When Sysmax saved drilling operations from being suspended

Rigorous risk management processes are part and parcel of everyday operations for sectors that face strict regulations and standards. A lack can lead to services being suspended. Being able to demonstrate to the statutory authorities that these processes wrap around operations is crucial. Competency, improvement, and compliance management play a huge role in regulations. And indeed, this is increasingly the case internationally. In 2019, the USA and Australia passed legislation that has long been on the statute books in the UK to make competency a statutory obligation when it comes to risk management.

Global expansion leads to increased obligations

Global oil and gas companies face different standards in different jurisdictions. One example is our client, CNOOC (China National Offshore Oil Corporation). The company has long been the largest producer of offshore crude oil and natural gas in China. Recently, overseas expansion has meant that CNOOC is now one of the largest independent oil and gas exploration and production companies in the world. With over 18,700 employees globally, there’s a massive task in managing competency and improvement across the company – and in demonstrating that system to the authorities.

Challenge: Refusal of drilling approval

There are two relevant regulatory authorities for oil and gas drilling operations in the North Sea and under the UK’s jurisdiction.  The UK government’s Department for Business, Energy and Industrial Strategy (BEIS) provides environmental oversight, while the Health and Safety Executive (HSE) focuses on the safety aspects of operations. Their statutory authority extends to shutting down operations if they fail to meet standards.

We became involved with CNOOC after the company had assembled a rig, and it was being moved to a new site to begin drilling operations. BEIS and the HSE refused CNOOC’s 14-day notification to start drilling. They each wanted proof of a systematic approach by CNOOC across its North Sea drilling operations, and that there was a live system in place to control risks. Had it been unable to meet these requirements, CNOOC would have lost many millions of pounds and severely undermined its reputation.

Solution: PROVING STANDARD TO REVERSE SUSPENSION

CNOOC approached us in the wake of this suspension to address the concerns of both statutory authorities. We were rapidly able to put a comprehensive competency and improvement management system in place, as we deployed Casmax and Sawmax in tandem. Casmax demonstrated the competency of all the teams involved, covering their skills, knowledge, and experience. In turn, Sawmax served to provide a chance to fill in any gaps highlighted by Casmax’s four-dimensional approach to competency. This instance was the first of three occasions when Sysmax products assisted CNOOC in demonstrating its competency and risk management systems to UK regulatory authorities.

DEMONSTRATE COMPETENCY OF CONTRACTORS

It can be difficult to manage competency over time, especially in those sectors which rely heavily on the use of contractors. Therefore, the transportability of competency data between companies and projects is crucial. The beauty of Sysmax products is that the profiles are attached to individuals. For oil & gas and construction companies in particular, Sysmax products can keep regulatory authorities happy by demonstrating competency of operations teams even when they consist mainly of contractors. This was certainly the case in our approach with CNOOC.

Once a company has a Sysmax competency, improvement, and compliance management system in place, we have an excellent retention rate. Sysmax renewed its contract with CNOOC in early 2020, extending the contract beyond our usual three-year term. During contract negotiations, CNOOC noted the sheer scale of resources which would be necessary to create an equivalent system internally. Sysmax products reduce the administrative burden on HR departments and senior management alike, while empowering individuals as they fill in and own their competency and improvement management profiles.

We are looking forward to continuing to protect CNOOC’s revenues and reputation with our competency and improvement management systems.

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