Persevering through industry ups and downs to make things better

From the President/CEO

2015 marked the 75th anniversary of IADC. Over this time, our members have experienced the inevitable ebbs and flows of the global oil and gas industry. But this year has been as testing as any we have known – low oil prices and high operational costs have led to drastic reduction in rig counts globally both onshore and offshore.

The speed of decline, depth and uncertain duration of this downturn have led many within our industry to describe it as a generational downturn, in two senses of the word. First, many of the younger hands in our industry have never experienced anything like this before, and it has been a hugely unsettling and chastening experience. Second, the older hands who have been through it all before understand that they must, necessarily, generate fundamental changes within the industry. The only thing we can be sure of now is that when the upturn comes, as it inevitably will, the industry that emerges will likely look, and must behave, significantly different.

On an operational level, we have three main challenges to overcome: eliminating injuries, driving out costs and driving up efficiency. Put simply, we have to do everything safer, better, faster and cheaper. This will involve significant enhancements in the operation of our facilities, the performance of our people and delivery of our processes. These will form the foundation of our continued “operational license to operate” – our ability to undertake our activities in the way they need to be done and which are economically viable.

From a reputational standpoint, we similarly face three key challenges: maintaining existing and gaining new access to resources; resisting ill-informed pressure against the continued use of fossil fuels; and avoiding inappropriate regulatory action. Our continued “societal license to operate” depends directly on what we do, how we do it and how we talk about it.

Underpinning this will be achieving recognition as a high-reliability industry, one with a strong safety culture and top productivity. Achieving this will secure the trust of the communities in which we work, the respect of governments and regulators and the confidence of industry partners, as well as the support of investors and shareholders.

The need for the role IADC plays has never been greater, and the assistance and value proposition the association offers members and key stakeholders has never been more compelling. In 2015, IADC has:

• Demonstrated leadership in drilling’s core functions and standards through the successful launch of WellSharp, the new global industry standard for well control training; extending the Knowledge, Skill & Ability competencies to cover all drilling rig roles; and updating key industry publications – IADC Drilling Manual and IADC Deepwater Well Control Guidelines

• Provided stewardship of the drilling industry’s core values through growing the opportunities for the drilling community to connect, collaborate and create solutions to the industry’s key challenges.

• Introduced new conferences, such as Human Factors, and changed the format of others to directly identify actions and initiatives for IADC workgroups. The chapter network has been grown and overhauled, and the extensive committee output has been enlarged and refocused on delivery of specific goals and objectives.

• Influenced political thinking to secure better regulation that enables our industry’s continued freedom to operate in the most appropriate manner. Our greatly enhanced US (federal & state) and international policy and governmental affairs capability has already positively influenced proposed fiscal and liability (Europe, India) and regulatory programs (US, Europe, Australia, South America).

• Advocated extensively and successfully for more constructive oversight by regulators. This has included working collaboratively with regulators to overhaul existing misdirected regulation and proposed rules and examining ways to create a more enabling climate to support continued growth of our industry while ensuring safe, clean and efficient operations.

In addition, IADC has taken the first steps toward becoming the voice of the drilling industry. As part of our “Step Up & Step Out” initiative, we have already grown our media engagement, begun developing educational; programs for “The Case for Drilling” and explaining the performance of the industry.

In the most difficult times, we turn to family for support, and IADC is where the drilling contractor family comes together. When we all come together, and pull together, we can and do make things better. Together we can sustain through this downturn, prepare for the upturn and ensure a better long term.

Notwithstanding the difficulties the industry has faced in 2015, and the uncertainty still facing us in 2016, I remain very positive for the future success of our industry. I am particularly confident that the transformation IADC has undergone over the past few years has uniquely prepared us to help our members deliver that future success. DC