28 March 2014

The Manager Environment, Safety and Security Section Offshore Resources Branch Resources Division Department of Industry GPO Box 1564 CANBERRA ACT 2600

Dear Sir/Madam,

Chevron Australia Pty Ltd ABN 29 086 197 757 L24, QV1, 250 St Georges Tee Perth WA 6000, Australia GPO Box S1580, Perth WA 6845 Tel 61 8 9216 4000 Fax 61 8 9216 4444

Issues Paper- Review of Part 5 of the Offshore Petroleum and Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011

Chevron Australia Pty Ltd (Chevron) welcomes the opportunity to provide comments on the above Issues Paper.

Attached to this letter are Chevron's detailed comments with regard the specific questions posed in the Issues paper to identify policy and operational issues that could impact on the effectiveness of the regulation of wells and well activities for petroleum and greenhouse gas storage activities in Commonwealth waters.

Chevron looks forward to further engagement as any recommendations develop, and we would be pleased to discuss our submission further. Should you have any further queries, please contact Scott Faragher on (08} 9262 2040 or scott.faragher@chevron.com

Yours sincerely,

Graeme Harman PGPA Manager- Operations

Dist DociD

Chevron Comments on Review of Part 5 of the Offshore Petroleum Greenhouse Gas Storage (Resource Management and Administration) Regulations 2011:

3.2 Chevron is supportive of using the concept of reducing risks to ALARP as the standard for regulating well operations.

4.2 Chevron would support extending the titleholder requirements to cover suspended wells, including production wells that have been shut-in. In the case of abandoned wells, the WOMP should include some definition of the standard to which the well will be abandoned, Chevron does not however support the concept of maintaining active WOMP's for abandoned wells. It is Chevron's view that the well should be abandoned such that, judged by a reasonable standard (i.e. ALARP and acceptable, or "good oilfield practice"), it does not have the potential to pose any unacceptable risk to either people or the environment. A standard of risk being both ALARP and acceptable would align and be consistent with the Offshore Petroleum Greenhouse Gas Storage (Environment) Regulations 2009 (Cth).

4.3 Chevron supports the Safety Case Regime, but in establishing a general duty of care for the titleholder with respect to wells, consideration must be given to the limits placed on the titleholder by the Safety Case Regime in defining process and equipment standards on the drilling unit. The duty of care for operational safety on a Mobile Offshore Drilling Unit (e.g. semi-submersible, jack-up, drillship, tender) is with the vessel operator under the Safety Case regime. While the titleholder interfaces its Safety Management System and well integrity standards with the vessel operator through the mechanism of a Safety Case Revision (typically prepared by the titleholder and reviewed, approved and submitted to NOPSEMA by the vessel operator), it is the vessel operator who is responsible for the safety systems, equipment and processes in use on the drilling unit. In certain areas, for example well control, the maintenance of well integrity relies very much on procedures and equipment that are the responsibility of the vessel operator. The titleholder's general duty of care for wells should not conflict with or undermine the responsibility and accountability of the vessel operator under the Safety Case Regime.

4.4 Chevron believes the current definition of "well" and "well related activity" to be workable and generally well understood by the industry. Consideration should however be given to excluding very shallow boreholes drilled or cored purely for the purposes of obtaining shallow soil data used to establish seabed stability and quantify structural support properties. These activities may be captured by the current well definition, but would not typically be considered by industry as "wells".

4.7 Chevron supports the recommendation of the Montara Commission that the WOMP should be a free-standing, primary framework document that outlines how the titleholder will maintain well integrity. Given the requirement for a WOMP to be a free-standing document, it is by definition going to be a substantial piece of work. Practically, both in regards to the resources required to prepare a WOMP and the

regulatory resources required to review a WOMP, titleholders should reasonably be allowed to group similar activities together under a single WOMP. Examples of this might include drilling and completing all wells in a discrete field development, covering all producing or injecting wells within a discrete development in respect of workovers and interventions, or drilling multiple wells making up an exploration drilling campaign.

(N.B -the review document contains two points number 5.6. The above comment pertains to the second of these points.)

4.8 The WOMP addresses many higher level systems and processes in place within the titleholder's organization, including organizational capability, well construction standards to individual well performance standards. Practically speaking, the titleholder will often look to submit a WOMP well in advance of the current 30 day notification period, in recognition that any changes the regulator might require would potentially be time consuming to implement (e.g. changes to standards that must be subjected to internal due diligence and approval, provision of additional systems and personnel). The detailed design of an individual well activity, however, may not be finalized at the time of WOMP submission, particularly in the case where similar well activities are grouped. An example would be a multi-well development campaign, where well construction and integrity standards, well performance standards, and general well design would be well understood at the time of WOMP submission, but the detailed well designs for the later wells in the campaign would not be complete. In this regard, Chevron still identifies a need for individual well activity applications or notification that would demonstrate that the detailed designs for each individual well activity had been carried through to completion. Adopting a well activity notification system comparable to that utilized by the HSE in the UK would be an acceptable alternative to the current well activity application, although in practice, Chevron believes that the contents of a well application and a well notification would be comparable.

4.9 Chevron supports the view that there should only be one active WOMP in relation to a specific well at any point in time.

4.11 Broadly speaking, the WOMP should contain sufficient information on the titleholder's Organizational Capability, Safety Management Systems, Well Construction Standards, Well Integrity Standards and scope specific Well Performance Standards for the regulator to make an informed judgment of the titleholder's ability to maintain well integrity, and achieve safe operations throughout the proposed well activities. While the WOMP needs to function as a standalone document (as per the recommendations of the Montara Commission), it would not be practical to submit all the details of a titleholder's Safety Management System and Well Construction Standards .. A balance must be achieved between providing adequate information to allow the regulator to evaluate the titleholder's relevant systems and processes while keeping the WOMP a manageable document, both for the titleholder to produce and implement and for the

regulator to review. Chevron believes there is scope for the WOMP to reference the titleholder's detailed standards, which the regulator may request for further review, while maintaining the intent ofthe WOMP as a free-standing document.

4.13 Chevron believes that the titleholder's system for managing contractors is out of the scope of the WOMP. The WOMP should focus on standards and processes in place for maintaining safe operations and well integrity.

4.15 Chevron supports the adoption of a well examination scheme, similar to that utilized in the UK. Chevron does not support such a scheme requiring third-party assurance if the definition of 'third-party' limits the use of well examiners not employed directly by by the titleholder (i.e. mandates an external company or organization be used). Chevron believes the titleholder should have a choice between using an external organization, or internal resources to fulfil this well examination role. If a titleholder uses internal company resources for the well examination process, the titleholder must reasonably demonstrate adequate separation of the well examiner position from the day-to-day well design, execution and supervision process such that the independent nature of the well examiner's assurance role is not compromised. 5.22 Chevron believes that a 5 year period is a reasonable revision frequency for a WOMP (as long as it has not been comprehensively revised in the previous 5 years).

4.23 The titleholder should specify the activities and the time period covered by the WOMP, subject to the regulator's approval and recognizing that the WOMP is limited to a 5 year period of validity. In the case of a WOMP for a producing field, for instance, unplanned well interventions may be required even after all planned activities are complete. It would be beneficial for a WOMP to be in place and valid for these unplanned activities, which by their nature may be required to address well integrity ISSUeS

4.27 Chevron accepts the need for the regulator to provide notice of intent to withdraw (or consider withdrawing) a WOMP to other regulatory and government departments. Chevron does not however support extending this to non-regulatory or non-government organizations or individuals (e.g. titleholder's joint venture partners, non-government organizations, titleholder's contractors).

5.1 Chevron supports the requirement to notify the regulator that a permitted well activity is complete and update the regulator on the final status of the well after the well activity.

5.2 Chevron would support a transition to a well notification system, but believes the regulator should still play some role in reviewing the contents of the well activity notification, It is Chevron's view that this process should in broad terms be similar to the contents of the current well activity application, which would ensure that the titleholder has adhered to the principles outlined in their approved WOMP in designing the specific .well activity. This process could take the form of a review of all submitted

notifications, or an audit type approach on a cross section of notifications. Indeed, there is a case that the regulator should have some discretion in which notifications it reviews based on a titleholder's track record in the areas of well integrity and operational safety, the titleholder's experience in the area of operations (both in terms of work scope and geographical area), and the titleholder's ability to remediate any loss ofwell integrity.

5.4 Chevron would support either a 21 or 30 day notification period for the drilling and completion of new wells, and a shorter 10 or 14 day notification period for well interventions.

6.1 Chevron believes the titleholder should have an active WOMP to cover suspended wells, including production wells that have been shut-in. In the case of abandoned wells, the WOMP should include some definition of the standard to which the well will be abandoned. Chevron does not however support the concept of maintaining an active WOMP for abandoned wells. A well should be abandoned such that, judged by a reasonable standard such as ALARP and acceptable and I or "good oilfield practice, does not have the potential to pose any unacceptable risk to either people or the environment.

Chevron does not believe the definition of a well activity should be extended to cover the monitoring of inactive wells unless the monitoring activity requires entry into the well pressure envelope. However, in the case of suspended wells, Chevron believes it reasonable to require the active WOMP to address the monitoring standard, that will be adhered to in order to ensure well integrity is maintained, or else demonstrate that the suspension standard is sufficiently robust, including barriers with appropriate design life, such that no monitoring is required over an interval of time to be defined by the titleholder.

7.2 Chevron believes a three (3) day response time for the initial written notification of a 'well accident' or 'notifiable event' is reasonable, albeit this initial response may be limited on details of the planned response, particularly in the case of subsea wells where mobilization of vessels and ROY's may be required to fully assess any event. Chevron does not believe that a 2 hour verbal notification period is adequate (i.e. a longer notification period is required). In the case of a loss of well integrity and I or environmental discharge, the immediate focus will be on making the area or well safe and ensuring the safety of personnel; reporting requirements should be secondary to this concern. A 2 hour reporting requirement potentially places undue time pressure on personnel involved in the incident response. In the case of remotely operated wells (e.g. subsea), the initial incident will likely be noted by distant control room operators and a sequence of verification and analysis would need to be undertaken before an event can be confirmed or classified. Such work would not likely be feasible within a 2 hour period. . Chevron suggests a minimum 6 hour period for verbal notification is more appropriate for a qualifying well event ('well accident' or 'well notification') that does not involve injury to personnel.