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Millions of man-hours are spent drilling and producing the world’s oil and gas. As methods of extraction increase in complexity, we have seen more tools and techniques come to the fore. However, increasing complexity often brings greater challenges—most notably the Macondo blowout in April 2010, which saw an estimated 62,000 bopd spill into the Gulf of Mexico.
With the longevity of Macondo’s post-spill effects yet to be fully understood, there are important lessons are to be learned. These include the way in which companies operate, how we gather evidence on operational activities, and how we can work toward the prevention of something similar occurring again.
Specifically, we have to consider how individual tasks are recorded, ensuring that every step in our day-to-day operations can be accounted for.
As a direct consequence, API’s Q2 standard is set to change the regulatory landscape in the energy sector. However, by adopting this form of self-regulation, it is uncertain whether Q2 will have the desired impact, and we are still unaware of how service companies will respond.
It was stated during API’s meeting in May 2012, that any company not Q2-certified by January 2014 will not do business with any of the major oil and gas companies. The drilling community is looking to join forces, and it will not be threatened by this deadline. This is mostly because there are serious doubts that this timeline is realistic, especially as API does not have enough trained auditors to meet the deadline.
Although API’s Q2 standard is targeted at service companies — primarily drilling, completions and concreting — it will also be very beneficial to other types of businesses. Besides the ISO-9001 baseline, for which the standard was created, there are several key additions to the standard that, if implemented, will not only improve a company’s operational excellence, but also help it plan and execute projects. The additional areas added to API Q2 that are above and beyond the API Q1 (ISO-9001:2008) standard are listed below.
Risk assessment and risk management. There are few companies that have a robust risk management process. However, this area, if managed properly, can be widely beneficial to the bottom line by avoiding unnecessary risk. I have noticed recently that many companies are beefing up risk management and even appointing employees to focus on risk management, at an executive level. Some companies are going as far as creating entire departments with Six Sigma belts, where their primary duties center around risk assessment and management. The processes for this are well-documented and very robust.
Contingency planning. This is also an area that is not widely considered. However, if a proper risk assessment is done as stated earlier, the contingency plan can be executed, even if the worst-case scenario plays out, as identified during a project’s risk assessment stage. Recovery and action plans can be executed to minimize the impact, if an incident occurs. Contingency can include anything from ensuring spare parts availability, all the way to how a company reacts to an environmental or health-and-safety incident.
Execution of service. The service execution requirements in Q2 include service quality planning, which is rarely done. Going forward, there must be a quality plan that details step-by-step requirements. This also includes an obligation to identify the service process status. Methods must provide service validation and verification, as well. These methods can be applied to almost any type of service activity, to ensure that work has been completed properly.
Preventative maintenance and inspection & test programs have been enhanced in the new standard. Although ISO-9001 and other standards already have requirements for this, the new Q2 standard is more formal and will focus more on this area. This will help to prevent potential safety and environmental impacts resulting from poor maintenance and inadequate documentation of key equipment; primarily in drilling and completions.
Management of change (MOC). This very important element has been added. Often, companies will make design or process changes without considering downstream impacts, such as process efficiency; form, fit and function; existing inventories; items on order; health and safety; environmental or even quality. Never before has an MOC procedure been necessary. Q2 has made this a requirement, and it ties in with risk avoidance, as stated earlier. Some of these tools for risk include FMEA (Failure Modes and Effects Analysis), criticality studies and fault tree studies.
There is also discussion that API will create standards that are more independent of the ISO-9000 series, due to increasing regulation within the oil and gas industry. I fully expect to see more regulation in the sector under the current Democratic administration.
A drilling company and, more generally, any service company that embraces these additions to the current standard will certainly be ahead of the curve, when certification to the standard becomes mandatory. It must be emphasized however, that compliance to the new Q2 standard will be beneficial to the effectiveness of any company, in any industry, whether the path to “certification” is chosen or not. The use of a business management system, such as BusinessPort’s Agility, will help to capture and process the necessary evidence to support Q2 certification, as well as foster efficiency, transparency and safety in an organization. 
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