Introduction of a hydraulic rig – how to lose friends & influence people © Contact Energy Limited 3 April 2013 Document title 2 Where are we? 3 April 2013 Document title 3 Background to the introduction of a new hydraulic rig to NZ MB Century drilled more than 50 wells and over 100,000m with Rig 27 since 2005 © Contact Energy Limited 3 April 2013 Document title 4 It’s not broken so why fix it? • • • • To help us achieve our vision of zero harm To be able to drill closer to town To drill more efficiently Benefits listed in RFP: – Potential reduction in incidents by 60% – Slightly smaller footprint – 15% – Quieter – stated 45 dBA at 250m and no squeaky brake! – Quicker drilling times – Reduced rig move loads and shorter moves (6) days – Reduced crane dependency © Contact Energy Limited 3 April 2013 Document title 5 Rig Specification – HH350B • Rig, HPU, Generators, MCC, PCR VFD, Mud System, TDU, CRT made in Italy • BOP’s and Koomey made by T3 in N America • Maximum Pull 350 tons (700,000 lbs) • Maximum torque 4910 daNm (36,200 lbft) • Range 3 singles • Mast 16.6m stroke • 30 ton pull down • 37” rotary table • 3600m 5-1/2”pipe bin capacity • 30” casing capability • 3 no. 1000HP mud pumps • 5 mud tanks - 363m3 (2280 bbl) • 4 no. Generator Sets 1485 kVa, 1757 bhp • Skidding system – 3 wells © Contact Energy Limited 3 April 2013 Document title 6 Assurance Framework – 5 phases 1 • Procurement & Staffing 2 • Well Site Selection, preparation & handover 3 • Commission & Integrate Rig 4 • Drill Well One (WK321) 5 • Drill Well Two (T8C01) © Contact Energy Limited 3 April 2013 Document title 7 Critical Success Factors for Commissioning Safety – zero harm Future Well Programme No additional cost © Contact Energy Limited 3 April 2013 Document title 8 Procurement & Staffing – what was good • Sign off by Moduspec as part of pre-spud • 60 day on-site Drillmec support • OEM parts specified for key components – lift path, well control, mud pumps, pressure control, safety systems • Contract specification priority over manifest • Staffing selection and training completed on time © Contact Energy Limited 3 April 2013 Document title 9 Procurement & Staffing – what wasn’t so good Long contract negotiations (9 months +) Control of manufacturing process only ½ way into the build Desired modifications could not be achieved (carrier axle configuration) Improvements such as better secondary retention in mast couldn’t be achieved Definition & understanding was weak for Best Practice, FAT, SIT, SAT No requirement to supervise manufacturing or FAT testing Specification missed 16” casing from contract Unrealistic expectation on both sides that 1st well will be up to speed No contractual requirement for operational commissioning What constituted competency was difficult to reach agreement on Specify exact standards especially where ambiguity or multiple regs. exist – to ensure rig is built to NZ/AU standards & regulations • Clearly define what needs to be installed for spud – e.g. Pipe bins – up or down, all or some, rig release bins and pipe handler up or down? • Clearer notification requirements of defects – how, when, what? • • • • • • • • • • • © Contact Energy Limited 3 April 2013 Document title 10 Manufacturing – the bad bits • • • • • • • • • • • • You only get what you ask for (CE mark, toolshed, paint) Some commissioning in the factory was poor Pipe handler was never commissioned or tested satisfactorily in Italy Pipe handler did not fit to rig without modification Support beams for rig carrier did not fit Mud pumps have caused some problems and delays Lack of information regarding interlocks and P&ID diagrams Lack of manuals for much equipment including H2S system Suction line in wrong place from supercharger skid to pumps Torque wrench and power tong clashing Numerous minor issues Poor handrail fit © Contact Energy Limited 3 April 2013 Document title 11 Shipping Scheduled for 8 weeks but took 12 Contractor had no control over shipping Boat was very slow Heavy damage sustained in transit – pipe handler requiring significant repairs • Customs clearance was very smooth with unloading straight onto trucks • Several minor items missing on arrival • • • • © Contact Energy Limited 3 April 2013 Document title 12 Simulator Training Italy © Contact Energy Limited 3 April 2013 Document title 13 Training • Contractor sent crews from AD up to Italy • Electricians and Mechanic training • Contact sent Company Man, Senior DE and Drilling Manager • Training was high quality and comprehensive • Opportunity to meet senior Drillmec staff • Opportunity to ask DWOP questions • Drillmec flew trainers to NZ to train remaining crews and third parties in New Zealand • Short shift crews during commissioning and 1st well so they get good exposure to operations © Contact Energy Limited 3 April 2013 Document title 14 WellSite Site Selection Well Selection, Preparation & Handover © Contact Energy Limited 3 April 2013 Document title 15 Well Site Selection, Preparation & Handover • • • • • • • • • • The perfect site? Very close to office Most predictable geology and drilling in the Wairakei Field Good offset information High profile placement for public viewing Easy to control visitors No nearby residential neighbours Close to Contractor yard Laid up our workover Rig 16 for the period to concentrate on Rig 32 introduction Optimisation of drill layout carried out © Contact Energy Limited 3 April 2013 Document title 16 Commissioning • Commissioning period extended for 2 wells • Contact and Contractor had very different ideas about what a commissioning plan looked like and who was responsible • Initial resistance from third parties to engage in the process (BAU to solve on the job) • Contractor initial commissioning planning was poor • Had suspension clauses in third party contracts to cover extended commissioning • Lots of questions raised in DWOP’s • Operational commissioning critical – e.g. running casing, lifting ops, wireline • Amount of certification and data to review is huge • Daily meetings once rig arrived • Additional Company Men used in Assurance role during commissioning • Sought advice and experience of other operators around the world • PLC & calibration issues required attendance by Drillmec from Italy (10 day delay) © Contact Energy Limited 3 April 2013 Document title 17 Assurance • Vital to integrate as much as possible and test at factory prior to shipping • Factory Acceptance Testing paperwork was average quality – 1600 pages • MBC employed Moduspec to witness FAT testing – insufficient and several visits should have been made • Lack of Drillmec recommendations for FAT, SAT and SIT testing • Contact employed Moduspec to provide Electrical, Mechanical and DROPS inspections and surveys – part of pre-spud • Defect reporting was critical to keep in touch with delays • Daily commissioning report updates vital © Contact Energy Limited 3 April 2013 Document title 18 People • MBC had up to 8 FTE’s during the mid to late stages of procurement • Contact employed a contract Project Manager with 20+ years experience • Contact team involved Project Sponsor, 2 Company Men, 5 Drilling Engineers, admin © Contact Energy Limited 3 April 2013 Document title 19 Manufacturer Drillmec SupportSupport © Contact Energy Limited 3 April 2013 “It could have been better” MB Century 24 hour helpline was called at 10am Italian time on a Saturday morning. The answerphone message said please call back Monday at 08.30 as the office is now shut! Document title 20 Hand Rail Incident leading to Injury • Hand rails were not well manufactured with poor fit, gaps, independent movement and insufficient toe boards. • This was identified early on but deemed as a low risk to be fixed at a later date. • A Company Man descending the shaker stairs caught his hand on the temporary fix of rope and ruptured his bicep tendon requiring surgery and resulting in an LTI. © Contact Energy Limited 3 April 2013 Document title 21 Communication • • • • • • Sharepoint set up by Contractor for them to upload documentation Team grew all the time and people got missed off important emails Decisions being made all the time – vital to use issues and decision registers Should have implemented Acconex! Version control by Contractor was poor Project Administrator was invaluable in arranging meetings, minutes etc. © Contact Energy Limited 3 April 2013 Document title 22 Time & Cost It takes longer than expected to build, ship and commission Making changes during manufacturing added considerable build time in the factory The ship was very slow due to the level of shipping contract chosen Drillmec added an extra unexpected 10 days to commissioning for PLC and electrical issues to be resolved due to lack of commissioning in Italy • NZ$500k was budgeted • It cost NZ$1M to commission • • • • © Contact Energy Limited 3 April 2013 Document title 23 Analysis of Performance • Our in-house data analyst looked at time taken to drill sections, run casing etc. for comparison with historic wells (36K data points) • The well was drilled at P57 • Very little down time during well one • 96% operating rate • 2% rig repair • 2% code zero • Cementing P18 and lost circulation P16 (good choice of site) • Some flat spots that need working on: • Casing operations – P87 – singles so need to run coupled 24” pipe rather than weld • Tripping – P74 • BOP’s - P92 © Contact Energy Limited 3 April 2013 Document title 24 HSE Dedication of HSE Staff was a big factor in the successful introduction © Contact Energy Limited 3 April 2013 Document title 25 HSE • Development of SWMS – huge improvement over original SOP’s. About 80 new SWMS produced. Good use of photos. • Development of DROPS photo book – big improvement • Development of Lift plan book including third parties • Many items in mast not subject to secondary retention • Crew used step backs instead of JSA’s or developing SWMS • Trades now use JSA’s and step backs • Dedicated HSE personnel required for SWMS development © Contact Energy Limited 3 April 2013 Document title 26 Improvements Made • • • • • • • • 3rd party integration and layout optimised to keep worst noise in one area Better layout reduced trip hazards Separate fuelling for third parties stopped fuel transfers New installation solutions for Mud Logging – safer and more robust More cement storage for larger jobs Additional crew for cementing to manage fatigue better Silenced booster for Air Drilling Silenced Cementing Unit will be procured © Contact Energy Limited 3 April 2013 Document title 27 Key risks & issues remaining - Understanding of PLC issues and implications to operations Lack of definitive competency approach Level of defects has continued Ability to operate rig at production performance Safety across all of the above Unable to make up 36” BHA CMUT – can’t run 13-3/8” Geoconn, 18-5/8” & 24” casing issues Topdrive gooseneck redesign required to better handle rough drilling Lack of storage on or near floor Unable to set bend in motors Control switches to the mixing pumps at ground level © Contact Energy Limited 3 April 2013 Document title 28 Summary of learnings • • • • • • • • • • Reminding yourself that your role is one of assurance Set expectations as clearly as possible in the contract Use shock subs to protect TDU Ensure that the contractor understands their obligations Include lists of standards pertaining to the operations Its going to take a long time! Involve the subject matter experts at early specification and design stage There was a steep learning curve for both Contractor and Contact teams MBC relied heavily on key individuals with little contingency available Revisit DWOP’s regularly as knowledge increases © Contact Energy Limited 3 April 2013 Document title 29 We have drilled the first well at P50 cost and time, no-one got hurt during initial commissioning and we are all still friends! © Contact Energy Limited 3 April 2013 Document title 30 © Contact Energy Limited 3 April 2013 Document title 31