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Audit of Centrica's planning and execution of exploration drilling - well 6506/9-2S

Audit: The Petroleum Safety Authority Norway (PSA) conducted this audit by means of two meetings with Centrica Energi (Centrica) on 19 and 21 January 2010, as well as observing an exercise for second-line emergency preparedness on 27 January 2010. Based on our findings from this audit, we cannot see that Centrica is capable of prudently managing the exploration drilling activity that they have applied for, at the present time.

Centrica is a participant in a consortium of operating companies that cooperate in the hiring of the West Alpha drilling rig and a number of suppliers of third-party services in connection with drilling operations on the Norwegian shelf.

Each individual operating company takes over control and enters into the relevant contracts when they start their own drilling operation.

Background for the audit
The background for the audit of Centrica's management of HSE in the preparation for and execution of drilling operations with the West Alpha is that this is the company's first operated exploration well on the Norwegian shelf.

It is also a well characterised by HPHT conditions. The PSA prioritises audits of new players who initiate drilling operations for the first time on the Norwegian shelf in order to evaluate their HSE management in relation to organisational, technical and operational capacity and competence.

Purpose of the audit
The purpose of the audit was to examine the company's compliance with requirements as to the management of health, safety and the environment (HSE) in preparations for starting drilling operations with the West Alpha drilling rig.

Result of the audit
The PSA's main impression is that Centrica has largely relied on the resources that are part of the rig consortium, and that the company has only to a lesser degree been involved in a management role in accordance with the regulatory requirements pertaining to the operator's supervisory duty.
This duty to ensure compliance, the supervisory duty, entails an obligation to follow up to ensure that the parties that participate in the activities comply with requirements set in and in pursuance of statutes and regulations. This must be done in part through establishing management systems and conducting audits.

The responsibility for ensuring compliance with regulatory requirements will thus be a general and overarching supervisory duty in connection with the execution of petroleum activities.

Centrica's management of the preparations for carrying out the drilling operations with West Alpha is inadequate. This applies both to how Centrica safeguards its supervisory duty vis-à-vis other players, as well as how Centrica quality-assures its own activities.

The audit revealed the following nonconformities in Centrica's handling of emergency preparedness in relation to the upcoming drilling operation:

  • Centrica's management of the preparations for implementing drilling operations with West Alpha and the drilling of well 6506/9-2 S is inadequate. This applies both to how Centrica safeguards its supervisory duty vis-à-vis other players and to how Centrica quality-assures its own activities.
  • We identified nonconformities in connection with Centrica's management and handling of emergency preparedness aspects in view of the upcoming drilling operation. This nonconformity must also be viewed in context with the parts of the nonconformity in Item 5.1.1 that deal with governing documents for emergency preparedness.

The circumstances described above indicate that Centrica should consider the composition of its own organization in terms of necessary resources and competence.

These conditions have been addressed after the audit, and Centrica has identified a number of compensating measures.

Under the condition that these measures are carried out as described, we have given Centrica consent to carry out exploration drilling pursuant to the application (link).

Journal 2009/1607 (documents in Norwegian)

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