Once again, the drilling industry is undergoing major changes. Members are consolidating at the same time they’re expanding. An influx of inexperienced workers has intensified our need for training and competency assurance. Environmental regulations and technical challenges are getting tougher. In an exclusive interview, Drilling Contractor speaks with IADC president Dr Lee Hunt on how the organization has evolved and how it will continue to improve drilling operations in a changing industry.
DC: How has the strategic vision of IADC evolved since its founding in 1940?
Dr Hunt: The drilling contractor industry has been through an amazing transformation since 1940, from our members’ values and leadership to their needs and resources. As our members changed, so did IADC as we continually adjusted ourselves to make sure we’re providing the right service.
When IADC began as the American Association of Oilwell Drilling Contractors, staff was small, with mainly administrative competencies. The entrepreneurial drillers of the time drove the organization’s efforts. By the mid-’70s, offshore drilling had expanded significantly, large incorporated companies with overseas rig fleets emerged, and we renamed ourselves the International Association of Drilling Contractors.
In many ways, it was a boom-and-bust era. Up to 1984, IADC and its members were trying to cope with the industry’s expansive growth, and after 1984, it was all about surviving the downturn.
DC: What was IADC’s response at this point and what did we do as an industry association?
Dr Hunt: One thing we did was professionalize the IADC staff by hiring people with strong credentials and industry experience — staff who could both liaise with members and act on their behalf in regulatory matters and on technical committees. This was important because, in this period, governments were actively stepping up their efforts to regulate, and industry was just beginning to recognize that rather than fighting the government, we should be working more cooperatively with them.
DC: What strategic changes did you implement at IADC when you became president in 1990?
Dr Hunt: We took on the explicit mission to make IADC a genuine multinational trade organization. That did not mean sending out more Americans into the world. It meant bringing everyone in the business – regardless of nationality or geographic location – into IADC and creating a staff capable of multicultural, cross-national participation. Our diversity became our greatest strength in providing global leadership for the drilling industry.
DC: In what ways has IADC reached out to the global drilling industry to become genuinely multinational?
Dr Hunt: We have actively recruited non-US membership and non-US leadership into IADC committees and as officers. We have also established offices and IADC representation around the world — in the Netherlands; London; Dubai, as well as Houston and Washington, DC — and each one of them works under a global mandate.
For example, our government affairs office is located in Washington, DC, but its efforts span the globe. We have drafted legislation in Brussels with the European Commission on the EU Working Time Directive. We have intervened in Indonesia, Equatorial Guinea and India on customs and tax issues. We have advised the US Trade Representative in trade agreements with Colombia and Peru. Our reach is global.
DC: How is IADC forging external alliances to expand its activities and create more value for members?
Dr Hunt: We have formed an alliance with the Drilling Engineering Association to promote the spread of new technology. With the Society of Petroleum Engineers, we have expanded from holding just the annual Drilling Conference to holding two additional regional technology conferences a year. We’ve just entered into an agreement with Det Norske Veritas to use their worldwide network of auditors to expand audits of training providers. We work in conjunction with The Nautical Insitute of London on stability training accreditation and ballast control operator certification.
A project we began last year, the International Forum of Energy Centres & Museums, is working to correct public misconceptions of the industry. We can’t do that single-handedly, but we can do our part through local and regional educational efforts in alliance with educators, curators and teachers worldwide.
DC: How is IADC responding to the industry’s needs in this period of personnel shortage?
Dr Hunt: We recently kicked off a program called Career Connection to educate workers on the value and benefits of working in this industry. We’re not serving as a personnel agency; we’re serving as an educational agent to encourage people to consider careers in this very exciting business.
DC: How is IADC continuing to help members improve their safety performance?
Dr Hunt: When Alain Roger of Sedco Forex became chairman of IADC in 1991, he set a five-year goal of reducing the industry’s accident rate by 50%, which we achieved. That was the kick-off to a continuous decline in the industry’s incident rate and to a tremendous improvement in our commitment to safe performance.
NASA recently invited other industries, including the offshore drilling industry, to discuss safety cultures with their safety panel and share our lessons. It’s a testament to our success for the space industry to recognize the incredible strides we’ve made.
DC: What are some areas of expansion that IADC will focus on in 2008?
Dr Hunt: First, we will be working to expand IADC’s global representation due to membership growth in areas such as Asia, the Middle East and eastern Europe. Second, we are forming the Ethics and Corporate Compliance Committee to address bribery/corruption issues and compliance with various international anti-corruption laws. Third, we’ll be engaging in “greening” of the industry and its public image, with the formation of an environmental policy advisory panel.
Our mission will stay the same — serve the members, whoever they are, wherever they are. The challenge is to keep up with how they’re evolving.
DC: How can IADC serve everyone when its membership is so diverse?
Dr Hunt: Companies are diverse, so we don’t focus on the needs of companies. Instead, we do what’s right for the rig. The rig is the common element for all stakeholders. For drilling contractors, it’s the primary unit of revenue production. For operators, the rig is the conduit to their revenue-making reservoirs. For most of our associate members, the rig is the primary unit of service.
Our members are wildly diverse. One may have three land rigs in Abilene, Texas. Another is based in Houston and has 146 offshore rigs working globally. Still another is based in Denmark with an integrated fleet that works both onshore and offshore. To do the right thing for each of these contractors, we must do what’s right for their rigs. If IADC can help to make a rig more efficient by promoting technology, that efficiency is delivered to every one of our members.
For example, a standard rig inspection form we’re creating will inspect one rig as well as 100 rigs. It will benefit the small companies in West Texas as much as the big players.
We’re also working towards a global accreditation, training and certification process, because blowouts don’t happen in English. Every person on the rig — no matter their nationality, language or education level — needs to know how to recognize the signs of a blowout and what to do. They need certain competencies to work on a rig, and that’s what we’re trying to do with WellCAP. The focus is not on teaching office managers or engineers; it’s to train the man on the rig so he can do what’s right for the rig.
The HSE Case Guideline is also a great example of an instrument we created for the rig. It’s being considered as a model regulation, not just in the five countries of the North Sea but also in Australia, New Zealand, Italy, South Africa, Malaysia, and in the Middle East. This type of harmonization of safety practices provides tremendous cost savings to our members.
DC: What is unique about IADC that differentiates itself from other trade associations?
Dr Hunt: First, we have some of the industry’s most talented, educated and experienced people on staff working on behalf of our members. Our operations staff is incredibly knowledgeable about this industry. Second, we are global in our mission, activities and membership. In that regard, we stand alone in the energy trade association world. Third, we are vital to the economic work of our members because we do what’s right for the rig. We take the lead in setting standards for the industry, thereby creating a level playing field for all drilling contractors.
I’m very proud of the fact that IADC is recognized by our clients, the oil companies, as the premier service association that helps our members deliver valuable quality service to them.
DC: What do you think members of the future want from IADC?
Dr Hunt: They want value, options and speed. As a trade organization, we have to figure out what values to serve, the different ways to offer those values, then do it fast. For example, when an IADC workgroup created the IADC Deepwater Well Control Guidelines, the Minerals Management Service asked our members why they came to IADC, not another organization, to develop these guidelines? Their answer was, “Because we didn’t have two years to do it.”
DC: So where does IADC go from here?
Dr Hunt: We go where the rigs are, because that’s where our members will be. We’ll be on the frontier with them, not waiting but leading.