Cross-Functional Teams for Planning and Monitoring Drilling Projects
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1 GRC Transactions, Vol. 36, 2012 Cross-Functional Teams for Planning and Monitoring Drilling Projects Alan Bailey, Mary Ohren, Ozgur Balamir, and Jonathan Hernández Geothermal Resource Group, Inc. Keywords Drilling projects, project planning, planning drilling, drilling programs, drilling risk, lessons learned, project management Abstract Success in drilling can often be traced to adequate planning, including risk identification and response strategies. The traditional framework for planning drilling projects is hierarchical and consists of a small project team. The high complexity of drilling projects, combined with time restraints, often results in a failure to identify risks, provide contingency plans, and effectively monitor project execution. One solution is to create an integrated cross-functional team specifically for planning and iterative project review. The team is composed of representatives of the operator s drilling, resource, and production groups, representatives of the companies providing major services, consultants, and personnel from the lead regulatory agency. In a cross-functional team, the members have input into the initial drilling plan, and then participate in a drill-on-paper exercise in which a detailed drilling procedure, including risk identification and contingency planning, is developed. The team then establishes iterative review sessions at key milestones of the project, promoting rapid self-correction, accurate lessons learned, and project-specific heuristics. Introduction Project management is an ongoing process presented in the commonly used Project Management Body of Knowledge (PM- BOK ) Guide, with a five-phase framework: Initiation Planning Execution Monitoring & Controlling Closing of the project Project management for drilling projects should be especially attentive to the Planning and Monitoring & Controlling phases to react and adapt to changes in the program as borehole conditions dictate. For drilling a well, the life cycle of the project can be broken into distinct stages, each affecting and overlapping with the next. For example, the Execution phase of the project could be broken down into rig-up, spud, surface casing, intermediate casing, production casing, completion of the well, testing and rig down. The completion of each well interval may be considered a milestone where there are specific standards to be met. Each milestone of the project should incorporate a review and performance evaluation session. This rethinking of the management structure of drilling projects has been done in order to promote productivity, flexibility and to improve risk management. Project management for drilling should be performed in a manner that acknowledges the importance of communication between all personnel involved. The complex and expensive nature of drilling provides an opportunity for input from beyond the drilling management team; input that can often best be acquired from project stakeholders whose specialized skills and knowledge can supplement the program and ease the path of change, as conditions dictate, during the life of the project. Assembling an integrated team to provide input into the design and to help review each milestone is an effective tool to acquire better planning from the outset and improve project outcomes. The integrated teamwork model is not the team-drilling model that was attempted in the 1990s and early 2000s. Rather, it encourages group participation from the outset to establish improvements in the Planning and Monitoring & Controlling phases. The drilling management team remains a hierarchical group, and functional day-to-day management is still performed by the operational personnel at the well site. Why Drilling Projects Fail Once a drilling project has been initiated, there are several areas that will commonly lead to failure. Though the causes may seem disparate, project failure can almost always be recognized as having been created by a failure either to plan properly or to moni- 271
2 tor progress effectively. Poor project planning results in budgetary shortfalls and failure to identify drilling risks. The Planning phase is the opportunity for the project manager to assemble the appropriate project team to ensure that the well is designed appropriately to meet project objectives, budget, and schedule. Diligent project monitoring can allow rapid identification of quality issues and enhance the Lessons-Learned process, whereas poor monitoring can lead to unserviceable or mechanically unsound wells. There is never a guarantee of success, but the risk of failure can be greatly reduced with extensive advanced planning and constant review by an experienced project team. Benefits of Good Planning One of the greatest errors that an operator can make is failing to perform sufficient advance planning. Planning costs constitute a trivial fraction of the total cost of drilling a well, but the failure to plan properly may result in wells that cost millions more than necessary. A complete planning process starts with a high level decision to drill and the creation of a well proposal. It is continued throughout the Execution and Monitor & Control phases of the project life cycle, with update and modification as required by circumstances. Advance planning that begins with a complete well proposal will serve to inform supervisors and critical vendors, identify risks, determine potential resource bottlenecks and reveal potential logistical issues. Advance planning appears to add cost to the project, but in fact, in conjunction with a responsive and flexible method of ongoing project management, costs are significantly reduced. outcomes from one or more of the project knowledge areas (Figure 1). Understanding and applying the inputs, tools and techniques, and outputs of each of these processes paves the way for better risk management, cost control, scheduling, and scope control. Project Initiation A requirements document, called a well proposal and analogous to a project charter, is received following a high-level decision to drill, and will be used throughout the planning process. Deveroux (1998) recommends that the document contain the well objectives, the anticipated timeline, well design essentials, the requirements for particular services such as surveying or testing, and the project approval from the financier of the project. The well design essentials section is the heart of the document. Well design essentials include all of the predictions for well conditions while drilling, the regulatory compliance expectations, the geologic and The Project Management Framework It is recommended that some project management methodology be applied to drilling project implementation to enable a systematic approach. There are numerous approaches to choose from but for the sake of this presentation, the authors have selected the Project Management Institute s methodology as outlined in the PMBOK Guide. The PMBOK Guide provides a framework with five phases and nine knowledge areas. The phases of project management were introduced earlier as Initiation, Planning, Execution, Monitoring & Control and Closing. The knowledge areas are integration, scope, time, cost, quality, human resources, communications, risk and procurement. For each phase of a project there are expected Figure 1. Project phases, knowledge areas and outcomes framework. 272
3 structural assumptions, and completion requirements. Creating a well design will involve discussing the project with the appropriate personnel in the initiating organization, thorough review of offset data, discussions with regulatory agencies, and contacting vendors. It is during the identification of the well design essentials that the project manager assembles the drilling management team (discussed below). The well proposal should be completed and approved before the preliminary drilling program is drafted. A Typical Drilling Management Team Geothermal operators commonly create a drilling team composed of a limited number of members, typically a drilling manager and drilling engineer dedicated to design and planning work, and two or more drilling supervisors. A drilling superintendent may be a part of the team, particularly if there are two or more rigs in use. The responsibilities of all the team members overlap, at least in part, with the drilling manager and drilling engineer focused more toward project responsibilities and the superintendent and supervisors oriented more toward operations. Any or all of the team members may be hired as consultants rather than full-time members of the operator s staff. When this is the case, the operator will usually assign a functional manager to oversee the routine work not associated directly with a drilling campaign. In addition, a company geologist will normally be assigned to the drilling team through the project life cycle, with a reservoir engineer involved with targeting and testing. The team will have a well-defined hierarchy. This is necessary during the greater part of the project life, as safe and successful operations demand clearcut responsibility and accountability. In the authors opinion, the team drilling concepts of the late 1990s and early 2000s have largely been abandoned. The deaths of 11 crewmen on Macondo give lie to any notion that an experienced and accountable chain of command on the well site is a management style and not an absolute necessity. However, there are times during the phases of a project where multiple ideas and inputs are very desirable. fishermen, down-hole tool hands, cementers and drilling fluids engineers. In applications where highly specialized tools and materials are used, knowledgeable salespeople may be included. If a drilling contractor has been selected, members of that organization could also be selected for the team. The purpose is to create a group whose experience and knowledge make them an asset to the planning process (Figure 2). There is one additional member in the team, and a participant to a greater or lesser extent based on willingness and agency policy. A representative of the surface management agency (SMA) should be included in order to provide advice and consent on the regulatory hurdles to be met during the drilling process, and to approve BHA design and testing parameters. The SMA should, in fact, be considered a customer of the project, in as much as the SMA s acceptance of the project procedures and goals is as important as the operator s willingness to undertake the project. While representatives of the SMA may decline active participation beyond approval of designs, keeping them apprised throughout planning and monitoring functions as well as operational activities allows the agency to gain buy-in and support. The Cross-Functional Team During certain portions of the Planning and Monitoring & Controlling phases of the drilling project, it may be advantageous to assemble a special group of people whose broad variety of skills and expertise can greatly improve project performance and significantly reduce risk. For the purposes of this presentation, this group will be referred to as a cross-functional team; crossfunctional in the sense that the breadth of knowledge offered by the group members leads to insight into the interaction of the many processes involved in the drilling project. A cross-functional team for planning and monitoring drilling projects consists of the drilling management team (including the reservoir engineer and geoscientists supporting the project), representatives of the companies providing the major services (logging, casing, cementing, directional drilling, and drilling fluids), and one or more individuals serving in an expert judgment role. The experts may include drilling engineers, managers, and superintendents, as well as trade specialists, such as experienced Figure 2. Structure of the cross-functional team. 273 Founding the team begins in the initiation phase of the project when a project manager is selected. Normally the project manager will be a drilling engineer or drilling manager but, depending on the internal structure of the operating company, this may also be a resource manager, field operations manager, or geologist. Once the project manager has gathered the drilling management team, the responsibility for creating a basic drilling program is assigned and initial planning begins. The planner uses organizational assets such as offset well data, bit records, and previous drilling programs to create as detailed and field-specific a drilling plan as possible. The drilling management team then reviews the program and preliminary consensus is achieved. At this point, the project manager and the well planner (assuming the planner is not the project manager) create a basic risk registry (Figure 3) to identify risks and make recommendations for risk mitigation. If the project manager and the planner do not have significant operations experience, the superintendent or an experienced supervisor should also take part in this effort.
4 Risk Likelihood (1-3) Impact (1-5) Risk Score Most Likely Encountered While Mitigation Technique Gas invasion of annulus with gas channeling to surface Wellbore enlargement Stuck Pipe Solids control problems Poor hole cleaning Uncontrolled flow above production zones Undergauge hole in RWD hole section Figure 3. Example of a basic risk registry. While cementing conductor, surface 1st intermediate hole While drilling surface and 1st intermediate hole When hole cleaning problems occur; during the drop sequence of the hole (keyseating) Drilling through formations that dissolve in the mud or are fine enough to pass through the shaker screens In the clayey and unconsolidated surface sections, deeper in the hole if pump rate vs. pump pressure becomes a problem If loss of circulation occurs or if gas enters the well bore While drilling the 17 1/2" hole section and RWD to 22" hole Use a pre-flush to prevent channeling. Use a thixotropic additive. Consider accelerating cement to reduce set time. Use gas block in cement slurry. Drill with reduced AV's, but beware of subsequent hole cleaning problems and potential for sticking. Pump sweep to assure proper hole cleaning. Run (back reaming) stabilizer above the drilling assembly and wipe the hole frequently. Pump sweeps to clean the hole. Survey 30' off bottom. Have procedure in place to check hole condition regularly. Monitor the mud properties constantly and run a high volume centrifuge, check and dump sand trap on a regular basis. Consider addition of a mud cleaner or desilter Maximize hydraulics in deeper hole sections, perform regular wiper trips when drilling though clay-rich formations. Pump sweeps. Watch the mud weight and make sure no water is added to the mud pits unless supervised by the mud man. If flow occurs, close to the well in and use standard well control methods to get it under control. Have some weighted mud premixed and ready to pump. RWD placement and drilling parameters must be judicially decided and watched closely. Once a preliminary drilling program and risk registry have been created, these documents are used to begin procurement planning. Vendors are selected in accordance with the operator s assessment criteria, and representatives from the service companies are recruited to join the cross-functional team. The draft plan and risk report are then passed on to the cross-functional team members. Following a reasonable period of time, responses are gathered and the drilling program is amended to include input from the members of the cross-functional team. In acquiring input in this way, the drilling management team is implementing a Delphi technique (Cline, 2000) providing the group members an opportunity to contribute expertise anonymously and without being influenced by the group as a whole. It is important to note that although the crossfunctional team is a very useful tool, its use should be limited to the Planning phase except for the predetermined evaluation points during the Monitor & Control phase (Figure 4). Committees are not suited to the sort of direct, hands-on management required during the bulk of a drilling project. Figure 4. Cross-functional team role during the phases of a drilling project. The Drill-on-Paper Exercise Once the drilling program and risk register drafts are revised, the Drill-on-Paper exercise is scheduled. This is where the cross-functional team will meet as a group. This exercise serves many important functions. First, it is an opportunity to develop consensus on the overall drilling program. Procedural nuances can be discussed in more detail, with interaction between the different service companies. Risk issues 274
5 Subsequent to the Drill-on-Paper exercise, all participants are given a brief opportunity to respond before the formal drilling program is produced (Figure 5). Inputs, Tools and Techniques, Outputs of the Team There are several inputs, tools and techniques required to take the greatest advantage of the cross-functional team planning process. Beginning with the inputs, these are listed below: Inputs Well Proposal Working drafts of the Drilling Procedure and Risk Registry Service company-provided procedures for special operations Iterative goals Tools and Techniques Expert judgment Delphi technique Drill-on-Paper exercise Output - Drilling Procedure Figure 5. Process of creating the drilling program. Beyond the Planning Phase Monitoring, Controlling and Lessons Learned An important part of the scheduling process is to identify specific, iterative benchmarks. As described earlier, the iterative phases will likely be the different well bore intervals, with the milestones occurring upon the completion of each interval, plus at the end of the testing phase. When a milestone is reached, it is the job of the project manager to provide a preliminary Lessons-Learned document to the members of the cross-functional team. The cross-functional team members then take the opportunity can be spelled out in better detail, and the scheduling of long lead-time items can be determined. It is also an opportunity for the project manager to take a measure of the commitment of the service companies it can be fairly assumed that a vendor who takes an energetic part in the planning exercise is more likely to carry forward with a commitment to the project overall. Above all, it provides an opportunity for the service companies to buy-in to the project. The cost of the Drill-on-Paper exercise should be minimal relative to the cost of the project as a whole. Service companies generally view project-oriented exercises as a cost of doing business and, for those participants who must be paid, the advantages that this sort of planning presents in long-term cost savings to the project far outweighs the small cost incurred. For a few hundred dollars to rent a conference room and buy everyone lunch, the project gains tremendous input. Figure 6. Review process during the life of the project. 275
6 to review, comment, and add lessons to the document. This can be initiated less formally than a Drill-on-Paper, with participants reviewing the Lessons-Learned document using a video or audio conference call (Figure 6). Once the Lessons-Learned document is completed to the best ability of the team, a set of rules-of-thumb, or heuristics, can be established for future drilling. Some of these rules-of-thumb may align with industry best practices and so may be well known to the drilling management staff. Others may be specific to the field itself, the formations being drilled, or external issues ranging from water supply quality to local vendor capabilities, operator s policies, etc. Capturing and incorporating these heuristics into future drilling plans may result in improved preparedness and performance by the drilling team on the next well. The desired outcome of the review process is that a set of standards be developed that is specific to the field for drilling and completing wells that meet the quality requirements of the operator. There is much confusion as to the precise meaning of quality. In the sense of drilling and completing a well, quality refers to four concepts: Completing the project as designed, on time, and within budget. Completing the well so that it is mechanically sound and capable of maximum life. Drilling using techniques that do not damage the formation in the productive interval. Completing the well so that its optimum design performance is not impeded. The actual ability of the well to produce is not a quality issue for the drilling team. The success of the well in meeting the project s resource goals is clearly important to the higher management of the project, but existing resource risk is outside of the scope of drilling and completion tasks. However, if resource goals are not met, the planning team should be reassembled via some medium to evaluate changes to the original procedure such as sidetracking, re-drilling or deepening. Isn t This Agile? It is important to mention the Agile project management method, as the concept of the cross-functional team is a cornerstone in that project management methodology. Agile is a project management philosophy first developed in the late 1990s for the software industry in order to respond to rapid pace of change in hardware and customer requirements. Agile management promotes teamwork and open communication, encourages frequent inspection and self-correction, allows for the creation of engineering best practices intended to improve delivery times while reducing cost, and helps to align project development with stakeholder requirements and goals. In its purest form, agile project teams are wholly self-organizing and cross functional. Corporate hierarchy or the corporate roles of team members are not considered. Rather, team members accept responsibility for tasks based on their particular talents and ability to deliver the functionality that new iterations of the project require. They decide on an individual basis how to meet new requirements. Although the concept presented in this discussion borrows concepts from Agile, the authors are not promoting an Agile framework for managing drilling projects. As has been stated before, drilling projects are by necessity managed in a fashion that creates a clear chain of accountability and command. The authors are presenting a concept to improve planning and specific aspects of monitoring project work to be incorporated into a more traditional project management framework. Conclusion Drilling projects are inherently risky and expensive. There is no way to ensure absolute success. Even so, there are several methods by which project risk can be dramatically reduced. A cross-functional team should be put in place during the Initiation phase and be involved in extensive advance planning, culminating in a Drill-on-Paper exercise. The entire drilling team should be aware of the goals and objectives of the project. During the planning phase a thorough risk assessment and response plan should be completed. During the life of the project there must be constant process review and intensive oversight by experienced personnel. References Cline, A. (2000). Prioritization Process Using Delphi Technique. Retrieved from Devereaux, S. (1998). Practical Well Planning and Drilling Manual. Tulsa, OK. PennWell Corporation. Managing Cross-Functional Teams: Balancing Team Needs and Functional Lines. (2012). Retrieved from newtmm_30.htm Project Management Institute (2008). A Guide to the Project Management Body of Knowledge. (4 th ed.). Newtown Square, PA. 276
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