vollstad, Aker’s training concept consists of e-learning, classroom training, simulator and practical training. Topics they cover include equipment maintenance, operational safety, hydraulics, electrics, etc.

Besides customer training, the Texas facility will also be used for internal training for familiarization, troubleshooting, maintenance and operation. There are four instructors, and the first customer was Larsen Oil & Gas. Aker supplied the complete drilling package for PetroRig I, a semisubmersible scheduled to drill in the Gulf of Mexico deepwater under a five-year contract upon completion.

A fourth training center is being planned for Brazil, according to Aker.

At its Perdido Development, Shell recently completed the installation of the drilling and production platform atop a 555-ft cylindrical spar floating in about 8,000 ft of water 200 miles from Houston in an isolated sector of the Gulf of Mexico. It is the deepest such facility in the world.

“Perdido is a technological tour de force that is opening up a new frontier for global oil and gas production,” said Russ Ford, Shell’s technology vice president for the Americas.

“Producing oil safely and responsibly this far out and this deep should allay concerns about industry access to the 85% of the US Outer Continental Shelf that remains undeveloped,” he added.

The Perdido project, which Shell operates on behalf of partners BP and Chevron, began with a lease sale in 1996. Several technologies had to be pioneered before commercial development could be launched in 2006.

Over the next several months, approximately 270 personnel living on the platform and on a “flotel” alongside it will complete the myriad of tasks in the commissioning and hookup required to produce first oil. The facility is capable of handling 130,000 bbl/day of oil equivalent. To get the oil and gas to market required installing 77 miles of oil export pipelines and 107 miles of gas export pipelines in a remote part of the Gulf of Mexico over very rugged sea floor terrain to connect to the existing offshore pipeline infrastructure.

Nine polyester mooring lines averaging more than two miles in length now hold the 50,000-ton floating structure in place, which will be nearly as tall as the Eiffel Tower when fully operational.

The Perdido Development includes a common processing hub that incorporates drilling capability and functionality to gather, process and export production within a 30-mile radius of the facility. This concept will provide regional synergies, reduced cost and lower risk, as well as reduce the number and size of the facilities and operations in this frontier area, resulting in a lower environmental impact than would otherwise be achieved.

100-level 3D, walkaway VSPs completed in Oman

Baker Hughes has successfully completed a seismic project in Oman, deploying a 100-level seismic tool array – the first of its kind in the world. The Baker Atlas Borehole Streamer Seismic Digital Array System was deployed to record two walkaway lines, which were each 5-mile long. The system enables large 3D VSP and walkaway VSP for customers with minimal rig time. Over 64,000 source receiver pairs for the walkaway VSP survey were recorded, with a total operating time of 65 hours.

Aker ready to field-test bidirectional tractor

Aker Solutions is very close to identifying a test well and operator for the first field trials of what it calls the world’s first bidirectional tractor. At press time, the company planned to test the tractor onshore by early May.

The PowerTrac Advance 434 Open Hole Tractor’s bidirectional capability means the tool can push heavier open tools into the well and to help retrieving tools by reversing the tool, according to the company.

“The reason the tools need assistance getting out of the hole is the strength limits on the cable,” said Oddvar Dalane, area manager for Aker Well Service.

Another advantage, he said, is that the tractor can be reversed if the open-hole tools become differentially stuck. The bidirectionality also helps if the cable becomes stuck against the well wall, he added.

The tractor features titanium drive sections, 4.75-in. wheels and 4.75-in. tool OD. It’s 21-ft long and can operate in temperatures up to 350°F.

StatoilHydro has acquired a 40% stake in 50 blocks from BHP Billiton in the frontier DeSoto Canyon area of the US Gulf of Mexico. “DeSoto Canyon is a mostly unexplored region in the eastern part of the Gulf of Mexico. Obtaining early access to new plays is regarded by the company as key to our success,” said StatoilHydro vice president of exploration for North America, Tony Dore. The company did a similar access deal with ExxonMobil in 2005 in the Walker Ridge Area of Central GOM.

DeSoto Canyon is located east of StatoilHydro’s current production operation at Independence Hub. The area has water depths of about 1,000 m.

2nd ENSCO 8500 series semi named

The ENSCO 8501 ultra-deepwater semisubmersible was recently named at the Keppel FELS shipyard in Singapore. It is the second in a series of seven deepwater semis to be constructed by Keppel FELS for ENSCO International. ENSCO 8501 is expected to go to work in the Gulf of Mexico for Noble Energy and Nexen Petroleum. The first deepwater rig, ENSCO 8500, was delivered in June 2008.

Dan Rabun, ENSCO chairman, president and CEO, said, “We expect to begin realising the benefit of our significant deepwater investment starting in the second quarter of 2009. The first of our seven new ENSCO 8500 series ultra-deepwater semis, ENSCO 8500, is currently undergoing deepwater sea trials prior to commencement of operations.

“With the expected addition of all seven new 8500 series deepwater rigs to our fleet by 2012, we anticipate that our deepwater segment will contribute approximately one-third of our revenue once all the new rigs are delivered and operational.”

Ocean Guardian contracted to drill offshore Ireland

AGR Petroleum Services has secured a contract worth £835,000 to execute a drilling programme on behalf of Serica Energy. As a result, AGR has contracted the semisubmersible Ocean Guardian from Diamond Offshore, which will be used to drill the Bandon exploration prospect off the west coast of Ireland in Licence PEL 01/06. Offshore operations are scheduled to start in early May 2009 and are expected to continue for approximately six weeks.

Atwood Richmond awarded GOM 1-well deal

Atwood Oceanics announced that the Richmond has been awarded a contract by Applied Drilling Technology to drill one well in the US Gulf of Mexico at a dayrate of $52,500. The well, estimated to take 40 days to complete, will be drilled immediately following the completion of the rig’s current contract, which is expected to terminate in late April 2009 or early May 2009. The Richmond is the company’s only rig in the Gulf of Mexico.

Eni Norge selects Sevan FPSO 1000 for Goliat project

After an evaluation of the FEED design competition, Eni Norge has selected the Sevan FPSO 1000 concept for the Goliat development project. Sevan Marine was also selected for the project’s FPSO post-FEED engineering, which is expected to be completed during 2009. The Sevan 1000 is capable of handling the harsh demands of the Barents Sea. Its design also focused on minimizing operational discharges to sea. The facility will be provided with electrical power supply from shore to reduce emission of greenhouse gases.

Deepwater Shenzi field starts production

First oil and natural gas production commenced from the Shenzi development in the deepwater Gulf of Mexico, BHP Billiton announced in late March. The TLP has a nominal capacity of 100,000 bbl/day and 50 million cu ft/day of natural gas. The Shenzi facility is located approximately 120 miles off the Louisiana coastline and is installed in approximately 4,300 ft of water on Green Canyon Block 653, making it the second-deepest TLP in the world. Along with the Neptune field, Shenzi is the second BHP-operated, standalone deepwater facility in the GOM.

Dhirubhai 1, 3 discoveries begin gas production

Reliance Industries commenced gas production from the Dhirubhai 1 and 3 discoveries of the KG-D6 block in the Krishna Godavari Basin. This marks the commissioning of the world’s largest deepwater production facility in the same block in which Reliance discovered oil reserves (Dhirubhai – 26) and commissioned trial production earlier. At peak production, the KG-D6 facility is expected to produce over 550,000 bbl/day of oil equivalent.

Reliance started KG-D6 gas production only six and a half years after discovery, compared with the world average of nine to 10 years for similar deepwater production facilities. This was achieved despite the hostile weather conditions common in the Bay of Bengal – storms, cyclones, waves up to 20 m in height and subsea currents of over 4 knots. Supply chain challenges and manpower shortages also had to be overcome.

Retrofitted drillship heads to offshore Ghana as petroleum agreement signed

The government of Ghana, the Ghana National Petroleum Corp (GNPC), Vanco Ghana and LUKOIL Overseas Ghana have signed a petroleum agreement covering the Cape Three Points Deepwater block. It allows Vanco and LUKOIL to continue exploration, with new 3D seismic and additional drilling activities planned. It also provides GNPC and the government of Ghana higher royalty and increased GNPC participation.
The Cape Three Points Deepwater block encompasses 5,146 sq km in water depths ranging from 200 m to 3,000 m in the Tano Basin.

The new agreement comes as the Aban Abraham deepwater drillship departs Cape Town, South Africa, after completing final retrofit operations to enable the unit to drill in water depths of up to 2,000 m. The Aban Abraham will mobilize to Ghana to commence the Dzata-1 exploratory well by the end of April 2009.

Situated in 1,874 m water depth, the Dzata Prospect is a large anticlinal structure with numerous Upper and Lower Cretaceous potential reservoir horizons and distinct direct hydrocarbon indicators, including flat spots and a “gas chimney.” The well will be drilled to a total depth of approximately 4,786 m, or 2,912 m below the mud line.

TOTAL, Cobalt to jointly explore GOM deepwater

TOTAL E&P USA has entered into agreements with Cobalt International Energy to jointly explore the deepwater Gulf of Mexico. These agreements will form the basis of a strategic alliance in the region. The exploration portfolios of both companies in the Gulf of Mexico – 122 exploration leases on Cobalt’s side, 80 exploration leases on TOTAL’s side, and 12 exploration leases already jointly owned – are expected to be generally shared on the basis of 60% for Cobalt and 40% for TOTAL.

Discoverer Clear Leader en route to Gulf of Mexico

Transocean’s Discoverer Clear Leader drillship left South Korea’s Daewoo Shipbuilding Marine Engineering (DSME) shipyard in late March, bound for Singapore. It will then change crews in Durban, South Africa, before arriving in the US Gulf of Mexico in about 60 days. After mobilization and customer acceptance, the rig will commence its five-year contract with Chevron.

The drillship is designed to drill wells up to 40,000 ft deep in up to 12,000 ft of water. It is the first of Transocean’s 10 ultra-deepwater newbuild rigs to leave the shipyard, including five enhanced Enterprise-class newbuild drillships.

Tullow Oil deepens Tweneboa-1 well

Tullow Oil announced that the Tweneboa-1 well offshore Ghana was deepened to 3,938 m and encountered 4 m of highly pressured oil-bearing sands, as well as an overpressured zone at TD. Further exploration drilling will be required to test the extent of the deeper levels and the shallower accumulation where seismic indicates sands thicken away from the well location. The well was drilled by the Eirik Raude in a water depth of 1,148 m about 25 km west of the Jubilee field.

Dali test completed; 3D seismic planned

Noble Energy announced flow test results from the Dalit natural gas discovery in the Michal license offshore Israel. Of the previously reported 110 ft of net pay identified, testing procedures were performed over a limited 43-ft section of the reservoir. The tests, which yielded a flow rate of 33 million cu ft/day of natural gas, were limited by testing equipment available on the rig. Performance modeling indicates the well can be ultimately completed to achieve a production rate of about 200 million cu ft/day. Based on log and test results, Dalit is estimated to contain gross mean resources of approximately 500 billion cu ft of natural gas. The company expects to begin acquiring 3D seismic within the next several months.

Eni makes discovery offshore Indonesia

Eni has made a new hydrocarbon discovery offshore Indonesia with an exploration well drilled on the Jangkrik structure, located in the Muara Bakau block Kutei Basin, east of Kalimantan.

The Jangkrik discovery, drilled in 400-m water depth, represents a significant success in Eni’s exploration efforts in the Kutei Basin. The company plans to proceed with appraisal and to assess the technical and commercial viability of a fast-track development of the new field.

In the Kutei Basin, Eni is also participating in the development of significant gas reserves in the Rapak and Ganal blocks. In the nearby Tarakan Basin, two other discoveries, Aster and Tulip, are in an advanced appraisal phase.

Eni holds overall working interests in 11 permits in Indonesia and operates six of them. The offshore activities are located in the deep waters of the Tarakan and Kutei basins and north of Sumatra Island. Other activities are in the Mahakam River Delta, East Kalimantan.

This is a tough old industry, with more than its share of ups and downs – particularly the downs, which historically have wielded an iron upper hand. One of the recurring wonders in this business is the valiant optimism of its people.

Our endless reservoir of optimism sang out like the proverbial fat lady when I reviewed a recent survey on DrillingContractor.org.

We wondered: With the North American rig count falling into the low four figures – and, at press time, below 1,000 – are we at bottom? Is recovery near?

Fully 83% of respondents fall into the category I will describe as either “unrepentant” or “nervous” optimists. Only 17%, alas, are pessimist, whether “hopeful” or “curmudgeon” (see below). Did their parents short them on lollipops?

Whatever the reason, it is clear that the overwhelming consensus is for a recovery within months. Great news, right?

But what is our track record to date? Recall, faithful reader, the humble results of a couple of recent surveys forecasting future oil price. One survey ran on DrillingContractor.org on 1 April 2008. The second appeared on 21 October 2008, when the handwriting of doom was emerging on the wall, downward spiral-wise. You can see the stark contrast in the bottom figure.

We are today at that moment of time we sought to predict. So who picked the right door?

Unfortunately, in both oil price surveys, the on-target forecasts lie squarely in the Curmudgeon Zone – not only in October 2008, but even six months earlier, in starry-eyed April.

I am a child of the constant curmudgeon (sorry, Dad). I respect that perspective. But I refuse to repent on optimism. So call me a curmudgeon.
Thanks to DC Assistant Managing Editor Linda Hsieh for conceiving this survey.

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

IADC has opened a regional operations office in Bangkok, Thailand, staffed by Chit Hlaing, IADC’s new operations assistant – Asia operations. Mr Hlaing will serve IADC members and support association activities throughout Asia. Among his responsibilities will be coordinating operational functions, promoting accreditation programs and membership, and supporting conferences and chapters in the region.

A native of Myanmar, Mr Hlaing graduated with honors in 2007 from the Wentworth Institute of Technology in Boston, Mass., with a bachelor of science in electronics engineering. Previously he was an assistant QA engineer/technician for ABB Industry in Singapore and an instrumentation/sales engineer for SMART Technical Services in Yangon, Myanmar. He can be reached at the Bangkok office at +66-2-664-2790 ext 3 (chit.hlaing@iadc.org).

Additionally, Ken Fischer has taken on a new title and is now IADC regional vice president – Middle East & Africa. Among other duties, he will serve as liaison with Middle East and African members and chapters. Mr Fischer can be reached at ken.fischer@iadc.org.

Offshore Competency Training Programme revised

The IADC European Operations Forum Training Workgroup has issued Revision 10 of the IADC Offshore Competency Training Programme. It includes changes to class size, exercise groups and the height-of-water entry for practice drills. The latest revision can be found in the Offshore Competency Training Programme page on the IADC web site. The Training Workgroup met earlier this year in a meeting hosted by Seadrill in Stavanger, Norway. The next meeting will be held on 24 May in the Netherlands.

Rig Pass Review Panel approves curriculum changes

To ensure continued relevance to new-hires in the petroleum industry, IADC’s Rig Pass Review Panel has revised the Rig Pass Accreditation Program curriculum. Specifically, modules for general safety principles, materials handling and first aid were expanded, while a new wellsite environmental protection module was added. Additionally, an optional land endorsement module was created.

Emphasis on the employee’s responsibility for his/her own safety and the safety of co-workers permeates the entire revised curriculum, said Brenda Kelly, director of the IADC accreditation & certification department (ACD).

Curriculum changes are effective immediately for all new Rig Pass applicants. Currently accredited training providers must implement the revised curriculum no later than 1 October 2009. They must incorporate the new topics into their training programs and notify ACD staff of an implementation date.

In revamping the general safety principles module, panel members emphasized that today’s petroleum industry empowers employees to take a more proactive role in safety. The revised curriculum now contains a discussion of the authority given to employees to stop or intervene in unsafe work practices.

Also added was a discussion of job safety analysis/job hazard analysis. The discussion of items prohibited in work areas was expanded to include cell phones and other personal electronic devices, drug paraphernalia and other items.

The materials handling module was expanded to include a discussion of critical lifts. The first aid module was totally reworked and is now a module on first aid and employee health. Health topics regarding staph and other risks that may be associated with adverse weather conditions and local wildlife (i.e., alligators, bears, insects, snakes, spiders and scorpions) were added.

The new wellsite environmental protection module addresses waste management and wellsite environmental issues such as leaks, spills and releases. The new optional land endorsement module is designed for new-hires working onshore and will provide insights to issues unique to that environment. Examples include trenching and shoring, plus onshore environmental issues.

The previous Rig Pass curriculum was originally implemented in 2004 and contained 10 core safety modules, plus an optional offshore endorsement module that remains unchanged.

A copy of the new curriculum can be found online at www.iadc.org.

It’s a simple equation: Increased taxes = less investment = less production. Which is why IADC is working, through its alliance with industry groups like API and IPAA, to oppose a budget request by the Obama Administration that would essentially repeal Bush-era tax breaks for the oil and gas industry. This could mean a $30 billion-plus tax increase on American energy producers, most of whom are small businesses.

According to the IPAA, US independent producers develop 90% of US wells and produce 82% of the country’s natural gas and 68% of oil. Increasing taxes on these companies would strip essential capital from new investments, therefore reducing production. And because oil and gas royalties already account for the second-largest income source for the US Treasury, less production would also result in less income for federal and state governments.
Some areas of impact would be intangible drilling and development costs; percentage depletion; geological and geophysical amortization; marginal well tax credit; enhanced oil recovery tax credit; manufacturing tax deduction; excise tax on Gulf of Mexico production; and passive loss exception for working interests in oil and gas properties.

IADC is cooperating with industry grassroots programs designed to encourage greater involvement and higher visibility of the issues, as well as one-on-one relationships with congressional representatives. The association has signed on to related testimony and continues to participate in the IPAA legislative alert system, which generates letters to individual members of congress. IADC and IPAA have shared database information for the alert system since its inception.

Victory for WTD appeal

In a sweeping judgment issued by the Scottish Employment Appeal Tribunal (EAT) in Edinburgh, offshore employers prevailed on all major points involving application of the EU Working Time Directive (WTD) on the UKCS. Oil & Gas UK and IADC have long argued that the WTD requirement of four weeks’ annual leave is provided in the existing offshore rota system during field breaks. Offshore unions claimed that the Directive required an additional four weeks of holiday. The tribunal reversed the findings of a lower tribunal in Aberdeen, which held that the Directive requires two weeks of additional leave. In addition, the EAT dismissed all individual employees’ pending claims involving the decision.

UNITE, the successor union to the former Amicus offshore trade union, has announced it will appeal the EAT decision, likely to the Scottish Court of Session. However, should UNITE fail in its appeal, it will be required to pay all court costs, as well as legal costs of the employers group incurred in opposing the appeal.

A message from IADC president Dr Lee Hunt was delivered by IADC regional vice president – Middle East & Africa Ken Fischer to congratulate the chapter for a decade of stellar success. Dr Hunt emphasized the support of ONGC’s leaders, commenting, “Without their patronage and sponsorship, it would have been difficult to assemble the lineup of distinguished guests and speakers who have brought such high levels of learning and information to these assemblies.”

He also noted the chapter’s achievements in 2008 under chapter chairman U.N. Bose of ONGC, with continued involvement in practical issues confronting the promotion of health, safety and efficiency in operating environments in the region.

Mr Bose was in attendance, as was S. Sundareshan of India’s Ministry of Petroleum & Natural Gas. Both congratulated the chapter on its milestone and encouraged further cooperation in the future among IADC and drilling contractors, the Indian government, and oil and gas companies.

Mr Fischer also delivered an address to the attendees. Following is an excerpt:

It is my great pleasure to be here with you to celebrate, if belatedly, the 10th anniversary of the South Central Asia Chapter of IADC.

I would be remiss if I did not acknowledge the reason why this gathering was postponed from November 28th last year …. The terrible events in Mumbai that began on 26 November and resulted in the death or injury of several hundred Indian citizens and their guests shocked the world and drew our attention to issues far more important than our industry or our profession. Believe me when I say that all of us who know and respect India and its great people shared your grief and sorrow at that time…

Before I share with you my own thoughts on this occasion, please allow me to read a message from Norman Edwards, who retired from IADC a couple of years ago. The message reads:

“Heartiest congratulations to the IADC South Central Asia Chapter on its 10th anniversary celebration event and, in particular, to Mr U.N. Bose and his committee of long-serving stalwarts, supported, as ever, by Arun and Shaila Karle and a host of other faithful members. All best wishes for the future.”

As many of you know, Norman enjoyed his work in India as much as I do. And he especially enjoyed making speeches at these chapter gatherings. One thing he always did was to quote Winston Churchill or some other famous Brit. So in keeping with that tradition, allow me to share a couple of quotations from American presidents that I think sum up what IADC is all about.

The first one is from President Woodrow Wilson. President Wilson said, “Power consists in one’s capacity to link his will with the purpose of others, to lead by reason and a gift of cooperation.”

Cooperatively linking our purposes truly does give IADC members great power. Together we can accomplish much more than any one of us could do alone. Sometimes this cooperation requires compromise, but I believe the benefits far outweigh the small concessions we must sometimes make to achieve our objectives.

Another quote comes from Thomas Jefferson, the third US president. Jefferson said, “An association of men who will not quarrel with one another is a thing which has never yet existed, from the greatest confederacy of nations down to a town meeting.” He must have had the oil industry in mind when he said this even though it was decades before oil would be discovered in America.

IADC is not immune from “quarrels.” The quarrels, however, lead to better understanding … to improved ways of going about the business of producing the world’s most important natural resources. So let us not avoid our quarrels but let us learn to disagree, when necessary, without being disagreeable, and to move forward together as part of a unified industry association.

Lastly, a quote that can probably be attributed to many great men, in politics and in our business: “Teamwork is essential. It allows you to blame someone else.”

And what about the future? I see only greater success for IADC and for this chapter. India’s oil and gas industry will continue to grow, bringing more and more IADC members to India for the first time. And when those companies arrive, they will find a mature and effective IADC chapter waiting for them. So let’s prepare ourselves by solidifying our base, by making sure that all companies currently operating in India are members of IADC.

Ladies and gentlemen, I congratulate you all on 10 successful years of cooperation, quarrels and teamwork, and I look forward to working with you to meet the challenges of the years to come.

In December 2007, the International Regulators Forum (IRF) convened in Miami, Fla., to focus attention on asset management and safety in the offshore industry. As a representative of the drilling industry, IADC invited IRF to further publicize their views on this important issue by publishing a series of articles in Drilling Contractor.

IRF selected four of its members to prepare articles for the series: the UK Health and Safety Executive (HSE); the Petroleum Safety Authority (PSA), Norway; the State Supervision of Mines (SSM), the Netherlands; and the National Offshore Petroleum Safety Authority (NOPSA), Australia.

The UK HSE kicked off the series in our May/June 2008 issue by urging senior management to increase their focus on major hazard control and to create a culture where good practice and lessons can be shared and sustained. The HSE’s three-year KP3 inspection program had found, for example, that the role of asset integrity was not well understood across the industry. Their study also concluded that while primary structural integrity is reasonably well controlled, the condition of hardware integrity varied widely.

“Managing continuous improvement, like managing risk, needs to be formalised if it is to be effective,” the UK regulator urged.

In the September/October 2008 issue of Drilling Contractor, the PSA and HSE discussed aging offshore installations and the process for life extension. While these two regulators had taken slightly different approaches to the task, their objectives were the same: to ensure that aging facilities are robust and that their safety does not differ from that of younger units.

Both regulators also agreed that industry practice must be developed for the structural integrity management of aging installations and their deterioration. The HSE has initiated this work and plans to announce their results in 2009. The PSA is also working on a draft NORSOK standard for assessment of life extension that will be published this year.

Then in the November/December 2008 issue, NOPSA presented findings from an ongoing national program of inspections. Their data indicated that fewer than half of the facilities inspected fully met the good practice expectations in facility integrity management of topside hydrocarbon process related equipment. Proven management techniques already exist, they pointed out, but operators must be more rigorous in their implementation.

In closing the series in the March/April 2009 issue, the SSM emphasized the sense of urgency pervading asset integrity. Their survey of stakeholders in the Dutch sector found that inherently safe designs are not being uniformly applied and that full risk analyses may not be getting sufficient time and resources. Stakeholders – rig owners, classification societies, operators and service providers – must not only determine their own responsibility but also share the responsibility among stakeholders. “That is the key in assuring asset integrity of MODUs,” they said.

All four of these presentations are now available in a publication issued by IADC. It will serve to further promote interest, discussion, dialogue and action in addressing the variety of concerns expressed by the regulatory authorities.

To get your complimentary copy of “Asset Integrity: Regulatory Perspectives,” contact Amanda Lemmond, IADC operations group assistant, at +1/713-292-1945 or amanda.lemmond@iadc.org.