Third-party personnel on rigs: Who owns them?

A panel discussion held on the second day of the 2010 IADC Drilling HSE Europe Conference in Amsterdam this week – “Third Party Personnel on Rigs – Who ‘Owns’ Them?” – generated the liveliest discussion of event. Moderated by John Karish, director SHE at Ensco, the session offered a chance for drilling contractors’ supply chain to debate many issues that are rarely debated so vigorously and openly.

First up at the podium was Mike Mannering, VP rig management, Schlumberger. He delivered three viewpoints … as a drilling contractor, from a third-party service provider’s perspective and from the perspective of the integrated project management provider/duty holder.

One might think there is a simple answer to the question of who “owns” third-party personnel on rigs, Mr Mannering said.

“You would think there would be a simple answer along the lines that the contracting entity … the contractor … should own them. But life is never quite that simple.”

Why is there such complexity? he asked. The answers lie in the huge variation in regulatory environments in different parts of the world; the onshore-versus-offshore divide in terms of contract drilling; and subject knowledge, including ownership of bridging documents, safety cases, reporting operationally.

“These are interesting topics, and, unfortunately, I have to say there are many operators with whom you can’t have a particularly serious discussion because they are simply not knowledgeable about those topics,” Mr Mannering said.

“If I say that about operators, unfortunately, it is also true of drilling contractors and third parties as well. In such a situation, you can imagine that this could easily lead to a catastrophic event.”

Gert-Jan Windhorst, mediator NMI, HSE/Q manager, Noble Drilling (Netherlands), highlighted the multicultural nature of life on rigs, the complexities that come with international operations and the accelerating pace of corporate life.

He pointed out that, in the past, operators tended to own everything. They had the money, therefore the rigs, and it was easy for governments as they basically had to deal only with the operators. Therefore, relationships were relatively straightforward.

Not so today. The industry has become more complex, with a different supply chain structure and patterns of ownership. This poses significant challenges in terms of the way contractor personnel are managed.

Mr Windhorst also commented that he dislikes the “third party” aspect of the industry. “Everybody on a drilling rig is important. I think we should start treating service providers better,” he said.

George Galloway, MD, Geotechinvest, took a tough line, portraying the third party’s view of working on rigs, the management systems under which they are obliged to work and stakeholder relationships.

Mr Galloway pointed out that each rig has its own unique safety culture and that, in general, third-party service providers are not familiar with the rigs they work on, nor are they familiar with the layouts, unless they are regulars such as mud-loggers or cementers.

“It still happens that there is often insufficient time for third parties to prepare for the job they’re asked to do by the operator,” he said. “Often they are accommodated in substandard conditions. These rigs haven’t changed in 20, 30 years. But what has changed is that we’re drilling more and more complex wells that require more and more of these third-party service providers.

“And these third-party service providers are often viewed as a nuisance; they disturb the routine.

“And they’re also expected to immediately adopt the rig safety management system (SMS) when they come on board. Typically there will be an initial induction of maybe an hour or two hours, then they’ll be expected to work under that safety management system, and that’s on top of having their own SMS with their own company.

“And as for those third-party safety management systems, they operate with some of the most highly regarded SMS’s within the business.”

Gordon Graham, VP wells HSE, Shell International, said an aspect of the conference that stood out was the interdependence of the various parties in the chain … operators, drilling contractors and third-party service providers.

“But how can we make that interdependence work better?” he asked, describing an hierarchy essentially defined by contractual obligations, especially the fact that accountability for operational control lies with the drilling contractor, and that was the bottom line.

“That tells me something about accountability and how we’re framing this at the contract level,” Mr Graham said.

“And of course the other contract term that we all know and love … mutually hold harmless. I was thinking as the other speakers were talking: ‘Where’s the mutually hold accountable clause in our contracts?’ ”

Touching on safety performance, Mr Graham called into question the way in which incidents are recorded and analysed. Was it in the context of drilling contractors, or was it the drilling industry, that is, inclusive of its service providers?

And he challenged the industry by asking whether third-party service providers feel like they are a part of the drilling industry. What would a show of hands tell one?

“I think the answer would be a clear yes,” Mr Graham said, adding that this was not reflected in the safety statistics.