CODT0309

An Official Publication of the Canadian Association of Oilwell Drilling Contractors

oi driller

WINTER 2010

THREE FLEETS. ONE VOICE .

Employee Assistance Programs Reach Out to Rigs Alberta Rig Techs Benefit from Campus Upgrades

Trinidad Drilling Ltd. Corporate Head Office 2500, 700 – 9th Avenue SW Calgary, AB T2P 3V4 Phone (403) 265-6525 Fax (403) 265-4168 Trinidad Drilling Ltd. Nisku Operations Center Nisku, AB Phone (780) 955-2340 Trinidad Drilling Ltd. Lloydminster Area Operations Center Lloydminster, AB Phone (780) 875-1414 Trinidad Drilling Ltd. The Bear Training Centre Corp.

Springbrook, AB Phone (403) 886-2242

Victory Rig Equipment #54 – 37337 Burnt Lake Trail Red Deer County, AB T4S 2K5 Phone (403) 340-2267 Mastco, a division of Victory Rig Head Office 1511 – 10th Street Nisku, AB T9E 8C5 Phone (780) 979-2888

Trinidad Well Servicing Ltd. Head Office Calgary, AB Phone (403) 265-6525 Trinidad Well Servicing Ltd. Red Deer Area Operations Center Red Deer, AB Phone (403) 314-0771 Trinidad Well Servicing Ltd. Grande Prairie Area Operations Center Clairmont, AB Phone (780) 567-3748 Trinidad Well Servicing Ltd. Lloydminster Area Operations Center Lloydminster, AB Phone (780) 875-4259

Titan, a Trinidad Drilling Company Head Office Calgary, AB Phone (403) 265-6525

Automation Controls & Electric Inc. Bay #3, 511 – 11th Street Nisku, AB T9E 7N5 Phone (780) 955-4711

www.trinidaddrilling.com

est. 1949

CONTENTS

10 CAODC

Winter 2010 Vol. 8, No. 1

14

news

Message from the CAODC 7 Forecast - 2010 7 Committee Updates 8 Service Rig Competency Program Stats 8 Welcome New Members 17

features 10

Work to Live Those Who Drill Deep are Getting Good at Reaching Out

14

Room to Learn Alberta Schools Invest in Rig Tech Spaces

16

Actions Speak Louder than Words Safety Stand Down 2010

16 Published for The Canadian Association of Oilwell Drilling Contractors 800, 540 - 5 Avenue SW Calgary, Alberta T2P 0M2 Tel.: (403) 264-4311 / Fax: (403) 263-3796 E-mail: info@caodc.ca Web: www.caodc.ca Published by Naylor (Canada), Inc. 100 Sutherland Avenue Winnipeg, Manitoba R2W 3C7 Tel.: (800) 665-2456 / Fax: (204) 947-2047 Web: www.naylor.com Publisher: Robert Phillips Project Manager: Kim Davies CAODC Editor: Cindy Soderstrom Naylor Editor: Leslie Wu Project Manager: Kim Davies Publication Director: Brenda Ezinicki Sales Executives: Brian Hoover, Mark Hawkins, Wayne Jury Layout and Design: Naylor, LLC Advertising Art: Julius Muljadi On the cover: A service rig with Precision Well Servicing, a division of Precision Limited Partnership ©2009 Naylor (Canada), Inc. All rights reserved. The contents of this publication may not be reproduced by any means, in whole or in part, without the prior written consent of the publisher.

Published November 2009/COD-T0309/9381 Canadian Publications Mail Agreement #40064978

Index to Advertisers 18 The Canadian Oil Driller • Winter 2010

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MESSAGE FROM CAODC

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n the last five years, Canada’s rig fleet has been built up to include some of the newest and most advanced rig technology used anywhere in the world. Much of this equipment is racked and waiting for better economic times. And this has resulted in substantial job losses with a large percentage of the trained professional labour force waiting to be called back to work. 2009 was the most difficult year in recent memory with rig utilization averaging out to not quite 25%.

Overall utilisation will increase when commodity prices do.

The CAODC forecast for 2010 anticipates natural gas averaging out at the nominally depressed price of $5.50/mcf (in Canadian dollars). Until we start to see growth in the economy, particularly industrial demand for natural gas, we are not going to see gas prices increasing.

Oil prices have recovered better than gas prices. Stronger oil prices are particularly good for Saskatchewan. The oilbased Bakken Play in the southeast of the province offers promising work, but that area is only big enough for around 150 rigs, less than 20% of the total available fleet.

Stronger oil prices are also good news for Alberta’s conventional oil reserves, but Alberta, being primarily a gas basin, particularly relies on strong natural gas drilling.

Fiscal regimes are also a contributing factor to activity levels. Investors look carefully at all aspects that affect their rate of return. Canadian jurisdictions need to be particularly aware of how well their investment opportunities compete against new shale gas plays in the United States. Discussion

FORECAST – 2010

in Alberta, in particular, is considering how the fiscal regime can be structured for the long term to attract the investment that is needed to bring jobs back to the province.

In British Columbia, similar shale gas plays are the main developments. Investors are very excited about these opportunities. 150 rigs ran in BC last winter, and industry expects it to be one of the more optimistic areas of exploration and production in 2010.

Despite the reduced activity, the CAODC membership remains focused on its collaborative efforts. The successes of CAODC initiatives are possible only through the strong volunteer support of its members. It is particularly commendable that, even during these uncertain times, member companies remain committed to setting aside time for this cooperative work. Some of this work is detailed in the Committee Updates section of this issue, and more information is available at CAODC’s website.

These projects lay the groundwork for a safer, more efficient industry. Both these qualities will be needed when commodity prices and investors call the fleet and its personnel back to work.

October 20, 2009

WESTERN CANADA 2010 Total Number of Wells (Western Canada): 8,523 QUARTER

ACTIVE RIGS

FLEET

UTILIZATION

OPERATING DAYS *

2010 – 1st

320

800

40%

28,800

2010 – 2nd

96

800

12%

8,640

2010 – 3rd

200

800

25%

18,000

2010 – 4th

256

800

32%

23,040

Average 2010

218

800

27%

78,480

2007

2008

2009

Drilling

Util.

Wells

Drilling

Util.

Wells

Drilling

Util.

Wells

336

38%

19,144

351

40%

16,844

209

24%

8278

Assumptions:

WTI: $70.00/bbl (USD)

AECO: $5.50/Mcf (CDN)

9.3 days/well

* Calculation based on spud to rig release data

The Canadian Oil Driller • Winter 2010

7

CAODC COMMITTEE UPDATES

Accounting & Taxation (A&T) Committees

Engineering and Technical (E&T) Committee

Recently, the province of British Columbia announced that it will adopt a harmonized tax system. This means that rather than having separate provincial sales tax and federal goods and services tax, there will be one combined sales tax – the HST. The HST is a federal program, so Canada Revenue Agency will be in charge of the program. From drilling and service rig contractors’ perspectives, the combined tax appears to be a non-issue. In fact, HST may end up being more attractive for contractors as the recovery process for input tax credits is more straightforward. However, A&T Committees will watch closely to ensure that any potential issues can be resolved prior to the program’s July 1, 2010 launch date.

The E&T Committee is reviewing all CAODC Recommended Practices (RPs). The committee has held several consultative sessions with contractors and will make a final proposal to drilling and service rig executive committees later this year.

Information Technology (IT) Committee The IT Committee is examining the potential of developing a standard electronic data interchange model. CAODC contractors use many software vendors and products, and these programs have different data requirements. To facilitate the organization of information, the IT Committee will propose a data model that feeds into all common software products. As with many IT projects, much of the work happens behind the scenes. A successful result is when programs and tools run smoothly allowing users to increase productivity. This remains the goal of the committee for all of their projects.

Forecasting Committee

Of all the committees at CAODC, the Forecasting Committee faces the toughest challenge this year: predicting when the market downturn will end. Low natural gas prices and a U.S. storage oversupply are working against Canada’s conventional oil and gas indusSeptember YTD Nisku Service Rig Assessments Book Sales Count and Amount try. Having said that, some analysts feel that gas prices will recover sooner than originally 1200 forecast. Let’s all hope that this 1052 is the case. More information 1000 about the 2010 forecast is in the 800 644 570 CAODC Message (see pg, 7).

600 364

400

Human Resources & Training (HR&T) Committees The HR&T Committees continue to confront the challenges of maintaining experienced, trained crews while battling low rig utilization rates. Many contractors are using alternative scheduling in order to keep their best workers busy during this downturn.

CAODC reminds employees that rules regarding certifications and training are still in effect. In particular, the Rig Tech trade is a mandatory requirement in Alberta, and employees must demonstrate progression to remain active apprentices.

8

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197

143

200 0 Service Rig Derrick Man Competency Student

Service Rig Driller Competency Student 2008

Service Rig Floor Hand Competency Student

2009

$40,000

$34,716

$35,000 $30,000 $25,000

$21,252

$18,810

$20,000

$12,376

$15,000 $10,000

$6,698

$4,862

$5,000 $0 Service Rig Derrick Man Competency Student

Service Rig Driller Competency Student 2008

2009

Service Rig Floor Hand Competency Student

Service and Technical (S&T) Committee

will log in to Red Deer College’s e-campus and work through modules at their own pace while emailing classmates and a designated instructor. The students began work on the modules on September 21 and have until the end of January to complete course work and write the final exam.

The S&T Committee is eager to see the official release of the CAODC Service Rig Vehicle & Driver Standards Guide.

This document, along with the new Alberta Transportation MOU, will be formally adopted early 2010.

The new Semi-annual Preventative Maintenance Check is being used in the field to exempt contractors from yearly CVIPs. Contractors can access this form on the new CAODC website through the Online Library.

Health, Safety and Environment (HS&E) Committee The HS&E Committee completed a DACUM in preparation for the drafting of a new CAODC Rig Move Guide which is slated for release in 2010. The current guide has been discontinued in anticipation of the new edition.

The committee also is assisting the CAODC Exposure Control Plan committee. WorkSafeBC is striving to curb occupational exposures that stem from invert mud. The Exposure Control Plan committee will provide WorkSafe BC with an industry perspective as this collaborative group addresses the issue of worker safety. Enform is also assisting this committee.

Apprenticeship Shop Contact Committee CAODC’s Apprenticeship Shop Contact Committee met in September. Of note, the committee has registered a small group of students to partake in Red Deer College’s fi rst ‘online’ Rig Technician 1 class. The students piloting this opportunity will complete their first period technical training through web-based training modules. Unlike attending technical training on a campus, these students

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The Canadian Oil Driller • Winter 3/23/09 2010 2:29:58 PM9

Work to Live Those who drill deep are getting good at reaching out

By Michelle Morra

A

man stationed at a rig site takes a short break to phone his HR director at head office, hundreds of miles away. “I spoke to my wife last night,” he says. “She’s feeling lonely and frustrated, dealing with our teenager by herself while I’m out here, and I don’t know what to do.”

Dean Fraser of Concord Well Servicing has received that call and responded in a way that is perhaps unique to the industry. She met with the employee’s wife over coffee and lent a sympathetic ear.

The challenges of remote and migratory work are as old as the industries (such as mining, construction and oil drilling) that create those challenges. Geographical isolation, performance pressures and work schedules are stressors that workers and their families don’t always deal with in healthy ways. These issues are nothing new, but something has changed: workers now talk about them.

Unlike when it was a badge of honour to spend 60 days working remotely, today’s workers are concerned with staying well both physically and mentally, and being fully present as a spouse and parent while fulfilling their professional responsibilities. When that balance is skewed, they feel stress and need an outlet. Widespread adoption of employee assistance programs (EAPs) makes it easier to ask for help.

But in case they don’t, their supervisors, HR people and the industry as a whole are better equipped than ever to help them come up with constructive solutions.

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That commitment, and heightened awareness of work stressors, have opened up a floodgate – a gusher, even – spilling employee concerns out into the open where they have a better chance of being resolved.

Facts vs. Figures An employee assistance program (EAP) is an employer-funded, 100% confidential service for employees who need support or advice on work or personal matters. In recent years, oil and gas workers have increased their use of EAPs at a rate greater than other Canadian industries. According to a new report from Shepell-fgi Research Group entitled “Health and Wellness Trends in the Oil and Gas Sector,” they are picking up the phone in droves to address concerns about work-life balance, including family support services and substance abuse intervention, as well as nutritional issues, family and relationship issues, elder- and childcare services and more.

The report reflects an industry on the right path: when employers make the counselling tools available, the workforce will use them if needed.

Employees in oil and gas are more likely than the national average to access the array of EAP support services.

The report reveals oil and gas employees consistently access most services more often than the national average (for instance, eldercare support), but a summary accompanying the report zeroed in on employees who

access substance abuse counselling, calling it a ‘chronic challenge’ in the oil and gas labour force.

Fraser is puzzled by the summary’s focus on substance abuse. At Concord, she refers someone on average once

per month to the EAP for family counseling to do with teenagers, by far the primary issue for her workforce.

Fraser stays in close contact with rig managers and says she would know if there were a substance abuse problem

on a site despite regular alcohol and drug testing and the strict policies of today’s “dry camps.”

Regarding the reported increase in EAP use Fraser wonders, “Was it that no EAP was offered before, or was it

offered before but not socially acceptable to reach out for help?” Because the biggest trend she sees is a positive one: Workers are now apt to use services “that a generation ago either wouldn’t have been available, or it

The Canadian Oil Driller • Winter 2010

11

might have been considered weak to use them.”

Ensign Energy has had dry camps for more than 15 years. Cindy Hames, Ensign’s Director of Global Strategic Management, Field Resources, also questions the summaries that imply the report has measured and found an industry with increasing problems.

“What I see is an increase in awareness,” says Hames, who notes a substantial difference in crews since she started in the industry 17 years ago.

“The quality of the people working in the industry, and their commitment, their professionalism, the technological ability they have, all of that has gotten just that much better. We don’t have the same types of absenteeism, the incident rates. All of that is better now than it has ever been.”

Bob Ross, Manager of Workplace Safety at ENFORM, says the oil and gas industry is at the forefront of addressing these very kinds of problems. He believes higher rates of EAP use indicate that employers are working more closely with workers to make sure they

Geographical isolation, performance pressures and work schedules are stressors that workers and their families don’t always deal with in healthy ways. These issues are nothing new, but something has changed: workers now talk about them. take advantage of the services available to them. The industry has a longestablished zero tolerance for unsafe behaviour, including working under the influence of alcohol.

“These are well paid positions,” Ross says. “So when it’s a condition of employment that you remain intact with all your wherewithals and faculties, it puts a whole new spin on health and safety.”

Oil and gas companies do more random testing than most other safety-sensitive industries. And in

many companies, if someone is suspended for substance abuse, part of the requirement for the worker to be reinstated is counseling.

“This is an industry that sincerely cares, collectively,” says Ross. He says ENFORM routinely meets with other associations, regulators and workers’ compensation boards to address health and safety concerns. “They’ve taken a very active role and been duly diligent as far as things like random alcohol testing.”

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Celebrating 60 Years

He stresses that the industry has progressed by leaps and bounds in all areas of worker health and safety. As someone who recently worked on the regulator side in Saskatchewan, Ross says compensation rates have come down considerably and time-loss injuries are dropping.

But for those workers who do grapple with substance abuse and other personal problems, employers have the tools in place to proactively address job stressors before they escalate. Shepell-fgi recommends measures many petroleum producers are already doing. Promoting a healthy workplace culture. Offering training for supervisors who might need to intervene in a substance abuse issue.

Encouraging open exchange and dialogue within teams and across the organization, addressing substance abuse in a similar manner to other health issues, and continuing to promote programs offered through the EAP.

workers, both Hames and Fraser are glad to tell applicants that their company offers an EAP. While new recruits do see the service as a plus, it’s never certain if they will use it in a timely enough manner to mitigate a personal crisis. But they are probably more likely to than any previous group of workers.

The average worker at Concord is 33 – an age group that’s very open to addressing a problem rather than deny or tolerate it.

“I would comfortably say that baby

boomers are least likely to use an EAP,” Fraser says, “whereas Gen-xers might be more likely to use it, and Nexters (today’s 30-somethings) would expect it. They don’t live to work. They work to live.”

Job demands haven’t necessarily changed. And while a flawless worklife balance has yet to materialize, Fraser says, “Many, many are making it work.”

For more information on ENFORM’s drug and alcohol policy, visit www.enform.ca

Arnco Technology has done it AGAIN!

Soft skills for tough guys Every worker could benefit from occasional support, advice and guidance. That’s where those people skills for which HR is renowned can come in handy. Besides taking wives out for coffee, Fraser offers support in other ways. When one employee was home for a few days that happened to fall on his wedding anniversary, she offered to babysit so he could take his wife out to the movies. Having that personal rapport, she says, helps workers and their families feel supported and more open to talking about whatever challenges they face.

Hames reminds workers to communicate openly with family about work-related concerns. Many, she says, have a single-parent household two-thirds of the time.

“Often you do end up where your employees and their spouses lead different lives when they are apart,” she says. “They have to. It’s part of survival. Then when [the workers are back home], they have to learn to live together again.”

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The Canadian Oil Driller • Winter 2010 13 PM 10/15/09 9:39:26

Room to Learn Alberta Schools Renovate, Rig Techs Benefit

SAIT will begin construction on a Trades and Technology Complex shortly.

T

he most recent “oil boom” had industry scrambling for tradespeople. But the pressure of the skilled labour shortage wasn’t limited to industry circles. The schools that offered technical training to tradespeople felt this pressure as keenly as employers who needed more tradespeople.

Schools are actively preparing for the industry’s next call for trained people.

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The economy has shifted dramatically since those months when oil and natural gas prices soared to record highs. Being short on work is a different discomfort than being short on tradespeople, and companies are struggling with the new set of problems posed by sub-economic activity.

For schools, this slow period is a breather, an opportunity to finish projects that looked indispensible during those months when it seemed there could never be enough training to pull together the workforce industry clamoured after.

In Calgary, SAIT is in the middle of long term renovation that will see the whole campus renewed. In Edmonton, a new trades and technology building has been added to NAIT’s classroom spaces, completed even before the economic slowdown. In Red Deer, the College is putting finishing touches on its newly expanded spaces for students.

The classroom in Red Deer College’s new Centre for Trades and Technology.

A common area for students in NAIT’s Petro Canada Centre.

Red Deer College’s Centre for Trades and Technology where Rig Tech classes will be held this spring.

SAIT’s Trades and Technology Complex will offer twice as much space as what is currently allocated for Rig Tech classes.

Shop spaces in NAIT’s Petro Canada Centre.

These renovations are worth noting for what’s common to all of them: at each school, these areas will improve the classroom, lab and shop spaces offered to trades training.

And each of these schools have dedicated some of these new spaces to Rig Technician classes.

SAIT Polytechnic’s Trades and Technology Complex, anticipated to be ready in 2012, will afford Rig Technicians approximately double the classroom space available to them now. NAIT’s Petro Canada Centre for Millwright Technology is the newest building on its main campus, having opened in the fall of 2007. It too offers the space for more hands-on equipment. This spring, Red Deer College will run Rig Tech classes in its new Centre for Trades and Technology where floor to ceiling windows surround the shop spaces.

The classrooms in these new facilities are Smart Boardwired so that instructors can seamlessly use the latest technology during the lectures and presentations. The instructors are equally excited about the expanded shop space, which will allow them to store and access equipment, making it possible to break up a day of lecture material with some hands-on opportunities.

Schools are actively preparing for the industry’s next call for trained people. When that call comes, the Rig Technician trade will have some of the newest classrooms to call their own on Alberta campuses.

To find technical training schedules for spring Rig Tech classes, see www.rigtech.ca The Canadian Oil Driller • Winter 2010

15

Actions Speak Louder than Words Safety Stand Down 2010

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S

afety Stand Down is a designated time for CEOs, executives and senior managers to talk about safety issues directly with frontline workers.

Safety Stand Down usually takes place during a focus week.

This year the focus week is January 18 - 22. However, this time frame is only a suggestion. Each organization should choose a time frame that works best for them. The important thing is to make time for safety — no matter when that might be.

Frontline workers are generally the largest group in the workforce. Most recordable incidents and injuries occur within this group - particularly among new workers. Too often, the safety messages that trickle down to this group become diluted.

However, when senior management takes the time to discuss safety issues in person during Safety Stand Down, this group is more likely to pay attention.

Some executives will choose to visit plants or permanent sites, while others visit temporary sites such as drilling and service rig operations.

Enform encourages executives to participate choose a location that will have the greatest impact.

The important thing is to make time for safety – no matter when that might be.

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The Canadian Oil Driller • Winter 2010 8/19/09

17 PM 8:40:22

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CAMP & CATERING SERVICE Aramark Remote Services ............................. 16

DRILL PIPE PRODUCTS Grant Prideco Canada...........outside back cover DRILLING CONTRACTORS Trinidad Drilling Ltd. ........................................ 3

PAJAK

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ENGINEERING LTD.

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Engineering Investigations

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Phone: (780) 483-3436

SPILL CONTAINMENT Katch Kan Limited ........................................... 9 TRAINING PROGRAMS Enform ............................................................ 6 WELL SERVICING Classic Well Servicing Partnership ................. 12

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