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Oil&GasCONNECT CONNECTING THE OIL & GAS INDUSTRY

FOR OIL & GAS MANAGEMENT & PROCUREMENT WWW.OILANDGASCONNECT.CO.UK

Deepwater Horizon after the Gulf of Mexico oil spill

Underneath Morecambe Bay Oil&GasCONNECT looks back at over 40 years of offshore gas

ISSUE 1 JUNE 2011 ÂŁ9.50

The Oil & Gas Industry and naturally occurring radioactive material

Shale Gas transforming global gas markets


E N G I N E O I L S | T U R B I N E , H Y D R A U L I C & C I R C U L AT I N G O I L S | C O M P R E S S O R O I L S | GEAR & TRANSMISSION OILS | GREASE | OFFSHORE SPECIALITIES

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Introduction

Issue 01 1st June - 31st October 2011 MANAGING DIRECTOR Dan Connew T: 01937 580400

Welcome to the first edition of Oil&GasCONNECT, a publication available

SALES DIRECTOR David Wightman T: 01937 580408 E: david.wightman@theconnectseries.co.uk

both on-line at www.oilandgasconnect.co.uk and in printed format, with the aim of becoming a communication aid for the whole of the oil and gas industry.

RESEARCH & DEVELOPMENT MANAGER Finn Langley T: 01937 580423 E: finn.langley@theconnectseries.co.uk

We hope you enjoy the editorial content of Oil&GasCONNECT - we want people in the industry to look forward to its arrival and read it, so our aim is to be very people focused.

PRODUCTION MANAGER Tracey Bramall T: 01937 580406 E: tracey.bramall@theconnectseries.co.uk

We are all aware how complex the oil and gas industry has become, and whilst companies are very good at communicating to their own supply chains, the entire

STUDIO MANAGER Andy Bickerdike T: 01937 580407 E: andy.bickerdike@theconnectseries.co.uk

industry would benefit from improved communication generally. The directory section starting on page 33 has been introduced to give a handy up to date reference section of the companies and breadth of product and services available within the industry. We envisage this section to grow over future issues, so if your company isn't currently listed; please refer to our Inclusion Form on page 75.

Published by

This issue of Oil&GasCONNECT investigates the exploitation of shale gas and how it has transformed the global gas markets. We take a look back at the Deepwater Horizon accident and also discuss the latest budgets affecting the

Group Information Services Ltd,

oil and gas industry.

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Your input is important to us, Oil&GasCONNECT is about your industry, we therefore welcome your editorial contributions, and look forward to publishing

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your views, with the aim of benefiting the oil and gas industry as a whole.

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For more information on supplying editorial contribution, please visit The design and layout of this directory remains the property of Group Information Services Ltd, it must not be reproduced or transmitted to a third party without prior written consent. Š June 2011. All of the

www.oilandgasconnect.co.uk/contact-us. I look forward to hearing from you.

articles in this publication have been supplied to the publisher by external sources. The publisher can not accept responsibility for the accuracy of

Tracey Bramall Editorial Account Manager

the content, or for any errors, omissions or mis-statements, nor can the publisher accept responsibility for the copy supplied by the advertisers. The publisher shall not be liable for any direct or indirect or consequential loss or damage suffered by any person as a result of relying on any statement in or omission from these articles. Opinions expressed in these articles are not the opinions of the publishers.

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STAND OUT FROM THE REST Contact Sales on 01937 580477 Showcase your company in front of over 3000 key

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1


Introduction

Industry News 9

OIL & GAS UK starts the search for industry's award winning performances Companies across the country are being invited to submit entries for the prestigious

4

Oil & Gas UK Awards 2011.

7

10 Suretank launches new 10ft offshore cryogenic tank

Industry News

Suretank, a leading manufacturer of cargo carrying units, launch

7

Momentous dive achievement reached The Seven Atlantic dive support vessel has reached a major milestone in achieving 1,000 dives.

8

a10ft DNV certified offshore nitrogen tank.

29 Getting to know David Binnie Managing Director of OPITO

UK first for TCO

Oil&GasCONNECT

TCO In-Well Technologies has completed the first remote opening of their Tubing Disappearing Plug 2.

speaks with David Binnie

9

UK MD of OPITO and asks a few probing questions.

Feature 4

Exploitation of shale gas transforming global gas markets Drilling for shale gas has transformed the US gas market. Could it happen here?

14 Deepwater Horizon Oil&GasCONNNECT looks at changes in the offshore industry since the Deepwater Horizon explosion last year.

14

THE CONNECT TEAM

Andy Bickerdike Studio Manager

2

Oil&GasCONNECT

Liz Boyle Financial Controller

Jo Brotheridge Data Executive

Tracey Bramall Production Manager

Dan Connew Managing Director

Julia Dingwall Account Manager


Introduction

Directory 33 Category Listings Search for companies you need by their category of services.

65 Alphabetical Supplier Listings Search for companies you need by their name.

18

Website Law

Feature 18 Underneath Morecambe Bay Oil&GasCONNECT looks back at over 40 years of offshore gas.

22 Budget blues hit oil & gas industry Oil&GasCONNECT takes a look into the effects the new budgets will have on the oil and gas industry.

Diary of Events

For all the latest vacancies

26 The Oil & Gas industry and naturally occurring radioactive material Gareth Davies discusses the regulations relating to the Naturally Occurring Radioactive Material known as (NORM).

Visit the Oil&GasCONNECT Website now at

www.oilandgasconnect.co.uk

Training 30 Turning the spotlight on competency David Binnie discusses how

20 Diary of events

recent events worldwide have seen

Essential events to attend in

an increasing focus on safety and

the forthcoming months.

competency in the oil and gas industry.

22

Sam Eason Media Sales

26

Angela Johnson Media Sales

Finn Langley R & D Manager

30

Oliver Lee Media Sales

James Parnham Media Sales

David Wightman Sales Director

Oil&GasCONNECT

3


Feature

Exploitation of shale gas transforming

global gas markets? In 2009 the United States overtook Russia as the world's largest producer of natural gas. This rise up the ranks owed much to the development of shale gas which supplied over 14 per cent of the US gas supply, compared with 1.4 per cent 20 years earlier. This phenomenal increase could continue - the US Energy Information Administration says that by 2035 shale gas could be supplying 45 per cent of the US demand for gas. However, an environmental debate about the effects of shale gas exploitation is raging. ccessing the resources trapped in shale formations involves combining horizontal drilling from a single surface location with deep underground hydraulic fracturing (fracking) to release the gas. Three developments in technology have enabled the shale gas boom:

A ■

3D seismic imaging increases the reliability of prospecting for hydrocarbons. Two out of three oil and gas wells drilled achieve commercial potential, compared to one in three 20 years ago.

Horizontal drilling from one gas well enables work in a much wider area than a single vertical well.

Improved techniques for subterranean hydraulic fracturing.

The fracking process involves injecting a mixture of sand, chemicals and fluid into the well under very high pressure so that it spreads through the horizontal drill paths causing fissures in the rock to shatter, releasing the gas and giving it a route to the production well. Once fractured, a "propping agent" such as sand or ceramic bead is pumped into the fractures to keep them from closing when the pumping pressure is released. The production profile of a typical shale gas development is front loaded with the best extraction figures coming within the first year. This enables swift recoup of capital costs, but continual investment requirements make the technique vulnerable to the economic cycle.

4

Oil&GasCONNECT

Image provided courtesy of Cuadrilla Temporary drilling rig at Cuadrilla’s Grange Hill site. Preese Hall, Lancashire


Feature

looking at shale gas. Cuadrilla has planning permission for five exploratory sites and is carrying out exploratory drilling for shale gas near Preston in Lancashire. Cuadrilla has said it believes there could be enough gas in that region to supply about 10 per cent of the UK's future needs.

pumped under pressure. About a quarter

Composite Energy, based in Stirling, Scotland specialises in coal bed methane but is 'evaluating commercial development options' for a licence it hold for the East Midlands which could yield shale gas.

Shale Gas, Cuadrilla CEO Mark Miller

IGas Energy has licences to extract

injection rate we want without excessive

hydrocarbons across the north of Wales

friction,” and a biocide, “something like a

and the north of England covering an

gallon of this goes into 20,000 gallons of

area of more than 1,756km2. IGas has

fresh water.”

The Crown, rather than the land-owner, controls UK rights to produce hydrocarbons via licenses issued by DECC. Three companies are currently exploring shale gas opportunities under existing Petroleum Exploration and Development licences (PEDL).

eleven Petroleum Exploration and

A report on shale gas published January

Development Licences (PEDLs) in

2011 by the Tindall Centre at Manchester

the UK, two methane drainage licences

University says that 58 out of the 260

and three offshore blocks under one

chemicals held in large quantities by shale

Seaward Petroleum Production Licence.

gas operators in New York State are

Its areas of operation are Cheshire,

potentially toxic, carcinogenic or

Yorkshire, Staffordshire and the North

mutagenic.

Cuadrilla Resources Ltd is furthest advanced of the three companies currently

Wales coast. IGas is the operator and

Could the shale gas boom happen in the UK? A 2010 report by the British Geological Society for the Department of Energy and Climate Change (DECC) speculated that if the prospective UK shale gas areas are as prolific as the US resources, then UK shale gas production could reach around 150bcm (billion cubic metres) of gas (900 million barrels of oil equivalent). This compares with the UK's overall remaining conventional oil and gas reserves, including offshore, of some 20 billion barrels. However, this estimate is theoretical and extensive drilling and exploration would be required to substantiate the figure.

sole owner of each of its licences, IGas shale estimates acreage internally to comprise up to 1.9 trillion cubic feet of gas. Although IGas intends to conduct further work to better understand the

of the liquid rushes back to the surface of the well immediately the frack is completed, with another 20 percent following at a more leisurely pace. Appearing before a House of Commons Energy & Climate Change Committee on explained that the fracking chemicals are “a friction reducer… it just really makes the water slippery and kind of puts it in laminar flow and enables us to get the

It recommends a moratorium on shale gas exploitation until the results of a US federal investigation into the safety of the extraction processes are known. The report says:

potential of its shale holding, it has no

“Evidence from the US suggests shale

plans to develop this resource

gas extraction brings a significant risk of

at present .

ground and surface water contamination and until the evidence base is developed

Is groundwater safe from

a precautionary approach to development

contamination after shale gas

in the UK and Europe is the only

fracking?

responsible action.”

In the US exploitation of shale gas is contentious. The principal environmental concern is that the toxic chemicals used in the fracking process can migrate into the ground water causing contamination to life and the environment. While 100 onshore rigs are working to extract shale gas from the Marcellus Shales in Pennsylvania, next door New York State has imposed a moratorium on extraction of gas from the sediment.

STOP PRESS Cuadrilla suspended test drilling at the end of May following a 1.5 magnitude earthquake on the Fylde coast, the second in two months. The British Geological Society (BGS) recorded earthquakes in the area of the test drilling on April 1 and again on May 27. The earlier tremor was recorded at magnitude 2.3. The BGS says that the epicentre of the May 27 earthquake was within 500 metres of

Gasland a 2010 US documentary about shale gas development in Pennsylvania, shows polluted wells, fouled streams and dead livestock in drilling areas. The film, a Sundance Film Festival award winner, blames fracking for polluting the water table. The industry rebuts this saying that there are no proven cases of fluids migrating from the deep-fractured shale formations into groundwater.

the Cuadrilla’s Preese Hall site, at a depth of 2 km. The similarity of the recorded waveforms in the two events suggests that they share a similar location and mechanism. The BGS says: “Any process that injects pressurised water into rocks at depth will cause the rock to fracture and possibly produce earthquakes. It is well known that injection of water or other fluids during the oil extraction and geothermal

Fracking requires vast quantities of water.

engineering, such as shale gas, processes

About 4 million gallons (15 million litres) of

can result in earthquake activity.” Cuadrilla

water are required for each frack.

has currently ceased drilling while it

Chemicals are added to the water which is

examines the data collected by the BGS.

Oil&GasCONNECT

5


6

Oil&GasCONNECT


Industry News

Momentous dive achievement reached he Seven Atlantic dive support vessel has reached a major milestone in achieving 1,000 dives without lost time incident (LTI). The vessel which has been in operation for a year is owned and built by Subsea 7 and encompasses a Divex designed and built state-of-the art saturation system.

T

UIE Underwater Services recorded the 1,000th dive in April 2011. George Thomson, Team Lead Underwater Vessel Operations for Shell U.K. Limited said: “The performance of the Seven Atlantic has proved to be fantastic after over one year of operation. The success of our joint ventures is wholly attributable to the professional approach of our personnel.

The Divex designed and built dive system includes ergonomically designed divers' living space as well as SATCON, a computer based control system providing automation of life support equipment and the hyperbaric environment including pressure control. The development of the integrated control and monitoring system is based on established SCADA (supervisory control and data acquisition) as well as PLC (programmable logic controller) and HMI (human machine interface) systems. The overall control system is called SATCON.

The key features of the diving system onboard the vessel are: The Chamber Layout, Enhanced Diver Living Standards, Dual Hyperbaric Life Boats, Bell Configuration, Bell Location, Triplicate Power Supply, Bell Launch and Recovery System (LARS), Control Rooms and Offices, and the Advanced Gas Management Systems. Divex would like to congratulate the staff at Shell and Subsea 7 for this momentous achievement.

The dive system, which meets NORSOK standards has been paramount during the design and build process. Divex worked closely with Subsea 7 to ensure that the system

Whilst we cannot be complacent

has been integrated

about our activities, the terrific safety

successfully, which at

performance on both vessels is

times has been extremely

no accident.

challenging.

As we look forward to further demands

Safety, diver comfort, quality

in the coming years, I am confident that

and traceability are all

with the vessels and teams in place, we

benchmarks for this and

will continue to see ever more efficiencies

similar Divex systems that will

and improvements in our combined

be in operation during the next

activities.�

phase of Saturation Diving history.

Oil&GasCONNECT

7


Industry News

UK first for TCO Aberdeen-based TCO In-Well

8

Glass Plug was then remotely

Technologies UK Limited, a provider

pressure cycled to open without the

of well completion technologies to the

need for intervention.

global oil & gas industry, has

TCO UK sales & marketing manager,

successfully completed the first

Rob Grassick, who is also chairman

remote opening of their Tubing

of industry body ICOTA, said: “TCO

Disappearing Plug 2 (TDP-2) on a

UK has had a very successful start

subsea well in the UK Continental

since the company was founded in

Shelf (UKCS).

late 2009 and was initially involved in

The operation, which was carried out

a number of similar operations based

for an oil major and thought to be

on platforms in the UKCS.

worth a six figure sum, was

“With this remote work we have

successfully completed with the

further proven the capability of our

company's patented TDP-2 Glass

technology and now aim to build on

Plug being used as a secure ISO

our reputation for providing innovative

14310 V0 certified barrier.

and reliable well completion

The client's well planning called for

technologies.”

the TDP-2 to be used as a pressure

The firm's in-well technologies

vessel to set the production packer at

provide innovative solutions to oil

4500psi. Once the packer was set,

majors' operational challenges - the

the completion string was then

patented laminated glass ISO 14310

pressure tested for integrity.

VO certified isolation and barrier plugs

Upon completion of the operation,

are currently the only technology of its

and with the Xtree landed, the TDP-2

kind available to the market.

Oil&GasCONNECT

Rob Grassick, TCO UK Sales & Marketing Manager and Chairman of Industry Body ICOTA


Industry News

OIL & GAS UK Starts the Search for Industry's Award Winning Performances ompanies across the country are being invited to submit entries for the prestigious Oil & Gas UK Awards 2011, which opened for nominations on Monday June 6. With principal sponsorship provided by Shell U.K. Limited, the perennially popular event provides the UK's upstream oil and gas community with an annual opportunity to celebrate the talent, dedication and entrepreneurial flair of its best performing individuals and companies.

C

Regularly attracting more than 500 people, including leading figures from across the operator, contractor and supply chain sectors, the Oil & Gas UK Awards dinner takes place at Aberdeen's Exhibition and Conference Centre on November 3. For last year's winners of the 2010 Awards, it has been a productive year. Kevin Dunn, a production technician at BP, won Oil & Gas UK's Young Technician of the Year and commented that it not only provided him with incredible recognition but also a confidence boost for the future efforts of fellow teams across the business. He said: “It demonstrates to younger apprentices

that you do get recognised for pushing above and beyond the basic job.” Mark Arnold won the Oil & Gas UK Award for Overall Excellence. For Mark, captain of Craig Group's Grampian Explorer platform supply vessel, it has been an excellent opportunity to promote the UK's maritime sector. He explained: “I've been able to raise awareness of the merchant navy, the cadetship programme and the excellent career opportunities out there.” The Oil & Gas UK Award for Mentoring went to Gill Cowlam, previously BP's engineering authority in the North Sea and now working for BP in Azerbaijan. Gill believes the award positively impacted her application for the new role but she commented: “It has also helped my peers feel valued, by association, for their contribution to encouraging, supporting and developing engineers on their journey towards achieving professional recognition by qualifying as chartered engineers.” Oil & Gas UK's corporate awards are presented to companies that take an enterprising, innovative and forwardlooking approach to their business. In 2010, Wood Group won the Oil & Gas UK

award for People Development for its commitment to retaining and investing in the development of a professional, talented and competent workforce. Wood Group's clients have also requested assistance in the development and enhancement of their own training and development programmes. Introduced for the first time in 2010, the Oil & Gas UK Award for Business Efficiency was presented to Aker Solutions for successfully developing innovative commercial improvements and sharing the lessons they have learned with the industry. Mike Forbes, managing director, said: “It is especially gratifying to have our business efficiency recognised by the UK energy industry body in terms of enhancing our credibility among our existing and potential clients in the sector.” Companies and individuals wishing to follow in the footsteps of the 2010 winners must submit their entries online at www.oilandgasuk.co.uk/2011awards by Friday August 5. All winners will receive a specially commissioned glass trophy and winners in the individual categories will each be presented with a cheque for £500.

Oil&GasCONNECT

9


Industry News

Suretank Launches New

10ft Offshore Cryogenic Tank

S

uretank is a world

DNV certified offshore nitrogen

The tank is certified for the

leading manufacturer

tanks, from the beginning of 2011.

safe transportation of LIN, LOX

of cargo carrying units

With the first 4 units manufactured

and LAR by road, rail and sea

for the global Oil & Gas

and on route to Western Australia

and is supplied with the recognized

Industry. It has a broad

and a further 6 currently in production,

industry standard cryogenic valves.

range of products which includes

Suretank is intent on becoming a major

The tank is approved to ASME VIII

player in this market.

Div 1, EN 13530-2, ADR/RID, IMDG,

containers, workshops, mud skips

This new tank was designed to

UN Portable Tank T75, TPED, US

and baskets. All these products are

set new standards for product carrying

DOT CFR 49, Worksafe, DNV 2.7-1,

designed and manufactured by Suretank

capacity, higher working pressure, lower

EN 12079, ISO 1496-3, CSC,

to meet the most demanding

evaporation rate, longer holding times,

and TIR

international standards.

wider product approvals, higher build

Suretank's new cryogenic

After repeated demand from

quality, and ease of maintenance for the

manufacturing facility in Dunleer,

Suretank's major customers, within

operator with a bolt down vessel and

Ireland is open to any inspection

the Oilfield Service Industry, a program

pipe work which can be easily removed

and can offer shorter lead times than

was developed to manufacture 10ft

for inspection, repair or repainting.

many of its rivals.

offshore chemical tanks, acid transport tanks, helifuel tanks, offshore

10

Oil&GasCONNECT


FRANCIS BROWN Set the standard for energy sector fabrications with ISO accreditation Francis Brown Ltd, the North East fabrication and engineering specialist, has become one of the only fabricators serving the energy sectors to achieve a highly-respected welding accreditation. The Stockton-on-Tees-based company has been awarded ISO 3834, the quality assurance for welding capabilities as part of its commitment to raise standards in the fabrication market. Achieving the accreditation is part of Francis Brown’s growth plans, which have included the reorganisation of its management structure to create capacity within the business to accommodate its planned growth. The company is targeting growth of around 70 percent on its current turnover of £5 million within the next three to five years. Delivered by the Welding Institute, TWI, the accreditation provides Francis Brown Ltd with high profile independent verification of compliance, confirmation of its welding and fabricating capability and staff competence. More commonly held by fabricators in the building and constructionrelated industries, it is emerging as a supply chain requirement from major oil & gas and chemical contractors. Having achieved the ISO certification, Francis Brown Ltd will target increased national and international business opportunities, particularly in Aberdeen where the company has recently secured contracts that have been part of projects for companies including Technip, Expro and Subsea 7. The 107-year-old company, which employs 60 people, is becoming a prominent supplier to the energy market, most recently in the renewables sector.

Improving standards of manufacturing and safety

are becoming increasingly vital to contractors and they

Its team completed the fabrication of a key section of the Wave Hub system, which has been manufactured by Hartlepool-based JDR Cables.

need to rely on suppliers that can deliver products In addition, the company undertook a major fabrication project for Wallsend-based SMD’s construction of the Atlantis Tidal Turbine, which is part of a major renewable energy test project in the North Sea.

and services that meet rising quality thresholds.

It is important for the supply chain to drive up standards, which will improve the reputation of suppliers among contractors and increase new business opportunities.

Jamie Brown, Managing Director of Francis Brown Ltd, said: “We have carved a strong niche for delivering high calibre fabrication services to the energy sectors and this accreditation will help improve our position in the market.


Telephone +44 (0) 1937 580400 Facsimile +44 (0) 1937 580499 www.gisltd.co.uk

Oil&GasCONNECT

13


Feature

DEEPWATER t's over a year now since the Deepwater Horizon accident. Eleven rig workers were killed and 16 injured in

I

the initial explosion. It took five months to get the oil spill under control during which time 5 million barrels of oil were released into the Gulf of Mexico, with drastic effects on the environment and livelihoods. In the aftermath of the incident the United States observed a moratorium on deepwater drilling for six months. What lessons have been learned and what effect has this disaster had on the offshore drilling industry?

After the Gulf of Mexico oil spill… Deepwater Horizon Timeline

14

2001: Deepwater Horizon, ultra-deepwater semi-submersible offshore oil drilling rig built, commissioned by R&B Falcon, (later part of Transocean) and registered in the Marshall Islands

22 April 2010: the burning rig sank, leaving the well gushing at the sea floor and causing the largest offshore oil spill in United States history

March 2008 - September 2013: Deepwater Horizon leased to BP

United States imposed a moratorium on deepwater drilling (lifted on 12 October 2010).

September 2009: Deepwater Horizon drilled the world's deepest oil well - vertical depth over 35,000 ft - in Keathley Canyon, 250 miles southeast of Houston, in 4,132 feet of water

15 July 2010: After various attempts, the leak was stopped on by capping the gushing wellhead, after it had released about 4.9 million barrels (780,000 m3) of crude oil

20 April 2010: a blowout while drilling at the Macondo Prospect, caused an explosion killing 11 crewmen and ligniting a fireball visible from 35 miles away

19 September 2010: the relief well process was completed, and the federal government declared the well "effectively dead"

Oil&GasCONNECT


Feature Images provided courtesy of the US Coastguard

Reports into the causes of the Deepwater Horizon explosion and oil spill. BP internal report "Bly Report" (September 2010) BP found the accident was the result of multiple causes, involving multiple companies. BP said: “its managers on the oil rig could have prevented the catastrophe had they picked up warning signs of a breach of the cement seal at the bottom of the well, and unusual pressure test readings shortly before the explosion.� It places much of the blame on Transocean which owned the Deepwater Horizon rig and Halliburton which managed the well-sealing operation. The report contains controversial conclusions surrounding the design of the well.

US Presidential Commission (January 2011) This report says the oil spill was an avoidable disaster caused by failures and blunders by all three of the main companies involved: BP, in overall charge of the well; Transocean, the contractor which owned and crewed the drilling rig; and Halliburton, responsible for the cement that failed to seal the well. Poor management and communication within and between the companies, as well as a number of outright errors, led to unnecessary and unrecognised risks being taken. As these contractors work nearly every offshore field in the world, this indicates systemic failure in the industry, says the report.

US Marine Board of Investigation (due August 2011) Marine Board of Investigation (the highest level of investigation following a maritime casualty) jointly run by the US Coast Guard and the Department of the Interior's Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), the federal agency responsible for overseeing development of energy and mineral resources on the Outer Continental Shelf. The final investigative report was originally due to be completed by March 2011 but it is still taking evidence and publication is not now expected until August 2011. Oil&GasCONNECT

15


Feature

Images provided courtesy of the US Coastguard

How has oil spill affected the UK offshore industry? In the UK, the Department of Energy and Climate Change (DECC) conducted a review of the existing safety and environmental regulatory regimes in the UK and found them to be "fit for purpose". However, it decided that annual inspections of drilling rigs were to double and insurance requirements were to be reviewed. In January this year the Energy Secretary announced that the number of offshore inspections undertaken each year will be raised from 60, the number before the Gulf of Mexico spill, to 150. DECC's environmental inspections of oil and gas installations are undertaken on top of safety inspections carried out by the Health and Safety Executive. Fifteen new members of staff will be recruited for DECC's Offshore Environmental Unit, and the increased costs will be recouped through fees charged to the industry.

of the Health and Safety Executive, the Maritime and Coastguard Agency and will be based on the life cycle of an offshore development. The House of Commons Select Committee report into the Implications of the Gulf of Mexico Oil Spill, published in January 2011 found: ■

16

Oil&GasCONNECT

The Offshore Pollution Liability Association (OPOL) limit of $250 million is insufficient.

The Government should recognise that oil spill response equipment is no substitute for a fully functioning blowout preventer.

challenging environment found in the seas West of Shetland.

disasters at sea. ■

There should be no moratorium on deepwater drilling in the UK Continental Shelf.

The flexible, goal-setting approach adopted by the Health and Safety Executive's Offshore Safety Division is superior to the regulatory regime under which the Deepwater Horizon incident occurred.

Concern about the ability of oil spill response equipment to function in the

Britain's oil and gas operators are ill prepared to deal with big

A comprehensive review into the UK's oil & gas offshore regime will begin once the findings of the US Presidential Commission report have been thoroughly analysed, and will report later this year once the US Maritime Board Investigation Report has been published. The review will be led by DECC with the collaboration

Calls for increased oversight of the UK offshore industry by the European Commission should be rejected in favour of multilateral approaches to regulation and oil spill response by relevant maritime countries.

Effects on BP In the days and months following

The Government needs to ensure that offshore oil and gas exploration companies have considered highimpact, low-probability events as part of the process by which they obtain a license to drill.

the disaster BP was a dirty word in

The HSE should consider prescribing specifically that blowout preventers on the UK Continental Shelf should have two blind shear rams.

dropped by 2 percent to £3.3 billion,

the US. CEO Tony Hayward was forced to resign and the company had to sell around £25 billion-worth of assets to foot the Gulf of Mexico clean-up bill. In the first quarter of 2011 company has profits while output was 11 percent. The group's share price is still about a third lower than it was before the disaster.


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Choosing AVEVA will be one of the best decisions you ever make.

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Feature

Underneath Morecambe Bay ver 40 years of

O

offshore gas has transformed UK gas supply. It's hard to

remember the days when there was no UK offshore industry, when oil was imported and when every town and city had a 'town gasworks' burning coal or coke to make gas which was stored in inflatable gas holders. The discovery of offshore gas has transformed city landscapes as town gas works and gas holders have been demolished and forgotten. The first significant discovery of UK offshore gas was made in 1965 in BP's West Sole field 70 kilometres off the East Yorkshire coast. This marked the beginning of developments of gas fields in the Southern North Sea, which within a decade were supplying almost all of Britain's gas.

Images provided courtesy of Centrica 18

Oil&GasCONNECT

Natural gas has different characteristics to town gas and switching over to using it required all gas appliances to be converted to use the new fuel. All the 13 million customers of British Gas (the monopoly corporation) all over the country were all affected by this. The conversion programme started in May 1967 near Burton on Trent in Derbyshire and was finally completed 10 years later. The cost of converting 40 million appliances (including 2,000 designs of gas cooker) was over ÂŁ550m. Organising the changeover to natural gas involved isolating areas or sectors from the gas distribution network while their equipment was adapted. In advance of the switchover, all the gas users were surveyed to establish what equipment was required to adapt their gas appliances. On the day of changeover everyone had to switch off their appliances and then the town gas was purged from the local mains system. Gas engineers then rushed around fitting the new parts in each house and business. It was only when this was complete that natural gas started feeding into the mains system and conversion was finished for that sector. It took up to a week to convert each sector.

The lesser known gas fields of Morecambe Bay The words 'North Sea' has become almost interchangeable with the UK offshore oil and gas industry, yet to the west of Britain, the land beneath the Irish Sea holds substantial gas reserves. However, exploration of these reserves has been slower and more difficult than exploitation of the North Sea resources. Currently fields in Morecambe Bay produce about 6 per cent of the UK's annual gas requirements, (up to 12 per cent of residential gas demand). The South Morecambe gas field was discovered in September 1974 twenty-five miles off the Lancashire coastal town of Blackpool. It has proved to be one of the UK's largest gas fields. In 1978 the British Gas Corporation started work on developing it. This required establishing new infrastructure, including pipelines (on and offshore), a gas terminal, storage facilities and an onshore base. The ports around Morecambe Bay - which include Fleetwood, Glasson Dock, Heysham and Barrow-in Furness - were all keen to attract the facilities, as were the local cities of Preston, Lancaster. A decision was taken to pipe the gas onshore at to the Cumbrian port of Barrow-in-Furness, at the northern tip of Morecambe Bay, while onshore facilities to service the gas rigs


Feature

would be developed further south at the Lancastrian port of Heysham. This has spread the economic benefits across a wide region. In 1985 the first gas from Morecambe Bay came ashore in 36 inch pipelines to a brand new gas terminal and storage facility at Barrow-in-Furness, in south west Cumbria. The site was on land used as a tip for pulverised fuel ash from the coal powered Roosecote power station. A new pipeline was built across country taking the gas nearly 50 miles east to Lupton near Kendal where it is mixed with North Sea to ensure consistent gas quality as it enters the national gas transmission system. The North and South gas fields are operated by Hydrocarbon Resources Limited (HRL), which is owned by Centrica (which also owns British Gas). The South Morecambe field consists of a Central Processing Complex (CPC) powered by four dual-fuel gas turbines, powered by the field's gas or low-sulphur diesel and five drilling platforms. It contains four fifths of the total gas in the Morecambe Bay area. The North Morecambe field was discovered in 1976. Production started in October 1994 via one unmanned platform. Although the two Morecambe fields are close together the gas from the two fields is slightly different as the North field has higher levels of carbon dioxide and nitrogen. A dedicated pipeline take the North Morecambe field gas to Roosecote where it is undergoes a three phase separation with carbon dioxide removed via an amine wash and nitrogen removed by a cryogenic distillation process. At this stage it can be mixed with the gas from the other field and piped across country.

New Morecambe Bay fields brought onstream in 2000 The Morecambe field is the second largest gas field in the U.K. The shallow depth of the reservoir complicated the development of the field and a slanted drilling rig had to be used to enable the development wells to reach the most distant parts of the reservoir. Exploration of Morecambe Bay has yielded more gas reserves which have now been developed. The Millom and Dalton gas fields, now owned by ConocoPhillips and operated by the Centrica Energy subsidiary Hydrocarbon Resources produce sweet natural gas through a platform and two subsea manifolds. The gas is fed through

to the Morecambe Bay North terminal for processing, including nitrogen removal. Millom was discovered in April 1982 while Dalton was discovered in April 1990 but, as was the case with Millom, it was not developed at the time. Production at the two fields came on-stream in 2000-2001. In June 2002, Burlington Resources (now owned by ConocoPhillips), received approval for its £185m Rivers Fields development. This consists of five marginal gas fields- Calder, Darwen, Crossans, Hodder and Asland and a new 50km-long, 24in-diameter pipeline to carry gas to a new onshore treatment plant next to the North Morecambe Terminal. The new pipeline was necessary because the gas is sour, containing hydrogen sulphide and nitrogen which is removed at the Rivers processing terminal. The processed gas is then routed to the existing North Morecambe Terminal for further processing and national network distribution. Field life is anticipated to be 15 years, with a peak gas production of 4.124 million cubic metres a day. Calder, which lies southwest of the South Morecambe field is the largest of these Rivers fields. It was discovered in February 1982. Who knows what the future will yield? Further exploration and developments in technology could mean continued development of Morecambe Bay gas resources, alongside the burgeoning number of wind-farms in the bay. However as Oil&GasCONNECT goes to press, Centrica has closed its Morecambe Bay gas fields for planned maintenance and says that in the light of recent Budget tax increases it is considering shutting them down. Watch this space‌

Oil&GasCONNECT

19


Diary of Events

DIARY of

EVENTS 2011 June

July

Mature Fields 2011:

Iraq Petroleum 2011 The next phase of current & future upstream opportunities - July 12th - 14th

Maximising Production and Extending Life-Cycle June 27th - 29th Mercure Aberdeen Ardoe House Hotel,

The Landmark Hotel, London Website: www.cwciraqpetroleum.com

Aberdeen, UK Website: www.maturefieldsevent.com

Optimising Oil & Gas Logistics Conference - June 28th - 30th TBC, London, United Kingdom Website: www.oilandgaslogistics.com

Copthorne Tara Hotel, London, United Kingdom. Website: www.smi-online.co.uk/ smiconferences/default.asp

Westminster Energy Forum - Annual Review of UK Energy Policy, Regulation & Delivery - June 29th

Semantics in Oil & Gas Workshop - July 18th

Clifford Chance, 10 Upper Bank Street, Canary Wharf, London Website: www.westminsterenergy.org

Copthorne Tara Hotel, London, United Kingdom. Website: www.smi-online.co.uk/ smiconferences/default.asp

Aberdeen Breakfast Briefing Opportunities & Challenges Facing the UK Supply Chain - June 30th Boyd Orr Hall, Aberdeen Exhibition and Conference Centre, Bridge of Don, Aberdeen Website: www.oilandgasuk.co.uk/events

The Oil Council hosts Drillers & Dealers Summer Ball June 30th Delfina, 50 Bermondsey Street, London Website: www.oilcouncil.com

20

Introduction to Project Finance Workshop July 15th

Oil&GasCONNECT

September Oil, Gas & Minerals - International Arbitration & Advocacy Skills Conference - September 5th - 9th Venue TBC, London, United Kingdom. Website: www.cepmlp.org/conferences/ brochures/ LondonArbitration.pdf


Diary of Events

September

October

SPE Offshore Europe Conference - September 6th - 8th

Offshore Decommissioning Conference 2011 - October 4th

Aberdeen Exhibition & Conference Centre

Doubletree by Hilton, Dunblane Hydro, Perth Road, Dunblane Website: www.decomnorthsea.com/events.cfm

Website: www.offshore-europe.co.uk/

Near Surface 2011 Conference September 12th - 14th

Arctic Oil Spill Conference October 4th - 5th

The University of Leicester, Leicester Website: www.eage.org

Future Communications & PR for the Energy Sector September 21st - 22nd The Grange Holborn Hotel, London Website: www.smi-online.co.uk/ smiconferences/default.asp

World Independent & Junior Oil and Gas Congress 2011 September 26th - 28th

Hilton London Paddington, 194 Pread Street, London Website: www.informaglobalevents.com/ division/ibc-energy

GBTA Europe Oil, Gas & Marine Travel Forum 2011 October 19th - 20th Thistle Altens, Aberdeen Website: www.gbtaeurope.org/go/events/oil_gas _and_marine.html

The Grange St. Paul's Hotel, London Website: www.terrapinn.com

14th annual Gas to Liquids Conference October 25th - 26th

The E&P Leaders Summit 2011 September 26th - 28th

Marriott Hotel Regents Park, London, United Kingdom. Website: www.smi-online.co.uk/smiconferences/ default.asp

Marriott Hotel-Grosvenor Square, London Website: www.terrapinn.com

7th Annual Global Local Content Summit September 26th - 29th The Bloomsbury Hotel, London Website: www.localcontentsummit.com

All dates were correct at time of going to print, however these may be subject to change. Please check first with the organiser. If you have any dates you would like to display in our next issue November - January 2012, please email editor@theconnectseries.co.uk

Oil&GasCONNECT

21


Feature

22

Oil&GasCONNECT


Feature

BUDGET BLUES HIT OIL & GAS INDUSTRY Most of us dread the annual budget suspecting that the government will have found new ways to hit our pockets. The March 2011 budget held a very unpleasant shock for oil companies as the UK government announced tax hikes targeting oil and gas producers. eorge Osborne, The Chancellor of the Exchequer announced on 23 March that the supplementary charge on corporation tax for oil producers would be increased from 20 per cent to 32 per cent, and said he plans to limit tax breaks on field abandonment costs. The move was designed to raise £2bn to fund a cut in fuel duty. The industry was outraged at being singled out for this treatment. Oil companies say that this will result in tax rates on UK oil and gas production of between 62 and 81 per cent. What has happened since then?

G

Disappointing quarterly results from big multinationals Quarterly results statements in April from BP and Shell gave the first clear indication of the likely costs to oil companies. BP said that it would take a $683 million writedown on its UK North Sea assets following the tax hike and expects a further $400 million hit when the field abandonment rules are in place. In a conference call with reporters Shell Chief Financial Officer Simon Henry said the tax changes would probably limit future investment in the region and prompt the premature end of production at some fields. 'The irony is we were just beginning to start looking again at what the opportunities were, for example, tight gas in the Southern North Sea and some of the heavier, more difficult oil.'

House of Commons Select Committee takes evidence on tax impact

Committee's s inquiry into the implications of the 2011 Budget on the UK's offshore oil and gas industry. Paul Warwick (ConocoPhillips) and Robin Davies (Subsea 7) were joined by Oil & Gas UK Chief Executive Malcolm Webb who all articulated concerns at the impact of the unexpected tax increase on investment and activity in the sector. After the evidence session, Malcolm Webb said, “The UK's offshore oil and gas industry remains of vital importance to this country now and in the coming decades for its contribution to the economy in terms of its hundreds of thousands of jobs, multibillion pound investments and tax revenues besides energy security. “Every £1 billion invested by our industry supports around 15,000 jobs. In a capital intensive industry such as ours, swings in investment could have a significant impact on employment.

Long term reductions in investment and production predicted 'The Effects of Budget 2011 on Activity in the UK Continental Shelf', a report published April 2011 by Professor Alexander G. Kemp and Linda Stephen of the University of Aberdeen, examines the economic effects of the increases on projects that could be developed over the next 30 years and on existing fields. It anticipates substantial long term reductions in field investment and oil/gas production resulting from the increased tax rates announced in the March budget. Mike Tholen, Oil & Gas UK's economics director, said that this research shows that the tax increase announced in the Budget could reduce UK oil and gas expenditure by up to £50 billion, investment by up to £30 billion and production by up to a quarter over the next three decades. He said, “This kind of impact is wholly expected following the sudden change which resulted in producers paying between 62 and 81 per cent tax on UK oil and gas production. “The tax change has damaged the industry's confidence and trust in the tax regime and that trust will take a long time to rebuild. Oil & Gas UK can only work with the Government to find ways to minimise the effects on investment, production, energy security and jobs.”

“Our primary message today was that this increasingly mature sector needs careful handling. It cannot take shocks such as the recent tax hit introduced by the Chancellor last month. These reduce the UK's relative attractiveness for investors who will now look to rival opportunities overseas where their capital will earn better returns.

Every £1 billion invested by our industry supports around 15,000 jobs.

The industry believes this tax regime will decrease investment, increase imports and drive UK jobs to other areas of the world. Industry representatives gave evidence to the Energy and Climate Change Committee in Westminster on May 4 as part of the House of Commons Select Oil&GasCONNECT

23


Feature

Centrica to shut Irish Sea gas fields? In May, Centrica, the owner of British Gas, said the increased taxes could lead it to shut one of its major gas fields. Centrica is closing three fields in Morecambe Bay for a month of maintenance, and says it might not reopen one of them. The company has closed the Morecambe Bay North and Rivers gas fields for about four weeks' planned maintenance. It is also shutting the South Morecambe field for an unspecified period of work, and the firm says it might not be restarted. 'UK oil and gas producing fields are now subject to some of the highest levels of tax in the world,' a spokesman said. 'At these higher tax rates, Morecambe's profitability can be marginal ... Accordingly, we may choose to buy gas for our customers in the wholesale markets in preference to restarting the field after planned maintenance.' Morecambe Bay produces about 6 per cent of the UK's annual gas requirements, or up to 12 per cent of residential gas demand, according to Centrica. 24

Oil&GasCONNECT

The company says the tax increase means its North Morecambe field is now subject to a 62 per cent tax rate and South Morecambe 81 per cent.

says the value of investments in

Tax increase leads to drop in confidence

to the highly positive business outlook

In another worrying development Oil & Gas quarterly UK's business index published in May show a dramatic drop in confidence throughout the UK upstream oil and gas industry in the first quarter of 2011. Oil & Gas

The trade association puts the blame

the UK continental shelf (UKCS) fell by 24 per cent overnight following the Budget on March 23 in marked contrast recorded in the fourth quarter of 2010. for this squarely at the door of the budget. The industry is currently lobbying hard to see these tax changes reversed, but it remains to be seen how effective this will be.


Law

THE OIL & GAS INDUSTRY and Naturally Occurring Radioactive Material

R

adioactive material is not perhaps the obvious choice of subject matter for an article on oil and gas, but Naturally

Occurring Radioactive Material (NORM) is encountered throughout the phases of oil and gas exploration, extraction, development and production operations. In this overview article, the first in a series relating to legal issues facing the oil and gas industry by Gareth Davies and James Phillips, the incidences of NORM will be discussed, along with some of the key regulatory, safety-related and waste issues.

26

Oil&GasCONNECT

Radioactive material, including Uranium and Thorium, has been present in the earth's crust in varying concentrations since its formation. This material can be transported from its subterranean reserves to the surface during the oil and gas extraction process. NORM may become concentrated in the drilling mud and sludge, or in insoluble radio-nuclides, in quantities which coat the insides of the extraction pipes, valves and separators. Some of these radio-nuclides are discharged with the produced water, (i.e. the residual water layer in untapped oil and gas reservoirs, along with any water that was pumped into the oil reservoir to bring the oil to the

surface) but equally some of the radio-nuclides will remain within the pipework, to be discharged at the on-shore terminal. The NORM scale which builds up within the pipework, causing the pipe bore to narrow, can significantly reduce the efficiency of the production equipment and consequently require periodic cleaning and removal. Some of the scale debris resulting from the cleaning of the larger pieces of equipment can be macerated and discharged at sea, whereas smaller plant may need to be taken to an on-shore authorised facility and refurbished.


Law

For certain parts of the plant, there will inevitably be residual NORM contamination. How this will be dealt with, whether onshore or offshore, will be determined by the installation's decommissioning plan and numerous site/installation-specific factors. Equipment which has come into contact with radioactive material can become contaminated and that contamination may be dispersed from site to site as equipment is re-used or re-deployed. Where activities, which involve concentrations of NORM, are not properly controlled, there is a resulting risk of environmental contamination and, in extremis, risks to human health through exposure. In December last year it was reported that an offshore industry firm was fined ÂŁ300,000 after fourteen of its workers on a North Sea installation were placed at risk of exposure to radiation, in breach of health and safety laws during a drilling programme. Whilst there is a need for constant vigilance when working or being exposed to radioactive sources, the radioactivity discharged from offshore oil and gas operations is not considered to have a significant environmental impact, particularly in comparison to manmade radioactive sources. In terms of human risk from exposure to NORM, there are two main ways this can occur;

In the UK the Ionising Radiations Regulations 1999 are designed to ensure that human exposure to ionising radiation arising from work activities, whether man-made or natural, is kept as low as reasonably practicable and in any event does not exceed specified dose limits. The regulations are made under the Health and Safety at Work Act 1974 and are enforced by the Health and Safety Executive. The key piece of UK legislation affecting radioactive sources and ionising radiation has been the Radioactive Substances Act 1993 (RSA 93). The RSA 93 addresses control over the security of radioactive materials and seeks to ensure that any appropriate and justified accumulation and disposal of radioactive waste occurs with minimum impact on the public and the environment. Whilst this Act remains in force in Scotland and Northern Ireland - regulated by the Scottish Environment Protection Agency and the Northern Ireland Environment Agency respectively since April 2010 in England and Wales it has (with the exception of the 18 Exemption Orders made under it) been incorporated into Schedule 23 of the Environmental Permitting Regulations 2010 (EPR 2010), under the regulation of the Environment Agency. Under the RSA 93, a number of Exemption Orders had been introduced over the years which provided

1 exposure to a source which remains outside the body Irradiation, or

exemptions from the need to register

2 exposure to radioactive material which is inside the body through having been absorbed, ingested or inhaled - Contamination

disposal of certain radioactive wastes.

The effects to health from irradiation will vary according to the degree of absorption, nature of the source material, exposure period and dose rate. However, in comparison with exposure to the high radiation levels from man-made sources, the levels of exposure from NORM are typically low, and in the case of very low-level ionising radiation, may not necessarily result in negative health consequences. That said, chronic doserelated exposure above safety limits may cause the long-term development of certain cancer forms. Safety regimes and personal protective measures therefore need to be in place and adhered to, in order to mitigate the risks of exposure and harm.

certain low activity radioactive sources, or to authorise the accumulation and This suite of Exemption Orders, believed out of date and unwieldy, have been under review through DECC's "Better Regulation" agenda. Natural radioactivity and substances of low activity (amongst others) are currently covered under the Exemption Orders, for example the Radioactive Substances (Phosphatic Substances, Rare Earths etc)

2011 has been published which replaces the 18 Exemption Orders in Scotland. That Order is also likely to come into force in October 2011. In much the same way that radioactive waste storage and disposal is regarded as a priority issue for both decommissioning and new build in the nuclear sector, issues of radioactive waste treatment, storage and disposal also affect the oil and gas sectors. This not only applies to materials accumulated during post operational clean-up or decommissioning, but also the legacy contamination affecting landfill sites, evaporation ponds and facilities used for equipment storage and cleaning. NORM contamination control procedures must be in place, and regulations relating to radioactive waste disposal must be adhered to. Pending disposal, short-term or interim storage may also be required. As with wastes generated by the nuclear industry, the ultimate objective of disposal is to ensure an on-going safe solution, which protects both human health and the environment. Any permanent disposal solution should address the risks of secondary contamination of the adjacent area, for example seepage into underground water. Current methods of NORM disposal in the oil and gas industry include land-based management solutions, offshore discharge, landfill and the use of salt caverns. Whilst the issues facing the oil and gas industry are not identical to those facing the nuclear industry, there is a degree of similarity and it is likely that lessons learned in one sector can be adapted and applied to the other. Indeed there may be sufficient similarities between the sectors to warrant a new approach, for example to offshore decommissioning, mirroring some of the best practice developed in the nuclear decommissioning field over the past decade.

Exemption Order, and the two Uranium and Thorium Exemption Orders. In terms of progressing the review of the Exemption Orders, in May this year, the Government produced its response to a consultation on this issue. Under the review programme it is anticipated that the new exemptions regime will come into force in October 2011 throughout the UK. In Scotland, the Radioactive Substances Exemption (Scotland) Order

If you would like to register to receive Burges Salmon's free nuclear law e-bulletin, or would like to suggest oil and gas related subjects for future articles please contact Gareth or James on direct line - 0117 307 6920 or email gareth.davies@burges-salmon.com direct line - 0117 902 7753 or email james.phillips@burges-salmon.com

Oil&GasCONNECT

27


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Feature

Getting to know David Binnie UK Managing Director of OPITO

Who are you? My name is Dave Binnie, the more formal David only seems to get used when I'm in trouble. I'm continuing on a 30 year journey in the energy industry, currently as the managing director of OPITO in the UK. I've held a number of diverse positions from engineer to leadership coach to business leader in the last 30 years, most of which with BP. I have also spanned the industry from oil to chemicals to renewables. However, work is only one part of my story and I have been privileged to dabble in many things, from playing guitar, climbing and sailing. Passions, for which my long suffering wife and three kids now more or less understand.

What brought you into the industry/your position? Growing up in Central Scotland, it was hard to miss engineering and big industry. I was good at making things and had an energy to learn how things worked. This has never left me and has been the main driving force behind my career so far. I came to my current role from a period in the Middle East, developing a world's first low carbon power plant.

Family status? I am married with three young kids.

Who is your hero and why? Most of my heroes are musicians. The one that stands out is Peter Gabriel. His musicianship and his stance on human rights is an inspiration.

What was your best holiday? Trekking in the Atlas mountains of Morocco

A 42 foot sailing boat moored in Bermuda.

What 3 words would best describe you? Energetic, creative, outgoing.

What talents would you like to have? Putting words to music.

What was your worst holiday? Don't have a worst, holidays are always good.

What is the best advice you've been given?

If you could time travel, where would you go and who would you want to meet? Monterey Music Festival, 1969, Jimi Hendrix.

Hold your ambition lightly.

What book are you reading at present?

What makes you laugh?

Longitude, a history of how longitude was calculated in the 17th/18th century.

A Billy Connolly DVD.

What do you do in your spare time?

Do you support any teams?

I have a lot of interests but sailing is the one I'm spending most of my spare time on these days.

The Scotland rugby team. I also have a soft spot for Arsenal.

What is your favourite music/artist?

What law/legislation would you like to see introduced?

I'm a big fan of blues and my guitarist of the moment is Joe Bonamassa.

Dramatic penalties for those who drop litter.

What inspires you? People who are consistent, positive, creative and work together to create great things.

If money was not a factor, what would you do/buy tomorrow?

What was the last film you saw at the cinema? True Grit

Where do you see yourself in 10 years? Sailing every week and still walking in the mountains.

Oil&GasCONNECT

29


Training

Turning the

Spotlight on

Competency 30

Oil&GasCONNECT


Training

R

ecent events worldwide have seen an increasing focus on safety and competency in the oil and gas industry.

With questions being raised both by those out with the sector and operators involved in increasingly more challenging and complex developments over the integrity of operations, the industry is responding by turning the spotlight on itself to evaluate whether its competency credentials are up to scratch. Ensuring companies are best placed to manage their competency issues is a key focus for OPITO, the industry-funded and employer-led skills, learning and workforce development body for the global oil and gas sector. Managing director David Binnie said: "The hard fact is that our industry operates in some of the most dangerous

environments in the world. While improvements in technology, workforce involvement, infrastructure care and rig operations have led to reductions in injuries and incidents, it is recognised that more still needs to be done if the industry is to achieve its vision of making the UK the safest place to work in the

resource management and the development of technical procedures. “Identifying gaps and developing skills enables managers to develop a safe and competent workforce and properly map out succession plans while employees develop attainable career paths: the employee benefits, the employer benefits and ultimately, the industry benefits. “But for oil and gas companies, many of whom operate in multiple countries across the globe, negotiating the medley of working practices and standards across continents and ensuring staff competency can be a minefield.” While many organisations are setting and maintaining their own high standards, a growing number are choosing to have a demonstrable and clear competence system that is judged on a regular basis by a recognised external authority. “This provides companies with a degree of assurance and quality - whilst potentially opening the door to a raft of new business opportunities. For major operators, auditing the performance of their key contractors against the same CMS criteria also ensures a standardised approach,” added Mr Binnie. The need to assure the competence of the workforce in the oil and gas sector has been underlined by a number of factors:

worldwide oil and gas sector. ■

The legal duty of companies to ensure that all employees are competent to carry out their work safely, especially where the work is safety critical

The need to demonstrate to the HSE that employees in safety critical roles are competent

The management of business performance through competence of employees

The demonstration of competency is increasingly becoming a requirement of new contracts. Mergers, alliances, partnering, outsourcing and right sizing, are changing the structure of the industry and the relationship between operators, contractors and service companies

Changing organisation structures, working patterns and manning arrangements.

“For an industry like ours where having the right skills and experience is paramount, having the right processes in place to oversee the competence of your workforce is vital and is not only desirable - it's essential.”

Rising costs, increased competition and time necessary to hire and train new employees have made the retention of existing personnel imperative to the bottom line

There is an increasing focus by oil and gas industry regulators and professional bodies on the need for formal processes for developing, maintaining and monitoring the competence of staff. OPITO works with companies to ensure they are aware of the options open to them and the benefits a good quality, effective competence management system (CMS) can bring in terms of safety and business performance. “Rising costs, increased competition and time necessary to hire and train new employees have made the retention of existing personnel imperative to the bottom line,” said Mr Binnie. “Competence is about sustained performance in the workplace rather than knowledge alone and is a business critical issue that can be linked to a number of areas including quality management, performance management, human

Oil&GasCONNECT

31


Training

It's a cliché to talk about people being the most important asset of a business, but it's true nonetheless.

A CMS utilises clearly defined standards of competence which are the building blocks of a structured assessment and verification process. A comprehensive CMS would have occupational standards for all job roles.

Total's Competency Assurance

Occupational standards define the competences which apply to job roles or occupations in the form of outcomes, including statements of performance and knowledge. They cover the main activities carried out within the occupation in question.

employed by Total on its sites to ensure

From an organisation's point of view, gaining independent approval of their CMS ensures that personnel become highly motivated, have the required knowledge, skills and attitude to operate and maintain safely all facilities with a high degree of competency, thus improving overall productivity and workforce satisfaction.

32

Management System (CAMS) was first deployed on the Dunbar platform before being rolled out to other sites. OPITO worked with Total to audit the system and the competence of contractors the same high quality performance across all operations. The CAMS uses national occupational standards for process, process engineering maintenance and management roles, as well as newly formed discipline-specific competence standards for any additional tasks. Managed online, it provides Total with real-time monitoring of employees training and competency progress. International drilling and engineering services company KCA DEUTAG has also undergone the audit process, becoming the first North Sea drilling

Martin Ellins, KCA DEUTAG UK Drilling Operations Country Manager said: “Within the drilling industry it is critical to have proven competent personnel who fully understand their roles and functions. Gaining OPITO approval ensures we are achieving this and helps us continually improve our business processes to provide safe, effective and trouble-free operations.” As the North Sea industry looks towards a projected rise in activity with a number of projects expected to progress in the next 12 months, OPITO has already seen evidence the industry is getting its ducks in a row with regards to CMS. “A skilled and competent workforce is vital to the health of the UK Continental Shelf in terms of ensuring safe operations, sustaining domestic oil and gas production

By striving to deliver the same high quality standards and training delivery, companies

contractor to achieve OPITO approval

help raise the bar for the offshore oil and gas industry around the world.

Their standards are based on the

and supporting the export of the knowledge and expertise that has grown up with it,” said Mr Binnie.

National Occupational Standards

“It's a cliché to talk about people

TOTAL E&P UK Ltd was the first major oil and gas operator worldwide to achieve OPITO approval for its CMS in June 2010.

in Offshore Drilling Operations and

being the most important asset of

One of the largest operators in the UK sector of the North Sea, the company wanted to ensure that personnel on and offshore are performing their roles to best practice criteria. Oil&GasCONNECT

for its internal CMS.

developed for industry by OPITO in line

a business, but it's true nonetheless.

with recognised competency processes.

We are seeing evidence of a real thirst

They focus on an individual's ability to

in the industry to ensure we have the

competently carry out their job role

right people with the right skills in

rather than simply their knowledge

the right jobs and ensure our safety

and understanding and are achieved

and competency credentials going

over a sustained period.

forward.”


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