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Systemic Management Failures IN WELL CONTROL & WELL INTEGRITY

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Presentation on theme: "Systemic Management Failures IN WELL CONTROL & WELL INTEGRITY"— Presentation transcript:

1 Systemic Management Failures IN WELL CONTROL & WELL INTEGRITY
Presentation by Wayne Needoba –(Red / Yellow) Striving to Show the Elephant in the Room While working with Esso Australia in Sale Victoria in the late 60’s, I was involved with the Marlin Platform drilling operations. I heard the call in the radio room that the well was flowing, and then its blowing out into the ocean. The Longford gas plant was built in the same area Dr. Andrew Hopkins has done a book on the Longford Gas Plant Explosions and many other disaster various disasters and through interactions regards DHSG, has done a book on Disastrous Decisions to point out the human factors. Ironically my contact with Dr. Robert Bea of University of California, Berkely and the DHSG evolved through the Montara Blowout where I used the term “gas burp” and Dr. Bea wrote an article on the gas Surge. "Better management by BP, Halliburton, and Transocean would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate, and address them," the commission said in a chapter of its final report released tonight. . "The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again. Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur." Among the errors that triggered the April 20 blowout and spill: inadequate risk evaluation," "a flawed design for the cement slurry used to seal the bottom of the well," and "apparent inattention to key initial signals of the impending blowout," the report found. Conclusions: Group think decision making should be replaced with a Re-engineered metrics for Project Management to have Certainty in Risk Management. Re-engineering metrics for project management

2 Systemic Management Failures- Solutions Learning Thru’ Stories of Metrics & Multimedia
Montara Blowout Timor Sea August /09 I had direct encounters with the management systems used during each of these incidents. Key Biscayne Sinking Esso Australia Offshore WA – Perth Early /83?? Marlin Blowout Bass Strait Esso Australia Nov / 68

3 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”

4 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.

5 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 blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again. Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur." Its not about technical, deep water, remoteness, Total Depth, Deviation, Permeability and Porosity, Is it partly linked to making humans a cost rather than a an asset. The rsullt As pointed out in the U.S. Chemical Safety and Hazards Board (CSB) report (2007) and by Hopkins (2010) the usual organizational approach to thinking about safety is to examine classical industrial accidents; trips, slips and falls, and to account safety as the number of these that happen in any given time frame. These individually based data points have nothing to do with the catastrophic systemic accidents we see in growing numbers. The classical way of thinking about accidents is evidenced in the Texas City disaster. An interesting facet of that accident is that shortly before the explosion a meeting was held in the control room that included about twenty people. The reason for the meeting was to celebrate safety! A thirty-five day maintenance shutdown of two other process units at Texas City was just completed without a single recordable injury and with only two first aid treatments. All three publications discuss BP’s failure to consider the Texas City disaster as a process safety catastrophe. From the top down, the BP Board did not provide effective oversight of BP’s safety, culture, and major accident prevention programs. Cost cutting, failure to invest, and production pressures characterized BP executive manager behaviors. Fatigue, poor communication, and lack of training characterized Texas City employees. On the day of the accident many start-up deviations occurred. Many aspects of the work environment encouraged such deviations, such as the fact that the start-up procedures were not regularly updated. Operators were allowed to make procedural changes without proper management of change (MOC) analysis. BP had replaced classroom training with some computer training. However, computer training doesn’t allow the trainee to have to think through problems. It is more appropriate to memorization. BP did not offer its rig employees simulation training. Simulation training is the appropriate form of training to give people practice with thinking through problems. The start-up procedure lacked sufficient instruction to the board operator for a safe and successful start up of the unit.

6 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’. 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. Casing shoe 90 degrees High Porosity Gas Leak through Floats

7 The Well System - Macondo
The burp was a surge. Formation Dip High & High Porosity

8 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

9 Management Systems Drilling and Completion Operations
Seeing The Elephant in the Room Reasons for Systemic Management Failures Drivers for Change Lives Sustainability Quality of Life Profit Reputation This course is based on the assumption that everyone is engaged in some form of practice – whether as a professional, a manager, a parent or a student. Through the course you will appreciate how your own understanding and practice can influence change. The course begins by exploring the nature of change and systems practice and why there is a need to manage systemic change. It goes on to address a simple but profound question: what is it that you do when you do what you do? It then considers the implications of practice in a networked or interconnected world, where groups, teams, organisations and even nations will have to be smarter in their ways of working together. Some claim that we now live in a world of short-term projects with pre-specified goals that can no longer deal with the complexity and uncertainty we have to manage. You will be introduced to systemic inquiry, which is an alternative way to organise programmes and projects, so as to be better able to manage the complexity and uncertainty associated with living in a world where complex and uncertain issues like adapting to climate-change and sustainability are increasingly important. The world of the future will require more skills and understanding of flexible and adaptive managing – we will have to place more emphasis on learning as we go and making sure the learning changes our practice and organisations. A promising way to do this is with systemic action research. The course will make it possible for you to organise and manage this type of practice – a form of research (with a small ‘r’) that is accessible to all people. More effective collaborative working will be a demand placed on more and more people. This will make new demands on meetings, teams, projects, committees, as well as interagency and cross-professional and cross-cultural groups. This course will consider the theory and practice of ‘social learning systems and communities of practice’ in order to develop your understanding of how different groups might work together better using systems thinking in practice. You will be able to critically evaluate your own processes, structures and experiences in your working groups, communities of practice and networks and consider possible alternatives for the future. Through developing an understanding of social learning systems and communities of practice you will aim to develop your own capacities for working with others in a practical way to bring about systemic change. Social learning and communities of practice are also at the forefront in managing. This material will be particularly useful to those who have encountered organisational structures that unhelpfully separate interconnected issues of change ( managing them in ‘silos’), or those who need to develop skills to work with multiple organisations. In summary, the course aims to help you to engage with and improve complex situations that involve change in all areas of work; evaluate your own social structures and experiences of working groups, communities of practice and networks; and consider possible future alternatives.

10 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? 2012: What's the 'real' truth? Managing systemic change: inquiry, action and interaction Rather than passively accepting change this course will equip you with skills to shape the nature and direction of change. It will develop your abilities to manage change with others so as to avoid systemic failures and improve joined-up actions amongst stakeholders along supply chains, in projects or, even, social activism. It is about learning to use systems thinking and practice to help you engage with change and act accordingly to recognise the interconnected nature of organisations and environments. Systemic failures to blame for BP oil spill, inquiry finds The Gulf of Mexico oil spill was the result of cost-cutting measures by BP and its partners, Halliburton and Transocean, according to a report issued by the White House Oil Spill Commission. The report warned that the three companies could be liable for billions of dollars in compensation. The bulk of the blame for the burst pipe, which initially went undetected, was directed towards a faulty cementing job at the base of the well, performed by Halliburton. BP was blamed for poor oversight of the masonry work and for misreading subsequent pressure test readings. Transocean, the world’s largest offshore drilling labour contractor, was faulted for failing to communicate to its crew the risks of deepwater drilling even after an accident had been narrowly avoided just months earlier. In a statement, Transocean placed the blame with procedures that had been approved by BP and federal regulators. Benghazi Attack Report Finds Systematic Management Failures At State Department Led To Inadequate Security Posted on December 19, 2012 An independent panel charged with investigating the deadly Sept. 11 attack in Libya that killed a U.S. ambassador and three other Americans has concluded that systematic management and leadership failures at the State Department led to “grossly” inadequate security at the mission in Benghazi. “Systematic failures and leadership and management deficiencies at senior levels within two bureaus of the State Department resulted in a Special Mission security posture that was inadequate for Benghazi and grossly inadequate to deal with the attack that took place,” the panel said.

11 Current Collaboration Processes Seeing impact of the EITR David Pritchard
BP Macondo Supervisors Criminally Negligent? Or everyone guilty, Business, Government, Individual.

12 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?

13 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 ) Systemic Management Failure in Well Control and Well Integrity re-engineered metrics for project management, that propels ISO / API / regulatory standards to be intrisically motivating Systemic management failures results from a gap in communication effectiveness, goals, and behaviour between the “field operators” and “corporate office”. Operations focus on a specific list of criteria addressing operational issues perceived through past and offset experiences; meanwhile, corporate is focused towards commercial risk. The tension between these groups are complex, as are the diversity of their goals, but time and budget dominate in all cases. Sophisticated models are used to define resource value where operational risk due to geological complexity tends to be resolved with “group think” and “probability”. Moreover, the interrelation of operating parties incorporate regulations, mixture of leadership styles, ego driven personalities, self-sufficiency perceptions, and a range of political ideals; generating a culture that causes loss of definition on best practices in the decision making process. This cultural issue in the front end of business decision making must be addressed to prevent and avoid catastrophes. Dr. Hopkins book "Disastrous Decisions", and various inquiries for Montara and Macondo define "Systemic Management Failures" as “The focus on minimizing cost and time during well system planning and facilitation in favour of a focus on commercial risk by the front end planners diminishes the possibility of perceiving "all" operational risk relative to well system "quality and reliability” during construction. The presentation will be illustrated with examples of the author experience and public information related to the BP Macond disaster, and to a lesser degree, Montara where geological hazards are similar.

14 The Earth Model Well Evaluation – BOD (Drilling and Completion Basis of Design)

15 The Earth Model and Well System - BOD cont’d

16 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.


Well Profile Well Character

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.

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.

Note Torque (yellow), WOB (blue on right graph) and Gas Units (purple right graph) erratic above 5200 ft

Wellbore Quality Friction factors Wellbore Quality Friction factors

Wellbore Quality Friction factors

Wellbore Quality Friction factors

25 Well Bore Quality & Barrier Quality

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

27 The Act of Continuous Improvement

28 The Results of Continuous Improvement







35 Way Forward Creation of Bureau Service – SPE & Universities.
Pilot Project Agenda: 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

36 Facilitate the Learning by: Creating Alertness to Hazards so perceived risks can be managed.
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

37 Facilitate the Learning by: cont’d
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”.

38 Facilitate the Learning by: cont’d
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

39 Facilitate the Learning by: cont’d
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.

40 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.

41 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: Strategic Revisions Establish Web Portal and Integrating with secure IT systems (Cloud Computer Technology. Create Interactive Alliances with Materials / Third Party Management System Demonstrating Use of Domain Expert, Mentors, Champions and Induction / Assessment for Continuous improvement

42 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”

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

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