After Macondo, Can the Rig Now Wait?

My heart sank when I read in the news that BP may eventually pay out more than $66 billion as cost of the 2010 Deepwater Horizon blowout, aka Macondo incident.  Assuming the Macondo discovery was one billion barrels reserves, at todays oil price, this would be a maximum revenue of $50 billion. Compare this with the cost of the incident, and it would be prudent to have avoided the incident at a higher cost.

The payout by BP is in addition to the loss of 11 lives, several injuries, as well as court cases resulting in, at least, one drilling engineer – Kurt Mix – being jailed, as well as Halliburton and Transocean, too, not being spared expenses as a result of the incident.

This single event brings to mind the risks that have to be managed every day in drilling a well that produces the hydrocarbon on which the world so depends. This incident has been eye-catching because of the scale of the loss. Yet more frequently, on a daily basis, there are less significant incidents, NPTs, near-misses and the invisible financial losses occurring in oil and gas companies, while drilling a well.   Most incident investigations have focused more on either an emotional attack on the oil companies’ safety culture or the technical side of the events ignoring the personal and organizational factors responsible for the disasters.  At the root of critical failures, is the oil patch doctrine of “the rig cannot wait”.

The cost of an oil well usually runs into tens of millions of dollars depending on whether the well is on land or offshore. A land well may cost between 5 to 30 million dollars, while an offshore well costs up to $150 million dollars, and may be more. Furthermore, over 70% of this cost is time-dependent cost on rental cost for the drilling rig, drilling service equipment hire and personnel.

The culture, therefore, is of time saving, resulting sometimes in impatience, and often adhoc solutions, in response to either a failed planning or operational changes, in the guise that the “rig cannot wait”.


Inflow test as an Illustration

An example that can easily be recognized is inflow testing a well.   While drilling the well, several barriers are installed to prevent the reservoir fluids from releasing uncontrollably. One or more of these barriers is required to be tested at some point during the drilling process, and certainly, prior to moving the rig away. The most effective procedure is to test a barrier in the direction of expected risk of flow.   This is done by simulating a flow condition, and observing if the well flows, in a procedure called inflow or negative testing.

To do this effectively, the flow observation period must be long enough to assure that truly, the well will not flow. Various conditions may combine to ensure that fluid is always returning from the well even when the reservoir fluids are intact. The challenge therefore, is to distinguish between fluids returning as a result of other harmless factors e.g. thermal expansion, and reservoir fluids that will eventually flow into the welfare uncontrollably.

The technical foolproof procedure is to collect the fluids emanating during the inflow test period, and make a graph called the horner plot. A straight line horner plot confirms the well is safe. A curved horner plot indicates the well may be flowing reservoir fluids. Many times the result will be inconclusive, and longer waiting period is advised.

The question is, is this simple foolproof procedure always applied during inflow tests? The answer is ‘No’. Only in very few drilling organizations worldwide, is this procedure enforced. Attempts to enforce good practices in very many drilling teams, is often resisted. And the reason is, the process is not only considered to be time consuming and ‘rig time is precious’, many well site supervisors have made their often long careers without having ever applied the horner plot method once, and have come to believe that they are capable of using their experience to detect a flowing well. This is analogous to a driver jumping the red traffic light, and believing he has saved time! He expects to get away with it everytime, until someday, a challenging well comes along, and the personal experience fails, and guess what? A disaster of some proportions!


 Avoiding drilling disasters

While rig time must continue to be well managed, there are two key barriers that helps to negotiate the fine line between wasting rig time and usefully waiting during drilling operations: Personnel competence and organizational factors.

Many, and indeed a very large number of drilling personnels have been educated on the job, by observing how the so-called experience personnel have done a particular operation, without understanding the physics behind the process. They have lived on doing things just the one way throughout their often long careers and have come to know this one way as the only way. Unfortunately, with time, a well comes along that requires a knowledge of the physics of the operations, deeper than just this one way. And, in fact, applying this one way not only being insufficient, but results in a disaster!

Disasters often happen when a change beyond the capability of drilling personnel is happening, and it is not recognized. This is where, organizational factors play a role. In most drilling teams, the experienced people are so trusted and not allowed to be challenged, that risky changes often take place undetected. As protection, some organizational cultures are designed to be benign, to avoid changes altogether, and achieve stability, protecting them from disasters. But operations in these organizations are many times, old fashioned and expensive.

In other organizations, new operations are often subjected to a very detailed, time consuming studies, taking long costly investigation periods, prior to implementation.

In many other oil and gas companies, the changes are often not recognized. Or the boss lacks the political will to delay the operations until it is fully understood, due to the costs involved in project delays. As it is not often allowed to challenge the bosses, knowledgeable team members are often silenced, resulting in the disastrous changes falling through the cracks undetected, and resulting in a disaster.

We therefore need drilling teams, both office and wellsite, where dissent is not only encouraged, but well investigated. Environment should be created where changes not well understood, would be allowed to be pointed out by the ‘nay sayers’ in the team. This may save time and expense and, the rig time spent on this, will eventually result in a robust, failure resistant, organization.

In conclusion, drilling personnel – both office based and well site teams- must be classroom trained from bottom up, to recognize when it is more prudent to allow the rig to wait, and secondly, drilling teams must adopt the culture of valuing every team member’s contribution, irrespective of their experience level. This will reduce costly disasters and NPTs.

Sometimes, it is more prudent to allow the rig wait!

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