By Linda Hsieh, Managing Editor
As the global oil downturn grinds on and the industry increasingly accepts the fact that the days of $100 oil are behind us, industry leaders must zero in on performance factors that can be controlled. In his keynote address at the 2017 IADC Drilling Middle East Conference in Dubai on 4 October, Paul Forman, VP Wells of the Middle East Region for BP, proposed a model for approaching and leading performance in the business of wells. “While the model may be simple, we should not be lulled into thinking that it is easy to achieve,” Mr Forman said. “It requires active leadership everyday to make the gains – gains that are not just for the short term but also sustainable.”
Under this model, performance is defined in three ways: safety, operational and financial. For BP’s global wells organization, safety performance means zero safety incidents, both personal and process safety. Operational performance relates to maximizing life-of-well value, and financial performance means best-in-class capital efficiency.
Looking first at safety and operational performance, Mr Forman emphasized the importance of getting three things right: people, technology and management systems. “First, we need good people,” he said. “We need people who are competent to perform tasks that we require to run our business.” In the context of a rig operation, a key factor is the ability of employees to work in accordance with procedures. “This begs the question: How good are your procedures and how well practiced are your people in their use? How often are (procedures) reviewed and updated?”
Mr Forman cited an incident from BP Oman’s Khazzan operations. The drill crew had been racking drill collars effectively without following procedures; instead, they had been following common practice. It was when they switched to handling the collars according to procedure that they had an incident. Fortunately, the incident did not cause any injuries, but the potential was there. The incident highlighted the importance of regularly updating procedures and of effectively training employees in executing their tasks in accordance with the procedures. “The condition we desire is that crews understand thoughtfully applied procedures and know what to expect from each step, stopping when they see a variance,” Mr Forman said.
“As leaders, we have to create the conditions that allow this to happen,” he continued. “Are you confident that the crews in your operations are completing tasks in accordance with your procedures? Are your procedures effective, and are your people trained in the applications of those procedures? Are you able to quickly update and reissue a procedure to capture learnings? If you’re not confident, then you can have the most modern and best-equipped rig in the world, but you won’t get the safety or operating performance that you desire.”
A second requirement for improving safety and operational performance is having the right equipment or technology for the task and operating it within its design limits, as well as maintaining the equipment to preserve the design envelope, Mr Forman said. This also encompasses technology development and application, including automation and mechanization. In Oman, BP recently approved the installation of hydraulic catwalks on four of the eight rigs in its current fleet that didn’t already have the technology installed. This decision was made after several V-door related near-misses, he noted.
Further, “BP was the first energy company to try a novel drilling automation system in collaboration with Schlumberger and KCA Deutag in an onshore field,” he said. Using this system, BP has drilled more than 4,500 m of 12 ¼-in. hole in an automated mode “at an average ROP comparable to regular drilling techniques. While the progress is encouraging, there is more we need to do to turn this into a technology that can economically beat current techniques.”
Yet another component of technology development and application is digitization and data analytics, which is helping BP to understand, for example, why tripping and connection times vary across crews. “Previously we knew that times vary but didn’t know why… By collecting and analyzing data, we can identify patterns, which can give us clues to better ways of working that are potentially more efficient.”
Finally, the third lever that must be pulled to improve performance is a company’s management system. “I’ve come across plenty of good management systems in our industry, but I can count on one hand the number of companies who implement them effectively,” Mr Forman said, noting that effective application of a management system can transform a business. Too often, he said, leaders don’t really know how well their management system is being deployed.
In the plan-do-measure-learn cycle, leaders and employees typically focus too much on “plan” and “do.” “To get even better, we need to engage with the other parts of the cycle more effectively. Specifically, we need to get much better at measuring and learning,” he said. If there are gaps between what is expected and what is observed, changes must be made. “It’s great to plan and do, but unless we are checking, how will we know that work is being done to the required standards?”
Finally, in terms of financial performance, Mr Forman noted that the entire industry is challenged to lower cost in a sustainable way. “It would be a big mistake to think that we can survive by doing the same things more cheaply,” he said. Companies must look at things like better preservation of the asset through optimized maintenance routines, as well as effective use of people and better application of management systems as previously mentioned.
“We also need to look at how we work together in the supply chain,” he said. “We have often focused on unit costs or dayrates instead of looking at the full supply chain for end-to-end efficiencies and new sources of value. What we should look at together is outcomes – how do we take waste out of the system and focus on delivering long-term value for the life of the asset. We’re on a journey focused on the overall value we receive for our investment, and we must work together as operators and suppliers to achieve it.”