SUBPART O TESTING PUBLIC WORKSHOP David Dykes Joe Levine

1. SUBPART O TESTING PUBLIC WORKSHOPDavid DykesJoe Levine February 19, 2009 New Orleans

2. WORKSHOP AGENDA Subpart O Testing Regulations Subpart O Testing History Subpart O Pilot Testing Process Subpart O Pilot Test Results Testing Beyond Pilot Discussion, Q & A

3. WORKSHOP GOAL • To explain • What Subpart O testing is all about • Eliminate unwarranted concerns • How MMS & industry can use testing to help raise the level of OCS safety

4. Can Testing Benefit Your Company? • An extra set of “eyes” evaluating your personnel • Additional assessment of employees between regularly scheduled training • If an area of concern is uncovered by testing you have the opportunity to address it

5. What Subpart O Testing Is Not • A quantitative measure of an employees’ • Competency or knowledge of job • Ability to perform their job • Passing a test does not mean an employee knows their job • Failing a test does not mean an employee can not do their job

6. What Subpart O Testing Is • Another data point for MMS & industry to use to assess the effectiveness of a company‘s Subpart O training program and overall safety management system (SEMS, SEMP….) • An opportunity to gain additional feedback on how well “you” are getting critical job related information across to your most important asset; your people

7. Subpart O Overriding Principles • Testing, as with other aspects of Subpart O is aimed primarily at the lessee • Testing will impact not only lessees, but contractors as well • It is the lessees responsibility to ensure their contractors can properly perform their assigned duties

8. Subpart O Testing Regulations

9. 30 CFR 250.1507 (c) c) Employee or contract personnel testing MMS or its authorized representative may conduct testing at either onshore or offshore locations for the purpose of evaluating an individual's knowledge and skills in performing well control and production safety duties.

10. 30 CFR 250.1507 (d) (d) Hands-on production safety, simulator, or live well testing MMS or its authorized representative may conduct tests at either onshore or offshore locations. Tests will be designed to evaluate the competency of your employees or contract personnel in performing their assigned well control and production safety duties. You are responsible for the costs associated with this testing, excluding salary and travel costs for MMS personnel.

11. 30 CFR 250.1508 What must I do when MMS administers written or oral tests? MMS or its authorized representative may test your employees or contract personnel at your worksite or at an onshore location. You and your contractors must: (a) Allow MMS or its authorized representative to administer written or oral tests; and (b) Identify personnel by current position, years of experience in present position, years of total oil field experience, and employer's name (e.g., operator, contractor, or sub-contractor company name).

12. 30 CFR 250.1509 What must I do when MMS administers or requires hands-on, simulator, or other types of testing? If MMS or its authorized representative conducts, or requires you or your contractor to conduct hands-on, simulator, or other types of testing, you must: (a) Allow MMS or its authorized representative to administer or witness the testing; (b) Identify personnel by current position, years of experience in present position, years of total oil field experience, and employer's name (e.g., operator, contractor, or sub-contractor company name); and (c) Pay for all costs associated with the testing, excluding salary and travel costs for MMS personnel

13. Subpart O Testing History

14. At This Point, Testing Should Not be a Surprise to You or Your Company • Testing has been included in our regulations since the year 2000 • We have voiced our intention to test at a variety of conferences & meetings in recent years • Before initiating the 2008 Subpart O pilot the agency began exploring testing in 2007

15. January, 2007 IADC Well Control Work Group MMS introduced idea to IADC that agency was interested in implementing Subpart O testing MMS presented hands-on well control testing options to IADC for discussion purposes Live well tests School based testing simulators computers 30 CFR 250.462 (d) Well Control Drill

16. January, 2007 IADC Well Control Work Group Why Was MMS Interested in Testing? Increase in Subpart O INCs 40 INCs as of 1/2007 G 846, G851, G862, G842 Loss of experienced personnel Up to this point MMS had conducted 6 written tests, several oral tests, & no hands-on tests MMS requested IADC/Industry input on testing

17. NTL No. 2008-N03 - Well Control & Production Safety Training Effective March 31, 2008 Clarified terms used in Subpart O rule Internal audit, production safety, periodic, contractor Discussed lessee and contractor responsibilities, program evaluations, & employee verifications Announced MMS intent to conduct hands-on testing in 2008

18. April, 2008 - Baker Energy • MMS met with Baker to review their production training program • Baker provided MMS detailed information on program highlights to aid us in developing a successful Subpart O test program • Training components • Assessment criteria • Test questions • Grading issues • Program statistics

19. June, 2008 IADC Well Control Work Group MMS updated IADC & continued to press for input into testing program Training INCs continue to increase 71 INCs as of 12/2007 Up to this point MMS had conducted 10 written tests, 36 oral tests, & no hands-on tests IADC agreed to form internal group to provide MMS testing feedback

20. August, 2008 IADC Well Control Work Group Since June, 2008 IADC/Chevron provided MMS a series of hands-on well control scenarios Operational based Position specific Discussed IADC/Chevron suggestions for hands-on well control scenarios received by agency MMS provided work group overview of how pilot Subpart O testing program could work moving forward

21. October, 2008Diamond Offshore Drilling • Diamond volunteers rigs for offshore written &/or hands-on well control testing • Diamond/Devon • Ocean Endeavour semisubmersible • Pre MMS pilot • Received valuable real world input and comments on specific test questions, test process, grading policies

22. Testing • Since publication of Subpart O in 2000 MMS has had a variety of tools at our disposal to monitor industry compliance • Employee interviews • Audits • Tests • Majority of MMS efforts to date have focused on interviews and audits

23. INFORMAL EMPLOYEE INTERVIEW’S (2002 – 2008 YTD)

24. SUB O AUDITS & INCs (2002 – 2008 YTD)

25. Testing • After evaluating how interviews and audits work/don’t work MMS began to explore testing • Provides MMS another tool in our audit tool box to evaluate employee competency • Provides MMS and company more of a “real” world evaluation of individual skills as related to their job

26. SUBPART OPILOT TESTING PROCESS

27. Testing Pilot Program Started 11/1/08 No enforcement (INC) Goal Issue as many tests as possible to gain a better understanding of test administration Receive lessee & contractor input Areas of concern Grading 70% pass/fail Consistency test administration Level of difficulty

28. Testing Pilot Program Open book All material acceptable Charts, guides, books, tables…. No time limit Testing location Onshore (office, school), offshore Passing grade Written – 70% and above Hands-on – pass/fail, all steps deemed critical

29. Written Well Control Pilot Tests Three tests; “A”, “B”, “C” Each test includes three levels based upon rig position Level “L1” floorhand, derrickman Level “L1L2” driller, assistant driller Level “L1L2L3” toolpusher, company man

30. Written Well Control Pilot Tests - Grading Level “L1” (floorhand, derrickman) 5 questions Passing = 70% on this section only Level “L1L2” (driller, assistant driller) 11 questions 5 questions from “L1” + 6 new questions Passing = 70% on 11 questions Level “L1L2L3” (toolpusher, company man) 20 questions 5 questions from “L1” + 6 questions from “L1L2” + 9 new questions Passing = 70% on 20 questions (entire test)

31. Written Well Control Pilot Tests - Questions Level “L1” questions Basic well control concepts, equipment practices Level “L1L2” questions More advanced well control theory, equipment concepts Level “L1L2L3” questions Deeper knowledge of well control techniques, operational systems, calculations Only level to contain calculations

32. Hands-On Pilot Well Control Tests Five scenarios Each scenario includes a series of Yes/No skill based questions 5 to 8 questions per scenario Employee/team needs to show competency by demonstrating or answering all questions correctly Each question in a scenario deemed to be critical Scenarios focus on either an individual or a team

33. Written Production Pilot Tests Five tests; “A”, “B”, “C”, “D”, “E” Each test includes three levels based upon position on facility Level “L1” C or D operator Level “L1L2” A or B operator Level “L1L2L3” Lead operator

34. Written Production Pilot Tests - Grading Level “L1” (C or D operator) 35 questions Passing = 70% on this section only Level “L1L2” (A or B operator) 44 questions total 35 questions from “L1” + 9 new questions Passing = 70% on 44 questions Level “L1L2L3” (lead operator) 50 questions total 35 questions from “L1” + 9 questions from “L1L2” + 6 new questions Passing = 70% on 50 questions (entire test)

35. Written Production Pilot Tests - Questions Level “L1” questions Basic wellhead equipment design, safety device testing and reporting requirements Level “L1L2” questions More advanced safety analysis concepts, system design theory and practices Level “L1L2L3” questions Deeper knowledge of analysis, design, installation and testing of production surface safety systems and of government codes, rules and regulations

36. Hands-On Production Pilot Tests Ten scenarios Each scenario includes a series of Yes/No skill based questions 10 to 14 questions per scenario Employee/team needs to show competency by demonstrating or answering all questions in a correct manner Each question in a scenario deemed to be critical Scenarios focus on either an individual or a team

37. PILOT TESTING PROGRAM RESULTS

38. Type of Tests Conducted During Pilot Majority of written tests were offshore & announced Small percentage of written tests were unannounced 18 well control written tests conducted at school & compared against schools’ test All hands-on pilot tests were conducted offshore

39. Testing Pilot Program Lessee & contractors either volunteered to participate or were picked at random Testing was conducted during normal MMS inspection activities Tests were mostly graded onsite Employee comments were solicited Often times an individual was given multiple tests for feedback and comparison purposes Test data was entered into an MMS data base

40. Companies Tested During Pilot • Devon/Diamond • ExxonMobil/H&P • ExxonMobil/Sam Jones • Energy XX1/Hercules • BP/Rowan • Helis/Rowan • Hunt/Ensco • Badger/Pride • Mariner/Noble • El Paso/Wood Group • Mariner/Prosper • Chevron/Parker • Venoco • PXP • Shell • Stone • Apache

41. Pilot Test Breakdown by MMS Region Total tests conducted during pilot Gulf of Mexico - 129 Pacific - 7 Alaska - 0

42. Subpart O Pilot Tests Conducted Written Tests Well control – 86 37 L1 23 L1L2 26 L1L2L3 Production – 31 4 L1 7 L1L2 20 L1L2L3 Hands-On Tests -19 Well control - 4 Production - 15

43. Pilot Written Well Control Tests

44. PILOT WRITTEN WELL CONTROL TEST “A”GRADE DISTRIBUTION*

45. PILOT WRITTEN WELL CONTROL TEST “B” GRADE DISTRIBUTION*

46. PILOT WRITTEN WELL CONTROL TEST “C” GRADE DISTRIBUTION*

47. PILOT WRITTEN WELL CONTROL TEST “A”

48. PILOT WRITTEN WELL CONTROL TEST “B”

49. PILOT WRITTEN WELL CONTROL TEST “C”

50. PILOT WELL CONTROL WRITTEN TEST vs. SCHOOL TESTS • 18 MMS well control written tests conducted at school & compared against schools’ test • Tested 6 people; 2 toolpushers, 1 driller, 1 derrickman, 2 floorhands • School WellCAP test averages • Introductory – 78% • Fundamental – 87% • Supervisory – 89% • MMS test averages • “L1” – 70% • “L1L2” – 81.7% • “L1L2L3” – 83.3% • Limited data shows consistently higher school scores than MMS scores for “comparable” tests