Offshore Clerks

Back in the days when I had a career and was running a team of engineers, a job request landed on my desk regarding the replacement of a valve in the depths of an offshore platform. According to the process, this request was born from a problem identified by the offshore operations and maintenance team, who then discussed it with their onshore counterparts to consider what should be done and with what priority. The offshore team consisted of the Offshore Installation Manager (OIM), the field operations supervisor, the maintenance supervisor, the marine operations manager, plus a whole host of operators, technicians, maintenance personnel, and safety officers. Onshore, the team comprised a production manager, a deputy production manager, a maintenance manager, a safety manager, plus a load of engineers and other support staff. All were involved in the discussions surrounding the problem – the valve was seized – and they decided to replace it. Were it a straight-up replacement it would have been handled by the maintenance team, but because they wanted to move it to a different location nearby, it became an asset modification and needed engineering to get involved. As per the process, every manager and supervisor both onshore and offshore had to sign off on the request for engineering support, and each was given space to append their discipline comments to the form. These managers and supervisors were mainly western expats between 35 and 55 years of age, and considered some of the best the company had to offer. For this reason they were well paid.

So the request lands on my desk, I look at it for a while, then turn it the right way up, then call my lead piping engineer, a grizzled Scotsman who I’ll call Fred. Fred had more brownfield engineering experience than I could hope to acquire in three lifetimes, and I decided early on that he was someone worth listening to. I handed the request to Fred and asked him to take a look, and a few days later we sat down and discussed the job. Fred said the valve was enormous, it was very heavy, and the area it was in very tight and congested. It was therefore going to be a rather difficult job, but not impossible. However, he said he’d know a lot more if he could get out to the platform and take a look for himself.

I usually insist on a site visit by discipline engineers on any brownfield job because the drawings, even if properly updated to as-built status, can never give you the complete picture. 3D scans and PDMS models are very useful, but everything must be verified with a site visit. For all you know, someone’s built a temporary structure right in the area you thought was free; temporary modifications in the offshore oil industry have a terrible habit of remaining in place until the facility is decommissioned. Some managers are only too happy to have engineers visit the site to allow them to discuss the precise problem and proposed solutions with the operators, and some OIM’s insist on such a visit. But often visitors are not welcome offshore due to a lack of bedspace or seats on the helicopter. In this particular case, it was easier to get an audience with the Queen than get a guy offshore as the accommodation was permanently full of essential personnel who couldn’t be spared for a single day. However, I’m a stubborn sod and I refused to move forward with the engineering until Fred had gone offshore and looked at the job in person; I was of the opinion that if the OIM cannot accommodate an engineer for a couple of days, the job can’t be that important. I learned that management don’t like it when you put it like that in meetings.

So eventually Fred got his offshore visit, much to the annoyance of the offshore team. When Fred got there and had undergone the usual safety inductions, he stepped out of the living quarters to find the operations area like the Marie Celeste. He walked around  the whole platform and barely saw a soul, but when he went back to the living quarters and stuck his head in the offices, he found it stuffed to the gills full of people. It stayed like this for the whole two days he was out there. In the company of the most junior operator on the platform Fred descended into the bowels of the platform and found the valve that was seized. It really was huge. He spent an hour or so down there, taking measurements and working out what could be done. He then went back to the living quarters where he was summoned to the meeting room by the OIM and asked to present his findings. Around the table were all the senior people on the platform, who lived there 24/7 for 4 weeks at a time.

Fred began. “I think we need to look at a repair, rather than replacement.”

He was immediately interrupted by the OIM. “No, we have decided it is better to replace it.”

“Replacing it is going to be very difficult,” said Fred. “It’s a huge valve and…”

The maintenance manager cut in. “Yes, it is big but it needs to be replaced.”

“Then that will be a lot of work,” said Fred. “And I’m not sure how you’re going to get a cutting torch down there.”

“A cutting torch?” said someone.

“Yes,”  said Fred. “The valve is too big to fit out the entrance door, even if we dismantle it. The valve body won’t fit.”

“Are you sure?” asked the OIM. “I don’t think so.”

“Okay,” said Fred. “A show of hands, please. How many people around this table have actually been downstairs and had a look at the valve?” The room fell silent. Everyone looked at each other. No hands went up. “Okay, well I have and I’ve measured the valve, the valve body, and the size of the hatch and there is no way we’re getting that valve out without cutting it up, and that won’t be easy down there. So I recommend we dismantle it and repair it in situ.”

So what’s my point? The situation described in this anecdote might not be typical, but it is certainly not unusual either. It is almost inconceivable that an oil company would pay hundreds of thousands of dollars per month to have people sitting on an oil platform (with all its inherent risks) who limit their interaction with the facility in order to do bureaucratic tasks which could just as easily be done onshore, yet it happens. It is common, especially in big companies, to have an organisation staffed by ostensibly experienced and qualified people who are well paid, but simply decline to do their jobs. Instead, they busy themselves with other activities, often under the direction of a manager who never properly understood what they should be doing in the first place. It’s what happens when an organisation’s processes become divorced from the goals they are supposed to achieve, and managers are rewarded solely for following the process regardless of outcomes.

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34 thoughts on “Offshore Clerks

  1. Very similar experience in recent years in my industry, without the grease and glamour of offshore operations. Staff complain that they now spend most of their time following byzantine SOPs, filling in checklists based on those (which tend to be ever-growing lists of everything that’s gone wrong since 1842) and clicking buttons in user-unfriendly client IT systems. It feels like we spend so much time making sure that something that went wrong in 1842 doesn’t go wrong now, that nothing goes right either.

    Time is wasted chasing the client project manager who’s not given them enough information to fulfil said SOP. Things like failing to provide contact details/names for someone who has to sign something off according to said SOP). Or updating ridiculously complicated and pointlessly detailed timelines, which everyone knows are purely academic and will change again within 48 hours.

    That the clerical work now leaches significantly into “downtime” (i.e. time committed to real work for other clients) is becoming a real problem.

    I praised one client recently who actually finally realised you cannot have more than one of (a) project done on time (b) all client managers sign off on it at every stage. They have gone for the latter, a policy which I expect to last about 5 seconds after it ends up costing them serious hard cash that they can’t blame their suppliers for.

  2. One place where a little personal on-site experience and much anecdotery / gossip leads me to think that this sort of dysfunction has been taken to a high art is Venezuela – where – if one believes the prevailing stories – political appointees/cronyism and nepotism in PDVSA ops/engineering have catastrophically reduced the functionality and safety of the O&G industry in that country.

    That bureaucrats gorge on process alone, divorced from delivery should come as no surprise but it seems a rare outfit that rotates the onshore personnel (office) with the offshore (site) on any regular basis – some even going to the extent of deliberately deploying fusible contractors at the dirty end – complete with contracts they have not read and understood.

  3. Unless I’m missing something here, if you can’t get the old one out without cutting it up, how are you going to get the new one in?

  4. Roué le Jour:

    I guess they keep making ’em smaller, just like they do with computers and Mars Mars.

  5. Roué le Jour

    … with difficulty

    A (the?) point here (I think) is that allowing bureaucracy to ferment unconstrained is a recipe for trouble on a grand scale. Activities that are physically and mentally more demanding than sitting in a Herman Miller chair and shoving a mouse around are administrated out of existence.

    It’s an aspect of human nature I suppose – but it is one that regularly leads to much inconvenience and quite regularly to calamity.

  6. What BiG says. Onshore folk like you & I are making petty checklists and buggy software for offshore workers, slowing down their actual work. Same problem in the NHS, schools, etc.

    It’s in the nature of big organisations. The Soviet Union had the same problem at large scale: half the country was employed verifying that the other half were doing their jobs properly.

    The UK governement thought it could solve the problem by outsourcing work, but that doesn’t always work – look at the PFI contracts in poorly-built Scottish schools, for example.

  7. Unless I’m missing something here, if you can’t get the old one out without cutting it up, how are you going to get the new one in?

    Make the doorway bigger.

  8. Activities that are physically and mentally more demanding than sitting in a Herman Miller chair and shoving a mouse around are administrated out of existence.

    The problem here was these guys were supposed to be on site getting their hands dirty, but that requires effort for little or no reward. Hence most found it easier just to sit in the office playing on the computer and attending pointless meetings. Certainly nobody was going to give them a bollocking for not going on site.

  9. The UK governement thought it could solve the problem by outsourcing work, but that doesn’t always work

    Indeed, because the companies they outsource to become better at buttering up politicians for juicy contracts than executing work. See Carillion, for example.

  10. The problem is not with the outsourcing, it’s that the companies they outsource to become too big. So, ensure that there is always competition when outsourcing and that the contract can be taken away and given to a competitor. Fear of losing work and desire to keep it from hungry competitors is the best way to keep firms and their employees keen and responsive.

  11. Buncefield

    my understanding (on nth hand info) is that the “full” float switches at the top of the tanks were a triplexed safety system – two of the three were purportedly known to have failed and it was deemed too inconvenient to send somebody up to effect repairs (fresh and current JSAs, RAs, worker certifications, work procedures + permits, weather and cost).

    The third switch failed and they kept pumping.

    I have heard other similar tales on big process plant where the maintenance is managed by bureaucrats who tick boxes and deploy contractors but rarely get PPE’d up and look for themselves.

    I do take your point about the field folk getting their hands dirty – but taking the piss is something that has to be actively combated – routine + boring might be “good” – but actually keeping an eye on stuff is hugely important.

  12. I do take your point about the field folk getting their hands dirty – but taking the piss is something that has to be actively combated – routine + boring might be “good” – but actually keeping an eye on stuff is hugely important.

    I fully agree. It is a disgrace that management aren’t ordering those who are paid to be be on site to spend a substantial portion of their time actually on site instead of surfing the internet in the office.

  13. There is money to be made in offshore drilling these days and I ain’t talking about on the back of the next $150 a barrel peak. According to Ensco, a British-based offshore drilling contractor, the average break-even cost for offshore projects is now in the $20 to under $40 range.

    Plus they are all desperately driving costs down further, as every company should, and wait for it productivity gains are being effected with the embracement of Big Data, so they say.

    Expect to see more offshore staff doing more things with data, hopefully productive, safe, and cost reducing things.

    https://seekingalpha.com/article/4159594-ensco-esv-presents-scotia-howard-weil-46th-annual-energy-conference-slideshow

  14. Another word: Flixborough. Engineering FU replacing a valve.

    But back to “our” valve. Valves jam when they’re never operated.
    This can be for 2 reasons:
    a) It’s redundant, others down the line do the same job.
    b) It’s for emergency only. If so, you’re F’ed.

    A big unit down in the bowels? Sounds like an emergency water inlet to me.

  15. And Shell say that they want deepwater at $40 a barrel.

    Shell Wants Deepwater Breakevens Below $40

    Even though Brent Crude prices hit $75 a barrel on Monday, Shell continues to stick to disciplined spending and wants deepwater projects to break even at $40 a barrel or lower—a sign that Big Oil is committed to not repeating past mistakes with lavish expenditure on complex projects, as the case was when oil prices were above $100 a barrel.

    https://oilprice.com/Energy/Energy-General/Shell-Wants-Deepwater-Breakevens-Below-40.html

  16. It is a disgrace that management aren’t ordering those who are paid to be be on site to spend a substantial portion of their time actually on site instead of surfing the internet in the office.

    Sometimes the line of command doesn’t go through the local operational infrastructure so operators are insulated against being held on task. Venezuela springs to mind as a classic example – PDVSA and their chums didn’t feel bound by site working practices – heavy equipment operators with their backs to the controls watching internet football or fiddling about on social media… They got a real snit on when I blocked their access…. until their higher up mates pressured the company.

  17. The other interesting reality is that Apple are now at a $1T market cap and they overtook ExxonMobil some time ago. It looks like digital is the new oil, but I think that it will bring oil (energy) along with it, due in part to the huge demand it creates for energy and the huge demand energy producers have for digital.

    I don’t know if anyone viewed that fascinating footage I posted on yesterday’s thread of Steve Jobs actually predicting the transition from the hydrocarbon age to the information age, 33 years ago, but boy he was certainly on the money!

    I don’t think it will take very long for the next digital company to take the $10T market cap prize.

    http://www.visualcapitalist.com/valuation-milestones-apple-1-trillion/

  18. It used to be that all the useless middle-class people with degrees ended up in the civil service. But then they expanded the Universities and now even the civil service can’t fit them all in, so now they infest private industry too.

  19. Bardon, you make an interesting point. But I’m not sure which way round it goes.

    You’re probably old enough to remember the promise of energy (nuclear) “too cheap to meter”. Didn’t happen.

    What has become too cheap to meter is information (google, skyoe, etc). Interesting that pure digital plays with more reach than apple (microsoft, facebook) are still valued less than an outfit that still makes hardware.

  20. The situation described in this anecdote might not be typical

    Ohhhhh, yes it is.

    I’m currently maintaining a 25-year old code base written in three different languages. We’ve spent north of $60,000 over the last year alone on resources because we don’t want to pay a contractor $5,000 to fix the installer.

  21. “Even though Brent Crude prices hit $75 a barrel on Monday, Shell continues to stick to disciplined spending and wants deepwater projects to break even at $40 a barrel or lower—a sign that Big Oil is committed to not repeating past mistakes with lavish expenditure on complex projects, as the case was when oil prices were above $100 a barrel.”

    Isn’t that target driven in no small part because fracking is around $60 pa barrel and set to come down?

  22. “Make the doorway bigger.” ?

    Why not do that before working on the seized valve, don’t bother to cut it up but rather haul it out the bigger doorway?

    Seems Fred the Scott isn’t so bright after all.

  23. Why not do that before working on the seized valve, don’t bother to cut it up but rather haul it out the bigger doorway?

    Modification to the hull structure, or chop up a valve. Your call.

  24. @Z- “you make an interesting point.”

    As do you.

    The one thing to remember about this information age is that it is very young and early days in its respective lifecycle. If we were to compare it to the automobile life cycle then its only 1925ish.

    So yes Apple done the transition and maybe pure digital will do the large one. It took Apple 20 years to get to the $1T, so maybe it will only be 10 years for the pure digital to get to the next $10T milestone, the organization that achieves this may not have been born yet, or it could be one of the current toddlers like, say, Atlassian?

    https://assets.bwbx.io/images/users/iqjWHBFdfxIU/ig2qGqNZdYYg/v0/600x-1.png

  25. @BIND – “Isn’t that target driven in no small part because fracking is around $60 pa barrel and set to come down?”

    I don’t believe so, my comment was based on purely offshore drilling particularly deepwater, this is the new extraction frontier. Undoubtedly the technology which enables these lower break even costs has benefited massively from the digitalisation of US shale extraction technology, but offshore wells are where the next boom will come from. 75% of the wells identified in the recent Drillinginfo “Wells to Watch Report” are offshore.

    “With the recovery of oil and gas prices,
    global investment opportunities are growing,
    and staying on top of this new activity can
    be challenging. In this report, Drillinginfo
    experts from around the globe pinpoint
    32 of the top wells and exploration
    drilling programmes to watch through the
    remainder of 2018. These include regionally
    significant prospects on and offshore from 23
    countries, representing high profile new-field
    wildcats (NFWs) targeting conventional and
    unconventional plays and some appraisals
    seeking to prove key discoveries.”

    http://info.drillinginfo.com/wp-content/uploads/2018/02/Wells-to-Watch-Report-2018.pdf

  26. Bardon,

    Thanks, but I’m not sure it answers my question (which is asked purely out of interest as I lack knowledge of the industry).

    I appreciate there’s different kinds of oil and each has its price with Brent being used as a general benchmark but doesn’t the lowest cost mass producer set prices, especially as fracking is easy to turn on and off?

    As I see it offshore is the next boom only because it can get below the cost of fracking, but I may be missing something.

  27. I am not sure what the breakeven costs are for US Shale. The market price is set by a few different factors but not on cost to produce alone, US Shale was running at a loss for sometime and may well be now, I just don’t know. There are many dynamics and when prices increase exploration and drilling increase which effects price as well.

    The point I was making was on the OT offshore, that the offshore share of market will increase from its current level of 30% of supply, the operators will be using more digital technology and deepwater appears to be the new frontier.

    Some of the other posters on here can probably update on production costs for US Shale.

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