Systemic Management Failures
IN WELL CONTROL & WELL INTEGRITY
Presentation by Wayne Needoba –(Red / Yellow)
Striving to Show the Elephant in the Room
Re-engineering metrics for project
management
Systemic Management Failures- Solutions
Learning Thru’ Stories of Metrics & Multimedia
Montara Blowout
Timor Sea
August /09
Key Biscayne Sinking
Esso Australia
Offshore WA – Perth
Early /83??
Marlin Blowout Bass Strait
Esso Australia Nov / 68
Systemic Management Failures
PTTEPAA Montara
• in its original Action Plan, PTTEP AA had not
identified the actions needed to address the
systemic organisational and governance issues
that provided the environment for the Montara
Blowout to occur
• PTTEP AA has a plan that effectively responds to
the issues raised in the MCI and importantly the
plan sets the company on the path to achieving
industry standards for both good oilfield practice
and good governance. “Success of PTTEP AA’s
program for change will depend entirely on the
quality of execution”
Systemic Management Failures
PTTEPAA Montara Story – Sim Ops
Industry culture is to focus on
managing commercial risk, like
mitigating the well
development of costs, and
competition (tendering) there
is little transparency of the
facts, so few lessons learned by
the regulatory, the operator
and the public.
Prior to the Montara Incident
there were 8 kicks while
drilling Montara wells
There is still a story to be told.
Well control and well integrity
reliability reliability have a
geological hazard as a
perceived risk.
Systemic Management Failures
BP Macondo
• the National Commission clearly define "systemic
•
•
management failures" as being a dysfunction
because of an inability to communicate
changes to drilling procedures in the weeks and
days before implementation were typically not
subject to any peer-review or MOC process.
decisions appear to have been made by the BP
Macondo team in ad hoc fashion without any
formal risk analysis or internal expert review.
This appears to have been a key causal factor of
the blowout.
The Well System -
Montara
It started with a burp
Finding 2
The installation of the cemented shoe was
defective in that, after failure of floats/
valves located in the shoe apparatus,
displacement fluid was pumped beneath
the float collar which resulted in
over‐displacement of cement from the
casing shoe track and in the area
outside the casing shoe (called the
annulus).
Finding 3
The pumping back of this displacement
fluid was contrary to sensible oilfield
practice, and led to a so‐called ‘wet shoe’.
Casing shoe
90 degrees
High Porosity
Gas Leak through Floats
The result was that the cemented shoe
lacked integrity as a barrier.
*Note that the gas burp occurred months
after the casing had been cemented.
The Well System -
Formation Dip High
& High Porosity
Macondo
The burp was a surge.
Common Factors –
Production Casing Design
Float Equipment Failure Unrecognized Well Conditions
• Montara Finding 44 Had key personnel from both
•
•
•
PTTEPAA and Atlas (on‐rig and onshore) possessed a
greater level of knowledge and expertise in relation to
cementing operations, it is likely they would have
detected (i) the problem with the cemented casing shoe,
thereby enabling remedial steps to be taken;
Macondo - Integrity test failed to identify communication
with the reservoir
- Operations allowed the influx to enter and move up the
well bore - well became capable of flowing
- Rig crew response to well flow failed to control the well
Management Systems
Drilling and Completion Operations
Defining Systemic Management Failures
Relative to managing “Process Risk” with Certainty
Seeing the Elephant in the Room
• What prevents D&C organizations reaching
desired reliability. Focus on commercial risk?
Current Collaboration Processes
Seeing impact of the EITR
BP Macondo Supervisors Criminally Negligent?
David Pritchard
Current Collaboration Processes Eg. JHA
HAZARD TYPE
FACILITIES AND PERSON AT RISK
Well Control - Low Risk. Oil in tubing Platform personnel Note Emergency Response Plan
Standpipe pressures in excess of 3000 psi Pump, standpipe and
rig floor areas
Tripping - high T&D, no top drive. Rig floor personnel
Develop Methods to Eliminate or Control Perceived Risks
1. Find a Better Way to Do the Job
2. Review Job Procedure to Determine Possible improvements
3. Study Environmental Changes if Procedural Changes
Insufficient
4. Consider Ways to Reduce Frequency of Performing the Job
5. Familiarize yourself with the associated hazards of the job.
Why is there not learning so loss control and death can be history on well
operations?
Possibility to Eliminate
Systemic Management Failures in Complexity
USE WELL CONTROL AND WELL INTEGRITY FAILURES to:
1.1 Strengthen Human Resources Quality thru’ empowerment
using re-engineered metrics for project management.
1.2 Review and Improve the Operator Business Process
1.3 Improve reliability & quality of back end
Operations management using using new IT / Satellite /
Internet Technologies
1.4 Develop Operator Strategies and Values that
Empower thru’ Community Development and Sustainability
Programs
1.5 Create a zero tolerance attitude to work
process standards: industrial occupational health and
operations safety, environmental, system quality (reliability /
Sustainability )
The Earth Model Well Evaluation – BOD
(Drilling and Completion Basis of Design)
The Earth Model and Well System - BOD
cont’d
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA - Reading the
Hole while drilling – Geological Character
• If wellbore pressure exceeds the fracture pressure, lost
•
•
circulation may occur. Any reduction in wellbore
pressure below pore pressure may cause an influx of
formation fluids into the wellbore from permeable zones.
At wellbore pressures well above the pore pressure,
wellbore stability may also become a problem.
Correctly predicting how pore pressure and fracture
gradient vary throughout the intervals to be drilled is
critical to designing an effective casing program.
Pore pressure/fracture gradient profiles are defined from
offset wells and modern prediction methods.
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA Reading the Hole
cont’d
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA Reading the Hole
Well Profile
Well Character
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA Reading the Hole
• Observations
Drilling (CondDR26) required 8 days & cost
US$310,000. Running and cementing 20”
Casing (CondR&C20) required 5 days & cost
US$313,000.
An 8 ½” pilot hole was drilled to 1800 ft The
formations were dispersing when drilled and
making mud. A shallow hot water sand (350
to 500 ft) had flowline temperatures of 135
deg F led to an over run on mud and cement
costs (Total cost of consumables for drilling
fluids was US$63,000 and for cement was
US$54,000). Mud engineering responded to
thinning the high viscosity mud (MBT’s
exceeding 15) by running 3-4% KCl and PHPA
and diluting with desander and desilter on
mud cleaner. The cement programme went
from running a CaCl2 accelerator to running
retarder.
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA Reading the Hole Cont’d
• Connections were slow
• Drilling & tripping times were slow for
•
•
•
three reasons:
1.
Tesco top drive was new to the
rig.. On connections with stands, the
traveling blocks had to be positioned
very close to the crown. Also, drill tools
had to be picked up out of the mouse
hole on a double or single. Long and
short bales had to be switched around.
2.
The weight on bit was maintained
around 10 kips to counteract any
deviation tendencies and to limit ROP’s
for shallow gas well control.
3.
Connections were reamed twice to
avoid bit balling.
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA Reading the Hole cont’d
Note Torque (yellow), WOB (blue on right graph) and Gas Units (purple right
graph) erratic above 5200 ft
Wellbore Quality
Quality
POWER OF DIGITAL FILTERING AND Wellbore
Friction
Friction factors
factors
INTERACTIVE MULTIMEDIA Reading the Hole cont’d
Quality
POWER OF DIGITAL FILTERING AND Wellbore
Friction factors
INTERACTIVE MULTIMEDIA Reading the hole cont’d
Wellbore Quality
Friction factors
POWER OF DIGITAL FILTERING AND
INTERACTIVE MULTIMEDIA Reading the Hole
cont’d
Well Bore Quality & Barrier
Quality
OPERATING MODEL PROPOSED
ON THE JOB LEARNING, ON-LINE
Reducing the Learning Curve On-line
• Enhancing Human Resources & Business Process
• Research Interactivity & Awareness Development
Improving Performance - Planned Vs. Actual
• Process of Continuous Improvement
• Planned and Managed Innovation and Change
• Reduced Operating Costs and Greater Profitability Thru’ Optimizing
Asset Value & Operational Efficiency.
Facilitating & Managing Learning - a Web Site
• Knowledge management, Lessons Learned, Competency Development
• Motivation and Empowerment including coaching and mentoring
• Greater harmony in the company and community
• Minimum waste, greater creativity, increased productivity
• Commercially Self-sustaining through cost savings (benchmarking and
planned Vs actual) promotion & e-commerce
The Act of Continuous Improvement
The cycle of Continuous Improvement
Strategic Thinking Process
Past
Diagnostics
(Gap Analysis)
Align II
Assemble I
Data
(Collect and
Collate )
Future
Direction
(Strategy for
Learning)
III Apply
IV Assign
Do
(Facilitating)
The Results of
Continuous Improvement
The cycle of Continuous Improvement
Strategic Thinking Process
Measuring Competency
for Sustainable Profitability
IV
III
II
IV
I
III
III
IV
II
I
I
II
Learning Time / Sustainable Actions
Learning-Life – Managing Performance Change
0
Performance
Improvement
Acquired
Wisdom
Awareness
Issues &
Actions
•Health
•Environment
•Safety
•Quality
Level 5
Level 4
Competence
Awareness level relative to
ISO Responsibility standards
Intelligence
& Aptitude
40%
Learning Strategies
Measuring Competency
for Sustainable Profitability
100
Performance
Acquired
Knowledge
Skills
Concepts
Level 3
Level 2
Level 1
Ideology – appropriate paradigms
(The Growth Spectrum to Optimised Performance)
Creative
•Economic &
Societal Change
Explorative
•Regionalism and
Cooperation
•Cultural Change
Ethical
•Auditing for Sustainability
•Product Stewardship
Proactive
•Diplomat & technical systems
•Integrated Management Systems
•HESQ Auditing
Reactive
•Impulsive & Opportunistic
•Technological Fix
•Add-on control systems
Learning Time & Sustainable Actions)
Job Analysis incorporates:
TIME, SEQUENCE, RISKS AND HAZARDS, EQUIPMENT & CONTRACTS,
PLANNED SEQUENCES
•Domain Expert has experience
•Visualizes the project jobs planned and analyses them.
•Team Builds - develops communication lines between:
•departments / employees
•technology specialists for planning and research,
•consultants and
• third party contractors
•Verifies the key indicators for monitoring
•Liaises with Management & HRD to set Research and Training
Strategies
•Participates in operational surveillance
Disciplines of a Learning Organisation
(Quoted from The Fifth Discipline – The art and practice of The Learning Organizaion – Peter Senge)
• Systems Thinking (in conjunction with satellite and web
communication, interactive multimedia, and collaborating data bases)
• Personal Mastery (competence including awareness of
responsibilities on issues of Health, Environment, Safety and quality (HESQ)).
• Mental Models (thinking, actualising, creating, innovating based on
awareness of HESQ issues and intrinsically motivating feedback).
• Building Shared Values (managing cultural and behavioural
change)
• Team Learning (developing group IQ through strong EQ (emotional
literacy)).
Planned Vs Actual - Work Scope
Sequence Monitoring - Benchmarking
Purpose:
Continuous Improvement - Working more Cleverly to reduce
operating costs & enhance asset value
Benefit:
Reduces Learning Curve, Maximizes Operational Efficiency & Asset
Value for maximum, sustainable profit to company and community.
Methodology
•Comparing Planned Vs Actual and sharing lessons learned
•Recognizing Root Cause of Failure
•Researching and Creating new ideas
•Passing on Experience
•Using Innovative Technology
Planned Vs Actual-Performance Metrics
Key Indicators - Cost, Time, HESQ
Purpose:
Measurables of Performance - Rewards / Compensation
Benefit:
Motivation to be clever
Methodology - Reward System
•Management (Cost Savings - less time, less consumption)
•Staff (Job Satisfaction, Ownership, Compensation)
•Consultants (Job Satisfaction, Ownership, Compensation)
•Contractors (Incentives, Ownership, Compensation)
The Matrix Organisation Achieveing Sustainable Energy Practises
Overview of Integrated Functions & Systems
Collaboration
Knowledge Management /
Education / Feedback
Creating Learning
Organisation (EON)
Operations
(Scorecard / KPI / Benchmarking)
Competence
Social Responsibility
Assessment & Skills (SHAWPAT)
Feedback–Lessons Learned
Certification (TISI-SPE)
Continuous Improvement
UNITY
ALLIANCES
PROJECT
COORDINATING
Sunflower-life
Styles
SYSTEMS THINKING
BEST PRACTISES
MOTIVATION & COMPETENCY
RELATIONAL EQUITY MANAGEMENT
DUE DILIGENCE & FEASIBILITY
Due Diligence
Feasibility-Case Studies
Design & Construction
Plant operations and
Maintenance Planning &
Management
Global Trading
Commercial
Research & Development
Administration and Marketing
Finances and Accounting
Communications & Management
Investment & Return on
New Projects & Systems
Discovery & Innovation
Trends & Patterns
Gap Analysis &Problem Solving
New Technologies
Way Forward
Creation of Bureau Service –
SPE & Universities.
Pilot Project Agenda:
1. Demonstrate the Challenges using the existing well planning, well
surveillance / well control and materials / contract monitoring system.
2. Allow for a comparison between the existing and an on-line analytical
data base and feedback system (pro vs cons)
3. Create the alignment between the proposed tools Internet and IT
systems (with, Mindmapping etc)
4. Conclude with a plan for Corporate Operators to achieve competence
in reaching the stated Corporate Objectives and Values
Facilitate the Learning by:
Creating Alertness to Hazards so perceived risks
can be managed.
1.Strategic Review for Achieving Competence
The goals of “needs analysis” is to go across the organizations to evaluate
communication and collaboration processes, jobs and people. Its
expressed a little bit in the words below in relation to having well control
while drilling.
“To be competent in well control, a supervisor is responsible for discerning what is
relevant information, then disseminating it to relevant key personnel. The quality
of information transfer is measured by how close it is to what is really
happening. A loss of orientation, e.g. due to decisions that follow incomplete or
inaccurate data, and its poor interpretation (if it isn't actually happening), is a
major reason for loss of control to occur”
Ensuring there are competence in people and effective systems to
collect, collate and disburse the data from drilling outcomes down
hole to others in the system, leads to optimum performance and
lessons learned.
Note Conclusions “Disastrous Decision” Dr. Andrew Hopkins
Facilitate the Learning by:
cont’d
2. Establishing a web portal for facilitation
& execution of a well determining root
•
•
•
•
cause and using open collaboration
Interlink databases and Operator / Contractor systems.
Demonstrate how program feedback on line can enhance
performance through reduced learning curves
Use multi functional and interdepartmental collaboration to
enhance system creativity.
Create a motivational and empowerment feedback system
in relation to the issues of Health, Environment, Safety &
Quality “best practices”.
Facilitate the Learning by: cont’d
3. Create Interactive Alliances with the
Suppliers and Contractors through a
Materials Management system and
Chart of Accounts
Using a material and time indexed data base, track all
usage and cost of contractor activities and material &
equipment usage by:
– Contractor name and equipment name
– Contract number and purchase order
– Requisition and Receipt
– Use and Consumption by well activity, phase and
hole size
– Consignment, Lost In Hole, Waste / NPT, Failure
– Environmental impact
Facilitate the Learning by: cont’d
4. Demonstrate using Domain Experts,
Mentors & Champions through pilot
projects, assessment and induction
Programs by: - Induction to the rig site
–
–
–
Best Practises Training incorporating “Stop for Safety”
“TRUE” and HSE meetings used by operator and
contractors
Demonstrating a computer based personal assessment
and continuous improvement process incorporating all
project functions and personnel.
Encapsulate HESQ in Technical and Logistical
initiatives for all company, contractor and community
participants.
Obtain Approval from & involve Regulator &
Standards Organizations
Pilot Projects Incorporating Social Responsibility
• Operator and Regulator target revitalization of
Brownfields to significantly enhance resource
objectives. Incorporate initiatives leading to a
“Brownfield Focus” in Oil and Gas Development.
Changing Focus
Macro Focus
Operational Focus
Production Profile
Involving Migas, BP Migas, PSC’s and Academia.
Brownfield Micro
Focus
Conclusion: Opportunity Cost for Achieving
Competence thru’ a Pilot Project
• A one well project with a budget in excess of 7 million dollars
•
•
•
so savings from optimizing performance in range of 1 million
dollars – Sufficiently significant to create a Realization
Attitude & Practises of the drilling contractor are
synergistic with the Goals and Policies of Star Energy
“Drilling Supervisor” could play the role of “Domain Expert”
while ensuring operational responsibilities are met.
All Functional Specialists mentioned share cost for creating the
learning system, Miscellaneous Expenses for Corporate would
include:
1. Strategic Revisions
2. Establish Web Portal and Integrating with secure IT systems (Cloud
3.
4.
Computer Technology.
Create Interactive Alliances with Materials / Third Party Management
System
Demonstrating Use of Domain Expert, Mentors, Champions and Induction /
Assessment for Continuous improvement
THOUGHTS - CORPORATE OBJECTIVES TO ASSURE CERTAINTY
IN WELL CONTROL AND WELL INTEGRITY RISK MANAGEMENT
1.1 Strengthen Human Resources Quality through:
– Implementation and internalization of corporate culture. Establish plan
and method of “affective internalization” .
– Develop a “Affective” Manpower Development and Continuous
Improvement Learning Process for the organization, contractors,
suppliers and adjacent community based on core purposes and
competencies.
– Rotation of key personnel. Management team to identity the people
and establish a plan for appropriate leadership for each situation.
– Selective positioning of appropriate “project coordinator” for each new
project requirement or to strengthen the organization performance.
1.2 Continue to review and to improve the Corporate
Business Process
– Assure efficiency and best corporate practices. Operation dept and
Support departments to conduct a review of major impact business
processes as a “gap analysis”
THOUGHTS - CORPORATE OBJECTIVES IMPROVEMENT
–
cont’d
1.3 Improve quality of employees’ understanding and
familiarization with the Company IT and ERP system across
the organization to enable them to utilize the system
effectively.
Conduct familiarization training for everyone with cost monitoring and
budgeting process, logistic and procurement and HR system.
Coordinator : Sr. Mgr Engineering/ IT Manager
1.4 Develop Company’s strategy and Policy on Community
Development and Relation Programs that will support the
Company long term strategy and objectives.
Coordinator : VP Admin/ Ext Rel Mgr
1.5 Maintain high standard of industrial safety and
environmental practice: Zero Fatalities, Zero Lost Work
Cases, Zero Oil Spills and 100% compliance to the globally
recognized Environmental Standards.
Coordinator : VP Operation