ARTICLE II – MILLIONS OF DOLLARS WASTED

Following up on my first article “MILLIONS OF DOLLARS AT STAKE” I have been exposed to another aspect of Inefficiencies and Deficiencies, a definite Red flag, especially at a time when there seems to be some movement in the market and assets are being put to work.

In an earlier article on preservation and cold stacking I did highlight the cause and effect with regards to “Preserved” versus “Left to Rot”.

It is common sense, that is not so common, this does not pertain to just expensive Oil field Assets but to assets for all Industries.

This article and my firsthand experience ties into the subject matter here and concerns highlighted in my first article.

Writing from a personal experience this is definitely an eye opener, an insight of various aspects related to the reactivation of a Newly Built cold stacked Mobile Offshore Drilling Unit. Concerns with Equipment reliability and Technical Support from various groups involved and Equipment Manufactures.

For nearly a Century The oil industry has been built on well-established methods and technologies and these have not changed significantly. In the same way, within the oil industry, major brands have been established for decades, and they have become recognized by name for their specialization in their particular field or technology to be regarded as OEM’s. In some ways their methods and Technologies have not changed significantly.

My statements, observations, comments, call it what you may is Fact not Fiction from what I have been involved with. I have seen Preserved, well maintained Equipment being Reactivated/Re-certified with the minimum amount of work & I have seen Equipment left to Deteriorate creating difficulties, Delays and Blown budgets to get it Re-Certified and Reactivated.

Initial planning:

1.      Prior to start of any Reactivation/Realignment of COC it would be advisable to have a Condition Assessment Survey conducted by the OEM and a Third-party (SME) Representing the owner.

2.      Based on the findings from the CAR, a Scope of Work should be formulated with the OEM and the Owner Representative laying out and covering all aspects of work pertaining to Reactivation / Realignment of Certification OR for any other classification of work. The reason for this is to firmly establish a SOW that is understood and agreed upon by the OEM and the Owner. With a Signed scope of work by all parties in place costing and budget estimates for the all tasks will be transparent with no hidden costs.

3.      A PROJECT Schedule should then be compiled and should be the master tracking document and this should be updated and tracked by 1 dedicated Project scheduler.

4.      The Owner, who may not be the operator of the asset, with any intention of selling the asset, would then be aware of all the costs to be included in the sale price.

5.      In the signed agreement there should be a section to address how VOR’s will be handled, the process for submission of the VOR with supporting documents and the review by the SME- owner Rep prior to approval

6.      Responsibilities and accountability for each of the teams should be well documented and understood by all. This will be discussed prior to establishing.

7.      Teams and Team leaders to be established who will stay for the duration of the project.

8.      Decision making should be streamlined and uncomplicated.

 Lessons Learned - Points to be understood:

1.      Deteriorated Condition of how the Asset was left at the downturn, completed and ready to work. Not preserved and routinely checked. Caretakers responsibilities or Irresponsibility’s as one could interpret it to take care of an Asset worth a few hundred Million.

2.      In most cases, a clear indication and advice from the OEM to the caretaker who now becomes the owner of the asset. Due to financial constraints and uncertainty for the future of the asset these “good practices” are not put into action.

3.      Due to the downturn, Owners of the asset are weary of OEM’s whom they feel are waiting in the side lines to make the best they can out of a bad situation. Thus, leading to Owners turning away from doing the right thing to the asset and in this case the Key to prevent Damage to Equipment, “PRESERVATION” and “ROUTINE Checks and Maintenance of the equipment”.

4.      No matter what, if the owner does not wish to engage the OEM to preserve the Equipment due to financial constraints, there are experienced personnel available who can preserve the equipment and maintain the equipment where by keeping the equipment in a better state for when the time comes to have the equipment re-certified and Reactivated in the presence of the OEM.

5.      So, the Question, Is the Owner obliged to use the services of the OEM to have the Equipment preserved? This is hardware we are talking about. Why not use the experienced Non OEM resources available to get the equipment preserved and maintained during the Stacked period and when the time comes for reactivation and Realignment of the COC the owner then engages the OEM, which, since it was preserved and maintained would still exist in a pristine condition.

6.      Alternatively, Owner will engage third party services that will carry out the preservation and maintenance of the equipment as per the guidelines stated in the Equipment Operations Manual. It is a known fact that all of these guidelines are available or should be available in the Manual.

More often than not and since the last downturn there is not only a dearth of good experienced personnel to operate rig equipment but the quality of the personnel coming out from the OEM leaves a lot to be desired. Many adjectives can be used to describe the talent, but I prefer to refrain from doing so and concentrate on how the process could be improved benefiting the client and the OEM.

To Be Continued