Working Together With Subcontractors Towards Excellence in Quality, Health, Safety, and Environmental Issues

Abstract

Introduction The contribution of subcontractors to oilfield service operations in Mexico has almost doubled over the last five years. Historically, the role of subcontractors was mainly limited to logistical or peripheral activities, but with the growth of integrated projects, they contribute directly to oilfield service operations, including well construction activities. In order to continue overall performance improvements in health, safety, environment, and service quality areas, it is critical to proactively manage interactions with our subcontractors so that risks are systematically identified and adequately controlled. This paper gives an overview of a subcontractor management initiative, implemented in Mexico during 2004 and 2005 that enhanced the interfaces between a service company and its subcontractors. The initiative defined risk-based subcontractor selection and classification criteria, established clear roles and responsibilities, formalized performance and compliance expectations contractually, and implemented systematic monitoring processes to ensure compliance and evaluate performance. Similarly, specific efforts were made to develop the maturity of quality, health, safety, and environmental (QHSE) systems and the cultures of certain subcontractors by providing assistance, including training and coaching. Exposures and Impact Contracting services and buying products have always been strategic components of oil and gas company operations because of the direct and critical impact on project technical performance and economics. Until recently, this dimension has not represented the same criticality for oilfield service companies like Schlumberger who are accustomed to working as contractors. This was largely due to a more limited exposure and a natural tendency to give absolute priority to the commercial and technical relationship with their clients, without necessarily realizing how much their own performance can be influenced by that of their subcontractors. However, over the last 15 years, a clear tendency to outsource activities has also taken shape in service companies for multiple reasons, such as the focus on core business activities and chain of value, needs for specialized equipment or particular expertise not necessarily available in house, short term needs or increasing flexibility requirements, cost effectiveness, clients or legal requirements, and access to local knowledge. In addition, with the development of integrated projects and turnkey contracts in which oilfield service companies are directly managing the well construction process for their clients, subcontracting part of the contributing activities, the exposure has increased to levels never experienced before. As an example, 3.2 million work-hours were out sourced by Schlumberger Mexico in 2004 corresponding to 34% of the total work-hours for the same period. For an oilfield service company, typical sub-contracted services includeLogistics: transport of personnel, equipment, products (land, air, water), craning, and liftingWell construction: drilling, fluids, casing, rig moves, civil worksConsulting, training, expertise, inspection, certificationConstruction: bases, workshops, officesMaintenance and repairs: bases, offices, and vehicles.Labor: workforce, consultantsCommunications: radios, frequency rentalMedical support: doctors, nurses, ambulancesWaste management: transport, treatment, disposalRental: bases, houses, equipment and tools, vehicles