Risk Management Plan - Deepwater Oil Rig Deployment
1. DEPLOYMENT OF A DEEPWATER OIL RIG - INITIATIVE
RISK MANAGEMENT PLAN TO: ENERGY-POWER COUNCIL
October 4, 2011
Taylor & Thomas Construction, Ltd
DDR Project
Deborah Obasogie, Project Manager
2. Table of Contents
Introduction..................................................................................................................................................1
Sources of Construction Project Risk...........................................................................................................2
Systems to Address Construction Project Risk............................................................................................2
Technology ...............................................................................................................................................2
People.......................................................................................................................................................3
Management Team...............................................................................................................................3
Planning....................................................................................................................................................4
Risk Identification..................................................................................................................................4
Risk Responsibilities..............................................................................................................................5
Risk Assessment....................................................................................................................................6
Risk Response........................................................................................................................................6
Risk Mitigation ......................................................................................................................................7
Risk Contingency Planning ....................................................................................................................7
Tracking and Reporting.........................................................................................................................8
Processes to Address Immediate Unforeseen Risks .............................................................................8
Catastrophic Failure Fault Tree: Spill – Loss of Life.....................................................................................9
Discussion of Catastrophic Fault Tree..........................................................................................................9
Risk Management Strategy....................................................................................................................10
Smaller Risks Impacts.................................................................................................................................10
Smaller Risks: Fault Tree One - Well integrity failure ...........................................................................10
Smaller Risks: Fault Tree One Discussion ..............................................................................................11
Smaller Risks: Fault Tree Two - Well control failure.............................................................................11
Smaller Risks: Fault Tree Two Discussion..............................................................................................11
Conclusions.................................................................................................................................................12
References..................................................................................................................................................13
Appendix A .................................................................................................................................................14
Appendix B..................................................................................................................................................15
Appendix C..................................................................................................................................................16
Appendix D .................................................................................................................................................17
Appendix E..................................................................................................................................................19
Appendix F..................................................................................................................................................20
Appendix G .................................................................................................................................................21
Appendix H .................................................................................................................................................22
Appendix J ..................................................................................................................................................23
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Deployment of a Deep Water Oil Rig
Introduction
Deepwater Horizon was an ultra-deepwater dynamically positioned, semisubmersible offshore oil drilling rig.
Built in 2001 in South Korea by Hyundai Heavy Industries, the rig was commissioned by R&B Falcon, which later
became part of Transocean, registered in Majuro, Marshall Islands, and leased to BP (formerly British Petroleum)
until 2013. In September 2009, the rig drilled the deepest oil well in history at a vertical depth of 35,050 ft (10,683
m) and measured depth of 35,055 ft (10,685 m) in the Tiber field at Keathley Canyon block 102, approximately 250
miles (400 km) southeast of Houston, in 4,132 feet (1,259 m) of water.
On April 20, 2010 an explosion tore through the Deepwater Horizon, an oil rig operating in the Gulf of
Mexico owner by BP. The disaster happened as workers were finalizing the drilling of the exploratory Macondo
well, forty miles off the cost of Louisiana. BP probably had had tragedies on rigs before, so a failure of that type was
understood as a potential risk. BP understood the risks involved with offshore rigs and was capable of handling the
initial event, including the tragic loss of life, but BP was completely underprepared for the environmental risk that
became the largest tragedy of its kind. The explosion killed 11 men working on the platform and injured 17 others
and caused extensive damage to marine. Eight U.S. national parks were threatened. More than 400 species that lived
in the Gulf islands and marshlands were at risk, including the endangered Kemp's Ridley turtle, the Green Turtle, the
Loggerhead Turtle, the Hawksbill Turtle, and the Leatherback Turtle. In the national refuges most at risk, about
34,000 birds have been counted, including gulls, pelicans, roseate spoonbills, egrets, terns, and blue herons. A
comprehensive 2009 inventory of offshore Gulf species counted 15,700. The area of the oil spill includes 8,332
species, including more than 1,200 fish, 200 birds, 1,400 mollusks, 1,500 crustaceans, 4 sea turtles, and 29 marine
mammals. As of November 2, 2010, 6,814 dead animals had been collected, including 6,104 birds, 609 sea turtles,
100 dolphins and other mammals, and 1 other reptile.
The U.S. House of Representatives Energy and Commerce Committee released a letter to BP's Chairman
outlining five questionable decisions made by the company in its development of the well that has blownout. The
decisions include: use of a less robust well design; failure to anchor the well's casing using industry standard (best)
practice; not carrying out a "cement bond log" test cutting to ensure cement had properly bonded to the steel well
casing.
Investigations discovered four primary lines of inquiry and concluded that for the accident and its
aftermath to have occurred, the following critical factors had to have been in place: well integrity was not
established or failed; hydrocarbons entered the well undetected and well control was lost; hydrocarbons ignited on
Deepwater Horizon; the blowout preventer (BOP) did not seal the well.
In addition, eight key facts and causes underlying these critical factors were identified and include: the
annulus cement barrier did not isolate the hydrocarbons; the shoe track barriers did not isolate the hydrocarbons; the
negative-pressure test was accepted although well integrity had not been established; influx was not recognized until
hydrocarbons were in the riser; well control response actions failed to regain control of the well; diversion to the
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mud gas separator resulted in gas venting onto the rig; the fire and gas system did not prevent hydrocarbon ignition;
the BOP emergency mode did not seal the well.
BP was not prepared for the accident, project management mistakes were made during drilling,
communication mistakes were made by BP executives following the accident (although many good decisions were
also apparent), the impact on the environment and stakeholders will be far reaching, and the future of BP is at risk
from this single incident. Risk is defined as an event that has a probability of occurring, and could have either a
positive or negative impact to a project should that risk occur. All projects assume some element of risk, and it’s
through risk management where tools and techniques are applied to monitor and track those events that have the
potential to influence the outcome of a project. Risk management is an ongoing process that continues through the
life of a project. It includes processes for risk management planning, identification, analysis, monitoring and control.
Many of these processes are updated throughout the project lifecycle as new risks can be identified at any time. It’s
the objective of risk management to decrease the probability and impact of events adverse to the project.
This paper is to define a risk management plan for the deployment of a deepwater oil rig. The aim is to
identify and analyze the risks. The risk plan includes fault tree analysis within our overall risk assessment. Fault
trees are utilized to offer a listing of potential risks and impacts in the event of several failures. The catastrophic
failure fault tree depicts risks associated with the BP spill and the loss of life. Smaller risks: fault tree one depicts
critical factor: well integrity failure and its cause while smaller risks: fault tree two depicts critical factor: well
control failure and its cause. The legend in Appendix J is used for all fault trees.
Sources of Construction Project Risk
Taylor & Thomas Construction, Ltd. (T & T) have overall responsibility for managing project risk. Project
Manager, Deborah Obasogie is assigned by T & T as the person responsible for administering risk management
processes and activities for the Energy-Power Council (EPC) during the Deployment of a Deepwater Rig Initiative,
the DDR Project.
A risk is any event that could prevent the project from progressing as planned, or from successful
completion. When this occurs there may be an impact on the project cost, schedule or performance. Risk
identification consists of determining which risks are likely to affect the project and documenting the characteristics
of each. Information in this process includes historical data, theoretical analysis, empirical data and analysis,
informed opinions of the project team and other experts, and failures discovered from the Deepwater Horizon oil
spoil. Appendix A lists identified sources of risks.
Systems to Address Construction Project Risk
Technology
T & T service produces a perfected strategy and contingency plan for accessing the wellbore. This
approach enables us to model trips into and out of the well to determine the best deployment plan. Modeling can be
verified going into the hole and adjusted for actual hole conditions. All of this means you get the job done quicker
with fewer problems.
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With longer, deeper, and more tortuous wells becoming increasingly common, the management of financial
and time-sensitive risk is more critical, especially in high-cost operating environments. Often neglected during the
design phase of these more complex wells is the severity of the risk associated with wireline and slickline well
interventions. This inevitability results in the use of slow and high-cost alternative conveyance methods.
During the last decade, new technology has eliminated or mitigated the risk that jeopardizes safe and fast
wireline well intervention. We reduce deployment risk and, in some cases, reduce deployment applying lessons
learned from a knowledge base of best practices.
We offer:
Drilling Management Services
Drilling, Testing and Completion.
Well Design, Planning & Project Cost Estimation.
Subsea Design and Engineering.
Logistics and Procurement Services.
Production Technology.
Pore Pressure/Fracture Gradient Prediction.
Oil & Gas Services
Geological, geophysical, & reservoir engineering.
Equity participation.
Field development capability.
Accepted exploration & development Operator.
We also use wireline forces modeling and wireline tension devices; wireline jars; high-strength wirelines;
releasable cableheads; openhole and cased-hole, low-friction roller standoffs; and advanced hole finders.
People
We offer a complete package for your well construction and field development with a diverse team of
geological, engineering and operations professionals utilizing the largest, most versatile fleet of mobile offshore
drilling units in the world. This combination of skills and expertise provides our clients with performance-based
solutions not available anywhere else in the global arena.
Management Team
Nathaniel Taylor Jr. - Managing Director
Nathaniel Taylor Jr., Managing Director since November 2008. In this role, Nathaniel is responsible for the
commercial and operational success of this new entity. With more than a decade of experience with T & T,
Nathaniel has a proven record of identifying and successfully managing projects that benefit T & T clients.
Nathaniel joined the company in 1996 and has held various engineering and operations management positions with
ADTI and CMI in the U.S. Gulf of Mexico and the North Sea, most recently serving as ADTI’s Vice President –
International. Nathaniel holds degrees in Petroleum Engineering from Louisiana State University and Business
Management from Louisiana Tech University.
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Matthew Thomas - Director of Marketing and Business Development
Thomas, Director of Marketing and Business Development, leads the initiative to demonstrate to potential
clients how they can benefit from the unique services of the group. Prior to joining T & T in 2004, most recently
serving as their Director of Business Development in the North Sea, Matthew held various senior Operations
Management, and Sales and Marketing positions with major service providers Halliburton and Schlumberger in the
North Sea, Libya, Norway, Italy, West Africa, Kuwait and Iraq. Matthew is a member of the Chartered Institute of
Marketing, Society of Petroleum Engineers, Petroleum Engineers Society Great Britain and IADC (International
Association of Drilling Contractors).
Omoruyi Hassen Taylor - Director of Exploration and Development
Omoruyi Hassen Taylor, Director of Exploration and Development for T & T is responsible for prospect
screening and facilitating project funding. Prior to being named to this role, he served as the Vice President Europe
Africa region for T & T. Omoruyi joined T & T in 2000 and was instrumental in the company’s growth beyond their
traditional Gulf of Mexico area of operations. Since beginning his career onshore Texas Gulf Coast with Texaco,
Omoruyi has directed exploration and development drilling programs in most basins of North America and parts of
West Africa with a number of independent upstream companies including Anadarko, Wainoco, Aberdeen American
and Apache. In the mid 1990s Omoruyi was the President of United Meridian in Calgary, and later was named the
President of UMIC Cote d’lvoire. Omoruyi holds a B.S. in Geology from the University of the Pacific and a M.S. in
Geology from the University of Rhode Island, and is a 30+ year member of the AAPG (American Association of
Petroleum Geologists).
Planning
Our risk management process involves the systematic application of management policies, processes and
procedures to the tasks of establishing the context, identifying, analyzing, assessing, treating, monitoring and
communicating risk. Our mission is to provide additional value to our clients through integrated exploration,
development and project management services. Below are processes and procedures that assist us in accomplishing
our goals and objectives. Appendix B depicts the risk management process flow.
Risk Identification
Throughout all phases of the project, a specific topic of discussion will be risk identification. The intent is
to instruct the project team in the need for risk awareness, identification, documentation and communication. Risk
awareness requires that every project team member be aware of what constitutes a risk to the project, and being
sensitive to specific events or factors that could potentially impact the project in a positive or negative way.
Risk identification consists of determining which risks are likely to affect the project and documenting the
characteristics of each. Investigations discovered four primary lines of inquiry and concluded that for the accident
and its aftermath to have occurred, the following critical factors had to have been in place: well integrity was not
established or failed; hydrocarbons entered the well undetected and well control was lost; hydrocarbons ignited on
Deepwater Horizon; the blowout preventer (BOP) did not seal the well.
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In addition, eight key facts and causes underlying these critical factors were identified and include: the
annulus cement barrier did not isolate the hydrocarbons; the shoe track barriers did not isolate the hydrocarbons; the
negative-pressure test was accepted although well integrity had not been established; influx was not recognized until
hydrocarbons were in the riser; well control response actions failed to regain control of the well; diversion to the
mud gas separator resulted in gas venting onto the rig; the fire and gas system did not prevent hydrocarbon ignition;
the BOP emergency mode did not seal the well. Appendix C depicts critical factors and the causes underlying these
critical factors.
Risk communication involves bringing risk factors or events to the attention of the project manager and
project team. The project manager will identify and document known risk factors during creation of the Risk
Register. It is the project manager’s responsibility to assist the EPC and other stakeholders with risk identification,
and to document the known and potential risks in the Risk Register. Updates to the risk register will occur as risk
factors change. Risk management will be a topic of discussion during the monthly project meeting.
The project team will discuss any new risk factors or events, and these will be reviewed with the project
manager. The project manager will determine if any of the newly identified risk factors or events warrant further
evaluation. Those that do will undergo risk quantification and risk response development, as appropriate, and the
action item will be closed. At any time during the project, any risk factors or events should be brought to the
attention of the project manager using email or some other form of written communication to document the item.
The project manager is responsible for logging the risk to the Risk Register. Notification of a new risk should
include the following Risk Register elements:
Description of the risk factor or event, e.g. conflicting project or operational initiatives that place demands
on project resources, design errors or omissions, weather, construction delays, etc.
Probability that the event will occur. For example, a 50% chance that the vendor will not have staff
available to pour the cement.
Schedule Impact. The number of hours, days, week, or months that a risk factor could impact the schedule.
As an example, the fires which have resulted in level 3 restrictions are likely to delay installation of the
shelter and generator for 2 weeks.
Scope Impact. The impact the risk will have on the envisioned accomplishments of the project. Extreme
weather conditions may result in a reduction in the number of tower sites that can be
completed.
Quality Impact. A risk event may result in a reduction in the quality of work or products that are developed.
As an example, lack of funding caused by construction cost overruns may result in the purchase of only one
cooling unit rather than the planned number of two.
Cost Impact. The impact the risk event, if it occurs is likely to have on the project budget.
These elements can be in a Risk Statement and/or the Risk Register. Appendix D depicts the Risk Register, and H, a
Risk Statement.
Risk Responsibilities
The responsibility for managing risk is shared amongst all the stakeholders of the project. However,
decision authority for selecting whether to proceed with mitigation strategies and implement contingency actions,
especially those that have an associated cost or resource requirement rest with EPC. Appendix E depicts specific
responsibilities for the different aspects of risk management.
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Risk Assessment
Risk assessment is the act of determining the probability that a risk will occur and the impact that event
would have, should it occur. This is basically a “cause and effect” analysis. The “cause” is the event that might
occur, while the “effect” is the potential impact to a project, should the event occur.
Assessment of a risk involves two factors. First is the probability which is the measure of certainty that an
event, or risk, will occur. This can be measured in a number of ways, but for this project will be assigned a
probability percentage for 1% to 100%. A risk with no probability of occurring will obviously pose no threat, while
a risk of 100% means the risk event has occurred. Appendix F depicts risk likelihood definitions.
The second factor is estimate of the impact on the project. This can be a somewhat subjective assessment,
but should be quantified whenever possible. The estimated cost, the duration of the potential delay, the changes in
scope and the reduction in quality are in most cases factors that can be estimated and documented in the risk
statement and then measured using the standard project management tools (i.e. project plan, budget, statements of
work). Rather than detailed impact estimates the Risk Register contains three ratings for impact; High, Medium and
Low. This makes it easier to compare one risk to another and assign priorities. For each of the impact categories the
impact is assessed as follows:
Cost: This impact is usually estimated as a dollar amount that has a direct impact to the project. However,
cost is sometimes estimated and reported as simply additional resources, equipment, etc. This is true
whenever these additional resources will not result in a direct financial impact to the project due to the fact
the resources are loaned or volunteer, the equipment is currently idle and there is no cost of use, or there are
other types of donations that won’t impact the project budget. Regardless of whether there is a direct cost,
the additional resources should be documented in the risk statement as part of the mitigation cost.
Scope: Whenever there is the potential that the final product will not be completed as originally envisioned
there is a scope impact. Scope impact could be measured as a reduction of the number of BOPs or not
providing a back-up power source.
Schedule: It is very important to estimate the schedule impact of a risk event as this often results is the
basis for elevating the other impact categories (sources). Schedule delays frequently result in cost increases
and may result in a reduction of scope or quality. Schedule delays may or may not impact the critical path
of the project and an associated push out of the final end date. As an example, a road wash-out for a tower
site might delay completion of that site for 3 weeks, but if another site is scheduled to complete after
delayed site, the 3 week delay won’t impact the final end date.
Quality: “low cost replacements” are ways of reducing cost impacts. If not documented appropriately and
approved by the project sponsor, mitigation strategies that rely upon a reduction in quality can result in
significant disappointment by the stakeholders.
Most risks will be assigned one category, but some might be assigned more than one, or all. Appendix G depicts risk
impacts definitions.
Risk Response
For each identified risk, a response must be identified. It is the responsibility of EPC to select a risk
response for each risk. EPC will need the best possible assessment of the risk and description of the response options
in order to select the right response for each risk. The probability of the risk event occurring and the impacts will be
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the basis for determining the degree to which the actions to mitigate the risk should be taken. One way of evaluating
mitigation strategies is to multiply the risk cost times the probability of occurrence. Mitigation strategies that cost
less than risk probability calculation should be given serious consideration. The possible response options are:
Avoidance – Change the project to avoid the risk. Change scope, objectives, etc.
Transference – Shift the impact of a risk to a third party (like a subcontractor). It does not eliminate it, it
simply shifts responsibility.
Mitigation – Take steps to reduce the probability and/or impact of a risk. Taking early action, close
monitoring, more testing, etc.
Acceptance – Simply accept that this is a risk. When choosing acceptance as a response the IMPD is stating
that given the probability of occurring and the associated impact to the project that results, they are not
going to take any actions and will accept the cost, schedule, scope, and quality impacts if the risk event
occurs.
Deferred – A determination of how to address this risk will be addressed at a later time.
The results of the risk assessment process are documented in a Risk Statement and summarized in the Risk Register
which will be reported on a monthly basis. Appendix H depicts a Risk Statement.
Risk Mitigation
Risk mitigation involves identifying the various activities, or steps, to reduce the probability and/or impact
of an adverse risk and creation of a Contingency Plan to deal with the risk should it occur. Taking early steps to
reduce the probability of an adverse risk occurring may be more effective and less costly than repairing the damage
after a risk has occurred. However, some risk mitigation options may simply be too costly in time or money to
consider. Mitigation activities should be documented in the Risk Register, and reviewed on a regular basis. They
include:
Identification of potential failure points for each risk mitigation solution.
For each failure point, document the event that would raise a “flag” indicating that the event or factor has
occurred or reached a critical condition.
For each failure point, provide alternatives for correcting the failure.
Risk Contingency Planning
Contingency planning is the act of preparing a plan, or a series of activities, should an adverse risk occur.
Having a contingency plan in place forces the project team to think in advance as to a course of action if a risk event
takes place.
Identify the contingency plan tasks (or steps) that can be performed to implement the mitigation strategy.
Identify the necessary resources such as money, equipment and labor.
Develop a contingency plan schedule. Since the date the plan will be implemented is unknown, this
schedule will be in the format of day 1, day 2, day 3, etc., rather than containing specific start and end
dates.
Define emergency notification and escalation procedures, if appropriate.
Develop contingency plan training materials, if appropriate.
Review and update contingency plans if necessary.
Publish the plan(s) and distribute the plan(s) to management and those directly involved in executing the
plan(s).
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Contingency may also be reflected in the project budget, as a line item to cover unexpected expenses. The
amount to budget for contingency may be limited to just the high probability risks. This is normally determined by
estimating the cost if a risk occurs, and multiplying it by the probability. For example, assume a risk is estimated to
result in an additional cost of $50,000, and the probability of occurring is 80%. The amount that should be included
in the budget for this one item is $40,000. Associated with a contingency plan, are start triggers and stop triggers. A
start trigger is an event that would activate the contingency plan, while a stop trigger is the criteria to resume normal
operations. Both should be identified in the Risk Register.
Tracking and Reporting
As project activities are conducted and completed, risk factors and events will be monitored to determine if
in fact trigger events have occurred that would indicate the risk is now a reality. Based on trigger events that have
been documented during the risk analysis and mitigation processes, the project manager will have the authority to
enact contingency plans as deemed appropriate. Day to day risk mitigation activities will be enacted and directed by
the project manager. Large scale mitigation strategies will be initiated by T & T. Contingency plans that once
approved and initiated will be added to the project work plan and be tracked and reported along with all of the other
project activities.
Risk management is an ongoing activity that will continue throughout the life of the project. This process
includes continued activities of risk identification, risk assessment, planning for newly identified risks, monitoring
trigger conditions and contingency plans, and risk reporting on a regular basis. Project status reporting contains a
section on risk management, where new risks are presented along with any status changes of existing risks. Some
risk attributes, such as probability and impact, could change during the life of a project and this should be reported
as well.
Processes to Address Immediate Unforeseen Risks
The individual identifying the risk will immediately notify the project manager who will assess the risk
situation. If required, the project manager will identify a mitigating strategy, and assign resources as necessary. The
project risk manager will document the risk factor and the mitigating strategy.
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Catastrophic Failure Fault Tree: Spill – Loss of Life
Discussion of Catastrophic Fault Tree
The fault tree depicts an oil spill, the Deepwater Horizon, which flowed for three months. It was the largest
accidental marine oil spill in the history of the petroleum industry. The spill was the result of a succession of
interrelated well design, construction, and temporary abandonment decisions that compromised the integrity of the
well and compounded the likelihood of its failure. The explosion killed 11 men working on the platform and injured
17 others and caused extensive damage to marine and wide life habitats and the Gulf fishing and tourism industries.
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The above drawing represents the catastrophic failure fault tree, spill – loss of life. The spill was in the lost
of life state when the BOP failed to seal the well and the explosion and fig fire. The BOP failed to seal the well due
to BOP emergency mode failure, the Well Control event (detailed in Smaller Risks: Fault Tree Two) and the annular
preventer failure event. The explosion and the rig fire was due to Well control failure (influenced by the well
integrity not establish, detailed in Smaller Risks: Fault Tree One) and vapor ignition event. There are some overlap
of some of the smaller critical factors and causes which contributed to the catastrophic fault tree failure. See
Appendix C for summary of critical factors and related key findings.
Risk Management Strategy
Our risk management strategy seeks to minimize the impacts of risk through the use of policies, procedures
and processes which provide the project team with the guidance to objectively address this type of failure and
determine how these risks can be avoided, mitigated or reduced to ensure the successful completion of this project.
The risk management process is outlined in the planning section and the result is the risk register. See Appendix D
for the Risk Register listing risks and strategies.
The column likelihood has three levels, high medium, and low. High means that there is means that the risk
is highly likely to occur and controls to stop this risk from happening will be ineffective. The medium likelihood
level means there is a likelihood of this risk happening though there are controls in place to mitigate the risk from
happening. The low likelihood level means that these risks lacks the capability of occurring and the controls in place
can either prevent this risk from occurring. See Appendix F for risk likelihood definitions.
The risk impact column can be seen as high, medium and low as well and the definitions for the
risk impact are in Appendix G. This information helps management to determine what actions need to be taken
when assessing risks.
Smaller Risks Impacts
Smaller Risks: Fault Tree One - Well integrity failure
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Smaller Risks: Fault Tree One Discussion
This branch depicts well integration failure. Well integrity was not established or failed when the cement
barrier failed and hydrocarbons entered the well bore. When the cement foam failed channeling or the cement was
unstable contamination, the cement barrier failed. Either failures, shoe track or casing seals, cause hydrocarbons to
enter the well bore. Well integrity not established is also a subtree branch that is used elsewhere in the tree (transfer
in). This event is found in smaller risk: fault tree two.
Smaller Risks: Fault Tree Two - Well control failure
Smaller Risks: Fault Tree Two Discussion
This branch depicts well control failure. Well control was lost when the well control response failed, the
negative pressure test was incorrectly accepted, and hydrocarbons entered the riser. Flow diverted to MGS and
annular preventer leaks caused the well control response to fail. The well control event and the branch, Well
integrity not established, caused hydrocarbons to enter the riser. Well control lost is also a subtree branch that is
used elsewhere in the tree (transfer in).
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Conclusions
Research concludes that the accident of April 20 was avoidable and resulted from clear mistakes, failure to
create and implement a program of regulatory oversight that would have properly minimized the risk and systematic
failures in risk management that they place in doubt the safety culture of the entire industry. BP appears to have
elected to not follow industry best practices or even standard practices in its rush to complete the well. BP’s risk
plan should have been developed to with safety and risk management their most urgent priority.
Risk is inevitable in everything we do. The good Project Manager will constantly assess the risks and take
action as needed. Our process for managing risks is to:
identify all realistic risks
analyze their probability and potential impact
decide whether action should be taken now to avoid or reduce the risk and to reduce the impact if it does
occur
where appropriate, make plans now so that the organization is prepared to deal with the risk should it occur
constantly monitor the situation to watch for risks occurring, new risks emerging, or changes in the
assessment of existing risks.
Compared with many other industries, the deepwater oil rig is subject to more risks due to the unique
features of construction activities, such as long period, complicated processes, abominable environment, financial
intensity and dynamic organization structures. Hence, taking effective risk management techniques to manage risks
associated with variable construction activities has never been more important for the successful delivery of a
project. Our project Risk Management Plan specifies how risk management will be conducted in the project, and we
integrate it with other project management activities and processes.
The project risk management process helps organizations like yours make informed decisions regarding
alternative approaches to achieving their objectives and the relative approaches to achieving their objectives and
relative risk involved in each, in order to increase the likelihood of success in meeting or exceeding the most
important objectives sometimes at the expenses of other objectives. Risk management encourages the project team
to take appropriate measures to:
Minimize adverse impacts to protect scope, cost and schedule (and quality, as a result).
Maximize opportunities to improve the project’s objectives with lower cost, shorter schedules, enhanced
scope and higher quality.
Minimize management by crisis.
Risk management is an investment in your investment. Let us help with your next successful deployment of a
deepwater oil rig. T & T is prepared and ready with processes to address immediate unforeseen risks.
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http://www.pmforum.org/library/editorials/2010/PDFs/july/Editorial-Pells.pdf
Transocean. (n.d.). Transocean solutions. Retrieved October 3, 2011, from
http://www.deepwater.com/fw/main/Transocean-Solutions-608.html
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Appendix A
Identified Risk Sources
Source Description
Poor Management
An organization's in ability to identify potential risks. This may be through implementing better
technology and hired staff.
Risk management is generally approached in an ad hoc manner.
This would not enable early risk identification, not continuous measurement and monitoring to
assure risky issues are managed effectively within the enterprise.
Engineering
The application and improvement of technology and processes of well designs and
constructions. This may include, but is not restricted to: reduced downtime. Improved
efficiency, maximized production, and performance ratings.
Quality
Risks associated with quality control and order. It ensures that the construction process takes
place within the framework of a quality management system. It also deals with the determination
of quantitative or qualitative value of risk as well as manage change.
Safety
Risks associated with operational efficiency, and facility safety. It also explores
the exposure to a hazard .
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Appendix C
Summary of Critical Factors and Related Findings
I. Well integrity not established
Cement barrier fails
Hydrocarbons enter well bore
II. Well control lost
Well control response fails
Negative pressure test incorrectly accepted
Hydrocarbon enters riser
III. Explosion and rig fire
Well control lost
Vapor ignition
Explosive vapor sent inboard to MGS
Fire system fails to prevent ignition
IV. Blowout Preventer (BOP) fails to seal well
BOP emergency modes fails
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Appendix D
Risk Register
Risk Likelihood Impact Note Strategy
Risk Management
and Communication
High High Fault tree indicates failure to
properly assess, manage and
communicate risk. For example,
BP did not properly communicate
to the drill crew the absence of
adequate testing on the cement or
the uncertainty surrounding
critical testing and procedures
used to confirm the integrity of
the barriers intended to inhibit the
flow of hydrocarbons into the
well. The actions of the drill crew
reflected their understanding that
the well had been properly
cemented and successfully tested.
Design and implement risk
management plan.
Implement project planning,
monitor and control procedures.
Communication must be
addressed within these
procedures.
Design and implement
environment risk plan.
Well Design and
Construction
High High Without the failure of the cement
barrier, hydrocarbons would not
have entered the well or reached
the rig. The production casing
design was of minimal quantity,
left little margin for error, and
was not tested adequately before
or after the cementing operation.
Further, the integrity of the
cement may have been
compromised by contamination,
instability and an inadequate
number of devices used to center
the casing in the wellbore.
Improved technical assurance
For thorough cement testing &
well design testing.
Examine total
overhaul/replacement.
Risk Assessment
and Process Safety
High High Inadequate assessment procedures
or prepared Management of
Change documents to address
cement testing and adequate risk
assessments. Resulting in adverse
effects on personnel and process
safety.
Design and implement
adequate risk assessment,
change management and
quality assurance processes
and procedures.
Operations High High Negative Pressure Test: The
results of the critical negative
pressure test were misinterpreted.
None of the individuals
monitoring the well detected the
influx. The well became
underbalanced during the final
displacement, hydrocarbons
began entering the wellbore
through the faulty cement barrier
and a float collar likely failed to
convert.
Well Control: Given the death of
the members of the drill crew
and the loss of the rig and its
Take proper actions to improve
business practices and to focus on
developing a skillful workforce.
Emphasize maintain pressure
integrity, well maintenance, and
procedures supporting 24/7
monitoring, in-flow testing, well
cleanup & other well activities.
Implement quality control and
performance measures.
Redesign HVAC system to
prevent hydrocarbons from
reaching potential ignition
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monitoring systems, the drill crew
did not detect a pressure anomaly.
By the time actions were taken,
hydrocarbons had risen above the
blowout preventer and into the
riser, resulting in a massive
release of gas and other
fluids that overwhelmed the mud
gas separator system and released
high volumes of gas onto the aft
deck of the rig. The resulting
ignition of this gas cloud was
inevitable.
Blowout Preventer (BOP):
Although the Deepwater Horizon
BOP was properly maintained and
operated, it was overcome by the
extreme dynamic flow, which
prevented the BOP from
completely shearing the drill
pipe and sealing the well.
sources.
Develop and implement test,
maintenance, backup and
recovery processes and
procedures for well. Force
majeure events must be addressed
within these procedures.
Redesign emergency methods
(BOP) due to the potential
weaknesses in the testing regime
and maintenance management
system.
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Appendix F
Risk Likelihood Definitions
Risk Likelihood Impact
Low (10) Medium (50) High (100)
High (1.0) Low
10 x 1.0 = 10
Medium
50 x 1.0 = 50
High
100 x 1.0 = 100
Medium (0.5) Low
10 x 0.5 = 5
Medium
50 x 0.5 = 25
High
100 x 0.5 = 50
Low (0.1) Low
10 x 0.1 = 1
Medium
50 x 0.1 = 5
High
100 x 0.1 = 10
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Appendix G
Risk Impact Definitions
Risk Impact Impact Definition
High This impact has a high probability of happening and having a high loss of assets and
resources.
Medium This impact has a medium probability of happening and could cause a medium risk of
loss of assets and resources.
Low The low impact level could possibly have a low risk of losing assets or resources.
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