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Case Study

Deepwater drilling - Achieving Best in Class

Offshore Oil and gas field

After the success of the first of two deepwater rigs that were built and delivered, performance began to decline, and the cost of delivering the second well exceeded the first by $50 million.

The Situation

A U.S. drilling division of a Canadian oil company was a relatively new player in deepwater drilling in the Gulf of Mexico. Early success in exploration and drilling gave the organization a high level of confidence for future success. They ordered two deepwater rigs to be built and scheduled delivery for one year out and one year apart. After the success of the first well, performance began to decline. The cost of delivering the next well exceeded the cost of the first by $50 million.

Our Approach

Working closely with the client, we began to build the path to high performance and the journey to Best-in-Class. Initial realizations were that this would be a bold move and would involve risk. It would require the organization to take a very hard, internal look and would also require a cultural transformation. No one could hold back – the organization would be encouraged and rewarded for participation and honesty.

The case for change was realized. To build organizational traction, a global task force was formed. There would be global participation from Canada, the U.K., Indonesia, and other locations. The initial focus would be on Drilling/Completions and Rig Readiness, but the client realized that the entire business platform would be engaged before the journey’s end.

The analysis consisted of a benchmark study comparing our client against the Best-in-Class performers in the Gulf of Mexico, a review of internal past performance and a study of the current operating state.  Examples of the findings include:

  • Processes: The defined well delivery process was not being followed. The organization scored a 2 (below average) on the deepwater well review; data and record keeping were inadequate, and the decision-making process was broken
  • Equipment/services: Support services lacked deepwater experience and expertise; there was no formal QA/QC process; rig delivery and commissioning not clearly defined
  • People/organization: the organization was under- resourced and lacked the specialized skills in operation, engineering, management and support; roles were unclear and changing; and there was a lack of project management  structure
  • Cultural: a silo organization with a reactive and repressive environment, a lack of planning, “rig driven”

Of additional importance, the president realized the organization needed to be moved and transitioned. To that end, concurrent with the analysis, the following initiatives were undertaken:

  • Develop a hiring strategy and begin building capacity in skill sets
  • Develop a communication and execution plan
  • Begin the organizational behavior transition: Overhaul the business platform and build organizational clarity and agreement  

Recommendations

The next phase was to deliver the recommendations:

  • Build a completely new organizational structure, based on Best-in-Class drilling organizational models, with “well dedicated” drilling teams
  • Develop a comprehensive well delivery process, integrated with the exploration maturation process and other support processes Hire the needed resources to support the proposed organization structure to meet the rig and well delivery schedules
  • Build the communication infrastructure to ensure coordination of remote and separate operations (Dallas, Houston, Louisiana, onshore and offshore)
  • Build a robust rig acceptance and commissioning process  

Value Delivered

  • The resources were acquired and the drilling team assembled and trained in time for the rig delivery. (A 60 percent staff growth in less than a year)
  • The organization was originally behind schedule for rig delivery. The project enabled them to accept the rig on time and save 30 days of rig down time (at $600, 000 to $1,000,000/day)
  • All planned processes were developed and implemented
  • Support functions (Supply Management, HSE&SR, QA/QC, Regulatory) were developed and implemented on time
  • The Sustainability Process was implemented and has been successfully operating to date

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