Crewresourcemanagementinogindustry Upstreamindiadrillingsector 140116065540 Phpapp02

Crew Resource Management in Oil & Gas Industry

Upstream India – Drilling Sector

Presented by: Tapas Kumar Basu

Slide No Talent Conundrum

Big Crew Change 3 Global Issue 4 Upstream India 5 Projected Staff Shortage 6 How it happened 7 Challenges 8 -9 Consequences 10 - 12

Driving the Change Accidents and Fall outs 13 Technology 14

HR Initiatives Upstream Global 15 Upstream India 16

Upstream India Talent Conundrum 17 Profile of Drilling Sector 18 2013, Rigs and Drilling Crew 19 What do we need 20

New Framework Value of Competence – India 2013 21 IADC – Knowledge, Skills and Abilities 22 Crew Development Needs 23 What is available and what is required 24 Need for Strategic Collaboration 25 New Initiatives – Year 2013 26 Look Ahead – Year 2014 27

Slide No: ‹3›

Presenter

Presentation Notes

Great Crew Change, Silver Tsunami, Changing of Guard, Talent Conundrum “The Big Crew Change” is an approaching event within the oil and gas industry when the mantle of leadership will move from the “calculators and memos” generation to the “connected and Skype” generation.

Slide No: ‹4›

2005: Average age in O&G industry is 49; among the oldest of any industry…

2015: More than 50% of the workforce are ready to retire..

Slide No: ‹5›

2010: Average age is 47 for the NOCs which constitute 80% of upstream work force of the country

2015…………???

Presenter

Presentation Notes

Great Crew Change, Silver Tsunami, Changing of Guard, Talent Conundrum “The Big Crew Change” is an approaching event within the oil and gas industry when the mantle of leadership will move from the “calculators and memos” generation to the “connected and Skype” generation. 2004 – Texas Tech University presented at SPE ATC&E, Denver, CO their findings on the Big Crew Change for the Upstream Sector 2007 – “The average oil and gas industry workers across the upstream value chain are in their mid-40s, with more than a third expected to retire by 2012” – as per a report by Oliver Wyman 2010 - Oil & Gas Collaboration Survey funded by Microsoft Corp. and Accenture, Conducted by PennEnergy in partnership with the Oil & Gas Journal Research Center; 2011 - Specialist global recruitment company Working Smart, with the support of the American Association of Petroleum Geologists (AAPG) 2011 - Jean-Marie Rousset, Pierre Bismuth, and Olivier Soupa, of Schlumberger Business Consulting 2012 – IADC Annual Meet, Industry Leaders agreed that the crisis is evident globally for the drilling industry and the industry has no preparation to deal with the Big Crew Change.

Slide No: ‹6›

……Short supply of competent crew and looming talent crisis

Slide No: ‹7›

Analysis of 4 decades (1974 - 2013)

74 - 80 Oil price is going up

74 - 83 Upstream is booming

85 - 89 Oil price crashes

90s Upstream is ailing

……….Oil Industry workforce starting career mid-80s to end-90s is virtually missing

Slide No: ‹8›

More challenges as we go forward….

Slide No: ‹9›

Slide No: ‹10›

Slide No: ‹11›

Presenter

Presentation Notes

The increase in wage bill is based on inputs from three offshore drilling contractors, two land drilling contractors and one manpower agency’s database. Most of the Indian Drilling Contractors are not ready to part with any information officially, while every details is known in the market freely. While there could be good justification for maintaining confidentially. The salary data, as is very common in the western world, is very useful for the industry for reality check and course correction. The trend is just one element of the burden. The crew development and fast tracking has multiple benefit to the contractors. Internal replacement – eliminates the cost of recruitment, cost of the raise given to get the replacement. It was not possible for me to quantify the same, but it is sufficiently large to force some of the major international drilling contractors to shift from their internal traniing programs to structured approach by professionals in the respective field. Annual increments – a large part of the wage bill goes in annual increment to crew who are working year after year in the same category. Fast tracking of talented crew and replacement/ alternate career opportunity for slow-performers and internal replacements is expected to flatten the wage bill trend by approximately 40% in three to four years. Accidents cost fortune (billions..and billions of $) and accidents cannot be prevented by just safety training. The human factor of accidents are best demonstrated when Mocando and Pipe Alfa was analyzed. IADC’s KSA is trying to address the whole structure of creating competency level that will Perform Efficiently and Safely. And this

Cost of Incompetence

Slide No: ‹12›

1975 – 1980: peak in US E&P activities,

average ft/active rig went down up to 30%

Future: increased activity, frontier

technology compounded by big crew change

Globally Incompetence may lead to loss of 10% from US$ 700 billion E&P spend

Slide No: 13

In the Oil and Gas accidents are lost into HSE

statistics..

Piper Alpha in North sea and Mocando in GoM

received global attention which highlighted:

Poor Safety Culture in the upstream industry

Human Factors are the primary tool for

prevention

and were the primary vector for changing the industry norms…..

Slide No: ‹14›

Exploration successes in deepwater and ultra-deepwater

Complex Rigs, Subsea Systems and Production Facilities

Expensive exploration program

Many new entrants in deepwater drilling and services

Currently, demand driven by exploration work;

Will increase manifold as development activity begin

Journey into Deep/ Ultra-deepwater

....importance of Safety and Performance had never been so important

Presenter

Presentation Notes

The industry and the government are inadequately prepared in both knowledge and risks, while the technology is available to make the Journey.

Slide No: 15

Last decade large scale global initiatives to address the Big Crew Change had

been initiated by -

Governments (UK, Norway, Australia, Canada & USA),

Education Institutions (Texas Tech University, University of Calgary),

Consulting Agencies (SBC, E&Y, Deloitte, Accenture, Bain & Co etc..) and

E&P Majors, Contractors and Associations (IADC, SPE etc) :

Presenter

Presentation Notes

2004 – Texas Tech University presented at SPE ATC&E, Denver, CO their findings on the Big Crew Change for the Upstream Sector 2007 – “The average oil and gas industry workers across the upstream value chain are in their mid-40s, with more than a third expected to retire by 2012” – as per a report by Oliver Wyman 2010 - Oil & Gas Collaboration Survey funded by Microsoft Corp. and Accenture, Conducted by PennEnergy in partnership with the Oil & Gas Journal Research Center; 2011 - Specialist global recruitment company Working Smart, with the support of the American Association of Petroleum Geologists (AAPG) 2011 - Jean-Marie Rousset, Pierre Bismuth, and Olivier Soupa, of Schlumberger Business Consulting 2012 – IADC Annual Meet, Industry Leaders agreed that the crisis is evident globally for the drilling industry and the industry has no preparation to deal with the Big Crew Change. E&P Majors: Shell, BP, Exxon, Chevron through innovative programs - Upstream Challenge, Graduate Program, Fixed Step Training

Slide No: ‹16›

2006 – PWC & Petrofed “Workforce Sustainability and Crew Management in Upstream Oil and Gas Industry”

2007 – Hewitt & Oil PSUs “Compensation Benchmarking and Attrition..”

2009 – FICCI and UKIBC “Framework of Vocational Education..”

2010 – Booz & Co “Big Crew Change and Talent Crisis in India’s Oil and Gas Sector”

Common Findings

Aging Workforce

Scarcity of Skills

Lack of Vocational

Education

Slide No: ‹17›

4

5

6

7

8

9

10

11

30

32

34

36

38

40

42

44

2005 2006 2007 2008 2009 2010 2011 2012 2013

E&P

Budg

et (b

n U

S$)

Tota

l Wor

kfor

ce (x

100

0) --

>

Upstream India: E&P Budget and Total Workforce

Source: Indian P&NG Statistics 2012 - 13,

GoI, MoPNG, Economic Div

“Big Crew Change” …..it will not fix by itself

Slide No: ‹18›

Slide No: ‹19›

Rig Count Total (Drilling & Workover): 216 •Utlisation: 70%

Total (Platf, Jack-up, Floater): 49 • Floaters 12, Jack-ups: 37

Rig Crew Count Estimated Total: 15,000 •Potential for new requirement: 6,000

Estimated Total: 5,000

Slide No: ‹20›

The Upstream industry spends about US$ 3 bn, 30% of the E&P budget on drilling of wells

Drilling sector employs approximately 15,000 skilled workforce

India is still a major source of drilling crew in ME region and Africa

Crew Development: Experience (Long) vs Skill Certification (Fast Track)

Migration plan for talents: from onshore to offshore, from non-upstream to upstream services

Training for New-gen developments: cyber rig operation, deep-water technology, sub-sea system

Estimating Value of Competence: India 2013

Slide No: ‹21›

Total no of wells drilled 580

Drilling Spend (≈ 35% of E& P budget) US$ 3 bn

Avg. flat time as % of total time per well 20% - 40%

Slide No: 22

IADC: Knowledge, Skills, and Abilities (KSA)

List of minimum Knowledge, Skills, and Abilities required to perform the jobs for all rig-based positions – RA to OIM

Published in Offshore Competency Training Programme

Enhanced Competency Guidelines for rig personnel confirming proficiency levels of current work force and developing competence levels for new

entrants

Slide No: ‹23›

Human Capital Growth

Retention

Recruitment Development

Slide No: ‹24›

Course No of Schools

Drilling Technology 1

WellCAP (IADC) 6

Rig Pass (IADC) 8

HUET, First Aid, Fire Fighting, BOSIET, PST etc.. Many

1. KSA Program for Rig Crew (IADC) 2. OIM Certification (MODU)

3. Continuous Development Program (e.g PETEX)

4. Communication, Leadership and Emergency Response & Crisis Management

5. Competency Assessment Program by Drilling Contractors

6. Accreditation as per International Standard

7. Crew Qualification in Drilling Contracts

Slide No: ‹25›

E&P Operators

Contractors

IADC, SPE

Universities

Regulators

Though major stakeholders in

developing competent crew are

E&P companies and the drilling

contractors, the success of the

program can be achieved by

collaborative efforts to create

consensus, sustainability and value

chain

Slide No: ‹26›

Major Drilling Contractors from both Offshore and Onshore sector have started reviewing the new framework for the crew development

Year 2013 IADC SCAC: A new sub-committee to define the KSA for Drilling Crew;

Presenter

Presentation Notes

“Hire, train and retain bright motivated personnel and remain focused on core strategies.”

Slide No: ‹27›

…Year 2014

•IADC, Operators and Contractors: Agree on the KSA or KSA-revised, progressive 1

•Contractors, Simulation Experts and Training Institutes: Create Infrastructure 2

•Contractors: Recruit, Train Crew as per KSA, Develop and Implement Competence Assessment Program (CAP) and Continuous Education Program (CEP)

3

Presenter

Presentation Notes

“Hire, train and retain bright motivated personnel and remain focused on core strategies.”

Documents

Crewresourcemanagementinogindustry Upstreamindiadrillingsector 140116065540 Phpapp02