OTC: Operators assess advances in offshore drilling risk management

Recent advances in managing human and environmental risks associated with drilling and production operations in the deepwater Gulf of Mexico were brought into sharp focus for delegates attending a panel discussion Apr. 30 at the Offshore Technology Conference in Houston. Many of the panelists echoed one other, saying that the events surrounding the April 2010 Macondo deepwater well blowout and subsequent rig explosion and oil spill brought together industry’s best and brightest to improve regulations and safety, and therefore, reduce some of the risk in operating in the deep and ultradeep water.

Risk management in the deep water can be subdivided into three simple elements: incident prevention, incident intervention and containment, and incident response, explained Steve Thurston, Chevron Corp. vice-president, exploration and production. Comparing these elements to the legs of a stool, Thurston noted that all three are required for the stool to function properly. “But first and foremost,” he asserted, “the focus must be on prevention,” with the objective to put incident intervention and incident response at the company’s ready.

Thurston noted that the process starts with “a shared and unwavering commitment” to what Chevron refers to as “operational excellence,” or “OE,” which the supermajor has been developing for 30 years. “Our employees and our business partners don’t get to the jobsite without this shared commitment to OE,” he said.

Thurston said when it comes to incident prevention, the key lies in excellence in planning, design, and execution. To do this, Chevron deploys two things: “the right people and the right processes.”

Following the Macondo disaster, the federal government mandated that all companies operating offshore must conduct their business under the safety environment management system, or SEMS. In July 2010, Chevron partnered with three other majors—ExxonMobil Corp., ConocoPhillips, and Royal Dutch Shell PLC—to form Marine Well Containment Co. (MWCC), a not-for-profit, independent company based in Houston that provides well-containment equipment and technology for use in the US gulf. MWCC recognized in those early months after the event that there existed the need for operators to be better prepared in the event a potentially catastrophic event such as Macondo.

“Since Macondo, industry has come together significantly to increase the capability and capacity for incident containment and incident response,” Thurston noted.

He concluded with two thoughts on risk-management and deepwater operations: “First, it’s all about raising the standards of all operators and business partners to ensure the prevention of incidents and secondly, it’s about the industry developing large-scale containment and spill-response capacity that is commensurate with the scale and scope of the deepwater business in the Gulf of Mexico.”

Another panelist, representing Talisman Energy Inc., noted that while the Calgary-based independent doesn’t operate in the Gulf of Mexico, it still faces similar risk-management issues while operating offshore Malaysia, Norway, and Indonesia, among other areas.

Kevin Lacy, Talisman senior vice-president, drilling, posed a question to the OTC panel audience: Is drilling in the deep water getting riskier? Lacy then layered a second question: “Is being a passenger on a commercial aircraft risky?”

He then answered rhetorically, “I think most of us think, ‘probably not.’ Yet the statistics as far as airplane crashes go, a crash is actually higher than the probability of a blowout incident in the gulf.”

What gives most people that “sense of comfort,” he explained, is that there are high standards for the airline industry, and extensive training for its pilots, flight crew, and maintenance workers.

He said it all comes down to the “three Cs.”: conditions, competency, and complexity. Since offshore drilling conditions and complexity of wells have increased risk, competency of workers must rise to offset the unbalance, he said. “The business leadership must understand risks, and the technical leadership must communicate these risks effectively.”

All panelists agreed that building a strong corporate culture was extremely important for a company’s success. “It’s what drives the workforce,” Chevron’s Thurston said, adding, “Culture sets the tone.”

Contact Steven Poruban at stevenp@ogjonline.com.

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