INDUSTRY & TECHNOLOGY POLICY BOARD Petroleum and Drilling Engineering (P&DE) Division Annual Report for 2010

1. Board membership

Steve Bedford (Chair), Steve Jewell, Craig Durham, Margaret Copland, Prof. Babs Oyeneyin and Martin Cox. Stuart Preston IOM3 Co-ordinator.

2. Board meetings

27th April, attendees: Steve Bedford, Margaret Copland, Martin Cox, Prof. Babs Oyeneyin, Steve Jewell, Craig Durham and Helene Burd (IOM3).2nd November, attendees: Steve Bedford, Steve Jewell, Margaret Copland, Prof. Babs Oyeneyin, Martin Cox, Craig Durham, Peter Davies (IOM3) and Mike Edge (observer former IWSc Member).

Minutes of Board meetings are posted on the IOM3 website.

3. Opportunities for growth of Division Community or constraints

When the P&DE Board was established in 2007 the Division had 436 members. In line with IOM3 the P&DE Board set a target to increase Division membership by 20% by 2011. This target has been significantly exceeded with membership standing at 988 at November 2010. As part of the Division 5 year plan (Reference Appendix B) the Board has set a new target to increase membership to more than 2000 by 2015. The Board believe that the key short term levers to achieving this target are:-

Continued delivery of successful events and offerings. Canvassing and responding to member needs. A member survey was conducted

in 2009 and a follow up survey will be conducted in 2011. Raising the profile of the Division and improving communications. Raising the visibility of the opportunity for Oil and Gas professionals to obtain

CEng through the Institute and supporting attainment of this qualification. Note that the 2009 member survey showed that obtaining and retaining CEng was the primary reason for people to belong to the Institute. The Macondo well blowout in April 2010 raised the issue of personnel competence in Petroleum and Drilling Engineering and UK Oil & Gas has established a working group to look at this.

Engaging students and employees through the Institutes accreditation of relevant academic and Industrial development programmes.

Visible Institute presence at Offshore Europe 2011 to connect, and engage with, the expected 40,000+ attendees.

In the medium term the Board believes that there are growth opportunities through the establishment of local societies in other global oilfield centres, increased links with other

The global network for the materials cycle

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bodies who cannot offer professional qualifications and engaging the Technician community. The Board 2011 and 5 year plans are focused on growth.

The two key constraints to growth at this time are viewed as the number of Board members and limited Institute support for accreditation. The Board is seeking to recruit two new members in the short term and is canvassing the Institute for additional support to meet the accreditation targets. In addition the following are also viewed as constraints:-

No legal requirement for the professional qualifications and continuing professional development offered by the Institute.

Limited career enhancement through gaining the professional qualifications offered by the Institute and participation in the continuing professional development activities.

Engineers in the Oil and Gas Industry are very busy and find it difficult to make the time to participate in the Institute.

There are multiple Institutes working in the Petroleum and Drilling Engineering sector, decision makers tend to support their own “heritage” professional body.

The American Society of Petroleum Engineers (SPE) globally dominates the Petroleum and Drilling Engineering profession. The SPE has linked up with the Energy Institute and is offering an increased level of service to Petroleum and Drilling Engineers, including: a route to professional UK registration as a Chartered Petroleum Engineer and model codes of safe practice/guidelines for Petroleum and Drilling Engineering activities i.e. Industry Best Practices.

The P&DE Board continue to recommend that the Institute:-

Lobby the European Union, with other professional bodies, to have legislation passed to recognise and require professional qualifications to practice as an Engineer within the oil and gas Industry in Europe.

Update the home page of the IOM3 website to make it more intuitive and easier to access the Division micro sites and the application material for professional qualifications.

4 Technical programme

P&DE Division has been active through 2010 delivering technical presentations, industrial visits, student seminars and training courses as detailed in Appendix A. At each event there was a recruitment stand and video conferencing was used to reach the geographically dispersed membership. The P&DE membership survey clearly indicated that members view networking opportunities at professional events as a key reason for belonging to the Institute so the Division is looking to sustain popular technical events and add new events in 2011 as detailed in Appendix A. Highlights and learning’s from 2010 were:-

Engagement with other Institutes for joint technical events has proved to be effective for the Institutes involved as many different Institutes operate in the Aberdeen area and programmes tend to clash.

Continued over subscription for the downhole metallurgy course and interest from Companies for the Course for their Engineers.

Student seminars have proved to be a more effective means of engaging students than attendance at induction events and there is growing demand for seminars outwith Aberdeen

Techfest proved again to be a very effective way of reaching out to a large audience and the new Reservoir simulation model was well received.

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5 Foresight / Innovation and Growth

Through 2010 oil and gas spot prices have continued to steadily increase despite the relative weakness of the global economy. At the same time UK domestic production has continued to decline with the UK a net importer. As the global economy strengthens oil and gas prices can be expected to increase further. Recognising this countries are actively working to increase recovery from conventional hydrocarbon plays while developing non conventional resources (in particular shale gas and coal bed methane in the United States and eastern Europe) and licencing new areas for exploration. Major importing countries (such as China) continue to actively procure access to supplies. Western oil companies have been progressively driven to develop the technically more difficult to access resources e.g. the Artic/Antartic regions, deepwater and extreme high pressure/high temperature reservoirs. The risks and challenges of operating in these environments was illustrated in 2010 when the Macondo Gulf of Mexico deepwater exploration well blewout resulting in eleven fatalities, the loss of the drilling rig and the largest release of oil in US history. The subsequent response, successful containment of the oil and well kill illustrated the capabilities of the Industry. In October Drilling Engineering expertise was again illustrated with the successful directional drilling and rescue of Chilean miners trapped underground after a cave-in. Environmental concerns remain high on the public and political agenda. Carbon capture and storage projects continue to evolve, with Petroleum and Drilling Engineering having a key role to play in storage. The UK remains at the forefront of the application and development of Petroleum and Drilling Engineering, with Aberdeen the recognised “Oil Capital” of Western Europe. The Macondo well blowout has prompted renewed public and political scrutiny of Drilling and Production, including questions around personnel competency. Taken together all these factors align with the requirement for a strong professional body for Petroleum and Drilling engineers, and the Oil and Gas Industry in general. The P&DE Board believe that there is significant scope for further growth of the Institute within the oil and gas sector but recognise that the rate of growth will be limited by the available resources, in particular the Board of a small group of volunteers working in their spare time with constrained support from the Institute staff.

6 Professional membership developments

Membership developments are detailed in section 3 and 4 of this report. The Division has noted a steady increase in the number of candidates coming forward for CEng and have established quarterly professional review panels to cope with the increased demand. As detailed previously the Board view accreditation as a key lever to further growth. Current accredited programmes are as below:-

Heriot Watt University: MSc Petroleum Engineering. Newcastle School of Marine Science and Technology: MSc Subsea Engineering and

MSc Pipelines. University of the West Indies: MSc Petroleum Engineering. Vetco Gray: Initial professional development scheme.

Following the professional development event that the Division ran with the Institute in Aberdeen in December 2009 accreditation of the Shell Europe and BP Global wells development programmes are being actively progressed. Once these programmes are accredited in 2011 the Division intends to leverage off this to both recruit more members from these Companies and encourage accreditation of further Company development programmes.

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7 National and international linkages with other Societies /Institutes

The P&DE Division has active linkages with the Energy Institute, Institute of Mechanical Engineers, Edinburgh Geological Society and the Society of Petroleum Engineers; reference joint events detailed in Appendix A. The intent of the P&DE Division Board is to continue to work with these bodies to deliver an enhanced offering. P&DE is a global enterprise with strong international linkages and an expat community working from the Aberdeen area. The Division see opportunities to establish international local societies and links with other bodies, the intent is to develop and pursue these opportunities in the medium term i.e. 2013 to 2015.

8 Government interfaces

P&DE Division strategy is for government interface to be via the Institute with the P&DE Chair as the nominated subject matter expert.

9 Publications

Articles on the Division and its areas of interest have been regularly published in Materials World and MIS Branch News, including five technical articles in Materials World. The Division has also contributed to book reviews. The Division micro site has been regularly refreshed and is consistently among the most visited Divisional sites. In 2010 Craig Durham was appointed a columnist for Materials World.

10 Awards/prize

The Division has no specific awards of it’s own but actively works with the MIS in this regard. The Division worked with the Robert Gordon University and Aberdeen based oil companies to encourage high quality Petroleum and Drilling Engineering papers for the Young Person’s Lecture Competition. The Division helped the MIS run the Scottish competition in Aberdeen. Enhanced prizes were awarded for first, second and third with the winner going on to the UK final. As a new initiative funds realised from the metallurgy courses organised by the Division have been used to fund a scholarship through the Arkwright Trust to encourage and support young people at school to pursue careers in Engineering, specifically Mineral Extraction. The first scholar is from the Huntly Schools. The Division has provided mentoring and Industrial experience for the Scholar. The Division works with the MIS to award travelling scholarships to suitable students to enhance their studies.

11 Other matters

2010 was the third full year of operations for the re-established P&DE Division under the new Board. It is the view of the Board that the Division has continued to make significant progress and has a robust strategy and action plan to build on the momentum that has been created; thereby ensuring that the Division will make a significant and real contribution to the Institute.

S.BedfordEur Ing Steve Bedford BEng CEng MIMMMChair Petroleum and Drilling Engineering Division14th December 2010

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Appendix A – Technical Programme as of December 2010

Date Status(Held/Progressing/Planned)

TitleLocation Organising

Division(s) /Committee(s)/Collaborators

100%Target No's

Actual No's

Financial Underwriter (IOM3/Local/Other)

Financial Out-turn, Comments etc

2010-01 Held Field Installation, Reliance MA-D6, Bay of Bengal.

Aberdeen, Edinburgh, Glasgow &London

P&DE with MIS 50 33 MIS

2010-02 Held CompletionEngineering Seminar

The Robert Gordon University

P&DE 50 19 RGU Low turnout.

2010-02 Held Subsea Engineering & Gas Well Deliquification Seminars

The Robert Gordon University

P&DE 50 41 RGU No attendees from Aberdeen University despite extensive advertising.

2010-02 Held Young Person’s lecture competition

Aberdeen, Edinburgh & Glasgow.

P&DE with MIS 50 44 MIS Quality presentations from oil and gas sector.

2010-03 Held Slimhole borehole instruments.

Aberdeen, Edinburgh, Glasgow &London

P&DE with MIS & EGS

50 54 MIS & EGS

2010-03 Held Introduction to downhole metallurgy

Aberdeen P&DE 15 20 MIS CPD 2 day course accredited by IOM3. Over subscribed.

2010-04 Held Safety Seminar Sheffield MIMinE 50 200 MIMinE Well received.2010-04 Held Industrial Visit -

Rubber AtkinsAberdeen P&DE with MIS

& EI10 10 MIS Good feedback.

2010-05 Held Industrial Visit - Schlumberger

Aberdeen P&DE with MIS & EI

10 8 MIS Good turnout from younger members.

2010-09 Held Techfest Aberdeen P&DE 3000 2833 MIS Combined Mining/P&DE educational stand.

2010-11 Held Integrating numerical and geological data in sand prediction studies

Aberdeen, Edinburgh, Glasgow,

P&DE with MIS 50 23 MIS

2010-12 Planned Oil and Gas Industry seminar

Heriot Watt University

P&DE 20 MIS

2010-12 Held Mechanical properties that matter downhole

Aberdeen P&DE with MIS & IMechE

50 42 MIS Good attendance given the severe weather. Aim to host the 2011 joint meeting at BP.

2010-12 Planned Oil and Gas Industry seminar

Salford University

P&DE 20 MIS

2011-01 Planned Buzzard Field Development 4 years on

Aberdeen, Edinburgh, Glasgow,London

P&DE with MIS 50 MIS

2011-02 Planned Young Person’s lecture competition

Aberdeen, Edinburgh & Glasgow.

P&DE with MIS 50 MIS

2011-02 Planned CompletionEngineering Seminar

The Robert Gordon University

P&DE 30 RGU

2011-02 Planned Subsea Engineering & Gas Well

The Robert Gordon

P&DE 30 RGU

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Deliquification Seminars

University

2011-03 Planned Introduction to downhole metallurgy

Aberdeen P&DE 15 MIS CPD 2 day course to obtain IOM3 accreditation.

2011-03 Planned Underground coal gasification

Aberdeen, Edinburgh & Glasgow.

P&DE with MIS 50 MIS

2011-03 Planned Directional drilling presentation

Sheffield MIMinE 50 MIMinE Follow up to safety seminar.

2011-04 Planned Introduction to downhole metallurgy

Aberdeen P&DE with Chevron

30 Chevron Chevron looking for IOM3 accreditation.

2011-05 Planned Offshore Europe Aberdeen P&DE 40000 IOM32011-05 Planned Industrial Visit Aberdeen P&DE with MIS 20 MIS 2011-09 Planned Techfest Aberdeen P&DE 3000 MIS Combined

Mining/P&DE educational stand.

2011-11 Planned Technical presentation

Aberdeen, Edinburgh, Glasgow,London

P&DE with MIS 50 MIS

2011-12 Planned Technical presentation

Aberdeen, Edinburgh, Glasgow,London

P&DE with MIS and IMechE

50 MIS

2011-12 Planned Oil and Gas Industry seminar

Heriot Watt University

P&DE 20 MIS

Notes:-

Video conferencing used to facilitate multiple sites joining in the Technical programme where possible.All events included a recruitment session.

MIS: The Mining Institute of ScotlandEI: Energy InstituteIMechE: Institute of Mechanical EngineersEGS: Edinburgh Geological SocietyRGU: The Robert Gordon University

Appendix B P&DE Division 5 Year Plan