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Arctic Drilling: Shell explains its contractor management

Screen Shot 2013-01-11 at 20.09.51When the U.S. Department of the Interior reviewed Shell’s 2012 drilling operations, following a series of problems culminating in the grounding of the Kulluk, the company’s floating drilling platform, the agency particularly criticized Shell’s oversight of its contractors, saying that the company’s management systems were insufficiently robust to manage and minimize risk in contracted operations.

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Week of January 05, 2014

When the U.S. Department of the Interior reviewed Shell’s 2012 drilling operations, following a series of problems culminating in the grounding of the Kulluk, the company’s floating drilling platform, the agency particularly criticized Shell’s oversight of its contractors, saying that the company’s management systems were insufficiently robust to manage and minimize risk in contracted operations.

In a newly filed integrated operations plan, required by Interior in conjunction with Shell’s planned continuation of drilling in the Chukchi Sea, the company has spelled out a series of contractor-management procedures.

The plan says that Shell will use what it refers to as a “control framework” for overall management of the various contractors that will be engaged in the multifarious activities required to conduct and support a drilling operation in the Arctic offshore.

Evolving with experience
And Shell’s management structure has continued to evolve, the plan says.

“Building on Arctic operating experience since 2006, Alaska has become a center of Arctic operating experience within Shell,” the plan says.

A single integrated activity plan will drive the massive operation involved in conducting and supporting drilling in the Chukchi. The plan will be supplemented by procedures for managing project changes; achieving continuous improvement; and managing health, safety and environmental risks, Shell says.

A Shell “contract owner” for each contract will assume responsibility for the contract, while a “contract holder” will take responsibility for the contractor’s performance, the integrated operations plan says.

An assurance committee, headed by Shell’s executive vice president for the Arctic, will oversee safety assurance activities such as audits and inspections.

Other procedures for managing contractors include the use of required contractor qualifications; readiness audits and reviews; table-top exercises; and conferences with contractors, to select contractors and assure contractor readiness for the field operations, the integrated operations plan says.

—Alan Bailey

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