Managing the Human and Organizational Factors of Well Integrity
Written by Wood Group Intetech's Dr Liane Smith (Director and Founder) and Kyle Volf (Manager, USA)
Society’s tolerance of industrial accidents has dropped dramatically. Even small-scale issues have the potential to diminish a company’s brand value. As the appetite for risk has fallen, oil and gas operators have had to employ increasingly sophisticated monitoring and control systems to provide safeguards for their wells, pipelines, and production facilities. Yet many firms lack visibility at field or enterprise level because information relating to well production, barrier equipment, and design is held in different departments or various formats. These ‘silos’ make it difficult for management teams to identify problems, make informed decisions, and take remedial action.
Without an integrated source of well integrity data or a uniform method of analyzing that data, it is difficult for oil and gas firms to effectively manage the human and organizational aspects of risk.
Improvements in safety and serious lapses
In 2010, a year that saw safety issues related to oil and gas exploration dominating headlines around the world, the rate of fatalities was actually the lowest on record. This finding was based on an analysis of 3,411 million work hours of data in 102 countries by the International Association of Oil & Gas Producers (OGP), who has been publishing safety data since 1985.
Despite the continuous improvements in personal safety, the oil and gas industry has had to deal with several process safety lapses in recent years. The most significant of these was the Macondo incident in the Gulf of Mexico. Within months of Macondo, the OGP established the Global Industry Response Group (GIRG), which is overseeing industry efforts to determine what can be done on an international scale to improve well incident prevention, intervention, and response capabilities. The GIRG has determined more reliable well safety relied on renewed efforts in four key areas:
Creation of an industry-wide well control incident database
Assessment of blow-out-preventer reliability and potential improvements to this equipment
Improved training and competences and more attention paid to human factors
The development and implementation of key international standards pertaining to well design and well operations management
Complexity and confirmation bias
Benchmarking using such KPIs is critical given that every large organization is, by its very nature, complex. Moreover, different levels of understanding and accountability will exist within any large organization, making it a challenging task to ensure process safety and effective risk management across all aspects of its business. Indeed, even the best designed, engineered, maintained and operated assets and facilities are still vulnerable to human failings and organizational complexity.
One recognized example of the latter is the asset based organization model, which can lead to conflicts of interest. Under the asset model, there will be an engineer or someone responsible for managing a group of wells and who must balance good practice against production targets. If that person encounters a situation where they have to weigh safety concerns against production or financial targets, they may be more likely to not elevate concerns when compared to safety engineers.
Another example of how process safety can be undermined by human error is where engineers and specialists working in groups have the tendency to ‘normalize risk’. This can be the case where a test has been conducted thousands of times, an abnormal reading is returned on a single occasion, and is therefore more likely to be viewed as an anomaly. Whereas if that test was being conducted for the first time and an abnormal result were returned, it would be cause for major concern. This phenomenon is also known as ‘conformation bias.’
The renewed emphasis on process safety and work in the area of asset integrity has highlighted the importance of safety considerations through the lifecycle of an oil and gas asset, as well as for every phase of a major project. Information on the status of safety-critical well barrier components must be completely dependable, and the components must operate as reliably as possible should a problem arise at any given point in time. Yet many firms continue to rely on handover documentation and a patchwork of bespoke production management databases and spreadsheets to manage data.
What is needed is a systematic management system, especially since it can take a long time to gather statistically relevant data. Industry bodies such as the OGP now recommend that systems be implemented for consistent collection and analysis of data and related information on more than just major incidents.
One emerging model is the well integrity management system (WIMS), which aligns all elements including the business process, handover, data management, and risk management. As a sub-set of asset integrity management, WIMS exist both at a documentation and software level, and combine key well operating and production data within a framework for decision-making, management processes, and organizational structure.
A holistic approach
An advanced WIMS can interface to a wide range of third-party databases to collate the necessary information for analysis and identification of wells shifting outside critical safe operating limits, for the assessment of equipment reliability and well risk, and for real-time estimation of corrosion in the well tubing. Data can also be acquired directly via tablet PCs in the field, entered manually, or via spreadsheet loader – and synchronized instantly with the central database to provide a comprehensive, singular view.
Documenting institutional well integrity management into a software product and working system can have major benefits for a large company when combined with a robust approach to knowledge management and placed in the hands of trained and experienced personnel. It ensures consistency of data, which is vital for oil and gas firms with global operations who need the confidence that the right people have access to the right information at the right time for rapid, informed and consistent decision-making. It also ensures consistency in terms of knowledge management and approaches to well integrity. This is essential given large oil and gas firms tend to have a high turnover staff internally.
With operating well data consolidated within a single user interface, the addition of smart functionality enables operators to analyze the well condition automatically in real time and generate concise reports customized to their individual requirements. This ensures they have the specific ‘tools’ needed to satisfy local regulations, proactively identify potential problems, and plan test schedules and repairs.
Automating for operational efficiency
Spills and leaks through loss of well integrity can harm people, the environment and a firm’s reputation. In addition to the severe curtailment to production and cost of shut-in, there is also the cost of restitution and remediation. The aging of wells in many parts of the world does tend to result in increasing risk of leaks, particularly related to loss of integrity in the outer annuli of the well.
WIMS provide decision makers with the intelligence they need to strike the right balance in today’s risk-averse environment. At the same time, WIMS can help address the human and organizational factors surrounding well integrity by quickly focusing staff attention on problem areas of an asset, and by providing the ability to manage by exception.
Ultimately, WIMS can ensure the engineering/safety function operates independent of commercial considerations, so that design and risk decisions are free from the complexity of meeting financial targets.
Intetech has recently been acquired by Wood Group and will be known as Wood Group Intetech, part of Wood Group Kenny.
Ofwat allows retailers to raise prices from April
Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.
The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.
Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.
In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue.
Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”
There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:
- Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps.
- Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold.
- Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice.
Further consultation on the proposed adjustments to REC price caps can be expected by December.
"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.
"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."
United Utilities picks up pipeline award
A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.
The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.
“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.
Camus Energy secures $16m funding
Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent Ventures, Wave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.
As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.