CATEGORIZED | 2014, Departments, July/August

Drilling Ahead: Want good news? Don’t read this column!

Posted on 10 July 2014

By Mike Killalea, Editor & Publisher

“It’s not my job to give you good news,” declared spunky Susan Mackenzie, head of the Energy Division of the UK Health & Safety Executive. When Ms Mackenzie began regulating E&P six years ago, she believed that our industry would stand on the cutting edge of hazard mitigation.

“Frankly, I’ve been pretty shocked,” the no-nonsense regulator said at IADC World Drilling 2014, held in Vienna during June. Our industry, she intoned, is where the UK construction industry was 15 years ago.

Top of our game?

Thinking drillers – not to mention the public – have reached similar conclusions. About 1,000 people have died in our industry over the last 30 years, observed Kevin Lacy, who has held senior drilling and completions positions with Chevron, BP and Talisman. “We feel that we are at the top of our game,” he noted, also at World Drilling. “That’s far from what the public thinks.”

Catalyzing improvement

IADC has moved energetically to catalyze improved drilling performance, most recently through the launch of the IADC Knowledge, Skills and Abilities (KSAs). The KSAs will go a long way toward assuring competency of new and current rig workers (Page 18). The fact that industry has begun to recognize shortcomings is itself good news. Nor does IADC exist to sweep dirt under the rug. Declared IADC President/CEO Stephen A. Colville, “I will not be an apologist for bad behavior.”

The next generation

Improving performance is challenging enough with seasoned personnel. Today, however, we face the daunting task of bringing on a new generation, racing against an exodus of gray-haired, sunset-bound experience. This, in a business that skipped a generation during the downturn of the late 1980s and 1990s.

Despite frenzied recruiting, more than half the employees needed by 2018 remain unhired, said Jim Barron, Manager-Clear Leader Center, Chevron Global Upstream and Gas, speaking at World Drilling. Chevron developed a one-year program to train drill-site and wellsite managers competent to serve as the number two person on site. Their goal is to produce 50-plus of these individuals annually.

In partnership with colleges, IADC developed the Workforce Attraction and Development Initiative (WADI). WADI brings industry together with the college to reach out to career-seeking young people and to provide training for those already active in the industry. More than 40 schools are engaged in the program.

The perfect storm

Economics is the third cyclone constructing this perfect storm. While industry is robust today, disturbing signs of softening lurk on the horizon. “Global supply from non-OPEC (nations) is actually higher than demand,” explained World Drilling speaker Susan Farrell, IHS. “This will go on for another five years.”

If there’s one thing this industry does well, it’s build rigs – sometimes too well. As demand softens, a 150-strong fleet of newbuilds is set to descend on the market, explained World Drilling speaker Tom Kellock, IHS. More than half of these were ordered by firms lacking any experience in drilling, he added. “(Drilling) contractors have been very generous in building rigs that no one asked for,” Mr Kellock quipped.

This is not the most upbeat column I’ve written. But then, it’s not my job to report only good news, either.

Mike Killalea can be reached via email at mike.killalea@iadc.org.

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