wem - chapter 1 - organisation and activities - rev.0

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Well Engineering Manual – Revision 0 OKIOC Doc.no.: 99-03-002

Chapter 1 – Organisation and Activities of 13

OKIOC - CONTROLLING DOCUMENT

WELL ENGINEERING MANUAL (WEM)

CHAPTER 1 - ORGANISATION AND ACTIVITIES





TABLE OF CONTENTS

0. INTRODUCTION TO THIS MANUAL........................................................................................ 3

1. INTRODUCTION....................................................................................................................... 4

1.1 Purpose and Scope ............................................................................................................ 4

1.2 Abbreviations ..................................................................................................................... 4

2. RESOURCES............................................................................................................................ 5

2.1 Resource Framework ......................................................................................................... 5

2.2 Minimum working standards ............................................................................................... 5

2.3 Formal Skills ...................................................................................................................... 5

2.4 Standards relating to HSE Risk Reduction.......................................................................... 5

2.5 Procedures and Controlling Documents.............................................................................. 6

3. PROCESSES AND TASKS....................................................................................................... 6

3.1 General .............................................................................................................................. 63.2 Well Engineering and Construction..................................................................................... 6

3.3 Critical Assignments........................................................................................................... 6

3.4 Other tasks......................................................................................................................... 6

4. CONTROL OF PROCESSES.................................................................................................... 7

5. APPENDICES ........................................................................................................................... 8

5.1 Appendix 1, Training for Well Engineering Staff ................................................................. 8

5.2 Appendix 2, Job Descriptions for Well Engineering staff involved in well construction ........ 9





0. INTRODUCTION TO THIS MANUAL

This manual describes in general terms how a well construction project will be planned and executed

within OKIOC, using the resources provided by the Well Engineering Discipline.

The structure of the manual is such that in the first chapter, the organisation and its activities are

described. The second chapter provides a step-by-step process description of how a well project is to

be planned and executed.

Where applicable within this process description, reference is made to one or more of the chapters

following it. These chapters provide procedures or guidelines on how some of the steps are to be

executed. Where such procedures or guidelines contain requirements that shall be met, these will be

highlighted.





1. INTRODUCTION

1.1 Purpose and Scope

The purpose of this chapter of the Well Engineering Manual (WEM) is to introduce the work processes

to which the Well Engineering Discipline contributes, and to introduce the internal control mechanisms

which ensure quality service to customers.

The chapter also provides requirements to staff members which support well construction and

intervention operations, all in accordance with OKIOC policies, Kazakh regulatory requirements, and

other controlling documents.

Controls(measurement, supervision, audit)

Resources

(procedures, standards, skills, competency)

ADD VALUE

Plan Schedule

AnalyseImprove

Customer Process

Execute

1.2 Abbreviations

In this section the following abbreviations are used:

AFE Authority for Expenditure

HSE Health, Safety and Environment

OKIOC Offshore Kazakhstan International Operating Company NV

WED Well Engineering Discipline (i.e. the department)

WEM Well Engineering Manual





2. RESOURCES

2.1 Resource Framework

The Well Engineering Discipline (WED) in OKIOC is the provider of expertise on and executor of all

assignments relating to well construction and well intervention within OKIOC.

The organisation, will be manned and composed such that it can fulfil the well engineering tasks

required for planning, preparation, execution, follow-up and reporting of the assignments relating to

e.g. exploration, appraisal and development wells and well interventions with a drilling installation in

Company acreage, i.e. where OKIOC have business interests.

The staff of the WED shall be resourced, developed and maintained to comply with any changes in

OKIOC well engineering activities, and concurrently ensure that the requirements to Controls and

Mechanisms for the WED are up to date and maintained.

2.2 Minimum working standards

The Well Engineering Discipline is responsible for implementing OKIOC policies in relation to its

activities. In doing so it shall:

• utilise qualified personnel;

• organise its work in an efficient manner;

• implement procedures that ensure a consistent and correct execution of critical work tasks and

assignments;

• implement safe and cost effective work practices;

• take care of the short and long term financial interests of OKIOC, without imposing any detrimental

effect on the environment;

•

ensure a safe working environment for OKIOC and contractor personnel;• have a system in place that ensures that experiences are efficiently gathered, analysed and

distributed to all involved personnel.

2.3 Formal Skills

Job descriptions for key well engineering personnel are included in Appendix 2 of this section of the

manual. Reference is made to the first chapter of the Well Construction Manual for offshore staff. The

job descriptions are intended to describe the roles and responsibilities covered by the functions of the

WED, independent of the individual incumbent. All well engineering staff members are responsible for

understanding and discharging accountabilities as specified in their job descriptions. This will ensure

that the requirements that apply to the activities they are involved in are implemented.

A training matrix is included as Appendix 1 of this chapter.

2.4 Standards relating to HSE Risk Reduction

Health, safety and environmental objectives are to be given the same priority as other business

objectives, during the planning, execution and experience transfer phases of an activity.

To guide the implementation of this statement OKIOC have issued HSE management procedures and

guidelines which shall be adhered to in all well engineering operations.

The fundamentals in the HSE documentation also apply to OKIOC’s contractors and sub-contractors.

An inherent part of any business process is the experience feed-back loop. In order to improve the

efficiency for the next similar activity, both concerning the planning and execution efforts.

• all major activities shall be comprehensively reported and documented according to the regulations,

including experience reports,





• results and reports from an activity in an area is used as reference and correlation material for the

planning of similar activities in the same area later.

2.5 Procedures and Controlling Documents

Procedures and controlling documents are developed for the purpose of providing a tool for

continuous improvement, where learning points are captured and experience transfer is performed.

Whenever such a document specifies a mandatory requirement, any deviation shall be subject to non-

conformity reporting (ref. chapter 6 of this manual).

3. PROCESSES AND TASKS

3.1 General

Each assignment shall be handled in accordance with requirements relating to business processes

and assignment control.

This means that:

• the assignment shall be clearly specified in an assignment definition, which should be challenged

by the WED to ensure mutual understanding with the customer,

• the process shall be described, and as a minimum cover:

1. purpose,

2. process boundaries, i.e. who is the supplier, what are the inputs, who is the customer, what are

the deliverables,

3. process steps, if necessary to recommend a sequence in which the process should be

progressed to focus the effort on activities which add value, i.e. bring the process closer to the

goal.

3.2 Well Engineering and Construction

The task of eventually constructing a well will be specified in a series of Well Requests, issued by an

Activity (Well-) Sponsor, defining the scope of the requested well engineering activity. Based on this a

time and budget estimate will be prepared and agreed upon.

The format for such requests is fixed. Reference is made to Appendix 1 of the OKIOC Well

Engineering Interfaces, Doc no.99-03-003

Chapter 2 of this manual describes in more detail the various steps in planning, scheduling and

constructing a well.

The duties and interdepartmental processes relating to well engineering within OKIOC are further described in the Well Engineering Interfaces.

3.3 Critical Assignments

As indicated in 3.1 above any assignment of a critical nature, i.e. one that will expose the company to

risks, either financially or HSE or reputation, shall be performed according to a predefined process.

For all assignments which fulfil such criteria, a process description shall be developed, when not

already available.

3.4 Other tasks

In addition to the above the WED will:





• Participate with other departments in the development of OKIOC's long-term well construction

plans and other main activity plans (Country business plan, Programme Data Book,

benchmarking, etc.);

• Identify requirements for, and secure the resources to execute assignments;

• Compile well engineering budget estimates AFE's for in- house, corporate and licence partner

information and approval;• Ensure availability of required services, equipment and materials, by maintaining a status as to

the delivery time or possible short comings of these resources, communicate this information to

customers and recommend necessary financial commitments/ contracts to be entered into in this

respect.

• Report to partners and authorities where applicable.

4. CONTROL OF PROCESSES

In order to ensure the delivery of quality products to the customer, as specified in the WellEngineering Interfaces Doc no.99-03-003, the overall process must be controlled. This control will be

achieved by:

• supervision, both onshore and on site, to ensure that the steps within the process are carried out inaccordance with the applicable controlling documentation;

• reports, both daily and at the end of the project, to document actual performance and allowcomparison with planned performance;

• HSE statistics:- to gauge the effectiveness of the HSE management,- to monitor HSE performance and compare it to industry trends,- to ensure a continuous reduction of pollution to the environment,- to keep track of improvements to the working environment;

• performance review:- to assess the actual overall performance vs the planned performance,- to assess the actual performance vs competitors,- to identify shortcomings and areas for improvement;

• inspections, in order to verify compliance with controlling documents and highlight areas requiringadditional attention or improvement.

• Audits, to verify that the controls are effective.

In the following chapters, as well as in the Well Construction Manual Doc no.99-03-004, the above arediscussed in more detail.

In addition to the above, a monthly HSE meeting will be held with all major contractors whilst inoperation. This meeting shall be used to increase HSE awareness, monitor follow-up of incidents and

to exchange HSE experience.





5. APPENDICES

5.1 Appendix 1, Training for Well Engineering Staff

The following presents the mandatory training requirements for Well Engineering staff:

Course Applicable Staff

OKIOC Induction course. All staff.

H2S. All staff working offshore & staff and visitors travelling

offshore on a regular basis must have evacuation H2S

training.

International Well Control Forum. Offshore Supervisors.

Basic Offshore Survival Training

(BOST) & Helicopter Underwater

Escape Training (HUET).

All staff working offshore & staff travelling offshore three or

more times/year.





5.2 Appendix 2, Job Descriptions for Well Engineering staff involved in well

construction

The following onshore staff functions are, within the scope of this manual, covered by Job

Descriptions:

•

Head of Drilling,• Drilling Superintendent;

• Senior Operations Engineer.

Job Descriptions for offshore supervisory staff are listed in the Well Construction Manual, Doc. no.99-

03-004

5.2.1 Head of Drilling (2 rotators)

Purpose of the job:

To provide optimum well designs in liaison with well sponsors and asset holders in order to assist

them in achieving their goals & targets.

To lead the Well Engineering Team to deliver best-in-class HSE and operational performance to

OKIOC.

Dimensions:

Subordinates: The incumbents have direct line responsibil ity for :

• 2 Drilling Superintendents (on rotation).

• 2 Senior Operations Engineers (on rotation).

Accountabilities:

1. To report to the Operations Manager and act as deputy during his absence.

2. To ensure compliance with RoK Regulations, OKIOC standards and Permit requirements.

3. To ensure the technical integrity of all well construction operations.

4. To ensure the technical integrity of all well engineering related support operations.

5. To ensure timely generation of Well Programmes and AFE’s

6. To monitor well expenditure against well AFE and in case of overrun, secure approval for additional expenditure.

7. To ensure that staff of the appropriate level of competency is available.

8. To assess Well Engineering performance against OKIOC’s business objectives.

9. To carry out the medium- to long-term planning for future Well Engineering activities.

10. To co-ordinate onshore, offshore and support teams.

11. To promote networking, learning and change to enhance performance.

12. To ensure that staff is assessed and developed in accordance with HR guidelines and write staff evaluation reports.

13. To maintain correct communication channels with the RoK Regulatory Authorites.

14. To liaise with the OKIOC Development Group in the Hague.

HSE Roles & Responsibilities:

1. To participate in the OKIOC (Operations) HSE Committee and hold HSE meetings in their

departments at least before each OKIOC HSE Committee meeting.

2. To participate in a proportion of lower level HSE meetings within their departments, covering all

groups in the year.





3. To participate in regular inspection visits within their area of responsibility and, by invitation, in

others’ areas.

4. To develop their departmental annual HSE programme including the schedule for inspection

visits, the targets for reductions in HSE impacts, and implementation of corrective actions.

5. To contribute to the development of the company annual programme.

6. To lead the OKIOC investigation of all accidents in their department with the assessed potential to

cause a fatality or major pollution and review all accident reports from within their area of

responsibility, bearing responsibility for the accuracy and adequacy an follow up corrective action.

7. In co-ordination with the Heads of Safety and Environment, plan and perform Safety and

Environmental audits on contractors.

8. To ensure that all risks related to well construction operations are identified and addressed.

9. To co-ordinate the Well Engineering input to the Permit Documentation.

10. To ensure the interface with the environmental protection activities.

Qualifications:

A degree in Petroleum Engineering or equivalent.Experience:

15 to 20 years in drilling operations with a significant part of this time in a supervisory and

management role.

Other factors:

Experience in drilling carbonates, and highly overpressured, sour reservoirs.

Experience with working in ecological sensitive offshore environments.

5.2.2 Drilling Superintendent (2 rotators)

Purpose of the job:

To ensure that the well construction and associated plans and programmes are developed and

implemented in the most efficient, safe, environmentally friendly and cost effective manner, taking

fully into account all Company and Legislative requirements and regulations.

To supervise the offshore company staff and assist them in implementing the above during the

operations.

To co-ordinate the planning cycle of offshore well construction activities through utilisation of the

assigned company staff.

Dimensions:

Subordinates: The incumbents have direct line responsibility for:

Offshore:

2 Senior Drilling Supervisors (on rotation).

Onshore:

1 Kazakh Drilling Engineer.

Accountabilities:

15. Reports to the Head of Drilling.

16. To ensure that the installation under his control operates safely and efficiently, and in accordancewith the approved company requirements, programmes and Regulatory requirements.





17. To ensure that all offshore staff are fully familiar with the requirements of all programmes andprocedures and that the proper support and materials are in place for the work scope to be carriedout correctly and efficiently.

18. To maintain continuous contact with the installation in order to remain abreast of developmentsand provide advice and assistance as required.

19. To consult specialist with respect to any changes to the programme which may be required. Toensure that the changes are fully understood and implemented by the offshore staff.

20. To ensure the timely development and availability of all programmes, procedures, materials andservices of the required quantity and quality.

21. To manage and monitor well expenditure against well AFE.

22. To ensure by means of training and delegation of responsibilities that subordinates are developedin line with their career route.

23. To motivate subordinates and allocate responsibility such that they have job satisfaction and willperform in accordance with their potential.

24. To ensure that all significant events are recorded throughout the operation and at the end of eachwell to produce a final, critical well review. Lessons learnt are to be collected and used as a basisfor improving the controlling documentation. The review will also form the basis for providing

feedback to in-house departments, partners, contractors and Authorities.

25. To write staff evaluation reports.


1. To review HSE risk acceptance criteria and specific emergency preparedness requirements for well construction projects and update as required.

2. To maintain an overview of all non-conformances which have arisen with regard to specific wellconstruction projects.

3. To co-ordinate the preparation of the HSE case for the well construction project.

4. To investigate and report on offshore incidents and non-conformances that are not assigned to theHead of Drilling.

5. To follow up the well specific HSE plan during the operations.6. To co-ordinate the preparation of the Offshore Risk Reduction Programme and follow up the same

during operations.

7. To co-ordinate regular drilling unit inspections with drilling contractor and service companies, andact on the results of these.

Qualifications:

Graduate / HTS / HND

Shell Round I and Round II

Experience:

Technical professionalMinimum of 10 years experience with oil/gas well construction operations

Other factors:

Well developed communication and man management skills.

Good user knowledge of computer programmes and systems, in particular common Well Engineering

software packages.

5.2.3 Senior Operations Engineer (2 rotators)

Purpose of the job:

To ensure that the well data are acquired in a cost-effective manner, with the appropriate level of quality assurance, to satisfy the requirements of the OKIOC Exploration and Development Group.





To provide support to the Drilling Superintendent in the planning, execution and follow-up phases of

well construction projects.

Together with the Drilling Superintendent, regularly compile reports on work carried out ensuring that

all formal reporting is in accordance with company standards and statutory requirements.

Dimensions:

This position impacts directly on well construction and well testing operations by utilising the most cost

effective planning and programming for the specified well construction and well testing projects.

Subordinates: The incumbents have direct line responsibility for:

Onshore

1 Kazakh Drilling Engineer.

and functional responsibility for:

Offshore

• 2 Well Site Operations Engineers.

• 1 Consultant Geologist.

Accountabilities:

1. Reports to the Head of Drilling.

2. To ensure that wells are planned in a cost efficient manner whilst meeting the company and

legislative requirements.

3. To co-ordinate, compile and ensure optimisation of Well Programmes in accordance with the

company requirements.

4. To ensure that Well Programmes have technical integrity, and thus are compliant with OKIOC’s

technical standards.

5. To review well site data to verify that correct data is recorded, in order to create a high quality wellsite database for performance planning and evaluation.

6. To prepare AFE’s for all well construction activities.

7. To compile end of well reviews, ensuring that important lessons learned are discussed with the

Drilling Superintendent for inclusion in the controlling documentation.

8. To be up to date on the latest technology in all aspects of well engineering, in order to be able to

take these developments into consideration when planning future wells.

9. To input technical specification for materials and services required to support rig-based well

activities.

10. To co-ordinate with the Development Team to ensure that the data recorded on the well site is

sufficient for their requirement

11. To assist in the development of the Kazakh staff under their control.

12. To write staff evaluation reports.


1. To assist in the preparation of HAZID’s & risk analyses related to well construction projects.

2. To assist in the review of HSE risk acceptance criteria and specific emergency preparedness

requirements for well construction projects.

3. To report all non-conformances which have arisen wrt specific well designs or in the course of

preparing the well programmes.

4. To assist in the preparation of the HSE case for the well construction project.

5. To assist in the preparation of the Permit application.





6. To assist in the follow up all offshore incidents and non-conformances.

7. To assist in the preparation of the Offshore Risk Reduction Programme and follow up the same

during operations.

Qualifications:

University Degree in an engineering disciplineExperience:

Minimum 8 years experience in well construction operations and production engineering, including

wellsite experience.

Other factors:

• Significant experience of well design, including completion design, in high-pressure, sour

environment.

• Significant experience in the design and planning of well-testing and stimulation operations.

• Experience of metallurgy and elastomer selection in highly sour environments.

• Working knowledge of fluid selection and design (mud, cement, brine and acid).

• Working knowledge of Exploration and Petroleum Engineering issues.

• Working knowledge of contractual procedures.

• Supervisory and coaching skills.