DRILLBITS – September 2017
In This Edition
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Advocacy
House Passes Interior Appropriations Bill as Part of Larger Package – IADC Supports the Defeat of Anti Domestic Energy Amendments
On 15 September, the U.S. House of Representatives passed the Interior Appropriations bill, authorizing funding for key programs for fiscal year 2018. In a press release, IADC President Jason McFarland issued the following statement:
“IADC and its members are supportive of the House’s efforts to pass an Interior Appropriations bill that advances U.S. energy production, both onshore and offshore. The passage of amendments that prohibit the funding of costly and duplicative rules, including the EPA’s methane rule, and BLM’s venting and flaring rule, further indicate the House’s desire to support an industry that contributes billions of dollars to the U.S. economy and helps keep lights on in our homes and fuels our vehicles. Likewise, the House’s vote to defeat an amendment that would restrict funding to prepare a new OCS leasing program and an amendment to restrict oil and gas development and exploration along the U.S. Atlantic Coast points to an interest by this nation’s elected officials to further invest in U.S. energy development. We thank those Members of Congress who proposed amendments in support of the U.S. energy industry.”
IADC Participates in Canada – U.S. Energy Services Associations Meeting
In August, IADC participated in the Canada – U.S. Energy Services Associations Meeting in Washington, D.C. Organized by the Petroleum Services Association of Canada, and also attended by the Candian Association of Oilwell Drilling Contractors, the meeting offered an opportunity for attendees to discuss NAFTA and possible changes to that agreement that could impact the energy industry in both countries.
“The meeting was incredibly informative and timely with a robust discussion by those in the room on the reality of what, if any, changes to NAFTA would invoke for our industry. It also was an opportunity for IADC to continue to work closely with our sister trade associations, on an issue that could have a significant impact on the drilling industry, and is a topic that we will continue to monitor,” said Liz Craddock, IADC Vice President, Policy and Government Affairs, who attended the meeting on behalf of IADC.
5th Circuit Rules in Favor of Offshore Contractors on Contractor Liability Under OCSLA
On 28 September a panel of the U.S. 5th Circuit Court of Appeals ruled against the government with regard to its attempt to exercise criminal enforcement powers against contractors and subcontractors.
The case stems from a fatal welding accident that occurred on an offshore oil platform in the Gulf of Mexico in November of 2012. The government charged the owner and operator of the platform, Black Elk Energy, with criminal violations of the Outer Continental Shelf Lands Act and the Clean Water Act and sought to impose criminal penalties under OCSLA against contractors working on the platform.
In today’s ruling, the court stated, “For over 60 years, the federal government did not regulate or prosecute oilfield contractors, as opposed to lessees, permittees, or well operators under OSCLA” and affirmed the District Court ruling that ‘none of the OCSLA regulations apply to oilfield contractors’. In response, IADC President Jason McFarland issued the following statement:
“This is not about safe and environmentally sound operations, to which our members, and our industry, are committed, but about due process. Today’s ruling affirms that a regulatory agency cannot, through policy statement and without notice and comment rulemaking, abandon decades of administrative practice so as to criminalize the conduct of contractors, subcontractors and individuals broaching a rule that was never crafted to apply to them. As the Administration’s regulatory reform efforts move forward, we are committed to working with the Department of Interior and its bureaus to produce regulations that ensure safe working conditions, are protective of the environment and which are clear in their allocation of responsibility and liability.”
BSEE Hosts Public Forum on Well Control and Blowout Preventer Rule
On 20 September, BSEE hosted a Public Forum on the Well Control and Blowout Preventer Rule in Houston. In a presentation at the Forum, industry was able to reiterate concerns that it had expressed during the initial rulemaking. These included provisions of the rule which were not cost effective or which could have unintended consequences that increased, rather than decreased, risk. Industry was also able to talk about its efforts to seek clarifications to provisions of the final rule which, notwithstanding efforts to with BSEE to resolve, have gone unanswered. These include provisions of the rule with an unachievable and unrealistic implementation period; unnecessarily prescriptive requirements on drilling margins that can increase risk; and requirements that exceed those of industry standards developed post-Macondo which require costly and unwarranted modifications for rigs in order to be qualified to work on the U.S. outer continental shelf.
These concerns were similarly presented to the Administration in the form of a letter signed by IADC, API, NOIA, OOC, IPAA, PESA and the US Oil & Gas Association in May of 2017. The full contents of the letter can be found on IADC’s website.
In the spirit of the Administration’s regulatory reform and energy policy agendas, IADC is hopeful that all of industry’s concerns will be addressed by BSEE in the near future.
Washington D.C. Updates
House:
Congressman Steve Scalise (R-LA), who was shot in June while practicing for the Congressional baseball game, returned to the U.S. House on 28 September to resounding applause and thankfulness for his steady recovery. This month, the U.S. House passed a Continuing Resolution that keeps the Federal government open until December when it is expected that the FY18 government spending bills will be enacted. It also passed two Hurricane Disaster Aid bills and the Interior Appropriations bill, which included several other appropriations bills. Currently, the House is moving forward with a budget for FY18 and tackling tax reform. The House Natural Resources Committee is putting together energy legislation focusing on both offshore and onshore development.
Senate:
In September, the Senate passed the Department of Defense Reauthorization bill and approved several more nominees for Presidential-appointed positions. At the end of the month, there was an attempt to bring up legislation for another repeal and replace of the Affordable Care Act, but the Senate still does not have enough votes and it appears this issue may be dead for the foreseeable future. It is expected that moving forward the Senate will continue to process nominees and focus on tax reform and appropriations legislation.
White House:
President Trump only issued one Executive Order this month, which provided additional sanctions for North Korea. In addition, two more rounds of NAFTA re-negotiation occurred, with the last one in Ottawa, Canada.
INDUSTRY NEWS
NOPSEMA Opens Consultation on Draft Guidance Related to Offshore Medical Personnel
NOPSEMA, the Australian regulator, recently opened a consultation on Draft guidance on qualifications for offshore medical personnel. The consultation is open for comment until 31 October 2017.
NOPSEMA states that is has identified some operators employing, in the position of ‘Offshore Medic’, personnel who hold qualifications that are insufficient to competently deal with possible emergency medical situations. To ensure that operators are aware of their obligations in relation to this matter, NOPSEMA is proposing draft guidance on the topic.
The purpose of the Guidance Note is to provide facility operators with information on appropriate qualifications for offshore medical service providers, thus facilitating compliance with their legislative obligations.
More information can be found on the NOPSEMA website.
European Commission Proposes New EU Cybersecurity Agency
On 19 September, the European Commission issued a press release announcing the 13 September release of the Cybersecurity Package for consultative review. The review runs through 16 November 2017.
The Commission proposes to establish an EU Cybersecurity Agency that would have an operational role to counter particular threats, serve as a center of expertise on cybersecurity certification and support Member States in the implementation of EU legislation. The new body, if approved, will replace/augment the current Agency for Network and Information Security (ENISA) with a new one that could more effectively and efficiently support stakeholders efforts to ensure a secure cyberspace in the EU.
The new proposed body would more than double the current budget and increase staff by 50%. It would also establish an EU framework for cybersecurity certification by creating a comprehensive set of rules, technical requirements, standards and procedures to agree to each scheme. Each scheme will be based on agreement at the EU level for the evaluation of the security properties of a specific information communications technology-based product or service.
To read the full press release, please visit the European Commission website.
IADC President Jason McFarland Visits IADC Members in Japan
IADC President Jason McFarland visited Japan Drilling and Mantle Quest Japan in Tokyo in late August. Pictured are (from left) Shigeru Mitsuya, Representative Director and Vice President Executive Officer of Japan Drilling; Jason McFarland; Naoto Goto, General Manager – Safety & Environment Department for Japan Drilling; Erika Hashimoto, Chief – Marketing and Contracts Department for Japan Drilling; and Keith Kotval, Assistant General Manager – HSQE Department for Japan Drilling.
PSA Norway to Host Presentation on Learning and Prevention from Macondo
PSA Norway recently announced that Lars Herbst, Regional Director for the Gulf of Mexico for the U.S. Bureau of Safety and Environmental Enforcement (BSEE), will attend the PSA on 5 October 2017, and will host a presentation on learning and prevention in light of the Deepwater Horizon disaster of 2010. The presentation is from noon until 2 p.m. An additional presentation will address Acute Emissions and Risk and Barrier Management. Registration is not required.
More information can be found on the PSA Norway website. For questions, please contact Lin.silje.nilsen@ptil.no
API to Host 2018 Exploration and Production Winter Standards Meeting
API recently announced that registration is now open for its Exploration and Production Winter Standards Meeting. The meeting will be held 22-26 January at they Hyatt Regency in San Antonio, Texas.
The program highlights include: Task Groups on Oil Country Tubular Good and Line Pipe; Work Group on Sour Service Products; Resource Groups on Coiled Tubular Goods; Threading and Gauging and Non-Destructive Testing (NDT); Well Cements; Drilling, Completion and Fracturing Fluids; Supply Chain Management; and Quality Programs.
For more information and to register please visit the API Website.
Railroad Commission of Texas Issues August Data
The Railroad Commission of Texas (RRC) recently posted its monthly drilling, completion and plugging summary for August 2017. The RRC issued a total of 1,125 original drilling permits in August 2017 compared to 660 in August 2016. The August total included 987 permits to drill new oil or gas wells, 14 to re-enter plugged well bores and 124 for re-completions of existing well bores. The breakdown of well types for those permits issued in August included 298 oil, 74 gas, 666 oil or gas, 64 injection, two service and 21 other permits.
Also in August 2017, RRC staff processed 401 oil, 115 gas, 38 injection and three other completions compared to 545 oil, 223 gas, 46 injection and eight other completions in August 2016. Total well completions processed for 2017 year to date are 8,628; up from 4,830 recorded during the same period in 2016. According to Baker Hughes Inc., the Texas rig count as of September 8 was 455, representing about 48 percent of all active rigs in the United States. For additional drilling permit and completion statistics, please visit the RRC website.
BLS Posts International Review of Injuries and Illnesses in the Workplace.
The U.S. Bureau of Labor Statistics (BLS) recently posted an article, Counting Injuries and Illnesses in the Workplace: An International Review. According to the BLS the, “article reviews salient features of national occupational safety and health surveillance systems within a cross section of countries, including the United States. Special attention is paid to differences in system scope and in methods of injury and illness data collection.”
The full article can be accessed via the BLS website.
IADC to Participate at LAGCOE, SPE ATCE
Visit IADC at LAGCOE and at the SPE Annual Technical Conference and Exhibition during October.
LAGCOE, being held 24-26 October in Lafayette, La., features speakers including Scott Angelle, Director of the US Bureau of Safety and Environmental Enforcement (BSEE); and Randall Luthie, President of the National Ocean Industries Association. IADC can be found at Booth A56 in the Cajun Arena.
ATCE convenes in San Antonio on 9-11 October. This conference is SPE’s annual meeting, and features a broad array of E&P technology and topics. IADC is at booth 1228.
If you’re in town for either event, please drop by and say hello.
For more information on IADC’s participation at these events, contact Loretta Krolczyk, loretta.krolczyk@iadc.org.
ACCREDITATION
IADC Competence Assurance Program to be Updated
Competence Assurance is a crucial part of the employee development process. Having competent employees helps to assure the safety of employees, assets, and the environment. These are some of the reasons the industry worked collaboratively to develop IADC’s Competence Assurance Accreditation and Guidelines for Building a Competence Program. IADC and industry understand and embrace the need for continual improvement in an ever-changing industry and are working on making the Competence Accreditation better.
The Accreditation Division is currently working with industry and IADC Competence SME auditors to grow the program and include new industry best practices. Working together to share strengths from the various programs will help raise the bar on competence across the industry. The new accreditation handbook with enhanced requirements is anticipated to be released in Q1 2018.
For more information about the Competence Assurance program, please visit the IADC Accreditation website. For questions, please contact Brooke Polk at Brooke.Polk@iadc.org.
IADC WellSharp Now Available in Arabic
The online exam for IADC’s well control training and assessment program, WellSharp, is now available in Arabic. The Arabic translation is now available to all training providers. The exam was previously translated into Portuguese and Spanish, and it will also be available in Mandarin later this year.
WellSharp, introduced in 2015, is a rigorous well control training and assessment program that offers content on prevention, situational awareness, barriers, barrier management, and risk awareness and management. It encourages blended learning to enhance the quality and value of the training, with required independently proctored electronic knowledge assessments and enhanced simulator exercises.
For more information about WellSharp, please visit the IADC Website.
IADC COMMITTEES
IADC Cybersecurity Subcommittee Drafting Guidelines
The IADC ART Cybersecurity Subcommittee is in full swing drafting five additional guidelines following the guidelines published last year on Assessing and Managing Cybersecurity Risk for Drilling Assets. The five additional guidelines under development are as follows and due to be completed by the end of 2017.
- Guidelines for Minimum Cybersecurity Requirements for Drilling Assets
- Guidelines for Network Segmentation
- Cybersecurity training v1.0
- Guidelines for hardening of control systems focusing on existing drilling assets (to include patching)
- Guidelines for security monitoring and audit
Please join the Subcommittee at the next meeting to participate in or learn more about the progress of the guidelines. The focus of the next subcommittee meeting is to review the guidelines for Minimum Cybersecurity Requirements for Drilling Assets. The next IADC ART Cybersecurity Subcommittee meeting will be at 9 am on 14 September 2017 at IADC headquarters in Houston. If you plan to attend, please register online at the IADC website.
Call for Abstracts for IADC Spark Tank on 6 December: Meet the Sharks!
The IADC Advanced Rig Technology Committee has issued a call for abstracts for the ART Spark Tank, scheduled for 0900-1130 on Wednesday, 6 December, at IADC headquarters in Houston, Texas. The deadline for abstracts is Friday, 27 October.
The IADC ART Spark Tank is a strong opportunity to provide technology entrepreneurs a new opportunity to pitch their products and ideas to a panel of drilling contractors and operators (“Sharks”).
IADC ART welcomes abstracts on any new technology that will improve efficiency or safety in well construction. The purpose is to provide insights (“Sparks”) to technology developers into what matters to those they are innovating for. There is sometimes a vast disconnect between a good idea and a great product, and this series will attempt to close that gap in a good-natured, productive manner. Caveat: This forum is not designed to generate investments in the product or service.
Each Spark Tank presentation should last no more than 15 minutes, which will allow the Sharks to ask questions and give feedback on just how great (or not!) they think the product is.
Rules of engagement:
The ART Spark Tank is designed to allow technology entrepreneurs the opportunity to pitch products or ideas to a panel of experts comprising both drilling contractors and operators. The Spark Tank is envisioned as a forum to “spark” new thinking. The Spark Tank will be moderated by an officer of the Advanced Rig Technology Committee.
Format:
Thirty minutes are allotted for each topic. Each presenter will have 15 minutes to speak. Please be as brief and concise as possible.
Panelists will then use the remaining 15 minutes for questions and comments. Questions and comments will be candid.
Please be polite and allow others to complete their thoughts before speaking.
Investment:
The Spark Tank is not a vehicle to seek investment for an idea or products, though “order of magnitude” estimate of development cost is acceptable.
Click here to submit your abstract.
Presentations from DEC Tech Forum on MPD available
Presentations from the Q3 Drilling Engineering Committee Technology Forum, “What does ‘Prepared for MPD’ Mean?” are now available for download on the DEC website. The DEC is chaired by Keith Lynch, ConocoPhillips.
The Technology Forum and a post-event lunch was graciously hosted by Weatherford at its Spencer Road facility in Houston.
Tech forum presentations now available to the public are:
- “MPD Application Process” – Fred Brink, BSEE
- “ ‘Prepared for MPD’: Managed Pressure Drilling Rig Capabilities” — Wael Essam, BP
- “MPD: A Rig ‘Prepared for MPD’ “ – Roger van Noort, Shell
- “What Does ’Prepared for MPD’ mean? A Contractors Perspective” – John Kozicz, Transocean
- “Equipped for MPD” – Neal Richard, Weatherford
- “Subsea Pump System: Optimized for Rapid Deployment & Operation within the Primary Barrier” – Brian Piccolo, AFGlobal
The Q4 Technology Forum will be sponsored by Baker Hughes, a GE Company, on 19 Nov, at BHGE’s facility at 3300 N Sam Houston Pkwy E in Houston. Lunch will be provided. The topic is “Extreme Drilling”. To register, click here.
For more information about the IADC DEC, contact Mike Killalea, mike.killalea@iadc.org.
ART Committee to Meet in Amsterdam on 23 October
The IADC Advanced Rig Technology Committee will meet in Amsterdam on 23 October, one day prior to the 2017 Advanced Rig Technology Conference, 24-25 October in the same city.
The event will include a review of ART initiatives and deliverables, and foster a discussion of establishing a parallel IADC ART organization in Europe, among other topics.
The ART Committee will subsequently meet on 30 October at IADC HQ in Houston.
To view the full agenda and to register, go to http://dev2.iadc.org/event/iadc-art-committee/. For more information, contact Mike Killalea, mike.killalea@iadc.org
ART BOP Controls SC Closing in on Valve Guidelines
The BOP Controls Subcommittee is closing in on its goal of producing guidelines for shuttle valve qualification before the end of the year. The BOP Controls SC, respectively chaired and co-chaired by Roy Mills, Noble Corp, and Mitch Eichler, Parker Hannifin, operates under the auspices of the IADC Advanced Rig Technology Committee.
The team, comprising valve manufacturers, OEMs, contractors, and operators at their September meeting further developed previous work on directional control and shuttle valve qualification procedures. The SC also developed the wording for the planned formal recommendation to IADC. Prior to the SC’s next meeting, the team will review the draft document and tweak the guidelines to conform with known API and IADC conventions to produce a cogent and useful document.
The BOP Controls SC’s next scheduled meeting in 17 October at IADC HQ in Houston. For more information, contact Mike Killalea, mike.killalea@iadc.org
INDUSTRY RESOURCES
IADC Well Control Conference of the Americas Rescheduled
The IADC Well Control Conference of the Americas has been rescheduled for 6-7 December at the original location, Moody Gardens, in Galveston, Texas. The event, which was initially supposed to be held in August, was cancelled due to Hurricane Harvey.
To register or view more information about the rescheduled conference, please visit the IADC Events website.
IOGP Announces Availability of New Publications
The International Association of Oil and Gas Producers (IOGP) recently announced the availability of two new publications. They include:
- IOGP Report 2016p, Safety Performance Indicators – Process Safety Events – 2016 Data. The report is a further step toward making Process Safety Event (PSE) data and associated KPIs available to all stakeholder. The PSE data presented in the report are based on voluntary submissions from participating IOGP member companies.
- IOGP Report 2016pfh, Safety Performance Indicators – Process Safety Events – 2016 Data – Fatal Incident and High Potential Event Reports. This report describes the fatal incidents and high potential events that were also PSE, and fatal incidents and high potential events that were PSE-related. Registration is required to download them from the ‘Data Series’ tab of the IOGP Bookstore.
IADC Issues Annual Media Kit, Definitive Guide to IADC Communications
IADC’s annual media kit, the definitive guide to all products and services of IADC’s communications team. The DC media kit includes the editorial schedules for Drilling Contractor magazine and for eNews from DrillingContractor.org. The schedules include timing and topics for each issue.
The media kit also provides details on DC circulation, and on the many marketing opportunities available through IADC. Some key items include excellent new high-impression online positions in our IADC Lexicon and the Microsites in DrillingContractor.org. In addition, we have scheduled three Virtual Panel Discussions on high-interest topics that are available for sponsorship.
The media kit also covers IADC.org, DrillingContractor.org, DrillBits, 2018 IADC Membership Directory, and more.
Go to www.DrillingContractor.org/mediakit. The media kit is also available as a downloadable PDF.
For more information, contact Linda Hsieh, linda.hsieh@iadc.org, or Brian Parks, brian.parks@iadc.org. For sales, contact Bill Krull, bill.krull@iadc.org.
Updated IADC International Offshore Regulatory Summary Report Now Available
IADC recently updated the International Regulatory and Standardization Activities Affecting the Offshore Oil and Gas Industry report. The report provides a reference on international regulatory and standards development activities of various organizations that have the potential to affect offshore oil and gas operations.
The report can be accessed on the IADC Advocacy webpage. Questions regarding the report can be directed to Jim Rocco at Jim.Rocco@iadc.org.
Everyday Hydrocarbon Products Showcased in Drilling Matters
New modules on IADC’s DrillingMatters.org provides details the myriad products both trivial and critical that are based on hydrocarbons, and showcasing the industry’s solid environmental record. In addition, DrillingMatters.org now features an improved interactive drilling rig, allowing users to point and click and learn more about key drilling components. Also, a new glossary provides definitions for a plethora of industry terms.
“More than a Fuel” shows that from the food we eat, to the clothes on our backs, to cosmetics and skin care products, soaps and detergents, life-saving medical equipment and pharmaceuticals, building materials, toys and packaging materials, thousands of the products we use and depend on every day are made from hydrocarbons.
Drilling Matters’ new Interactive Rig Tour uses narrated video clips to explain the basics of key rig systems.
Finally, Drilling Matters’ new glossary describes equipment and will help educate industry newcomers about the meaning of numerous industry terms. Graphics, narrations and videos are planned for the glossary.
Drilling Matters is a web-based, modular and interactive website designed to dispel myths and correct misconceptions about the petroleum industry. DrillingMatters.org now comprises modules discussing drilling equipment, drilling people and companies, the value of hydrocarbons, energy poverty, and more.
For more information, contact mike.killalea@iadc.org
Drilling Matters: Spread the Word.
IADC Incident Statistics Program 2017 Q1 Data Available
The 2017 IADC Incident Statistics Program Q1 Year to Date Summary Report is now available via the IADC website. The 5 year LTI/RCRD Frequency rate has also been updated and published.
Participation in the IADC ISP is voluntary and open to all drilling contractors and well servicing companies engaged in oil and gas and well drilling. However, a company must participate in the IADC ISP program and be a member of IADC in order to qualify for rig/unit recognition. The ISP has tracked safety and accident information for the drilling industry since 1962. Data are compiled separately for land and offshore operations and for seven geographic regions – U.S., Europe, Canada, Central and South America, Africa, the Middle East and Asia Pacific.
To learn how your company can participate in the ISP, please visit the Incident Statistics Report page on the IADC website. Questions can be emailed to isp@iadc.org.
IADC Lexicon Featured Term for September 2017
The IADC Lexicon (IADCLexicon.org) is a compendium of upstream-related terms, which, unlike conventional glossaries, are official definitions drawn from legislation, regulation and regulatory guidance, standards (global, national and regional), and IADC guidelines. Terms often have multiple definitions from different sources.
This month’s Featured Term is:
“Spitzglas Formula” (Source: Source: IADC UBO / MPD Glossary, December 2011)
Equation used for calculating flow in small diameter, low-pressure distribution lines.
(click the link to read the full definition on the IADC Lexicon.)
Accreditation Updates
WellSharp
Safety Alerts
For the latest safety alerts, visit www.iadc.org/safety-alerts
Alert 17-6: Offshore crane operator falls through dislodged grating
Upcoming Events
Rigs Receive ISP Certificates
For certificates received since last LTI (in years):
New IADC Members
IADC welcomes 10 new members:
DRILLBITS Volume 27, Number 9
Andy Hendricks, Chairman • Jason McFarland, President • Amy Rose, Editor
All listed phone extensions are for IADC’s Houston headquarters,
+1/713-292-1945. Fax +1/713-292-1946.
Send comments/questions to Amy Rose at amy.rose@iadc.org.
To subscribe to Drill Bits, go to www.iadc.org/drillbits.
To change/cancel a Drill Bits subscription, send an e-mail message to
IADC Director – Membership Sharon Thorpe at sharon.thorpe@iadc.org.