Subject: IADC s three year tactical plan:

Transcription

1 Paper from the IADC President & CEO, 7 October 2014 Subject: IADC s three year tactical plan: Purpose of the paper To provide IADC s Executive Committee (ExCom) with an overview of the IADC President & CEO s proposed 2 nd tactical plan ( ) for our continuing journey towards a sustainable, high performance IADC organisation. This paper is deliberately focused, at this time, on setting out the outline tactical plan and its integration with the corporate level strategy. The intent is for ExCom to review and provide comment on direction of travel toward assisting/guiding IADC staff s continuing efforts on detailed planning. Work is underway to furnish the necessary supporting detailed planning and 3 year budget (detailed 2015 forecast 2016 & 2017) for consideration and approval at the November ExCom. This will include the roadmap for achieving specific goals and key deliverables. At the same time, staff are working to produce departmental/divisional tactical plans which align with and directly contribute to delivery of the corporate tactical plan. These will provide everyone within IADC (staff and Members) with direct line of sight on how they contribute to our goals, and the metrics by which progress towards the goals may be measured. 2. Executive Summary of IADC strategy 1 Oil and gas will be the major ingredients in the global energy mix for the foreseeable future and drilling contractors are therefore key players in the global energy economy. As the drilling industry s association, IADC s vision: for the drilling industry to be recognised for its vital role in enabling the global economy and high standards of safety, environmental stewardship and operational efficiency. Supporting this is IADC s mission of Catalyzing improved performance for the drilling industry. To secure these challenging outcomes IADC sets itself the goal to be the authoritative body in the drilling space and this goal should be achieved by A summary of the strategy is given here to provide ExCom context to the provenance of the tactical plan without undue delay getting to the plan itself. The full corporate strategy is provided simultaneously to IADC staff 1

2 IADC s strategy by which its goals are secured efficiently and effectively reflects life in the modern era of exploration and production (E&P). The modern era can characterized in the context of 5 key stakeholder groups: Drilling Contractors whose rigs, people and equipment are a major, vital element of the global energy economy; Governments at national and state level who set policies for business, fiscal and social contexts and who are increasingly targeting drilling contractors in all these areas; Regulators who are globally interconnected in their ways and means of working and who look increasingly to drilling contractors to lead in the drilling space; Producers who demonstrate both an abiding need of a more integrated relationship with, and a tendency to shift of liability towards, the drilling contractors; and Public & Media who have taken an adverse view of our industry s capabilities and culture that we cannot and should not accept. To adapt to these underlying drivers of change whilst catalyzing improved performance in drilling, within the vision of enabling safe, responsible and secure oil and gas development, IADC will pursue four ways of working: giving leadership in drilling s core functions and standards; providing good stewardship of the industry s core values; influencing government thinking to inform sensible government policy making; advocating better regulation to secure more constructive oversight by regulators. Securing the goal of being the authoritative body in the drilling space also requires change in IADC s delivery of its core services and tactical plans. Work has already begun to integrate Houston based and regional staff into an organizational matrix to enhance ways of working to give direct line of sight to our plans and to engage with the priorities of our key stakeholders. We aim to enhance the effectiveness of our core service delivery functions and focus clearly on achieving tactical priorities deploying all of our resources efficiently and effectively, and maintaining a balanced budget going forward. 3. Outline Tactical Plan This is in two parts: delivering core services to our Members; and delivering a powerful program of initiatives. Collectively, successful delivery of the plan will deliver improved performance and opportunity for our Members and secure IADC as the authoritative body in the drilling space. 3(a) IADC s service delivery functions 2

3 Through our service delivery plan we intend: (i) To connect our parts and our stakeholders, to secure collaboration between them, and create outcomes that continue to grow the reach and effectiveness of Organizational efficacy and development Offshore Division Onshore Division IADC Committees IADC Chapters IADC Conferences Accreditation & Credentialing International representation Influencing Governments and legislation Advocating better regulation IADC Publications and social media Communications and media differentiated between the USA and elsewhere (ii) To grow and consolidate our Membership (iii) To complete new governance arrangements of IADC (iv) To expand the Chapter network, targeting Mediterranean Norway Mexico China Angola (v) To intervene in fiscal, liability and local content initiatives, particularly resisting contagion (vi) To secure budgetary balance and efficacy 3(b) IADC s key external priorities The seven highest external priorities for are 2 : (i) Securing IADC s place as the authoritative body in the drilling space 3 The efficient and effective delivery of IADC s services and the external priorities are dependent upon achieving this goal. 2 The numbering does not imply relative importance 3 This is made an external priority because its achievement can only be a grant from our 5 key stakeholders drilling contractors; governments; regulators; producers; and public and media. IADC s current Division based organisation is counter productive to getting the job done and then consolidating the gains. 3

4 During 4 th quarter 2014 and 1 st half 2015 IADC will re engineer its structure to build a matrix organisation, a human Internet that will service the heightened expectations of our stakeholders and efficiently safeguard our role in the drilling industry. (ii) Securing effective collaboration with both regulators and producers A consultation between regulators, drilling contractors and producers can break the cycle of reactive regulation. This is only viable with the three parties acting off line in order to avoid conflicts of interest and to stimulate a creative agenda. During , IADC will actively encourage setting up a tripartite consultative forum with IRF and OGP in order to deliberate and determine the shared priorities for the drilling industry. During the period IADC will seek to grow its influence with other key industry and regulatory institutions: API/COS; EUOAG; NSOAF; major trade bodies for contractors (e.g. IMCA) and key producers organisations (e.g. APPEA, OGUK, NOGEPA) (iii) Well control. In order to command public credibility it is essential that the drilling industry fulfills its public commitment to learn lessons and identify improvements in well control standards and practices IADC will complete the arrangements to establish the Well Control Institute as the body that sets the global agenda for continuous improvement in well control practices. IADC will also complete the revised standard for well control training standards, and release the upgraded WellCap program. IADC will launch, with OGP, joint industry projects for collecting data on BOP reliability and improving shear ram efficacy. The database for BOP reliability data will transfer to IADC ownership during the period of the plan. (iv) US onshore. The onshore drilling sector in the USA is the most diverse and challenging region in terms of diversity of Member priorities, diversity of legislative interests, and conflicting public opinion. During the period , IADC will continue to increase visibility and communications to its US onshore membership. IADC will lobby energetically and effectively at State and Federal levels in order to hold at bay all unwarranted legislation and simultaneously to assist unlocking access for 4

5 drilling. IADC will give priority to SIMOPS (simultaneous hazardous well operations), and safety legislation proposals. IADC will monitor the treatment of liabilities for economic loss and environmental damage between producers and drilling contractors to identify any onset of liability transfer towards contractors. (v) Operational Risk Management The most active safety agenda shared by global regulators is process safety, for which the drilling analogue is the control of major accident hazards ORM affecting drilling installations well control, stability, and structural integrity. IADC will focus attention on high priority areas including: reliability of safety and environmentally critical equipment; accreditation and credentialing of people and critical equipment systems; human and organizational factors; safety case/sems approaches to risk control; and asset integrity and reliability. Well control (API S 53, RP 54, RP 59 et al), though strictly a subset of ORM is made a separate priority for IADC (see (iii) above). (vi) Geographies To meet Member demand and to respond to expanding regulatory initiatives requires boosting IADC s reputation and influence worldwide whilst continuing the effectiveness of its existing USA programs. Priority targets for influencing policy, regulation and business stakeholders are: Europe (new offshore directive; new trade treaty); Arctic (standards, access); Canada (member support & trade association collaboration); Brazil (market access, fiscal); Indonesia (cabotage issue); and Mexico (new regulations for safety and leasing). Planned IADC conferencing events present opportunities for influencing regulators and NOC s and simultaneously informing and supporting our Members where our footprint is currently light. More generically, IADC will strive to encourage a level playing field between different jurisdictions drilling without frontiers. This goal has eluded our industry for a long period of time. International land contractors are pressing for IADC support / membership, and opportunities / needs are multiplying outside the USA onshore for existing Members business interests. (vii) Giving voice to the industry 5

6 4. Costs There is a lack of key information concerning our industry s capabilities, its value to society, and its outstanding progress in safety, technology and environmental stewardship. The interlocutor is the media, through which IADC will reach the public, with which the industry has not hitherto succeeded to engage strategically. IADC will strengthen its communications systems and data management with media stakeholders and, through its matrix organisation, enabling its entire staff to be good ambassadors of our industry. IADC has great potential in its current excellent media and service products to create a powerful briefing book of use to IADC staff and also IADC Members. Media campaigns will be differentiated on a regional basis, in particular focusing US onshore and US offshore, Europe, the Americas particularly Brazil and Mexico, and the Asia Pacific regions. Responsible engagement avoids the significant risk of adverse media and it is essential that IADC act with the highest integrity in its media and public engagements. The costs of the organisation are continuing budget items. During its 1 st IADC tactical plan ( ) IADC invested heavily in rapidly taking the Association to the next level in performance, reach and impact. This 2 nd tactical plan necessarily focuses on consolidating this higher level of performance whilst establishing and maintaining budgetary balance and efficacy. The goal is to return IADC to a sustainable, balanced budget in Action The IADC Executive Committee is respectfully invited to review and endorse this paper. Any comments or questions can be directly addressed to me, to a member of the IADC Executive Team: Taf Powell (EVP Policy, Government & Regulatory Affairs) or Mark Denkowski (EVP Operational Integrity), or to IADC Chief of Staff, Jason McFarland. Stephen Colville 6