2013 IADC chairman David Williams: Safety is not negotiable

Industry, association must collaborate to drive competency forward globally

By Linda Hsieh, managing editor

In life, sometimes you have to be at the right place at the right time in order to get to that next step. But a lucky break is never enough; it’s what you do once you get that break that will show what you’re really worth and determine where it will take you.

For David Williams, just a few months out of college and in his own words “literally just a kid,” he found himself taking over the contracts administration department for a Galveston shipyard in 1980, simply because he was in the right place at the right time and they needed someone to do the job.

However uncertain of himself, Mr Williams decided to step up to the plate, putting in long hours and six- to seven-day weeks and learning as fast as he could. His hard work paid off, earning an unexpected call about 18 months later that led to a job offer with a drilling contractor, thus kicking off a career in the drilling business.

Now, more than 30 years later, Mr Williams serves as chairman, president and CEO of Noble Corp. He was recently elected 2013 chairman of IADC and is ready to lead the industry association on a broad range of initiatives to improve drilling performance and operational integrity.

Mr Williams’ time in the shipyard business may have been brief, but it was where he fell in love with “big iron” and where he got his first exposure to drilling rigs.

“Whenever a new ship would come in, I’d go down with the ship superintendent, and we’d crawl through the different parts of the ship,” he recalled. “I kind of fell in love with big ships and big engines.”

But this was 1981, and the oilfield was booming while US shipbuilding was in decline. Even at a young age, Mr Williams could sense that he was not in a growth industry.

When a headhunter called Mr Williams on behalf of a company called Salen Protexa Drilling, he knew it was time for a change. “The shipyard I worked for was building a dry dock for our own use, but we built it overseas because they could build it cheaper than we could build it ourselves. If they can build what you can build faster and cheaper, then you’re probably not very efficient,” he said.

Despite hardly knowing anything about the contract drilling business, Mr Williams decided to make the switch. For the next four years, he stayed with Salen Protexa, a Swedish-Mexican joint venture with seven offshore drilling rigs, including four that were under construction. He started out in recruiting and recalls finding mentors in two industry veterans – Darrell Zapp and Jack Smitherman – who taught him about oilfield sales and marketing and offshore operations. “Jack would take me offshore a week at a time. It was the genesis of my career,” he said.

By summer 1985, however, the oilfield boom was no longer. Salen Protexa had been dissolved and its assets sold off. Having been laid off and with bleak prospects for finding new employment in a weak industry, Mr Williams found himself interviewing for a job in a medical-related industry. At one time, he was called in for a third interview but backed out at the last minute because “I just couldn’t get excited about that business … I just couldn’t see myself doing it,” he said.

His passion for the drilling business paid off. Just a week later, Odeco called and hired him on. “Odeco was tough, old oilfield. It was a privilege to be there for a young person because you could learn so much. They were doing so much. We had rigs under construction, which was unheard of in the mid-’80s because the industry was in such bad shape. They really were a pioneer in the industry,” Mr Williams said.

By 1990, he had opened Odeco’s first Houston office to run its US marketing effort, and after Diamond Offshore’s acquisition of Odeco in 1992, Mr Williams continued with the new company in various marketing and operations positions through 2006.

Noble – new strategy, new fleet

When Mr Williams joined Noble in September 2006 as senior VP of business development, it was a company in transition. Longtime CEO James Day was retiring after leading the company for more than 20 years.

Less than two years later in January 2008, Mr Williams found himself being named chairman, president and CEO of one of the industry’s best-known and most-respected drilling companies. You might say that, just as it was nearly 30 years prior, Mr Williams had been in the right place at the right time. However, the more important question was, now that he had this opportunity, what was he going to do with it?

For one, under Mr William’s leadership, Noble has ordered 14 newbuild rigs totaling over $6.5 billion in investments. “What we’ve done at Noble since I’ve been there is take the company on a different path. Noble had only built two rigs from the keel up prior to 2000. The company had been grown primarily through acquisitions, or we would buy older rigs and upgrade them. But the difference between standard-spec rigs and high-spec rigs have gotten very large nowadays, so we realized we couldn’t do that anymore and still compete at the top of the industry,” Mr Williams said.

In addition to stepping out with the technologically innovative Globetrotter drillships, in 2010 Mr Williams led Noble into the acquisition of Frontier Drilling, which had two Bully-class deepwater rigs under construction that were jointly owned by and contracted to Shell. “With the Shell relationship came a lot of strength in the company, and we really felt like the best way to deploy the cash was to reinvent the fleet. So we started on this program to transform the fleet,” Mr Williams said.

Starting with deepwater rigs, Noble committed to two more drillships at the Hyundai shipyard in South Korea with options for two more. That was followed by commitments for two jackups at Singapore’s Jurong shipyard with options for four more. Ultimately, all options were exercised.

“Newbuilds are hard on an organization just because it takes so much time, effort and dedication, but we have such good loyalty with our workforce, and we’ve put together project managers we have a lot of confidence in,” Mr Williams said. “It’s not going to be without hiccups, but as we’re transforming our fleet we’ll also be rejuvenating it. Noble will come out of this looking like a different company, a much more technologically advanced company.”

Mr Williams believes this fleet makeover will be critical for Noble’s success going forward, particularly in the deepwater segment. “This industry has grown up with the rest of the world. We’re a lot more sophisticated. Odeco drilled Ekofisk with a first-generation semisubmersible, but they’d laugh at you in Norway if you tried to bring something in there like that now. The high-tech wells we’re drilling today in deepwater require much more sophisticated kit, and frankly the risks are much higher. Some of the older rigs may still be running, but with the big bores and deep waters, you need high-spec rigs to drill efficiently.”

Competency, safety top priorities

Amid the rig-building frenzy is another frenzy – for experienced and competent personnel. Industry realizes that no matter how great its rigs are, they won’t matter if we don’t have the right people to man them.

“Technically speaking, there’s not much difference between a DP3 sixth-generation deepwater rig and the space shuttle. They’re both very complex kits. To ensure we can operate those competently and efficiently is a critical part of what we’re doing, and we’re putting systems in place to develop that capability,” Mr Williams said.

Noble hired 1,400 people in 2011, approximately 1,100 in 2012 and is slated to hire an additional 1,000 people in 2013. “The ramp-up in personnel is not just about putting bodies on the rig. It’s making sure those bodies are competent to do the jobs that we require. Today we have more than 40 trainee subsea engineers working as extras in our fleet all over the world. We’ve got extra rig managers, extra drillers – so that we can have competent people ready to step up when those rigs come out of the shipyard.

“We try to put a crew on the rig as early as six months prior to delivery and even earlier for some of the key people. The goal is that by the time the rig rolls out, the crew is a team. They operate as a team safely and efficiently,” Mr Williams said.

Safety is not negotiable, he continued, which is why crew competency is paramount. The way that industry evaluates workplace safety is also evolving, with Noble now placing less emphasis on numbers like lost-time incidents and recordables.

“They’re just not statistically meaningful, so we’re looking at HIPOs and severity potential,” Mr Williams said. “If a bolt falls out of the derrick and hits a guy on the finger, that’s the same statistically as if a guy sets a load down on his finger. But the severity potential of the bolt falling is much higher, and it was just luck that someone wasn’t killed. We don’t trust in luck. We’re spending much more time looking at stuff like that than we are at just statistics, being much more focused on process safety.”

Another change Mr Williams would like to see in the industry is for contractors to get more involved in the wells they’re drilling. “For a while now, contractors have let operators make all of the decisions about the well. It was a mentality of ‘I’ll run the rig and you run the well.’ But I think that drillers need to get back involved because it’s our rig and our people. We have to maintain control of the situation. This means we have to be just as competent downhole as the operators. If the well starts acting up, we have to make sure the driller has the knowledge, the nerve and the support to say no to the operator. He needs to know what to do and to do it without asking.”

Management attitude will be key to providing a supportive environment for drillers so he can act with confidence, and Mr Williams also noted that the IADC KSA project will be a good starting point to ensure rig personnel are equipped with the right knowledge, skills and abilities to make such important decisions. “The KSA project will establish what the minimum competencies are for critical positions on rigs. They will be different for a driller on a straight hole in West Texas versus a driller in 10,000 ft of water, but there are a lot of similarities if that well starts flowing.”

As chairman of IADC for 2013, Mr Williams notes that although the association continues to be the only global forum that deals solely with drilling contractor issues, he would like to see more operator involvement on a broader level. “IADC should be the leading authority on how we drive competence in drilling hands, and if operators want input into that, they need to get involved. IADC’s role is to support and further the goals of drilling contractors, and that has a direct impact on other industry players, including operators. This is the forum to table those ideas,” he said.

The association is also in transition, he noted, moving in 2012 under the leadership of new president and CEO Steve Colville. “Steve’s doing great so far. IADC has taken on some good initiatives under his guidance,” Mr Williams said.

“The Executive Committee is taking a hard look at IADC for the first time in a very long time. Are we on the right path? Are we doing the right things? Competency means different things to different people, and there are different issues we’re facing offshore and onshore. But all of those issues of competence are going to permeate throughout the industry. Everybody’s going to insist on some level of accreditation, and IADC is the forum to get that done. I think the agenda IADC is pushing is the right one.”