Slide 1 Subpart O What’s Working & What’s Not Deepwater Operations Conference and Exhibition November 10-12, 2009

Slide 2 Proposed rule published in 1999 Final rule published 2000 Rule in effect since 10/15/2002 Performance based regulation Audits, interviews, and testing used to gauge industry compliance 146 Audits (GOM OCS) 150 INCs Subpart O History

Slide 3 Subpart O Statistics Total* Audits INCs * Includes data

Slide 4 Top Five Subpart O INCs G842 (4)G846 (4)G846 (7) G846 (10) G851 (3)G852 (2)G851 (7)G844 (6)G847 (4) G850 (2)G862 (2)G842 (5)G851 (6)G842 (3) G852 (2)G847 (3)G847 (5)G851 (3) G862 (2)G852 (3)G852 (5)G852 (2)

Slide 5 G842 – Can the lessee explain its overall program and produce evidence to support its explanation? G846 – Does the plan include procedures for evaluating the contractors programs and is there evidence indicating the evaluations are being conducted? G847 – Does the plan include procedures for internal audits and is there evidence indicating that the audits are being conducted? Repeat Subpart O INCs

Slide 6 G851 – Does the lessee ensure that the contractor’s program provides for periodic training and verification of knowledge and skills? G852 – Does the plan include procedures for verifying that all contractor personnel can perform their assigned duties and is there evidence indicating that all contractor personnel have been verified? Repeat Subpart O INCs

Slide 7 G844 – Does the plan specify the type, length, method, frequency, and content of the training? G850 – Are procedures established to verify adequate retention of knowledge and skills and is there evidence to support this? G862 – Does the lessee provide copies of training documentation for personnel for the past five years? Other Subpart O INCs

Slide 8 Clarifies – –Definitions Internal audits Production safety Periodic Contractor –Lessee responsibilities w/r/t contractors –Lessee evaluations of contractor training programs and verification of contractor employees –Lessee responsibilities w/r/t direct employees –Testing NTL 2008-N03

Slide 9 Lessee Responsibilities w/r/t Contractors –1501 requires you to ensure that your contract personnel engaged in well control or production safety operations understand and can perform their assigned duties. –1503(b)(2) requires that you evaluate the training program of your contractor(s). –1503(b)(3) requires that you verify that all contractor personnel can perform their assigned duties. –1506(c) requires you to ensure that your contractor’s training program provides for periodic training and verification of knowledge and skill. (This step can be/should be part of your procedures required by 1503(b)(2)) NTL 2008-N03

Slide 10 Lessee Verification of Contractor Personnel Training as required by 1503(b)(3) –Administer a written, oral, or hands-on test. –Review a contractor’s certificate of completion-of- training, provided you understand the criteria used by the contractor for determining if the training was successfully completed. –Review an electronic or hardcopy spreadsheet of contractor personnel training information, provided you are confident that the spreadsheet is accurate and up-to-date. NTL 2008-N03

Slide 11 Lessee Responsibilities w/r/t direct employees –Procedures for training your employees. Include the type, length, frequency, method, and content of the training. –Procedures for verifying that your employees can perform their assigned duties. Verify adequate retention of knowledge Assess the training needs of your employees. NTL 2008-N03

Slide 12 Contractor Responsibilities The contractor is responsible for training its employees to perform their well control or production safety operations responsibilities. –Include plan/process for periodic training. –Verify knowledge and skill of their employees

Slide 13 Operators with both company personnel and contractor personnel. –Had very good program w/r/t company personnel –Did poorly with respect to contractor by imposition of certain “requirements/restrictions” on the contractor. Operators with contractor personnel only –Relied on contractors’ programs to satisfy Sub O requirements. –Relied too heavily on consultants to educate them in the rule requirements (included in the written plan). –Failed to implement their plan as stated. Problem Areas

Slide 14 Operators and contractors continue to focus training efforts on the standard PSST. Little to no effort is exhibited in the area of training in production operations. Operators, contractors, and service companies do not fully understand the application of the rule to their operations. –Wireline operators –Coiled tubing/snubbing operators –Fire/Gas Detection technicians –Compressor mechanics/technicians Problem Areas

Slide Forward MMS will continue to audit companies Triggers –Poor performance –Incident root causes –Bad inspection –Random selection Will be looking more and more at the operations on the facilities.

Slide Forward Audit Tools –Plan review –Records review Contractor evaluations Contractor verifications Employee verifications Internal audits –Testing PSST Well control Production operations

Slide 17 Thank You