In the aftermath of Macondo, the E&P industry is preparing to invest heavily in upgraded BOP equipment. For some drilling professionals, including Fraser Offshore’s Douglas Nunn, this is a questionable use of resources. ‘Hardware upgrades and individual competency initiatives have their place in the follow-up, but above all Macondo flags a need for better operational management systems,’ he argues.
With annual spend in excess of $50 billion, offshore oil and gas drilling is a substantial industry by any measure. It is sometimes forgotten that this is also a relatively young industry, which still has much to learn.
The first rigs capable of year-round operation in the North Sea entered service some 40 years ago; most deepwater rigs are less than ten years old. Only a few dozen fifth-generation semisubmersibles exist worldwide, one of which was the Deepwater Horizon. A case can be made that, despite the high cost of offshore drilling, systems of operational management are not yet fully developed.
The 2010 Macondo blowout, and analogue events such as the 2009 Montara blowout, were entirely preventable. There was nothing in the nature of the wells being drilled, the equipment being used or the people in charge that made these incidents inevitable. In all cases human errors went unchecked, with catastrophic consequences. The people making errors were front-line drilling supervisors, drilling engineers and drilling superintendents. They were let down by systems of work which, despite adequate resources, did not provide essential safeguards such as a focus on wellbore barriers, written procedures and cross-checking by peers and supervisors.
Management systems in drilling
Managing an offshore drilling operation is a team activity in which heavy machinery and specialised expertise are pitted against the forces of nature. Effective management requires technical skills, clear division of responsibilities and a command structure which provides both checks and balances and, crucially, high-quality management of change. A sound operational management system results in team competence greater than the sum of individual competencies; errors by a single team member will be identified and neutralised before failures develop.
Comparison with other industries of similar human and financial scale can be enlightening. By contrast with an airline pilot, the toolpusher or drilling supervisor on an offshore drilling rig fares poorly in many aspects of professionalism. Few rig supervisors benefit from extensive classroom or simulator training. Mandatory training in well control is restricted in scope and tends to focus on gaining a ticket rather than understanding principles. Quality management tools such as checklists are not widely used and, beyond the occasional attentions of a mud logger, critical decisions and actions are not cross-checked by the equivalent of a co-pilot or a ground controller.
The drilling professional is also poorly served in the area of shared learnings. In the rare event that an airliner crashes, industry regulators are quickly on the scene. A forensic investigation is performed, culminating in wide dissemination of root causes and actions to prevent recurrence. By contrast, if a drilling rig suffers a serious safety incident, companies involved will often impose an information blackout, usually with the whole-hearted encouragement of legal counsel.
Perhaps, therefore, it is unsurprising that the drilling industry continues to suffer from poorly-developed systems of work in which team judgement and technical rigour are of no higher quality than that of the most competent individual; or worse, whichever individual happens to take the lead. While most offshore well work is carried out without catastrophic failures, it is common to suffer preventable loss in the form of error-avoidable non-productive time. Such wastage can be reduced through simple quality management tools to ensure that risks are assessed, procedures are understood and team members check each other.
Formal management systems complete with written procedures, checklists and management approvals, are profoundly unpopular amongst the rugged individuals typical of the offshore supervisory workforce. Indeed, when the man in charge knows through many repetitions precisely what needs to be done, it is arguable that a safe and efficient job needs no formal management system other than the barking of direct orders to a compliant crew.
Often overlooked, however, is that very few individuals can claim true fluency in all aspects of offshore drilling. By contrast with land work, where wells tend to be much shorter, a large offshore rig may drill only three or four wells a year. Such reduced fluency, in combination with elevated risk (probability x severity) makes a clear case for strong management systems in offshore drilling.
Macondo serves as an object lesson that ours is an industry where management systems have not caught up with new challenges and new technology.
Learning from tragedy
The drilling industry can, when galvanised, improve its collective game. The industry has worked hard on its safety record, with generally impressive results. A cornerstone of this improvement has been occasional willingness to learn from tragic incidents. In the North Sea, much of the current body of regulation governing offshore drilling has its roots in the loss in 1965 of the Sea Gem, and in 1988 of Piper Alpha.
For the drilling professional, Macondo must serve as the Piper Alpha of its day; a traumatic event which will act as a catalyst for organisational change.
The companies involved in Macondo were amongst the largest and most respected in the business. TheDeepwater Horizon itself was a state-of-the-art unit manned by experienced and competent individuals. Despite popular allegations of cost-cutting, none of the corporations involved would have vetoed a pause for thought in the interests of safety.
But the blowout cannot be explained away by simple bad luck, or by the nature of deepwater drilling, working within a narrow pore pressure/fracture gradient window. While these factors came into play, it is also clear that catastrophic errors were made as the situation unfolded. A complex inflow test was not properly planned, documented or executed. Indications of influx were ignored until too late. Rig team behaviours, set in place by management example and reinforced by everyday practice, dictate whether questionable actions are tolerated in the field.
Had the operator’s management system been adequate for the task, the chain of events would have been stopped in its tracks.
For 87 days crude oil gushed uncontrolled into the Gulf of Mexico, relayed to the world via subsea video. Reports and books were published, hearings and press conferences were held. With 11 fatalities, severe pollution and the destruction of tens of billions of dollars in shareholder value, the shortcomings of the offshore drilling industry have never been so prominent in the public eye. Yet, in the rush to judgement most commentators, unencumbered by experience in drilling management, have contributed little to the real question of how to prevent recurrence.
There has been much focus on why the Deepwater Horizon blowout preventer failed to secure the well. As a result, the industry has seen fit to mandate the fitting of a second set of shear rams in subsea blowout preventer stacks – an expensive measure which will add cost and complication but does not address the underlying causes of the blowout.
It is arguable that industry resources would be better spent on training to improve standards of professionalism and team effectiveness. Eliminating preventable loss of well control is a better ploy than procuring hardware to mitigate its effects.
Well integrity – a rig team responsibility
Within an oil company, offshore wells are planned and managed by a relatively small group of engineers and wellsite supervisors – the well operator’s rig team. Whether an internal department of the oil company or an externally-sourced well management group, these individuals are responsible for translating the geological well target into a multi-million dollar steel and cement pressure vessel extending miles below the seabed. In the course of this work, the rig team will manage the activities of dozens of companies and hundreds of specialised workers.
The most fundamental responsibility of the rig team is that of maintaining well integrity; that is to say, preventing blowouts and spills during the well construction phase and leaving behind a well which remains pressure-tight until (and beyond) final abandonment. Delivering well integrity demands effective design, installation, testing and maintenance of wellbore pressure barriers.
Expertise in wellbore barriers is a technical discipline which underpins well engineering yet few drilling professionals have formal training in the subject. Standard well control training does not address barriers in any depth and key concepts have been defined only recently in industry standards.
Beyond well integrity, the rig team is accountable for safe working, for cost control and for regulatory compliance. It is vital both for safety and for cost-effective performance that a rig team is effective as a collective unit – not simply a collection of competent individuals, but a competent organisation with a well-drilled management system to monitor, control and if necessary redirect wellsite operations.
The sternest test of such a management system is when unplanned events occur, as on Macondo where plans were changed several times to accommodate the fateful inflow test. An offshore drilling rig racks up expenditure at a daunting pace, 24 hours a day. Whether real or perceived, externally or internally imposed, there is pressure on the rig team to keep the rig moving. Cutting corners when plans change is likely to result in a new plan which has not been adequately risk-assessed or thought through in detail. In the case of Macondo the lack of a sound ‘management of change’ process proved fatal.
Within days of the blowout, BP’s chief executive stated in a TV interview: ‘This was not our incident.’ Whether genuine denial, or a lawyer-coached defensive response, this sentiment was foreign to most drilling professionals.
In the UK, key legislation2 places a legal duty on the well operator to maintain well integrity during all phases of well life. No drilling engineer or drilling supervisor worth their salt would seek to pass the well integrity buck to a rig owner or a service company, to whom the oil company has both duty and opportunity to provide oversight and direction. In communities familiar with oilfield practices, no doubt including those along the US Gulf Coast, this understanding of responsibility is universal. There is a gut appreciation that ‘the company man calls the shots’.
The first lesson, therefore, that oil companies should learn from Macondo is one of accountability. In the framework of licences and contracts governing offshore drilling, the oil company or licence holder is the top tier player, shouldering the greatest risk in return for the biggest potential reward and accountable to government for prevention of blowouts and spills.
Many contractors and equipment suppliers have a bearing on well integrity and must be held accountable for workmanlike delivery of their allocated scope. However, the oil company appoints them all, pays their invoices and must take responsibility for coordination and quality control of their output.
Situational leadership
It is a truism that democracy does not work at sea. So far as wellsite work is concerned, tasks are best performed with clear direction in the form of a written plan, good-quality briefing and supervised execution. Not dictatorship and certainly not democracy, but clear leadership with a ‘time out’ option if any team member perceives a new threat.
Onshore, the leadership style must bring into play the expertise of the engineering team while ensuring that changes to plan are centrally controlled. If, as in the case of Macondo, the operator has a dual management structure for engineering and operations functions, close attention must be paid to limits of authority and interfaces.
The onshore team must focus on forward planning, risk assessment and engineering rigour, particularly in the area of wellbore pressure control barriers. The team must be organised to ensure mutual checking and support, with key decisions and changes to plan systematically reviewed and approved by management.
Critical learnings
If any drilling manager should doubt the value of Macondo reports as required reading, consider the poignant fact that a visiting party of four senior shore-based managers, each with considerable drilling experience, was present on the rig floor during the initial phases of the erroneously-executed inflow test. Any one of half-a-dozen men present on the floor as events unfolded had the knowledge and experience to recognise the impending disaster and to call a halt to proceedings before the point of no return – none did.
Reports suggest that the visiting managers were focused more on ‘personal’ safety than ‘process’ safety in their walkaround, and that they were reluctant to interfere with the rig command structure by asking searching questions of the supervisors present; illustrating perhaps that a focus on well integrity and a duty to call ‘time out’ are two concepts which must find a home in an effective management system.
To summarise; the events of 10 April 2010 were shocking, tragic and preventable. The Macondo blowout highlighted critical inadequacies in the way our profession conducts its business.
Unusually for such an incident, the decisions and actions which led to the blowout are described in public-domain material with an adequate degree of technical detail. For the drilling professional, these accounts make chilling but necessary reading.
Oil company rig teams must question whether the same events could happen on their watch and must ensure that their management systems provide robust safeguards against such hazards. This most expensive of learning opportunities must not be wasted. OE
Doug Nunn ([email protected]), managing director of North Sea well management contractor Fraser Offshore, is a chartered mechanical engineer with 30 years’ experience of offshore drilling. He worked as a drilling engineer, drilling supervisor and drilling superintendent for Marathon Oil, Brunei Shell and Conoco in the North Sea and overseas for 13 years before joining drilling contractor Santa Fe in 1995. While with Santa Fe, Nunn managed well engineering work on over 100 southern North Sea wells and was responsible for the recruitment and training of up to 20 drilling engineers and drilling supervisors annually, either as graduate new hires or cross-trained from rig crew. In 2004 he founded Fraser Offshore. Operating from offices in Great Yarmouth and Aberdeen, the firm has a successful 28 well track record for North Sea oil company clients.
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