Rig Start Manual

WELLS MANUAL

Copyright Shell Group of Companies. No reproduction or networking permitted without license from Shell. Not for resale

RIG START MANUAL

WS 38.80.32.32-Gen. Revision 0.0

Custodian

ter Haak, Arjan GSNL-PTW/CR

Author(s)

ter Haak, Arjan GSNL-PTW/CR

Owner

Taff, Cindy D SIEP-PTW/D

Release Date

March 1 , 2014

Go-Live Date

March 1 , 2015

Exceptions to Go-Live Date

N/A

Valid To

March 1 , 2017

st st

st

Shell standards and manuals are intended to direct Shell employees in the performance of their duties. They are not intended for investors, and should not be relied on when considering whether to buy, retain or sell shares in any Shell Company. This document is classified as Restricted. Access is allowed to Shell personnel, associate companies and contractors working on Shell projects who have signed a confidentiality agreement with Shell. Copyright Shell Global Solutions International B.V. 2014. This document contains information that is classified as EAR99 and, as a consequence, can neither be exported nor reexported to any country which is under an embargo of the U.S. government pursuant to Part 746 of the Export Administration Regulations (15 C.F.R. Part 746) nor can be made available to any national of such country. In addition, the information in this document cannot be exported nor re-exported to an end-user or for an end-use that is prohibited by Part 744 of the Export Administration Regulations (15 C.F.R. Part 744).

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TABLE OF CONTENTS 1

INTRODUCTION .................................................................................................................... 1 1.1 SCOPE ......................................................................................................................... 1 1.2 DISTRIBUTION, INTENDED USE, AND REGULATORY CONSIDERATIONS .......... 1 1.3 REQUIREMENT STATEMENTS .................................................................................. 1 1.4 DEFINITIONS ............................................................................................................... 3 1.5 ACRONYMS ................................................................................................................. 4 1.6 CROSS-REFERENCES BETWEEN SECTIONS WITHIN A GLOBAL WELLS MANUAL ....................................................................................................................... 6 1.7 SUMMARY OF MAIN CHANGES ................................................................................ 6

2

SUBSURFACE DOCUMENTS SUMMARY .......................................................................... 7

3

SHALL[WELLS] STATEMENTS SUMMARY ....................................................................... 8

4

RIG START STRUCTURE ..................................................................................................... 9 4.1 OVERVIEW .................................................................................................................. 9 4.2 MANUAL LAYOUT ....................................................................................................... 9 4.3 GOVERNING DOCUMENTATION ............................................................................. 10

5

THE RIG START PROCESS ............................................................................................... 11 5.1 GENERIC PROCESS MODEL ................................................................................... 11 5.2 SCALABILITY ............................................................................................................. 12 5.3 RIG START TIME PLANNER ..................................................................................... 13

6

RIG START PROJECT MANAGEMENT............................................................................. 14 6.1 TEAM SET-UP AND RESOURCE IDENTIFICATION................................................ 14 6.2 LOCAL RIG START TEAM (LRST) ............................................................................ 14 6.3 START PROJECT MANAGEMENT TOOLS .............................................................. 18 6.4 START PROJECT MANAGEMENT REQUIREMENTS BY PHASE .......................... 19

7

STAKEHOLDER MANAGEMENT ....................................................................................... 21 7.1 STAKEHOLDER IDENTIFICATION AND ENGAGEMENT ........................................ 21 7.2 LOCAL CONTENT MANAGEMENT AND REQUIREMENTS .................................... 22 7.3 PERMITTING AND CERTIFICATION ISSUES .......................................................... 22 7.4 SOCIAL PERFORMANCE ......................................................................................... 22 7.5 STAKEHOLDER MANAGEMENT REQUIREMENTS BY PHASE ............................. 23

8

CONTRACTING PROCESS INTERFACE .......................................................................... 24 8.1 TIME AND ACTIVITY PLANNING .............................................................................. 24 8.2 INTERFACES WITH THE COMMERCIAL PROCESS .............................................. 25 8.3 SUBLETS ................................................................................................................... 28 8.4 ALLIANCES ................................................................................................................ 28 8.5 CONTRACTING PROCESS BY PHASE ................................................................... 28

9

HSSE PLANNING AND IMPLEMENTATION ..................................................................... 30 9.1 IMPLEMENTATION STRUCTURE ............................................................................ 30 9.2 INTERFACE/BRIDGING DOCUMENT ...................................................................... 31 9.3 HSSE PLANNING ...................................................................................................... 31 9.4 HSE MS ELEMENT 1 - LEADERSHIP AND COMMITMENT .................................... 33 9.5 HSE MS ELEMENT 2 - POLICY AND STRATEGIC OBJECTIVES .......................... 33 9.6 HSE MS ELEMENT 3 - ORGANISATION, RESPONSIBILITIES, RESOURCES, STANDARDS AND DOCUMENTATION .................................................................... 34 9.7 HSE MS ELEMENT 4 - HEMP - SAFETY .................................................................. 41 9.8 HSE MS ELEMENT 4 - HEMP - HEALTH.................................................................. 42 9.9 HSE MS ELEMENT 4 - HEMP - ENVIRONMENT ..................................................... 43 9.10 HSE MS ELEMENT 4 - HAZARDS AND HEMP - SECURITY................................... 45 9.11 HSE MS ELEMENT 5 - PLANNING AND PROCEDURES ........................................ 45 9.12 HSE MS ELEMENT 6 - IMPLEMENTATION AND MONITORING ............................ 49 9.13 HSE MS ELEMENTS 7 AND 8 - AUDIT AND REVIEW ............................................. 50 9.14 HSSE MANAGEMENT BY PHASE ............................................................................ 51

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10

VALUE ASSURANCE ......................................................................................................... 53 10.1 VALUE ASSURANCE PROCESS FOR RIG START ................................................. 53 10.2 NEW-BUILD RIGS AND MAJOR UPGRADES .......................................................... 64 10.3 REINSTATING STACKED RIGS................................................................................ 65 10.4 STACKING RIGS ....................................................................................................... 65 10.5 VALUE ASSURANCE BY PHASE ............................................................................. 65

11

LOCATION INTERFACE MANAGEMENT .......................................................................... 67 11.1 ONSHORE DRILLING RIGS ...................................................................................... 67 11.2 OFFSHORE RIGS ...................................................................................................... 68 11.3 LOCATION INTERFACE MANAGEMENT BY PHASE .............................................. 71

12

LOGISTICS AND MOBILISATION ...................................................................................... 72 12.1 LOGISTICS FOCAL POINT IDENTIFICATION.......................................................... 72 12.2 THE ROLE OF LOGISTICS IN RIG START .............................................................. 73 12.3 NEW-BUILD RIG MOBILISATION ............................................................................. 74 12.4 RECORDING OF MILESTONES ............................................................................... 75 12.5 WASTE MANAGEMENT PLANNING ........................................................................ 75 12.6 RIG IT CONNECT ...................................................................................................... 75 12.7 LOGISTICS MANAGEMENT BY PHASE .................................................................. 76

13

START FOR PERFORMANCE............................................................................................ 78 13.1 SHELL-BASED PROGRAMS AND PRACTICES ...................................................... 79 13.2 CONTRACTOR-BASED PROGRAMS ....................................................................... 83 13.3 RIG START AFTER ACTION REVIEW (AAR) ........................................................... 84

14

REFERENCES ..................................................................................................................... 86

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1

INTRODUCTION 1.1

Scope This Rig Start Manual describes the main processes for starting rigs and provides access to example documentation and tools, which have been utilised in other areas. In 1 combination with the ABC Guide for Rig Start and available information on the Global 2 Rig Start Team (GRST) website, it provides a framework of requirements to be followed to ensure a consistent approach to rig starts.

1.2

Distribution, Intended Use, and Regulatory Considerations This document is classified as restricted. Access is allowed to Shell personnel, associate companies and contractors working on Shell projects who have signed a confidentiality agreement with Shell. Authorised access to any Global Wells Manual does not constitute authorisation for access to other documents, data, or information to which the Global Wells Manual may refer. This Rig Start Manual is intended for all Wells staff involved in the process of mobilising and starting a new drilling rig. When implementing Global Wells Manuals, a Management of Change (MOC) process shall be utilised when appropriate at a line of business (LoB) level to ensure manual compliance. If LoB or local regulations exist, and contain requirements that are more stringent than the relevant Global Wells Manual, the regulatory requirements shall be followed.

1.3

Requirement Statements SHALL[WELLS] (uppercase): These statements designate a requirement intended to reduce or eliminate the occurrence of a process safety risk ranked as Risk Assessment Matrix (RAM) red or yellow 5A or 5B in Figure 1. To deviate, approval is required from the designated Technical Authority (TA)1 [per the Discipline Controls and Assurance Framework (DCAF)] and endorsement is required from the manual’s Custodian [typically Principal Technical Expert (PTE)] of this manual. Deviations shall be risk-assessed and logged in the Facility Status Reporting (FSR) tool. A process safety risk is a hazard that can give rise to major accidents involving the release of potentially hazardous materials, release of energy, or both. The deviation approval is time-constrained per Table 1 and shall not exceed 12 months prior to additional approval requirements.

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INCREASING LIKELIHOOD

Reputation

Assets

Environment

A People

SEVERITY

CONSEQUENCES

Never heard of in the industry

0

No injury or health effect

No damage

No effect

No impact

1

Slight injury or health effect

Slight damage

Slight effect

Slight impact

2

Minor injury or health effect

Minor damage

Minor effect

Minor impact

3

Major injury or health effect

Moderate damage

Moderate effect

Moderate impact

4

PTD or up to 3 fatalities

Major damage

Major effect

Major impact

5

More than 3 fatalities

Massive damage

Massive effect

Massive impact

B Heard of in the industry

C

D

Has happened in the Organisation or more than once per year in industry

Has happened at the Location or more than once per year in the Organisation

E Has happened more than once per year at the Location

Figure 1 - RAM Shall: The word “shall” (lowercase) indicates a mandatory requirement that is ranked other than process safety risk RAM red or yellow 5A or 5B defined above. TA2 approval is required for deviation against a “shall” requirement. Custodian (PTE) endorsement can be requested at the discretion of the TA2. The deviation shall be forwarded to the Custodian (PTE) for tracking through the online feedback tool. The deviation approval is time constrained per Table 1 and shall not exceed 12 months prior to additional approval requirements. Should: The word “should” indicates a preferred solution/option with no mandatory requirement. Table 1 - Time-Based Summary for Deviation and Derogation Requests Deviation

Derogation

Approver of Original Request

Approval of Extension at Year 1

Approval of Extension at Year 2

DEM1 SHALL[PS]

TA1

TA0

TA0*

DEM2 - PSBRs

CEO

CEO

CEO

TA1

TA0

TA0*

Shall TA2 * Endorsement of Chief Wells Engineer required.

TA1

TA0

SHALL[WELLS]

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1.4

Definitions The following key terms are used within this manual: General Terms Definition Company

The Company is the party that initiates the project and ultimately pays for it. The Company may also include an agent or consultant authorised to act for, and on behalf of, the Company.

Contractor

The general term for an individual or firm that has entered into a legal contract to provide equipment, materials, or services to the Company.

Derogation

Derogation is any non-compliance with a Design and Engineering Manual (DEM)1 or DEM2 requirement statement. Several DEM1 documents apply to Wells activities. When not following requirements of DEM1 documents or DEM2 Process Safety Basic Requirements (PSBRs), the derogation procedure mandated in the applicable Control Framework Manual shall be followed.

Deviation

Deviation is any non-compliance with a SHALL[WELLS] or shall requirement statement. Not meeting either of these requirement statements requires the appropriate level of approval as per DCAF.

Discipline Leadership Team (DLT)

The DLT is comprised of the LoB Discipline Leads and the functional Vice Presidents (VPs) at a global level and is led by the VP Wells Discipline.

Exceptions to Go-Live Date

List of requirements and date which these specific requirements within the Global Wells Manual shall become mandatory, where the go-live date differs from the overall Wells Manual go-live date.

Go-Live Date

Date on which Global Wells Manual’s requirements shall become mandatory and, if not followed, shall require a deviation.

Line of Business (LoB)

Thematic LoB in Wells organisation, which includes Operated, Unconventionals, Integrated Gas, Deepwater, Arctic and joint ventures (JV)/non-operated ventures (NOVs).

LoB Discipline Leads

Individuals who lead their discipline community at a LoB level and set the local standards using the global standard as a minimum, adding local requirements when required or desired.

Manual

Global Wells Manual developed with input from the LoB(s) and approved by the DLT. It establishes requirements, guidelines, and good practices for Wells global activities.

Next Review Date

The manual’s next scheduled revision. The manual may be revised prior to this date as conditions warrant. When using Global Wells Manuals, only the electronic copy is controlled while printed or saved copies are not.

Principal Technical Expert (PTE)

Recognised technical experts with deep technical knowledge and significant influence on the business in their specific field. PTEs’ primary role is to provide global technical consultancy support in their specific fields and lead a Common Interest Network (CIN) comprised of Subject Matter Experts (SMEs) from each LoB.

Subject Matter Expert (SME)

Recognised technical experts with deep technical knowledge and significant influence on the business in their specific field. SMEs’ primary role is to provide LoB technical consultancy support in their specific fields and participate in the CIN comprised of SMEs from each LoB.

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1.5

Acronyms The following acronyms are used within this manual. AAR After Action Review

LIRA Logistics and Infrastructure Resource Assessment

AFE Authorisation for Expenditure

LOA Letter of Award

ALARP As Low As Reasonably Practicable

MGS Mud-Gas Separator

API American Petroleum Institute

LOI Letter of Intent

BOD Basis of Design

LOPC Loss Of Primary Containment

BOP Blowout Preventer

LRST Local Rig Start Team

BOSIET Basic Offshore Safety Induction & Emergency Training

LSR Life Saving Rules

CP Contracting and Procurement

LTI Lost Time Incident

CWI Completion and Well Intervention

MOC Management of Change

CFC ChloroFluoroCarbon

MODU Mobile Offshore Drilling Unit

CIN Common Interest Network

MOPO Manual of Permitted Operations

COC Certificate of Conformance

MPD Managed Pressure Drilling

COS Certificate of Service

MSDS Material Safety Data Sheet

CWOP Complete-the-Well-On-Paper

NGO Non-Governmental Organisation

DCAF Discipline Controls and Assurance Framework

NORM Naturally-Occurring Radioactive Material

DEM Design and Engineering Manual

NOV Non-Operated Venture

DEP Design and Engineering Practice

NPT Non-Productive Time

DNV Det Norske Veritas

OBM Oil-Based Mud

DTL Deliver-the-Limit

OCIMF Oil Companies International Marine Forum

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ERP Emergency Response Plan

OEM Original Equipment Manufacturer

DWOP Drill-the-Well-On-Paper

OIM Offshore Installation Manager

DWOS Drill-the-Well-On-Simulator

OSRP Oil Spill Response Plan

EP Exploration & Production

OU Operating Unit

ESD Emergency Shutdown

OVIQ Offshore Vessel Inspection Questionnaire

eWCAT electronic Well Control Assurance Tool

P&ID Piping and Instrumentation Diagram

FMEA Failure Modes and Effects Analysis

POOH Pull Out of Hole

FPSO Floating Production, Storage and Offloading

PPE Personal Protection Equipment

FSR Facility Status Reporting

PTE Principal Technical Expert

GMAS Shell Global Maritime Assurance System

PTW Permit-to-Work

GRST Global Rig Start Team

QA/QC Quality Assurance/Quality Control

GWDP Global Well Delivery Process

R&R Roles and Responsibilities

GWMS Global Well Management System

RACI Responsible, Accountable, Consulted, and Informed

HazID Hazard Identification

RAM Risk Assessment Matrix

HazOP Hazard and Operability

rDTL revitalised Deliver-the-Limit

HEMP Hazard and Effect Management Process

ROV Remote-Operated Vehicle

HPHT High-Pressure High-Temperature

RTOC Real-Time Operating Centre

HRA Health Risk Assessment

RWP Rated Working Pressure

HIPO High Potential

SCBA Self-Contained Breathing Apparatus

HSSE Health, Safety, Security and Environment

SD Sustainable Development

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HSE MS Health, Safety, Security, and Environment Management System

SWP Safe Working Pressure

HUET Helicopter Underwater Escape Training

TA Technical Authority

IADC International Association of Drilling Contractors

TEH Technical Expertise Holder

IWCF International Well Control Forum

TOR Terms of Reference

JHA Job Hazard Analysis

TPW Temporary Pipework

JSA Job Safety Analysis

TRC Total Reportable Cases

JV Joint Venture

TROI Total Reportable Occupational Illness

KPI Key Performance Indicator

UBD Underbalanced Drilling WCCP Well Control Contingency Plan

1.6

Cross-References between Sections within a Global Wells Manual If the Global Wells Manual contains cross-references to other parts of the same Global Wells Manual, the referenced section number shall be included in parentheses ( ). A cross-reference to a section of an appendix indicates the appendix number and the section number.

1.7

Summary of Main Changes No changes have been implemented on this manual (new version).

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2

SUBSURFACE DOCUMENTS SUMMARY •

Site Specific Assessment of Mobile Offshore Jack-up Units for Project Engineering & Well 3 Engineering Activities .

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3

SHALL[WELLS] STATEMENTS SUMMARY There are no SHALL[WELLS] statements that apply to this manual.

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4

RIG START STRUCTURE 4.1

Overview The process of mobilising and starting a new rig is complex and critical. It involves considerable organisational expenditure in terms of cost, time and resources. For organisations where rig start is not a regular activity, or for those where available resources are limited, there is an increased operational or Health, Safety, Security and Environment (HSSE) exposure from a poor rig start. There are 3 fundamental elements in a successful rig start: •

People

•

Equipment

•

Systems

These three elements will be evaluated with increasing level of detail at each project phase and will focus on HSSE, compliance (contract/standards) and operational readiness. A smooth and effective rig start requires competent “People”, operating well-maintained “Equipment” within the confines of established and effective “Systems”. NOTE 4.2

The process described herein can also be utilised for other new units within Wells (e.g., workover units, well intervention and support units etc.).

Manual Layout This manual is structured around the main activities associated with a rig start. These activities have been listed as a series of logical sub-processes (Table 2), which are sequentially covered in the sections of this manual. Table 2 - Rig Start Sub-Processes ID

Sub-process

1.0

Start Project Management

2.0

Stakeholder Management

3.0

Contracting Process Interface

4.0

HSSE Planning and Implementation

5.0

Value Assurance

6.0

Location Interface Management

7.0

Logistics and Mobilisation

8.0

Start for Performance

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4.3

Governing Documentation 4

All rig start activities are governed by the HSSE & SP Control Framework , with references to corporate Exploration & Production (EP) and Contracting and Procurement (CP) documentation, as well as supporting information which can be found in the Rig Start Toolkit located on the GRST website. With the mandatory use of the HSSE & SP Control Framework, a number of EP Standards (95 and 2005) should now be used for guidance purposes only. To determine the current applicability status of individual EP Standards, reference should be made to the HSSE & SP Control Framework Implementation website. The process safety requirements are covered under HSSE & SP Control Framework, Element 03.

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5

THE RIG START PROCESS One of the most challenging aspects to starting rigs is that every rig start is a unique event. The combination of individual rig and rig type (onshore, drillship, semi-submersible, jack-up, etc.), individual company and contractor personnel involved, geographic location, and contractual and commercial arrangements, typically means that a large amount of variables come into play. These factors present a significant challenge to structuring a single process, sufficiently detailed to cover the needs of such widely-varying situations, but concise enough to remain usable. 5.1

Generic Process Model To procure, contract and bring a rig into service, various sets of sub-processes can be grouped together and arranged into a generic process model as follows (Figure 2): Nominal Timescale (months before spud) Sub-Process

ID

-18 -17 -16 -15 -14 -13 -12 -11 -10

1.0

Start-up Project Management

2.0 3.0 4.0 5.0 6.0

Stakeholder Management Contractor Process Interface HSE Planning & Implementation Value Assurance Location Interface Management

7.0 8.0

Logistics & Mobilisation Start-up for Performance

-9

-8

-7

-6

-5

-4

-3

-2

-1

0

Land Rig Spud Date

Offshore Mobile Rig

Figure 2 ­ Generic Process Model A high-level, time-based rig start project plan using the above generic process model as a basis shall be developed. The functionality of the above process can be represented as follows (Figure 3):

Overall Project Management

1.0

Start Project Management

2.0

Stakeholder Management

3.0 Project Planning

4.0 5.0

Contracting Process Interface HSSE Planning & Implementation Value Assurance

6.0

Location Interface Management

Project Execution

7.0

Logistics & Mobilisation

Quality Assurance & Continuous Improvement

8.0

Start-up for Performance

- Address the requirements of the wider community.

- Get the right rig for the job. - Guarantee a sustainable operation.

- Ensure the rig is fit for service. - Put the right rig on the right location.

Figure 3 ­ Rig Start Process Model Functionality

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5.2

Scalability The timescale and description of sub-processes shown on Figure 4 are not fixed and should be tailored to fit the specific circumstances and requirements of the project. The 8 project phases are shown below (Figure 4).

Figure 4 ­ Rig Start Staircase NOTE

ID

This manual describes the alignment and integration of the start process by phase and the relevant sub-processes. The ABC Guide for Rig Start only describes the same rig start process by the 8 project phases (see Figure 5).

Sub Process

Project Phase 1

1.0

Start-up Project Management

2.0

Stakeholder Management

2

3

4

2 Project Initiation

5

6

7

8

Review all aspects of completed Rig Start Project

Manage Project and Value Assurance Plan

Identify all Stakeholders

Manage Stakeholder Alignment

Contracting Process Interface

Formulate Contract Strategy

2: Scouting

HSE MS Planning & Implementation

Identify HSSE requirements

Assess HSSE Capabilities

Identify Integrity Requirements

Assess Technical Capabilities

3: Tender Preparation

4: Short Listing

5: Contract Award

Confirm Contract Compliance

Manage Contract

Implement HSSE plan

Confirm HSSE Compliance

Manage HSSE Performance

6: Rig Readiness Acceptance

7: Post Start Activities

3.0 Prepare HSSE Plan

4.0 Value Assurance

Confirm Technical specifications

Adress any shortfalls in People/Equipment/Systems

5.0 6.0

Local Interface Management

Identify Location Hazards / Interfaces

Logistics & Mobilization

Identify Logistics Requirements

Start for Performance

List Performance Opportunities

Manage Location specific Hazards / Interfaces Manage Logistics Interfaces

7.0 Pre-Start and Post-Start Performance Activities

8: AAR

8.0

Figure 5 ­ Alignment between Sub-Processes and ABC Guide Project Phases

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5.3

Rig Start Time Planner A Rig Start Time Planner shall be developed for the specific rig start project to further detail the areas of each sub-process. The individual project phases and time allocation should be reflected in the planner timescale. It should be clear that the timescale and process of a new-build deepwater unit start are significantly different than starting a land rig based on a call-off contract arrangement. The operational risks associated with deepwater operation are significantly higher compared to an onshore/brownfield operation in a remote location. The start process and sub-processes are applicable in both cases, however could be differently scaled. A new-build and start process for a deepwater unit can easily take several years and requires the full process as described herein. In some areas, onshore units are contracted on a call-off basis. For such units, the first five phases of the start process are already completed earlier, and in fact, the rig readiness acceptance reviews (and possible post-start activities reviews) remain. The involvement in such a start could be as short as one month prior to start. However, practice has indicated that people, equipment and standards aspects of these units could differ per unit and over time. In such a case, the earlier phases of the start (i.e., contract award reviews) shall be re-addressed. As every start is unique, including its operation area, it is impossible to propose a “minimal” process with an explanation of the loss in value for each minimisation. The designated Local Rig Start Team (LRST) Lead is responsible to adhere to the process described in this manual. A scaled-down process could be adopted for units under call-off contract or brownfield operations. The altered process, possible value erosion, and risk mitigation steps shall be agreed and approved by the respective Wells LoB TA1 upfront. Refer to the following link: 2.3 Example Rig Start Time Planner.mpp

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6

RIG START PROJECT MANAGEMENT The following requirements shall be complied with for people, equipment and systems in regards to project management. •

People: - Identify and establish a Local Rig Start Team (LRST) with a designated Team Lead. - Set-up an organisational structure. - Establish clear roles and responsibilities (R&Rs) and deliverables. - Identify specialist discipline support required (internal and external).

•

Equipment: - Define the overall project scope of work in order to establish the required rig functional and technical specifications.

•

Systems: - Establish a detailed project plan with clearly identified key milestones and scheduled progress review meetings. - Identify budget availability. - Establish a formal management progress review and final acceptance structure. - Establish formal MOC process. - Establish and initiate a value assurance process. - Conduct project hazard identification (HazID). - Rigorously implement and follow the rig start process.

The project management sub-process entails establishing and maintaining coordination between all the activities and interfaces that need to take place in order to start the rig. It covers the entire rig start lifecycle and interfacing with other work streams [e.g., the contracting process, Global Well Delivery Process (GWDP), etc.]. 6.1

Team Set-Up and Resource Identification The first step in starting a rig shall be to establish the LRST Lead. Depending on the organisation, the incumbent may be filling the role of Wells Operations Manager, Wells Operations Team Lead (WE), or Wells Operations Team Lead (CWI). For the purposes of this manual, the person leading the LRST will be referred to as the Wells Operations Team Lead. The Wells Operations Team Lead should be nominated by the local Wells management. The Wells Operations Team Lead shall establish the wider LRST in conjunction with line management and other disciplines, build the overall Rig Start and value assurance plans, ensure budget availability and begin to execute the activities around the start process.

6.2

Local Rig Start Team (LRST) The LRST will, depending on the project size and complexity, comprise of a number of individuals, each bringing a particular set of skills to the rig start. There is not generally a one-size-fits-all approach; the actual team composition and the time required from each individual member should be tailored to fit the specific requirements of the actual rig start project being undertaken. Implicit in the success of the rig start project will be the ability for team members to have sufficient time available to fulfil their role in the team, as well as maintaining its continuity. A typical LRST should comprise some or all of the following individuals: - Operations Team Lead - The Wells Operations Team Lead shall: - Have a full-time role throughout the full lifecycle of the rig start process. - Be the focal point for all matters concerning the rig. - Be responsible for managing the rig start project, and coordinating the LRST.

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-

Have single point accountability for the safe and efficient start of the rig, ownership of the overall rig start plan and the HSSE plan, as well as MOC authority in the project scope of work. Lead and coordinate operational rig start activities throughout the process, including input from the rest of the rig start team. Have single point accountability for the rig start budget. Have a key interface role with the CP Focal Point throughout the rig procurement process and provide technical input to the commercial process. Lead and coordinate around the value assurance aspects of the project, including scheduling, execution and management of the various reviews and inspections. Resource and coordinate the involvement of specialist discipline support (internal and external) as required throughout the lifecycle of the project plan. Coordinate a post rig start After Action Review (AAR) workshop and dissemination of the learnings. NOTE

In most organisations, it is also common for the Wells Operations Team Lead to act as the formal contract holder for the rig contract itself.

Wells Supervisor (WE or CWI) The Wells Supervisor (WE or CWI) shall: Have a full-time role throughout the full lifecycle of the rig start process. Be involved as early as possible in providing support to the Wells Operations Team Lead and ensure ownership. Lead the on-site verification of all aspects of the value assurance process on the rig. •

Rig Start Team Engineer The Rig Start Team Engineer shall: - Have a full-time role throughout the full lifecycle of the rig start process. - Directly support the Wells Operations Team Lead. - Be responsible for specifying and reviewing technical aspects of the rig, equipment, etc., and be accountable for ensuring that the requirements of the well programs are met. - Assist with technical aspects of the rig start process. NOTE

•

The Rig Start Team Engineer is usually a discipline Wells Engineer (WE or CWI) with operational field experience.

Contracting and Procurement (CP) Focal Point The CP Focal Point shall: - Have a full-time role throughout the full lifecycle of the rig start process. - Be responsible for looking after all aspects of the rig procurement process, from initial market enquiry to administration of the final rig contract. Also be involved in, rd or at least have knowledge of, contracts peripheral to the rig contract (e.g., 3 party services, materials, etc.). - Liaise with the Wells Operations Team Lead to provide the technical expertise as required. - During the rig start process itself, be responsible for providing support to the Wells Operations Team Lead in aspects such as interpretation of contractual matters, managing the clarification and evaluation process, to award recommendation, etc. NOTE

The CP Focal Point should be a member of the commercial organisation in an established organisation, or a CP professional working as part of the rig start team in a new venture set-up scenario.

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•

HSSE Focal Point The HSSE Focal Point shall: - Have a full- or part-time role throughout the full lifecycle of the rig start process. - Be responsible for supervising all the HSSE aspects of the rig procurement and start process, from initial pre-qualification of potential rigs/contractors at the start of the commercial procurement process, to final closeout of related action items. - Compile and rollout the interface/bridging document to address any gaps between the HSSE Management Systems (HSE MS) of the drilling contractor and the Shell operating unit (OU). - During the rig start process itself, be responsible for providing support to the Wells Operations Team Lead in HSSE-related aspects of the rig start process, including management and implementation of the HSSE plan on behalf of the Wells Operations Team Lead. Once the rig is in operation, continue providing support to the Wells Operations Team Lead during day-to-day running of the rig operation. NOTE

In an established organisation, the HSSE Focal Point should frequently be a discipline member of either the formal HSSE function, or a dedicated HSSE resource embedded within the Wells functional organisation. For new ventures, the HSSE Focal Point should be a dedicated full-time resource.

•

Logistics Focal Point The Logistics Focal Point shall: - Have a full- or part-time role throughout the full lifecycle of the rig start process. - Be a discipline specialist from the Logistics functional line organisation. - Have responsibility for looking after all the logistics aspects of the rig procurement and start process, from initial logistics planning and provision of technical expertise (technical specification, pre-qualification, technical bid evaluation, etc.), to the commercial procurement process to provide logistics infrastructure, as well as management of the logistics operation when the rig is up and running. - During the rig start process itself, be responsible for providing support to the Wells Operations Team Lead for all logistics-related aspects of the rig start process, including management of the Logistics plan on behalf of the Wells Operations Team Lead. - Depending on competencies, assist with technical aspects of the value assurance process with regards to marine, aviation, land transport, waste management, rd logistics (cranes, etc.) and 3 party services.

•

Asset/Exploration Team Focal Point The Asset/Exploration Team Focal Point shall: - Have a part-time role, throughout the full lifecycle of the rig start process. - Provide the link between the owner of the asset (existing offshore infrastructure, greenfield exploration acreage, etc.) and the LRST. This is important to ensure that the asset management team is kept aware of progress, and timely delivery of the scope of work and associated well proposals. It also ensures effective management of the interface between the rig and any other activities taking place in the asset. NOTE

•

Frequently, there are numerous other activities taking place in large offshore assets and particularly in onshore development assets (e.g., construction machinery and personnel movements, civil engineering works, pipe-lay and crane vessels, etc.). This may also directly affect the LRST in terms of stakeholder alignment, permitting issues, final permission to access the location, interfacing with wider Emergency Response (ER) systems, etc.

Global Rig Start Team (GRST) The GRST shall have structural involvement throughout the full lifecycle of the rig start process.

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-

The GRST is a P&T Wells specialist support resource that can be utilised during any phase, and ideally throughout the entire rig start process. The GRST possesses the expert knowledge in starting rigs and conducting the various levels of verification inspections (Level 1 - Scouting Inspection, Level 2 - Short List Inspection, Level 3 - Contract Award Inspection, Rig Readiness Acceptance Inspection [see Section (10.1) for further details], and can provide access to external resources outside the awareness of the LRST. Additional information can be obtained from the VP Wells SE, Global Category Manager Rigs or through the GRST website.

•

Marine Assurance Team The Marine Assurance Team shall have a structured involvement throughout the full lifecycle of the rig start process for offshore rigs. - The Marine Assurance Team works directly in conjunction with the GRST and is an integral part of the rig start process. - The Marine Assurance Team is a STASCO specialist support resource that can be utilised during any phase, and ideally throughout the entire rig start process. The Marine Assurance Team possesses expert knowledge in all marine-related aspects and provides direct support to the local Marine department. - The objective is to perform a Marine-focused safety and operations integrity and assurance inspection, which will contribute to existing asset assurance and risk management processes required by the asset HSSE case and the Shell OU. - Additional information can be obtained from the Marine Operations Manager P&T or through the GRST.

•

Specialist Discipline Support The roles of the various discipline specialists will be part-time and ad-hoc, throughout the full lifecycle of the rig start process. However, key technical demands (e.g., rig loads, reservoir depth, pressure and temperature, site conditions, etc.) shall be identified and discussed with the relevant specialists as soon as possible to ensure rig compatibility and identify any specific challenges. The following specialist disciplines should be included as part-time members of the GRST: - Well Engineering (WE) - Completion and Well Intervention (CWI) - Technical specialist support (i.e., rig inspection, electrical surveys, software interfaces, etc.) - Marine (i.e., detailed mooring analysis, review of marine operating procedures, vessel and class inspections, etc.) - Aviation (i.e., helideck inspection and certification, helideck landing officer and helideck assistant competency review, etc.) - Metocean, geotechnical, geophysical and survey - Naval architecture and structural engineering - Location construction and civil engineering - Potable and drill water provision services - IT and Telecommunications [including Real-Time Operating Centre (RTOC)] - Medical - Health - Safety - Security - Environmental - Finance - External Affairs - Sustainable Development (SD) If specialist discipline support is included in the LRST, proper terms of reference (TOR) for the role they are expected to fill shall be provided. Early involvement of specialist discipline support is key.

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•

Rig Contractors Representative(s) The Rig Contractors Representative(s) shall: - Have a full-time role throughout the full life cycle of the rig start process. - Assist the LRST with planning for, and putting in place the contractual, HSSE and logistical requirements necessary to be able to successfully start the rig. NOTE

•

rd

3 Party Contractor Representatives rd The 3 party contractor representative(s) shall: - Have a full- or part-time role throughout the full lifecycle of the rig start process. NOTE

6.3

When the representatives of the new rig contractor become available, (e.g., the Rig Manager and HSSE Manager), they need to be included as integral members of the LRST. This includes regular attendance at rig start progress meetings and management progress reviews. Colocating the rig contractor representative with the LRST during the rig start period will greatly benefit the project.

The rig start process frequently includes addressing interfaces between the rig and other contractors providing rig-based services to Shell [e.g., directional drilling, mud logging, wireline logging, drilling fluid engineering, cementing, casing running, cuttings containment, remoteoperated vehicle (ROV), etc.]. The installation for these services aboard the rig also needs to be addressed and included in the rig start planning. Therefore, it is prudent to include key representatives from these service providers in the LRST such that their preparation requirements can also be included in the planning.

Start Project Management Tools Having established the LRST, the Wells Operations Team Lead will start the process of setting-up and managing the project. Terms of Reference (TOR) The TOR for the overall project shall be developed, including details of the overall objectives and targets, as well as how they will be achieved (methodology, budgets, LRST team composition, etc.). The TOR shall clearly define individual’s R&Rs within the team, the time they are expected to commit to the rig start project, and their deliverables. This shall be supported by a clearly defined Responsible, Accountable, Consulted, and Informed (RACI) chart, included in Appendix A of the ABC Guide for Rig Start. Project Planning A high-level, time-based project plan (value assurance) for the rig start project shall be established and maintained by the Wells Operations Team Lead. The time plan shall be coordinated with the CP Focal Points’ commercial process to acquire the rig, as many of the value assurance activities are common to both plans. In addition to items from the CP plan, the rig start plan shall include: •

Progress meeting schedule: Including weekly team meetings, monthly management progress reporting meetings, etc.

•

Key milestone dates: Including but not limited to Letter of Intent (LOI) or Letter of Award (LOA), contract award, HSSE Case submission date, anticipated spud date, pre-start audit date, management visits, permits and consents, stakeholder interaction, etc.

•

Key activity periods: Including but not limited to rig visit/inspection periods, periods of rd upgrade shipyard stays, 3 party certification inspections, mobilisation to site rd (including transport requirements/constraints), installation and commissioning of 3 party equipment, etc.

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Hazard Identification (HazID) Rig start will require an early HazID study done in collaboration with the rig contractor to identify all the hazards related to rig start. 5

For additional information on HazID, refer to HAZID . Hazard and Operability (HazOP) Upon completion of the HazID, a HazOP study shall be conducted for any ‘processing’ and ‘automated’ equipment [i.e., for pipe handling equipment, underbalanced drilling (UBD), managed pressure drilling (MPD), well testing, etc.]. For additional information on 6 HazOP, refer to HAZOP . Start Authorisation for Expenditure (AFE)/Budget A dedicated start AFE/budget should be established, to cater for any costs incurred rd during the rig start process, (i.e., GRST inspections and 3 party site-specific or equipment surveys, etc.). NOTE

These costs can be included in the first well or spread over the wells drilled in the first year of contract. A finance focal point can assist.

Management of Change (MOC) In order to manage changes to the project scope, a base plan and MOC procedure shall first be established, against which the changes are proposed. Changes shall be communicated to all involved parties (including stakeholders) and properly recorded in a change register. MOC is a critical process which all project team members need to understand and the LRST Lead (TA2) is responsible to manage the process and approve changes. Progress Meetings In order to manage the rig start project, a regular series of formal progress meetings shall be established (i.e., on a weekly basis). The LRST shall attend these meetings and be prepared to report on those items for which they are responsible. The overall time plan can be adjusted as necessary as an output from the meeting. Meetings shall be minuted/documented and distributed to relevant parties (including stakeholders) to ensure continual alignment throughout the entire rig start project. Management Progress Reviews Progress reviews are a key method for ensuring that the rig start project remains on track and continues to meet management expectations. The target audience for the reviews would be management levels between local Wells functional management up to LoB technical management. The intention of such reviews is to present high-level progress to date, highlight any particular issues which may have arisen, and provide a forward look ahead to when the operation would be expected to start. This forum also provides an excellent opportunity for the LRST to reconfirm that they are meeting management expectations. 6.4

Start Project Management Requirements by Phase 1. Project Initiation: Resource and organise the LRST, identify stakeholders, define functional specifications. Establish the project plan, MOC process, value assurance process, budget requirements, and stakeholder requirements. Conduct a formal HazID on the total project scope to identify high-level risks and opportunities. 2. Scouting: Identify and evaluate qualified candidate rigs by close liaison with the Global Category Manager Rigs, and by conducting Scouting inspections (Level 1). 3. Tender Preparation: Ensure the tender documents specify the correct technical and commercial requirements to satisfy the project scope and are based on the Global Rig Model Contract template and CP procedures. Agree the tender evaluation model.

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4. Short Listing: Organise Short List inspections (Level 2) on candidate rigs, based on initial results of tender bid evaluation. Address outstanding technical and commercial clarifications. Identify any required rig modifications/upgrades and assess impact. Conduct technical and commercial ranking. 5. Contract Award: Identify preferred candidate rig. Conduct final contract clarifications. Organise a Contract Award inspection (Level 3) in order to identify any short comings and improvement areas, which can subsequently be negotiated prior to the award of the contract, and addressed prior to contract commencement. 6. Rig Readiness Acceptance: Organise a Rig Readiness Acceptance inspection on the selected rig. Ensure all critical outstanding corrective action items (from previous inspections, etc.) have been effectively closed-out. Verify that the rig assurance rd process is followed. Verify that final interface activities such as installation of 3 party equipment have been satisfactorily completed. Verify competency of assigned personnel, including mandatory training and familiarisation. Verify effective rollout and understanding of Shell policy and procedural requirements. 7. Post-Start Activities: Identify and provide additional resources and specialist support during actual rig start to ensure safe and effective commencement of operations. 8. AAR: Ensure AARs are scheduled and conducted on the rig start process and key learnings and best practices are documented and shared.

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7

STAKEHOLDER MANAGEMENT The following requirements shall be complied with for people, equipment and systems in regards to stakeholder management. •

People: - Identify all stakeholders and obtain alignment. - Engage as early as possible and keep updated throughout all phases of the project (with direct involvement as appropriate). - Involve specialist discipline support from External Affairs and SD functions.

•

Equipment - Ensure the functional and technical specifications satisfy the various stakeholder requirements.

•

Systems - Ensure local content, legislative requirements, and SD are suitably addressed in the detailed project plan and contract documents. - Ensure the project plan addresses stakeholder requirements on the critical path. - Compile a list of internal and external stakeholders who have influence over, or are affected by, the start of a new rig. Early consideration of the requirements and interfaces of these stakeholders is a key part of establishing a new operation, and should be taken care of along with all the other activities involved with preparing to take on the rig. In some cases, it may be the timeline governing stakeholder alignment issues which drive the timeline for starting the rig. - The stakeholder management sub-process will provide a baseline for establishing: - A fully comprehensive list of those internal and external parties who have influence over, or are affected by the start of the rig operation, and inclusion of the requirements for management of these parties throughout the rig start process. - The assurance that lead times associated with individual stakeholder management requirements, (e.g., obtaining permits, are adequately accounted for in the overall project time plan). - A simple demonstration that all stakeholder management requirements are being looked after in an appropriate manner by having them represented as activities in the overall project plan.

7.1

Stakeholder Identification and Engagement The term stakeholder is commonly used to refer to a wide variety of parties influencing or affected by Shell’s activities involving drilling, completion or well intervention operations. The final list is dependent on the exact nature and geographical location of the operation. Many stakeholders will be common across the world (e.g., example official and governmental bodies issuing permits). An even longer list will be unique to each operational environment; e.g., ornithology groups in Europe, wildlife research programs in equatorial Africa, local fishing communities in south-east Asia, whaling in Alaska, nongovernmental organisations (NGOs) worldwide, etc. The interaction with such external stakeholders frequently initiates additional internal stakeholder involvement such as local community liaison officers, wildlife monitors, SD advisers, and so on. Engagement with external stakeholders is usually a sensitive undertaking which shall not be unilaterally embarked upon by the LRST. The LRST shall play a role in stakeholder management as follows: •

Stakeholder identification: Involvement in a formal stakeholder identification exercise being conducted by, for instance, the External Affairs or SD functions of established organisations. Where such an exercise has not already been initiated by the External Affairs or SD function, the Wells Operations Team Lead shall notify them of the intention to start a new rig operation. They should review the need for further stakeholder management action. Stakeholders may include partners, joint venture parties, etc.

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7.2

•

Stakeholder engagement: LRST involvement in stakeholder engagement activities arranged and managed by the External Affairs or SD functions. This may be in the form of, e.g., presentations to local communities as to the exact nature of the rig operations, providing guided tours of the rig, etc.

•

Planning: Ensuring that any stakeholder management activities are included in the overall rig start project plan, in addition to ensuring that those charged with looking after stakeholder management activities are kept fully informed as to the rig start timing and ongoing progress (including any MOC of project scope).

Local Content Management and Requirements The agreements under which Shell operates in many areas worldwide include specific requirements around local content (‘in country value’ through local business development and nationalisation). As a rig operation is frequently an area of both significant financial spend and manpower involvement, this aspect shall be addressed early in the rig 7 selection strategy and the Global Rig Evaluation Framework shall be used to provide a total cost of ownership model in rig selection. NOTE

7.3

Management of rig crews, i.e., changing out crews when the rig moves from one region to another and especially crewing-up new rigs is a huge task that is usually underestimated from both time and human resource perspectives.

Permitting and Certification Issues Applicable legislation and standards shall be identified and assessed in the early planning stages of any new projects to ensure that regional requirements are being met for various activities. This is a function managed by the HSSE Focal point on the project. Examples are as listed below:

7.4

•

Chemicals used in conjunction with rig operations

•

Constructing roadways/locations

•

Accessing water sources

•

Waste disposal practices and licenses

•

Containment requirements (drilling fluids, drilled cuttings, helideck and deck drainage, etc.)

•

Emissions requirements [noise, exhaust gases, incinerators, ChloroFluoroCarbon (CFCs), etc.]

•

Radioactive sources and explosives

Social Performance Social Performance should be seen as the social dimension of the commitment to SD, rather than a separate activity or initiative. Social Performance includes activities directly related to our business, such as stakeholder engagement, social impact management and direct social benefits (e.g., jobs), as well as contributions to communities and society through social investment and involvement in broader issues (e.g., conflict). These aspects of Social Performance require input from both the External Affairs and HSSE functions and these functions should be contacted directly for examples, templates, input, etc., relevant to the specific area/LoB. Overall accountability for Social Performance lies with the line, which is advised by HSSE and External Affairs functions as appropriate. The following are the requirements for managing the Social Performance process: •

Social Performance plans shall be in place and updated annually for high-priority operations, i.e., those with potentially high amount of social issues and impacts, as determined by each LoB. These plans should be introduced over time.

•

Environmental (impact) assessment (including a consideration of social impacts) shall be conducted prior to all new activities and facility developments, or significant modifications to existing ones (Group procedure for a HSE MS).

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7.5

Stakeholder Management Requirements by Phase 1. Project Initiation: Define who the stakeholders are and their specific interests. These interests may extend into the operational phase and it is critical that these aspects (waste disposal, local content, etc.) are fully addressed. Define an engagement plan to ensure adequate proactive communication, how their interests are addressed in the project, and to ensure early involvement. 2. Scouting: Identify if stakeholder interests influence the selection of rigs and rig contractors to be involved in the contracting process. 3. Tender Preparation: Follow a strictly defined and agreed process to manage stakeholder influences, including tender evaluation model. Clear guidance shall be provided to prevent conflict of interest issues arising. 4. Short Listing: Clearly define, discuss and agree with stakeholders the contracting process and evaluation model. 5. Contract Award: Tender/contracts board approval may be required. Address stakeholder concerns in the contract documents. 6. Rig Readiness Acceptance: To mitigate stakeholder influence on rig acceptance, it is important to clearly define in the contract the requirement to follow the rig assurance process. 7. Post-Start Activities: Handover stakeholder management needs from the LRST to the rig operations team. Good documentation of previous stakeholder engagements and agreements made is critical. 8. AAR: Ensure stakeholders are invited to attend AARs (as appropriate) and that key learnings and best practices are documented and shared.

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8

CONTRACTING PROCESS INTERFACE The following requirements shall be complied with for people, equipment and systems in regards to contracting process interface. •

People - Ensure detailed focus on people aspects (resource levels, training and competency requirements, etc.) when compiling tender documents, conducting evaluation of tenders and conducting assessments and inspections.

•

Equipment - Ensure functional and technical specifications match project scope requirements. - Ensure detailed rig Acceptance Verification is included in the contract. - Ensure management of equipment through a structured planned maintenance system. - Ensure inspection/(re)certification program is addressed within the contract and effective implementation is verified during inspections.

•

Systems - Ensure Global Rig Model Contracts are utilised as the basis for the tender documents. - Ensure global and LoB/local standards and requirements are included in the tender documents and accessible. - Ensure tender documents facilitate the rig start process value assurance inspections.

The activities carried out in order to start a rig operation are fundamentally intertwined with the commercial process in which a rig is procured. Efficient coordination of these two lines of activities is necessary in order to result in assurance that the requirements and standards are unambiguous and clear, the rig start activities can be initiated in a timely manner, while avoiding any loss of commercial and/or performance leverage or short-cutting of good CP practice. The advantage of building a close and effective interface between the LRST and the CP function or Focal Point is that: •

The timing requirements of both procurement and operational start processes are defined with respect to the requirements of the other. Changes in timing, a request for additional bid submission time, or an offer to bring the rig early for example, can be readily evaluated with respect to the requirements of the rig start process.

•

An optimum balance can be made between the quality of people/equipment/systems being offered by the contractor and the price to be paid by the company.

•

Technical value assurance, in the form of pre-hire inspections, can be effectively integrated into the commercial process to provide protection against unexpected expenditure once the contract has been signed.

•

An effective strategy can be implemented to cater for the scenario where an unsuitable rig is promoted, for reasons such as local content or politics, which does not meet the required standards.

•

Inclusion of the LRST and GRST throughout the procurement process builds an early sense of joint ownership for both the rig coming into service, as well as the contracting process that enabled it. The tendency to work in separate commercial and operational/technical silos is also avoided.

8.1

Time and Activity Planning In order to ensure a smooth transition between the rig procurement phases and actual rig start phases of the process, the timing of the commercial CP process shall be included in the overall project plan. Additionally, having a defined role to play in the procurement process, the Wells Operations Team Lead shall be co-responsible for ensuring that the process runs in accordance with the established timetable. The CP Focal Point shall be responsible for the planning and execution of the Category Management and Commercial Procurement process. In order to do this effectively, the CP Focal Point should be assisted by the Wells Operations Team Lead. The following CP elements shall be included in the rig start project plan:

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8.2

•

Strategy development: Ensure the right balance between the business needs and available market.

•

Tender/contract development: Ensure specifications and standards are listed.

•

Procurement phases: Include negotiations, pre-qualification and tender periods, evaluation periods, etc.

•

Milestone events: Include tender issue dates, bid opening dates, tender/contracts board meetings, contract evaluation dates, contract award target date, etc.

•

Site data acquisition: A data review will give an early indication of the need for additional site specific geophysical, geotechnical or Metocean data, to ultimately ensure the rig technical specifications match the anticipated environmental conditions.

•

Rig inspection visits: Scouting (Level 1), Short List (Level 2), Contract Award (Level 3) and Rig Readiness Acceptance inspections are some of the key inspections that should be conducted as part of the rig start process plus any additional surveys, rd including those conducted by specialist 3 parties. These also will be clearly represented on the overall project plan and the CP Focal Point’s procurement time plan. Under the Category Management and Commercial Procurement process, which is the main process to follow, the timeline is driven in first instance by CP.

the

right

functional

and

technical

Interfaces with the Commercial Process The formal commercial process (Category Management and Commercial Procurement) under which to tender/negotiate for and finally contract the rig shall be owned by the CP function. The execution of the CP process to procure the rig, under the control of the Wells CP function, includes a multitude of interfaces with the LRST and GRST. The Global Category Manager Rigs will direct the GRST to the specific projects with specific focus on early involvement in the project. The Wells Engineers within the LRST shall specify the technical requirements and carry out technical evaluation and the CP team shall develop and implement a commercial strategy that delivers the required rig. Significant support in economic modelling can be provided through the CP function resulting in ‘Total Cost of Ownership’, which is a mandatory approach to the commercial evaluation process. These models can provide insight into contractor’s expected returns and commercial strategies. These should form part of the final evaluation. Based on the Category Management and Commercial Procurement process, the following interfaces are summarised as follows: •

Demand Planning

•

Market Analysis

•

Supply Chain Cost Modelling

•

Strategy Selection

These interfaces will be carried out in close collaboration with the Well Operations Manager, Business Planners, Global Category Manager Rigs and CP professionals. The sourcing and award process that follows these four steps can be subdivided as follows (although in many cases such as sublets, direct negotiations, mandatory local sourcing procedures and other variations may be apparent): Pre-Tender, Pre-Qualification, Market Enquiry •

Time Planning: The Wells Operations Team Lead should assist the CP Focal Point with planning the sourcing of activities to fit the required mobilisation of the rig.

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•

Tender/Contracts Board Documentation Preparation: The Wells Operations Team Lead shall ensure the scope, contract timing requirements, technical demands, etc., are accurately represented in governance documentation. The Wells Operations Team Lead and Business Planner should work in close collaboration to ensure the wider planning demands are met (e.g., requirement to include contract extension options, etc). Global Rig Model Contract documents (which include contractual learnings to date, reference to latest standards, etc.) are mandatory and shall be utilised as a template for the final tender documents with additional local and LoB requirements added, as appropriate. Refer to the following link: Global Rig Model Contracts.

•

Equipment Specification: The Wells Operations Team Lead shall define and draft all of the functional and technical specifications for the rig to be procured, and provide these to the CP Focal Point for inclusion in, e.g., market enquiries, tender documents, etc. The level of specification detail must be sufficient to cover all minimum requirements and critical aspects, yet avoid the tendency towards compiling a large list of “nice to have’s”. Particular diligence is required when accepting a rig from another OU under an existing contract, to ensure that the rig capabilities meet the requirements of the project scope and are not over- or under-specified. This is clearly an iterative process, especially during single source negotiations, sublets, and during periods of rig capacity constraints where it may be more appropriate to identify a gap list of requirements versus actual rig equipment, plus an analysis of specific requirements necessitating an upgrade program.

•

Scope of Work Definition: The Wells Operations Team Lead shall specify and draft a comprehensive scope of work for the incoming rig for inclusion in, e.g., market enquiry, tender documents, etc., and provide this to the CP Focal Point. A clear and comprehensive scope of work is fundamental key to procuring the right rig for the job, therefore sufficient time and attention to quality is required. Details of acceptance testing requirements (even for existing rigs) shall be documented within the scope of work and be in line with the rig assurance process detailed in the Global Rig Model Contracts. In addition, local standards/procedures shall be incorporated into the contract.

•

Bid List Compilation: In the event of sourcing from multiple available rigs, the Wells Operations Team Lead should assist the CP Focal Point in building the list of qualified parties capable of providing a suitable rig.

•

Pre-Qualification Criteria Selection: Definition of the technical (Wells Operations Team Lead), HSSE (HSSE Focal Point) and CP minimum criteria that must be met by contractors wishing to bid on the work. Often, the overall capability, HSSE and financial related (e.g., bank guarantee criteria, minimum company size, etc.) minimum criteria are set at corporate levels, and the CP Focal Point shall advise where this is the case. Compliance with the requirements of HSSE & SP Control Framework Contractor HSSE Management Manual, and the completion of an ‘acceptable’ 8 Contractor HSSE Capability Assessment (refer Management of Contractor HSSE ) shall be a pre-qualification requirement for rig contractors ‘new’ to Shell, as well as for ‘established’ rig contractors operating in new areas.

•

Pre-Qualification Evaluation: Provide the technical (Wells Operations Team Lead) and HSSE (HSSE Focal Point) with the CP screening of pre-qualification documentation received from contractors. The CP Focal Point shall then compile the final bid list from those parties meeting the pre-qualification criteria.

•

Market Enquiry Results Screening: Technical proposals (Wells Operations Team Lead) and HSSE performance/aspects (HSSE Focal Point) received as the result of a market enquiry shall be screened in conjunction with the CP Focal Point to determine a final list of parties who will subsequently be invited to take part in a more formal rig procurement exercise.

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Tender and Negotiation Process •

Technical Clarifications: During the tender and/or negotiation, technical clarifications are often sought by either or both sides. The Wells Operations Team Lead role will be to either channel technical queries through the CP Focal Point to the contractor, or provide technical responses back to contractor’s queries also through the CP Focal Point.

•

Commercial Clarifications: During the tender and/or negotiation, commercial clarifications are also sought by either or both sides. The Wells Operations Team Lead role will be to either channel commercial queries through the CP Focal Point to the contractor, or provide commercial responses back to contractor’s queries also through the CP Focal Point. All commercial clarifications, often only with permission of the tender/contracts board, will be treated with great care to ensure no breaching of procedures occurs and no ethics and compliance issues arise.

Bid Evaluation All bid evaluations shall be carried out in accordance with the requirements of the Global Rig Evaluation Framework. •

Technical Evaluation Model: Prior to the received bids being opened, the technical and performance evaluation models against which the bids will be compared have been finalised. The role of the Wells Operations Team Lead will be to complete this work, taking into consideration the technical and performance aspects of the rig estimated as critical to the upcoming work program to be executed. Consideration also should be given to specific rig requirements (i.e., emissions standards for rig engines in environmentally sensitive areas, zero discharge, etc.). The Wells Operations Team Lead will be guided in the finalisation of these models by the CP Focal Point, who shall complete the commercial evaluation model on basis of ‘Total Cost of Ownership’ with support from the Wells Operations Team Lead. The model shall be approved by the line management.

•

Technical and Performance Evaluation: The Wells Operations Team Lead shall provide an initial screening of bids received against the minimum requirements to arrive at a final list of potential candidate rigs. The Wells Operations Team Lead shall then provide the detailed technical evaluation against the pre-defined evaluation model, as well as determine relative performance differences in alternative rig designs and associated equipment being offered by different contractors. Short List inspections (Level 2) of rigs and rig contractors shall be conducted at this stage in support of the evaluation. The technical evaluation shall be provided to the CP Focal Point for inclusion in the overall (including commercial) bid evaluation.

NOTE

The Wells Operations Team Lead should pull together a small team of peers to either assist in the detailed technical evaluation, or review the evaluation carried out to ensure a balanced opinion is obtained.

•

HSSE Evaluation: Effective evaluation models usually also include an HSSE evaluation element. The evaluation model shall take account of specific HSSE risks for a project, e.g., H2S, high-pressure high-temperature (HPHT), difficult seabed integrity conditions for a jack-up and rack phase difference or punch-through risks, Dynamic Positioning (DP) station keeping capability, etc. The first pass (pass/fail) and second pass (relative ranking of those contractors/rigs making it through the first rd pass) evaluations shall be carried out by the HSSE Focal Point or by a specialist 3 party with the assistance of the Wells Operations Team Lead.

•

Valuation of Commercial Adders: In order to provide the CP Focal Point with the support in the final ranking of the bids received against each other, technical and performance differences of different rigs being offered shall be represented in monetary terms. The Wells Operations Team Lead shall provide the estimate of what differences in equipment mean in real cost terms in order that the CP Focal Point can include this impact in the final commercial model where the CP process allows. The

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Wells Operations Team Lead should call upon specialist help, e.g., marine, electrical specialists, etc., either inside or outside the LRST to achieve this cost estimate. Contract Finalisation and Award •

Technical Contents Review: During the finalising period of the contract document, the Wells Operations Team Lead shall ensure that the contract sections containing technical details are reviewed for sufficiency and correctness, including any updates that may be the result of clarifications or final negotiation.

•

Completion of Due Diligence: While in the process of finalising the details of the contract document itself, it is common practice to make a principle agreement with the contractor of award of contract. This is commonly done by issuing a Letter of Intent (LOI) to the contractor. This is aimed at ensuring that the LRST have time to inspect the rig in detail, with the possibility of being able to revert back to the contractor for further negotiation, should anything unexpected and unacceptable be subsequently identified during the value assurance inspections.

The contract documents shall specify the requirement for the rig contractor to participate in and help facilitate the various inspections conducted throughout the rig start process, as well as the requirement for the rig contractor to manage and address the resulting Corrective Action items prior to rig acceptance by the OU. 8.3

Sublets There are certain cases where the above process will be customised such as during sublets. A sublet is where Shell (or its affiliate) agrees with the parties holding the Contract (rig contractor and the other Operator) to take a part of the contract duration. Such part is generally (there are a few different methods) assigned to Shell through means of a tripartite agreement where the three parties (Shell, rig contractor, other Operator) agree to this deal. The principle of an assignment or sublet is that all terms and conditions and all rights and obligations (except for termination rights) are transferred to Shell from the other Operator (or vice versa if Shell sublet). What is important to realise is that in such cases the standards and specifications from the other Operator will remain in full force when the rig contract is transferred to Shell. Any identified gaps shall then be addressed through the tripartite agreement, the bridging document, a direct variation to contract, or in the event that compliance to standards cannot be adhered to, through the Shell deviation process. In any case, a sublet will always be worked in close consultation with CP and Global Category Manager Rigs, to ensure liability issues are properly addressed and managed.

8.4

Alliances In specific cases, there may be commercial advantages in forming an alliance with a rig contractor such as: •

Competitive day rates

•

Optimised ‘terms and conditions’

•

Enhanced working relationship through combined training, supply chain alignment, optimised risk sharing

•

Secure rig time in stressed supply markets

A joint platform to develop the business in a collaborative way towards achieving Goal Zero and Top Quartile well delivery shall be provided. However, the same rig start process shall be applied to ensure optimal value assurance is realised. 8.5

Contracting Process by Phase 1. Project Initiation: The CP Focal Point shall be identified and the initial commercial plan drafted to identify and schedule the required contracting activities. Rig contracting strategy and rig requirements shall be drafted, discussed with the Global Category Manager Rigs and approved by the relevant tender/contracts board.

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2. Scouting: Agreed functional and technical specifications shall be required to identify rigs based on technical suitability and availability. 3. Tender Preparation: Functional and technical specifications shall be issued. Contract Evaluation model shall be defined and approved. Corrective Action Management process shall be clarified, since it will have commercial implications during rig start. Non-commercial clarification requests shall be addressed. The Global Rig Model Contracts shall be utilised as a minimum standard. 4. Short Listing: After opening the bids, technical evaluation shall be supported through Short List inspections (Level 2) to assess the rigs offered, confirm rig equipment is as indicated in the submitted bid, confirm rig contractor capability (including crew competence) and rig equipment condition. 5. Contract Award: The final contract details will be clarified and include the specifics of the rig Assurance Process. A Contract Award Inspection (Level 3) shall be performed on the rig and rig contractor, preferably before award or issuing of LOI. This should be supported by other specialist surveys as necessary. 6. Rig Readiness Acceptance: A Rig Readiness Acceptance inspection shall be conducted to verify effective closeout of the corrective action register items, and to confirm that the people, equipment and systems elements are in place and in compliance. 7. Post-Start Activities: Clear unambiguous statements in a contract make contract management during the operational phase much simpler and benefit overall operations. 8. AAR: AAR shall be conducted on the Contracting Process and learnings and best practices captured in updates to the Global Rig Model Contracts and rig Assurance Process.

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9

HSSE PLANNING AND IMPLEMENTATION The following requirements shall be complied with for people, equipment and systems in regards to HSSE planning and implementation. •

People - Ensure trained, experienced and competent personnel are in place, and shall remain with the project from both Shell and the rig contractor. - Ensure personnel are familiar with and effectively implement the rig contractors’ and Shell HSE MS. - Ensure freely open and effective lines of communication exist between all parties and across all levels of the organisations.

•

Equipment - Ensure rig-specific operating and maintenance procedures are available, up-to-date and routinely utilised. - Ensure an effective MOC process is in place for rig modifications and upgrades (equipment, structural, etc.) including Hazard and Effect Management Process (HEMP) requirements (HazID, HazOP, etc.), and independent design/structural reviews (also applicable to new-build rigs). - Failure modes and effects analysis (FMEA) studies should be provided for any prototype (i.e., serial number 1) items of equipment.

•

Systems - Ensure there is a clearly defined HSE MS. - Ensure the HSE MS is ‘alive’, up-to-date and effective. - Identify gaps against Shell HSSE & SP Control Framework (including process safety requirements) and regional/local requirements, and manage through the interface/bridging document. - Ensure Shell policies and standards documentation is made available for the rig contractor to implement. - Ensure a formal risk assessment process is in place and effectively implemented. - Ensure Shell Life Saving Rules (LSRs) and any additional Shell and LoB/local requirements are embedded in rig ‘ways of working’. - Ensure “Think Process Safety – 10 Critical Elements” are embedded into ‘ways of working’. - Ensure a consequence management process is understood and implemented for any instances of non-compliance. rd - Ensure rig contractor’s subcontractors and Shell OUs 3 party contractors are effectively managed. - Ensure ER plans are in place and tested/proven.

Management of the HSSE aspects of bringing the rig into service is potentially the largest single area of activity in the rig start process. In certain areas, security aspects around starting the rig should also be considered. 9.1

Implementation Structure The rig contractor shall have in place their own HSE MS which might not be structured as the Shell HSE MS, but shall address all elements. In line with the definition of a “Mode 2” contract (as per contractor HSSE management) whereby the “contractor executes all aspects of the job under its own HSE MS”, the rig contractor’s HSE MS shall be utilised and the rig contractor should ensure personnel meet the HSSE objectives (supported by Shell). The rig contractor’s HSE MS shall address the obligation and responsibility for the management of their own subcontractors, and ensure their compliance with the HSE MS of both the rig contractor and the respective Shell OU.

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To help in identifying the requirements, this section will use the HSE MS model as outlined in the HSSE & SP Control Framework Management System Manual. For 9 reference, this model is also documented in Health, Safety and Environmental Systems (Figure 6).

Figure 6 ­ 8 Elements of Shell HSE MS Model Sections (9.4) to (9.13) are based on the 8 Elements of this standard model as it readily provides a structured and systematic way of managing rig start HSSE, which will also interface with the HSE MS of the wider organisation. 9.2

Interface/Bridging Document A formal gap analysis shall be conducted between the Shell OUs and the rig contractor’s HSE MS, including any regulatory LoB/local specific requirements. Gaps shall be clearly identified and documented in the interface/bridging document. The drilling contractor shall be involved in the creation and review of this document to ensure correctness and ownership, effective rollout and implementation. The interface/bridging document is required to ensure the differences between the management systems are aligned and clarity exists related to the various details (responsibilities, policies, procedures, etc.). Refer to the following link: 6.2 Example Interface-Bridging document.docx. The rig contractor policies and procedures shall be followed where possible, and supplemented with the relevant additional Shell requirements. In instances where the rig contractor does not have a specific policy or procedure, then the Shell policy or procedure shall be adopted. In other instances where one party has a more stringent requirement, then the later shall be followed. The specific details shall be clearly stated in the interface/bridging document. The relevant Shell policy and procedural documents shall be made available to the drilling contractor for implementation.

9.3

HSSE Planning NOTE

This topic actually falls under “Planning and Procedures”, however, for the purposes of this manual, it has been placed here as it provides a useful reference framework for the rest of this section.

Distinction can be made between the high-level HSSE Plan which rolls over into a more detailed HSSE Project Readiness Plan and a separate rig contractor HSSE plan focused on their own crews and rig operations. Wells Manual WS 38.80.32.32-Gen. Page 31 of 90 st March 1 , 2014 RIG START MANUAL Revision Number The controlled version of this document resides online in the DEP system. Printed copies are UNCONTROLLED. This document has been supplied under license by Shell to: Shell [email protected] 05/03/2014 10:15:02

•

Purpose: The HSSE Plan describes the implementation activities that provide assurance that the HSSE objectives of the overall organisation are being met during and after the rig start process.

•

Feedstock: Items which are to be included in the HSSE Plan would typically come from a number of sources such as action items from the high level project HazID and start planning meetings (e.g., environmental impact assessment, waste disposal permissions, set-up emissions reporting system, induction program for rig contractor staff, training and competency, auditing, etc.), generic requirements to meet company standards [e.g., interface/bridging documentation, baseline Health Risk Assessment (HRA), etc.], and detailed HazIDs on specific risks of the project.

•

Ownership: The HSSE plan shall be owned by the LRST Lead. Initial compilation and ongoing maintenance of the HSSE Plan can be delegated to the rig start HSSE Focal Point within the LRST. The HSSE Plan should be reviewed as a standard agenda item during the regular (e.g., weekly) LRST meetings. In order to get full ownership of the HSSE Plan, it is important that it is developed with a bottoms-up approach by both Shell and contractor personnel.

•

Structure: The HSSE Plan can be structured in the same manner as the common Shell HSE MS model described above. The plan should reflect the common requirements of each sub/element of the HSE MS model, assuring that all HSE MS requirements have been addressed.

•

Prioritisation: Activities detailed in the HSSE Plan may be prioritised. This allows them to be sorted into a ranked list. A commonly used ranking system is presented in Table 3 below. Table 3 - HSSE Plan Ranking List

Importance

Time

1 = Low,

1 = Pre Spud,

3 = High

3 = Immediate

Ranking Activity Description (I x T)

Leadership & Commitment 2

2

4

Performance Targets

2

3

6

Register of HSSE circulars (emails etc.)

1

1

1

Incentive Scheme Programme

The above list will then be sorted into a prioritised list with items ranked 9 (most urgent) at the top down to those ranked 1 at the bottom. 9.3.1

High-Level HSSE Plan Project initial HSSE planning will be managed by ensuring that key objectives are met including Shell Group requirements and all stakeholder concerns. This plan shall be supported by a project HazID. Refer to the following link: 6.3.1 Example High Level HSSE Plan.xls.

9.3.2

HSSE Project Execution Plan (Readiness Tracking) This is a more detailed working plan derived from various sources, (i.e., high-level HSSE plan, subject specific HazIDs, area specific needs, etc). Activities are catalogued, assigned, scheduled and provide a structured means to provide team updates throughout the project. Refer to the following link: 6.3.2 Example HSSE Project Execution Plan.xls.

9.3.3

HSSE Plan (rig contractor) This plan is specific to the rig, rig crew and rig contractor scope of work. It should be agreed and supported by the Wells Operations Team Lead to ensure training plans are complete and implemented, team building events organised, rig management visits and audits are planned and HSSE focus areas agreed.

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9.4

HSE MS Element 1 - Leadership and Commitment 9.4.1

Management Kick-off Presentations Shell and contractor senior management shall attend and set high level HSSE and performance expectations with the LRST, the eventual rig operational team, including key contractor representatives, and the rig crews, at suitable points in the rig start process. Such suitable points may be: •

At the kick-off meeting for the rig start project as a whole

•

At the first progress meetings including key rig contractor and 3 contractors representatives

•

At the start of team building and/or performance building sessions

•

Prior to the start of operations

•

At the pre-spud meeting and drill-the-well-on-paper (DWOP)//complete-thewell-on-paper (CWOP)

rd

NOTE

9.4.2

party

Inclusion of contractor senior management in Advanced Safety Leadership courses will generate shared expectations as well as demonstrate the required leadership and commitment. This in turn will improve ongoing communication.

Management Pre-start Rig Visit At a suitable point between mobilisation and acceptance of the rig, a visit to the rd rig by senior Shell, rig contractor and preferably 3 party contractor management shall be scheduled. Time in the agenda should be allocated to shutdown rig activities and gather all personnel for a management HSSE presentation. The intent of this is to convey a clear and visible management commitment to HSSE.

9.4.3

Team Building Event Senior Shell and contractor management should be invited to open the team building events with the rig crews, both on and off shift, to set expectations rd around HSSE and operational performance and project objectives. Dedicated 3 party personnel also should be included.

9.4.4

Achievement Recognition Recognition schemes for achievement of both operational and HSSE milestones are commonly used to good effect, and are generally recommended provided that they are appropriate, well thought out, and consistently applied. Where the contractors have their own award scheme, it is often a good idea for Shell to participate in this rather than add another scheme. Where an award recognition scheme is to be adopted, the details of the scheme should be documented, ready for rollout at the start of the contract, and clearly communicated to the rig personnel taking part during, for instance, a pre-start management visit or pre-spud meeting. To make the scheme successful, and maintain momentum, regular updates of performance versus plan should be communicated. These schemes should focus on rewarding the right proactive behaviours rather than focusing solely on HSSE reporting statistics. The use of a recognition scheme should be tailored when considering arrangements such as new-builds, sublets or farm-ins, etc.

9.5

HSE MS Element 2 - Policy and Strategic Objectives 9.5.1

Shell and Contractor Policies •

An updated list of Shell policies governing the rig start and operations shall be compiled. This list also shall be available on the rig. This list shall be included in the contract documents.

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9.5.2

9.5.3

9.5.4

9.6

•

The rig contractor’s equivalent policies shall be reviewed and their alignment with Shell policies shall be ensured.

•

The contractor shall have copies of all his policies available on the rig and the key HSSE policies shall be displayed and understood by the rig crew.

•

Policies should be regularly reviewed and updated/revised as appropriate.

Strategic Objectives •

The high-level strategic objectives of both the Shell OU and the rig contractor should be available and understood by all personnel on the rig.

•

Shell OU and rig contractor’s strategic objectives should be reviewed and compatibility confirmed.

Dissemination •

Copies of the key HSSE policies and strategic objectives governing the Shell operation should be prominently displayed on the rig (i.e., safety notice board, offices, training room, etc.).

•

Rig-based key 3 party contractors and Shell personnel shall be introduced to the key HSSE policies and strategic objectives as part of their induction to the project.

rd

Regulatory Requirements •

An updated list of all local regulatory requirements applicable to the rig start and operations shall be compiled. This list should be available on the rig, along with copies of all the referenced documents. Where necessary, interpretations, translations or summaries of these legal requirements in English should be obtained.

•

Both Shell and contractor’s practices and procedures shall be reviewed against the regulatory requirements to ensure compliance. Where there are gaps with regulatory requirements a plan shall be put in place to manage and close these gaps.

HSE MS Element 3 - Organisation, Responsibilities, Resources, Standards and Documentation 9.6.1

Roles & Responsibilities (R&Rs) •

Organisational Structure: Copies of the rig contractor’s organisational structure, both on the rig and in the rig contractor’s office-based support organisation shall be obtained and reviewed. Similarly, the rig contractor needs to be supplied with organigrams describing the local Shell OU. The organigrams shall contain names of individuals as well as their functions.

•

Organisational Interfaces: A simple diagram showing the interface and reporting requirements between the rig contractor’s rig and office-based personnel, and those of the Shell OU shall be put in place to ensure clarity of reporting lines. This should be part of the interface/bridging document.

•

R&R/Job Descriptions: Both Shell’s and the rig contractor’s HSE MS shall contain clearly defined R&R for all personnel. For additional requirements for those personnel identified as having HSSE critical positions, see Section (9.6.8). Employee key competencies shall be defined within the R&R. All personnel shall be familiar with their own R&Rs.

Typically, the R&R are combined with (or embedded in) detailed job descriptions. These will include details of reporting structure, personnel and job functions/positions that the individual is responsible for supervising/managing/mentoring, key tasks, safety critical tasks/activities, etc. Detailed job descriptions for Shell personnel based on the rig are essential to ensure that the personnel improve and add value to the efficiency and effectiveness of the operational and HSSE (including Process Safety) Wells Manual WS 38.80.32.32-Gen. Page 34 of 90 st March 1 , 2014 RIG START MANUAL Revision Number The controlled version of this document resides online in the DEP system. Printed copies are UNCONTROLLED. This document has been supplied under license by Shell to: Shell [email protected] 05/03/2014 10:15:02

performance. Alignment with the rig contractor’s organisation is key to avoid overlap and duplication of effort, or confusion. The detailed R&R/job descriptions should be fully aligned with the rig contractor’s competence development and assurance processes for new hires and existing personnel in HSSE critical positions. Signed copies of R&R/job descriptions of those employees defined to be in HSSE critical positions should be kept on file as a record of formal acceptance of the contents and obligations. This signing off process should be repeated periodically (e.g., time-based, upon change of role, and after formal review of the HSSE Case or equivalent) to ensure that individuals remain familiar with exactly ‘who and what’ they are responsible and accountable for. 9.6.2

HSSE Advisors •

Rig Contractor’s HSSE Advisor: It is recommended practice that the rig contractor have a dedicated HSSE advisor working as part of the LRST in a non-rig-based role. This position should be specified in the rig contract. The rig contractor’s HSSE advisor should liaise directly with the Shell Wells Operations Team Lead and the Shell HSSE Focal Point. The role of the rig contractor’s HSSE advisor should be to assist the LRST to understand and verify the effectiveness of the contractor’s HSE MS, address any deficiencies with respect to Shell HSSE requirements, and provide input for specific items such as interface/bridging documentation and HSSE Plans. The rig contractor’s HSSE advisor should also take an active role in coordinating any Shell and LoB/local training requirements and workshops. For continuity purposes throughout the entire start process, the rig contractor’s HSSE advisor’s involvement should carry through into the operational phase. Under some contractual arrangements, the rig contractor should provide an office-based HSSE advisor to work alongside the Rig Manager for the entire duration of the project. In this case, the HSSE advisor should cover the above scope of work during rig start, then move to cover other HSSE duties, such as HSSE reporting, auditing, etc., once the rig becomes operational. This is the recommended approach to ensure that once the rig commences operations, there remains a strong focus on the management of HSSErelated issues. The HSSE advisor should be sufficiently experienced and senior in the rig contractor’s organisation to be effective. The competency of the HSSE advisor to hold this role shall be verified.

•

Rig Contractor’s Safety Officers: (Also known as Rig Safety Training Coordinator, Safety Training Coach, HSSE Supervisor, etc.). This is a rigbased position with full-time coverage which should be provided by the rig contractor. It can also be provided by Shell, however, the preferred option is to have the drilling contractor staff this key position from within their own organisation, justified by increased knowledge and ownership of the rig contractor’s HSE MS. This provides some degree of assurance that HSSE matters do not become over-shadowed by operational necessities. E.g., safety inductions, meetings, HSSE reporting requirements, implementation of observation program, inspection and auditing, etc. The experience and competencies of the Safety Officer to hold this role shall be verified. This is a critical position and therefore should be properly resourced. Effective inter-personal skills are fundamental to ensure that such a position provides real support at crew level, as opposed to simply creating another layer of communication.

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Additional rig-based Safety Officers may be required to support the initial start of operations, and will be dictated by the project specifics on a case-bycase basis. •

9.6.3

Shell HSSE Focal Point: An office-based position who closely liaises with the rig contractor’s HSSE Advisor and Safety Officers in all HSSE-related matters, during all phases of the rig start process and subsequent operations.

Resources •

Start Team Resource Levels: Recommendations for the start team resource requirements are presented in Section (6). Careful consideration should be paid to ensure there are sufficient staff available to effectively carry out the project. Full-time roles should be ring-fenced and preferably dedicated to the start of the rig.

•

Operational Team Resource Level Verification: During the contracting phase and again at the final rig start phase, it shall be verified that the rig contractor has the required level of HSSE resources in his/her internal organisation to support the rig operation on a sustainable basis. This may be determined through examination of the contractor’s staff structure, and interviews with the contractor’s office-based HSSE personnel. The LRST HSSE Focal Point shall be responsible for carrying this out. Any deficiencies in this shall be addressed prior to the rig starting operations. Verification shall also be achieved through the various inspections conducted as part of the rig start process.

Additional layers of supervision may be considered for the start of new-build rigs to aid and support crew familiarisation. •

9.6.4

Leave/sickness Cover: Sufficient resources should be in place to provide cover for taking leave, and in the event of sickness for both key Shell and rig contractor staff. As the rig start phase is usually time critical, it should be ensured that resources sufficiently familiar with the project are always available to step in at short notice. Emergency staffing plans should be discussed with the Wells Operations Team Lead.

Competence Assurance Process The rig contractor shall effectively implement a Competence Assurance Process. The Process shall address both HSSE and Technical elements, and include both theoretical and practical assessments. The Process should form the basis for promoting existing personnel into new positions, as well as part of the HR process when recruiting personnel into the organisation. Implementing and managing the Competence Assurance Process typically requires a full-time resource, especially during the start of a new-build rig or moving rigs across international borders where crews will normally be changed out. Verification of regulatory required licenses shall be conducted (i.e., Captain’s license, radio-operator’s license, DP Operator’s license, etc.). rd

The Wells Operations Team Lead shall verify that the 3 party contractors involved in the project have similar Competency Assurance Processes in place, rd and that the 3 party personnel assigned to the project are competent. Particular focus is required for individuals in Health, Safety, Security, and Environment (HSSE) critical positions such as: •

Positions responsible for front-line operational HSSE critical activities

•

Positions responsible for planning/supervisory HSSE critical activities

•

Leadership positions

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People in HSSE & SP professional positions

Refer to the HSSE & SP Control Framework Management System Manual, Section 3, Organisation Responsibilities Resources, Competency. Wells Manual WS 38.80.32.32-Gen. Page 36 of 90 st March 1 , 2014 RIG START MANUAL Revision Number The controlled version of this document resides online in the DEP system. Printed copies are UNCONTROLLED. This document has been supplied under license by Shell to: Shell [email protected] 05/03/2014 10:15:02

Additional supporting information can be found in Competence Assurance of 10 HSSE Critical Positions . 9.6.5

Training The rig contractor shall have a formal system in place to address the internal and external training requirements of the Competency Assurance Process. Typically, this will take the form of a training matrix which identifies the specific training required for each individual position. The training shall include: •

Mandatory training [i.e., Basic Offshore Safety Induction & Emergency Training (BOSIET)/Helicopter Underwater Escape Training (HUET), Helicopter Landing Officer (HLO), International Well Control Forum (IWCF)/International Association of Drilling Contractors (IADC) Wellcap Certification, etc.].

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HSSE-related training.

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Technical training (including vendor specific operating and maintenance training).

Some training requirements have a validity period requiring refresher training after a certain period of time. Refer to the following link: 6.6.5 Example Training Matrix.xls. Any project specific or regulatory training requirements shall be included in the contract documents, and subsequently added to the existing training matrix (including emergencies management). Training shall be effectively managed and a process shall be in place to identify, plan/book training, and retrain as appropriate. Records of training and valid certificates shall accompany the training matrix and reviewed for completeness. This may be in the form of archived hard copies or soft copies from a corporate database. rd

The Wells Operations Team Lead shall verify that the 3 party contractors involved in the project have similar training systems in place, and ensure that the rd 3 party personnel assigned to the project are suitably trained. 9.6.6

Management of Short Service Employees (SSEs) The rig contractor shall have a structured system in place to effectively manage SSEs. By definition, a SSE is an individual who has held a particular position for less than 6 months on that particular rig. This includes newly promoted individuals. Example systems are green hat schemes, mentor schemes, assigned buddy, etc. The percentage of SSEs shall be monitored as one of the key performance indicators (KPIs) and reported on a daily basis. A typical target is