Bud's Offshore Energy (BOE)

Today, the International Oil and Gas Producers (OGP) released the Global Industry Response Group (GIRG) reports.  GIRG was formed last July with the goal of better managing offshore safety risks. The organizational structure is illustrated below.

Deepwater Wells: Lessons and Recommendations focuses on the critical prevention programs, and is perhaps the most important of the GIRG reports. Since Macondo, the GIRG team and other industry committees have worked diligently on well planning and integrity issues, and are commended for their outstanding efforts. However, the recommendations presented in the GIRG report are surprisingly modest, and do not reflect the technological and management innovation that industry has demonstrated in pioneering offshore development.  The recommendations fail to break new ground, lack specifics, and, in some cases, appear to be a step backward. In short, the oil and gas industry is capable of much more.  Initial comments follow:

• Incident data (problem): The absence of comprehensive and verified incident data is one of the “systemic” industry weaknesses identified by the National Commission. OGP has tried to address this problem for years, but has not had the industry-wide support needed to develop a credible program. GIRG has wisely recommended a Wells Expert Committee (WEC) to review selected incident data. However, the recommended program suffers from the same weaknesses that constrain existing OGP reporting programs. OGP must rely on “encouraging” its members to participate voluntarily, and non-members are not included. This type of voluntary program was not good enough before Macondo/Montara, and is certainly not good enough now.
• Incident data (solution): Industry and regulators need an ironclad commitment that all operating companies will submit incident data in accordance with defined protocols. Contractor data must be included. Companies should execute binding agreements with OGP, or some other entity, to provide this information. The data must be managed by a completely independent entity that cannot, in any way, be directed by an industry advocacy group. Regulators and other independent representatives should be included on the management committee. Regulators should prohibit companies that don’t agree to submit these data from from operating within their jurisdictions. A comprehensive incident reporting and data management system is long overdue, and continued delays are not acceptable.
• Montara: While GIRG is supposedly in response to both Macondo and Montara, the latter seems to have been largely ignored. The deepwater theme does not apply to the Montara platform, which was in only 80m of water. Despite the post-Macondo focus on water depth, shallow water was arguably a more significant contributing factor to the Montara blowout (batched completions using a cantilevered jackup, mudline suspensions, and two-stage platform installation) than deep water was at Macondo. Also, well capping, which was feasible and ultimately successful at Macondo, could not even be attempted at Macondo because of the manner in which these platform wells were suspended. Finally, GIRG  ignores the special gas migration and kick detection issues associated with horizontal completions like Montara, and the relief well rig availability and release issues that were never fully addressed during the Montara inquiry.
• Emergency worldwide notification system: In conjunction with the incident reporting system, industry needs an emergency notification procedure that goes beyond safety alerts and requires the immediate attention of every operator and wells contractor. During the Montara inquiry, worldwide attention should have been drawn to the inability of the Montara operator to identify a hydrocarbons influx through the shoe track and into the production casing. Could an effective notification system have prevented Macondo? No one can say for sure, but the probability of a blowout at Macondo would have been greatly reduced if key BP and Transocean personnel had participated in discussions about Montara and the importance of proper negative pressure tests.
• Dependence on regulator: On page 21 of the report, GIRG recommends that a company “carry out a more extensive programme of self-audit” when there is a lack of competent regulatory oversight. An operator should never depend on the regulator to verify its well or management programs, and should never relax its programs regardless of the level of regulation. Detailed regulatory reviews of specific drilling or management programs are never a substitute for operator diligence. Did the operators at Montara and Macondo rely on the regulator to protect them from themselves? Read the official investigation reports and make your own judgement.
• Best practices: GIRG recommends “refraining from using the term ‘best industry practice’ until this definition is clarified; we prefer ‘good oilfield practice’ for the time being.”  Isn’t the clarification of best practices the role of groups such as this and industry standards committees? This attitude explains some of the technical recommendations in this report which may be “good oilfield practices,” but fail to raise the bar for safety achievement. Would you be satisfied with “good” if  family members were working on rigs or if operations were conducted off your coast? While “best practices” vary depending on the conditions and circumstances, it’s industry’s responsibility to identify those practices, and industry and regulators must set the bar high and keep raising it.
• GIRG recommends established practices: Some of the GIRG recommendations, such as the “two-barrier” policy have been standard practice for most operators for years.
• API RP 75: There are numerous endorsements of RP 75 as an important reference for management systems covering the design of wells and other activities.  RP 75 was a reaction to an MMS regulatory initiative 20-years ago to impose safety management requirements on offshore operators. BP, Transocean, and PTTEP had management systems that were generally consistent with the guidance in RP 75. GIRG needs to go beyond RP 75 and focus on improvements that will make safety management systems more effective.
• API Bulletin 97, Well Construction Interface Document (WCID): Despite the complete absence of public attention, this is perhaps the most important post-Macondo initiative. It’s thus particularly disappointing that this document is now five months late. How does GIRG recommend the use of a document that is not complete and has not yet (to the best of my knowledge) even entered the balloting process? Another recommended and highly important document, updated RP 96 – Deepwater Well Design, has also yet to be finalized.
• BOP recommendations: Nothing new or innovative is offered by GIRG. The report calls for 2 shear rams, but only one need have sealing capability, which means that the Deepwater Horizon stack met the GIRG specification. While many BOP advances require additional study, some (such as real-time function and pressure monitoring systems) already exist. Other GIRG technology recommendations are rather timid and generally in the form of suggestions for future study (e.g. study cement bond log technology).
• Training: This section of the report is good, but doesn’t address deficiencies identified in the Montara inquiry and reviews of historical blowout data. Montara and other accidents have demonstrated that senior rig personnel may have limited understanding about well planning and construction practices. These topics are not covered in well control training programs. How does industry plan to address this major deficiency? While well planning is the responsibility of the operator (often a separate group than is represented on the rig), well control decisionmaking requires a fundamental understanding of well construction practices.  Also evident in the Montara testimony was the total absence of understanding on the part of operator, drilling contractor, and cementing personnel about the historical causes of blowouts. The cementers at Montara were unaware that gas migration/influxes during cementing operations were a leading cause of blowouts. Training programs need to be expanded to provide for the discussion of past accidents and how they could have been prevented.