IRP 22: Underbalanced and Managed Pressure Drilling with Jointed Pipe

Prepared on behalf of IRP 22 Development Committee May 14, 2007 Presentation By Jeff Saponja, P.Eng. President & CEO TriAxon Resources Ltd Co-Chair IRP 22

Traditional IRP Methodology

Gather a large number of industry experts to compile their collective knowledge on a specific subject Develop a prescriptive How To manual Avoids Regulator trying to establish prescriptive regulations Attempt to update every 4 years

IRP 22 Challenges
How to address current EUB ID 94-3 Regulations inadequate and out of date (EUB was in the process of writing a How To manual update to ID 94-3) How to effective align to all other IRPs and IADC UBO/MPD Committee How to avoid the 7-10 year IRP itch! A one size fits all solution does not exist. How to effectively and efficiently keep current Address the critical sour UBD moratorium and resolve plan for IRP 6 For UBD/MPD there is tight/small experience base underpinned by relatively low frequency of operations (specialized service)

IRP 22 Rationale
Accepted the industry perception that UBD/MPD operations could be conducted more safely and operationally more consistent (cost effectively) Site-specific and Western Canadian strategies are needed. Improved training and awareness are primarily required vs a How To manual. Todays science cannot conclusively predict what is safe and what is unsafe. Use Risk-Based approach as per IRP 18

Why a Risk Based Approach for IRP 22?

1. Risk Tolerance:

Reduce the apparent very wide industry risk tolerance. Awareness to potential train wrecks. General lack of standards and understanding as to WHY operations are conducted in a certain way. How To manuals often fail to address Hazard Scenarios and soon become outdated. Its not about the HOW !

2. Service Sector Technical Competency

Technical know how is generally resident in service companies, but is extremely difficult to collectively codify 100 different ways to make a UBD drill string connection! Competitive issues

3. Framework for Regulatory Enforcement:

Impractical for EUB field inspectors to be experts of UBD/MPD. Site inspections based on process used for addressing known hazard scenarios.

Risk Tolerance Issue

Varying Levels of Risk Tolerance is an Industry Issue
Person A

Risk Level
Prescriptive Controls because risk is too high at this time

CONSEQUENCE

Person B

LIKLIHOOD

Quantitative Risk Assessment Challenges

QRA Issues: Complex and time consuming Generally, not part of the Well Engineers toolbox (in Canada). Lack of basic understanding of what is a risk assessment. Not a risk adverse culture. High frequency of wells and short timeframe from planning to execution (not enough time available for QRA). Industry does not compile effective statistics for QRA thus quantification of risk is a huge challenge.

Risk Based Strategy

Challenged ourselves with: could we integrate Risk Mgt into the everyday process for designing and executing a UBD/MPD well? Avoid developing a comprehensive prescriptive How To manual; only be prescriptive in HSE Critical high risk hazard scenarios. Develop a Qualitative Risk Assessment process that can effectively address the risk tolerance issues. Ensure the Risk Assessment process is highly time efficient, to therefore allow for wellsite execution in less than 30 days (on average)

IRP 22 Required Process Stages

What What can can go go wrong? wrong? Apply Apply Hazard Hazard and and Risk Risk Mgt Mgt Process Process using using Risk Risk Register Register Identify Identify areas areas of of attention attention Stage Stage 1: 1: Establish Establish a a draft draft base base plan/program plan/program c/w c/w Process Process Flow Flow Diagram Diagram Stage Stage 2: 2: Assess Assess Hazard Hazard Scenarios Scenarios for for Planned Planned Operations Operations Preventive Preventive Controls Controls Engineering, Engineering, Equipment Equipment design design and and barriers, barriers, training, training, plans/procedures plans/procedures Stage Stage 3: 3: Resolve Resolve Hazard Hazard Scenario Scenario Controls Controls and and Prepare Prepare Final Final Program Program Stage Stage 4: 4: Execute Execute Program Program and and Implement Implement and and Monitor Monitor Effectiveness Effectiveness

Test Test Base Base Program? Program? Establish Establish how how much much work work left left to to do do prior prior to to well well site site execution execution Establish Establish Engineering Engineering requirements requirements and and timeframe timeframe to to execution execution

Protective Protective Controls Controls Alarms Alarms & & detection, detection, emergency emergency equipment equipment // procedures procedures

Hazard and Risk Mgt Process

Stage Stage 2: 2: Assess Assess Hazard Hazard Scenarios Scenarios for for Planned Planned Operations Operations

AWARENESS WHAT CAN GO WRONG? Apply simplified Hazard / Risk Mgt Process using IRP 22 Risk Register Register is a compilation of historic Train Wrecks, but is to be considered NON-EXHAUSTIVE Identify and brings awareness to areas of attention / problems. Eye opener on how prepared the draft base program is. Tool is not design to solve hazard scenarios / problems, but offers considerations (e.g., conduct HAZOP) and directs to prescriptive enforced HSE requirements. Ensures Risk Assessment SHALL be part of UBD / MPD planning Involves the team far-enough in advance of well site execution (historically team was pulled together days before execution in a prespud meeting often too late if Engineering controls are required.

Hazard and Risk Mgt Process

Hazard Scenario What If: Single jeopardy statement used to identify potential problems due to failure in pre job planning, training, procedures, or equipment failure

Hazard and Risk Mgt Process

Applicable: Choose "Y" if "Hazard Scenario What If" applies to operation and "N" if it does not.

Hazard and Risk Mgt Process

Consequences: A list of the potential consequences (HSE and NPT) of the "what if" occurring..

Hazard and Risk Mgt Process

HAZARD SCENARIOS: Evaluated in terms of both HSE and NPT HSE hazard scenarios include all threats to Health, Safety, Assets and the Environment. NPT hazard scenarios includes threats to operational non-productive time (lost rig time and cost).

Hazard Scenario
NPT is tied to HSE, as unplanned events can lead to unforeseen high risk hazard scenarios

HSE

NPT

Hazard and Risk Mgt Process

HSE: The risk of a situation/event with the potential to cause harm (to people, assets, or the environment).

Hazard and Risk Mgt Process

NPT: The risk of Non Productive Time (NPT), which included lost time and costs, formation damage and/or any operational deviation from the plan.

Qualitative Risk Ranking

TRAINING required Awareness to potential hazard scenario from industry experience Worker qualification / competency reviews required. Should consider Procedures and Engineering Those above, plus: PROCEDURES required to mitigate / control hazard scenario Safe work permits required. Should consider Engineering

Low Risk

Medium Risk

High Risk

Those above, plus: ENGINEERING required for detailed, site-specific hazard scenario plans prepared prior to execution Documented risk assessment completed. Documentation available to all at the work-site.

Hazard and Risk Mgt Process

Required HSE Critical Controls / Safeguards: Controls / safeguards, and detailed recommended practices for high risk HSE items referenced to specific prescriptive IRP 22 enforcements.

Hazard and Risk Mgt Process

Considerations: Recommendations, considerations, and informational statements on how to reduce, eliminate, or manage Medium/Low Risk HSE items and all NPT items

Hazard and Risk Mgt Process

Actions to be Taken: List of actions required to reduce/eliminate the potential occurrence and/or severity if the hazard cannot be eliminated entirely.

Hazard and Risk Mgt Process

By Who and When: Who = Party responsible for each action assigned. When = Date by which the action is to be completed.

IRP 22 Timeline
Phase 1 Phase 2 Phase 3

2005 Phase 1 Resolve IRP22 Process Methodology Review and compile existing industry standards

2006 Phase 2

2007 Phase 3 Test Hazard and Risk Mgt Process at SPE RTW Establish system for updating Risk Register Compile IRP document and release to industry

Establish sub-committee Work Groups Populate Risk Register

Wrap Up
IRP 22 is designed to integrate Risk Mgt into the everyday process for designing and executing a UBD/MPD Attempting to address a wide risk tolerance issue that is a result of a lack of hazard scenario and associated risk awareness. Adopted a simplified Hazard and Risk Assessment Process, underpinned by a non-exhaustive Risk Register NPT is an important component of the risk assessment, as many unforeseen HSE high risk hazard scenarios are realized during NPT events. Ready for Industry trials and feedback.

IRP 22: UBD and MPD with Jointed Pipe