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CHAPTER 2

PLANNING AND SCHEDULING


TABLE OF CONTENTS

2.1 INTRODUCTION.......................................................................................................................... 3
2.1.1 Purpose ................................................................................................................................... 3
2.1.2 Scope ...................................................................................................................................... 3
2.1.3 Overview ................................................................................................................................ 3
2.2 EXPLORATION WELL PLANNING........................................................................................... 6
2.2.1 Introduction ............................................................................................................................ 6
2.2.2 Activity Flow Chart................................................................................................................ 6
2.2.3 Activity Descriptions.............................................................................................................. 8
2.3 DEVELOPMENT WELL PLANNING ....................................................................................... 17
2.3.1 Introduction .......................................................................................................................... 17
2.3.2 Activity Flow Chart.............................................................................................................. 18
2.3.3 Activity Descriptions............................................................................................................ 19
2.4 COMPLETION/WORKOVER PROGRAMME PLANNING.................................................... 30
2.4.1 Introduction .......................................................................................................................... 30
2.4.2 Activity Flow Chart.............................................................................................................. 31
2.4.3 Activity Descriptions............................................................................................................ 32
2.5 BUDGET FORECASTS AND COST CONTROL ..................................................................... 39
2.5.1 Introduction .......................................................................................................................... 39
2.5.2 Activity Flow Chart.............................................................................................................. 39
2.5.3 Activity Descriptions............................................................................................................ 40
2.6 TENDERING AND CONTRACT MANAGEMENT................................................................. 42
2.6.1 Introduction .......................................................................................................................... 42
2.6.2 Activity Flow Chart.............................................................................................................. 44
2.6.3 Activity Descriptions............................................................................................................ 45
2.7 AUTHORISATION FOR EXPENDITURE ................................................................................ 49
2.7.1 Introduction .......................................................................................................................... 49
2.7.2 Activity Flow Chart.............................................................................................................. 49
2.7.3 Activity Descriptions............................................................................................................ 50

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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2.8 NOTICE OF OPERATION ......................................................................................................... 52


2.8.1 Introduction .......................................................................................................................... 52
2.8.2 Activity Flow Chart.............................................................................................................. 52
2.8.3 Activity Descriptions............................................................................................................ 53
2.9 FORMS ........................................................................................................................................ 54
2.9.1 Basis for Drilling Plan Form ................................................................................................ 54
2.9.2 Drilling Project Execution Plan and Schedule Form............................................................ 55
2.9.3 Well Design Hazard Assessment Form................................................................................ 56
2.9.4 Basis for Completion/Workover Programme Form ............................................................. 57
2.9.5 Basis for Drilling Cost Estimate Form ................................................................................. 58
2.9.6 Drilling Cost Estimate Form ................................................................................................ 59
2.9.7 Drilling Cost Estimate Summary Form................................................................................ 60
2.9.8 Tendering and Contracting Check List................................................................................. 61
2.9.9 Notice of Operation Cover Sheet ......................................................................................... 62

DRILLING DEPARTMENT
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DEM 2

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ENGINEERING PLANNING AND SCHEDULING
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PROPRIETARY INFORMATION - For Authorised Company Use Only July 1996

2.1 INTRODUCTION
2.1.1 Purpose

Planning and scheduling are key to the cost effective and safe conduct of drilling activities.
The objectives of the planning process are to ensure that:
• Well planning activities are carried out in accordance with all relevant legislation.
• Wells are planned and designed in accordance with company standards and agreed
Customer goals.
• Well planning is conducted in a timely manner.
• The relevant departments are involved in the decision making process.
• The necessary approvals are obtained.
• Sufficient resources are in place.
This chapter defines tasks and responsibilities for drilling personnel involved in the
planning process to ensure that the above objectives are fulfilled.
2.1.2 Scope

This chapter covers the following planning activities carried out by drilling personnel in
Malaysia:
• Exploration well planning.
• Development well planning.
• Completion/workover programme planning.
2.1.3 Overview

The planning and scheduling activities undertaken by drilling personnel are shown in
Figure 1, Activity Overview. This diagram shows the major steps required to progress from
a potential prospect at the beginning of exploration through to development drilling. The
drilling activities are shown in relation to the activities carried out by other disciplines.
The transitions between the exploration, appraisal, conceptual and development phases,
together with the major decision points and milestones are shown in the diagram. These
points signify major commitments of resources and are the natural points at which
coordination of activities is required. This coordination is also important for the other
activities within the major phases to ensure smooth and successful progression through the
planned process.
The timings shown in the diagram are approximate. Actual planning and scheduling
timings will be agreed between all parties concerned. Drilling personnel engaged in these
activities will have the opportunity to influence the timings by providing relevant input into
the early stages of each phase. Once agreed, all drilling personnel should be aware of the
agreed timing and their responsibilities in achieving the timely completion of each activity.

DRILLING DEPARTMENT
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Three key documents are prominent in the planning process:


• The Design Base Memorandum (DBM) is prepared during the conceptual phase and
forms the basis for the Field Development Plan. The DBM describes the chosen
development option, the financial justification and the design concepts for wells,
facilities and resource requirements over the life of the field.
• The Field Development Plan (FDP) is prepared during the development phase and
describes the reservoir, the planned wells and facilities, and how they will be developed
and operated.
• A Notice of Operation (NOOP) is prepared for each well one month before spud. The
NOOP describes the final well design and is the formal submission to Petronas for
permission to drill the well.
Drilling personnel make important contributions to all three documents and to the
associated planning activities, therefore it is important that they are involved in the early
stages of the planning process. In the exploration and appraisal phases this will consist of
input concerning rig specifications, rig rates and availability. Early drilling input into the
conceptual phase will ensure evaluation of the technical feasibility of all potential options
and allow cost comparisons to choose the most economical option. In the development
phase, timely input will have a great impact on timing and project screening leading to
optimisation of development options.
Close interaction between Drilling and the Exploration, Petroleum Engineering, Design
and Construction Departments is vital to optimise total project costs. Rig/platform
interaction, well reach and well design options should be fully evaluated in the conceptual
stage. All platform options and well design options should be considered and all
possibilities for reducing costs should be examined.
Drilling input is provided at each stage by drilling personnel nominated by the Drilling
Manager. During the early stages of each phase, the drilling contribution will be provided
by a drilling representative designated to provide specific input. As the workload increases,
a drilling team will be formed under the leadership of a drilling team leader.
In addition to the planning carried out by Drilling for specific exploration wells and
development projects, the Drilling Department, as the parent for all Drilling personnel,
carries out the following overall planning activities:
• Short Term Drilling Sequence (1 year).
• Long Term Drilling Sequence (5 year).
• Contracting.
• Annual budget forecasts.
• Technology Plan.
• Human resource planning.
• Training planning.

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
EXPLORATION APPRAISAL CONCEPTUAL DEVELOPMENT
PHASE PHASE PHASE PHASE

Decide
MANUAL

Potential Decide to Budget Project FDP


DRILLING

appraisal
prospect? drill well? approval approval approval
ENGINEERING

drilling?

Evaluation &
Seismic & Input to Input to
development KEY
evaluation NOOP NOOP
proposal
Hold/decision point/milestone
Overpressure 3D
prediction seismic

EXPLORATION
Studies.
Feasibility FDP Well Input to
Design Base
study preparation scheduling NOOP
Memorandum.
Mapping Depletion strategy. Formation Procure Finalise
economics Well spacing. evaluation. completion well targets

PETROLEUM
Completion design. materials

ENGINEERING
& project Tubing sizing.
ranking Production forecast. Materials selection.
SPUD SPUD SPUD

Optimisation
Gather Tender Contract Drill Tender Contract Appraisal Contracts & Development
NOOP NOOP Compare options FDP input & NOOP
info for rig rig wildcat for rig rig drilling materials drilling
procedures

Figure 1, Activity Overview

PETRONAS CARIGALI SDN BHD


DRILLING DEPARTMENT
DRILLING
External Compare Apply Review Refine Acquire Conceptual well Detailed Hazard Final well
factors options relevant wildcat drilling plan critical design well design assessment & design
knowledge technology perfor- planning SIPROD
PLANNING AND SCHEDULING

base mance data


PROPRIETARY INFORMATION - For Authorised Company Use Only

Feasibility Conceptual Procure Install drilling


Detailed design Fabricate
study design materials structure

Compile & compare Project Environmental Hook up &

DESIGN/
options schedule impact commissioning

CONSTRUCTION
assessment

24 - 48 months 18 - 36 months
Issue 1
DEM 2

July 1996
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DEM 2

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2.2 EXPLORATION WELL PLANNING


2.2.1 Introduction

Exploration well planning applies to wells which are drilled in new structures and to
appraisal wells which are drilled to obtain more information on an initial discovery to
ascertain if the discovery is commercial.
2.2.2 Activity Flow Chart

DEM 2.2
EXPLORATION WELL PLANNING
(Sheet 1)
Activities Petronas GM Customer DDR DT Related Activities
1. Identify Reqirement for
Drilling Input to Planning Start
Process.
2. Nominate Drilling
Representative.

3. Prepare Basis for Drilling


Plan.
No
4. Approve Basis for Drilling
Plan.

5. Prepare Drilling Project

INPUT TO CONCEPTUAL PHASE


Execution Plan & Schedule.
No
6. Approve Drilling Project
Execution Plan & Schedule.

7. Create Drilling Team.

8. Attend Kick-off Meeting.

9. Review Lessons Learned.

10. Prepare Conceptual Well


WDM
Design Options.

11. Prepare Conceptual Well


No DEM 2.5
Design Cost Estimates.

12. Select and Approve Most


Economic Option.

Continued on Sheet 2 Sht 2

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 2, Exploration Well Planning Activity Flow Chart (Sheet 1)

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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DEM 2.2
EXPLORATION WELL PLANNING
(Sheet 2)
Activities Petronas GM Customer DDR DT Related Activities

Continued from Sheet 1 Sht 1

13. Input to Drilling Sequence


and Master Integrated
Sequence.
14. Initiate Tendering for Long
DEM 2.6
Lead Items.

15. Site Specific Survey.

16. Prepare Hazard Assessment


and Environmental Impact
Assessment.
No
17. Approve Hazard Assessment
and Environmental Impact
Assessment.
18. Prepare Site-specific HSE
Documents.

INPUT TO NOOP
19. Prepare Final Well Design. WDM

20. Prepare Final Well Design


No DEM 2.5
Cost Estimate.

21. Approve Final Well Design.

22. Prepare Authorisation for


DEM 2.7
Expenditure.
No
23. Approve Authorisation for
Expenditure.

24. Initiate Tendering for


DEM 2.6
Remaining Items.
25. Check Drilling Sequence
and Master Integrated
Sequence.
26. Prepare Notice of
DEM 2.8
Operation.
No
27. Approve Notice of
Operation.

28. Prepare Drilling


Optimisation Plan.
29. Check Delivery of Rig,
PRE-OPERATIONS

Services, Equipment and


Materials.

30. Hold Rig Move Meeting.

31. Hold Pre-spud Meeting.

32. Supervise Drilling


Finish DEM 3
Operations.

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 3, Exploration Well Planning Activity Flow Chart (Sheet 2)

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DEM 2

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2.2.3 Activity Descriptions

2.2.3.1 Identify Requirement for Drilling Input to Planning Process

Drilling input to the planning process is essential in the screening and feasibility stages of
the conceptual phase when drilling expertise is required by Exploration. It is important that
Drilling are involved as early as possible to help Exploration rank and schedule their
prospects.
2.2.3.2 Nominate Drilling Representative

A Senior Drilling Engineer shall be appointed from within the Drilling Department as
drilling representative to be responsible for drilling input to the well planning and design
process.
2.2.3.3 Prepare Basis for Drilling Plan

The Basis for Drilling Plan (BDP) is prepared in order to establish objectives, evaluation
requirements and design criteria based upon the information available from Exploration
(the Customer). The SDE shall prepare the BDP on the BDP form. Refer to:
! DEM, Chapter 2.2.9.1, Basis for Drilling Plan Form.
The BDP should be accompanied by a Well Data Sheet which will provide a
comprehensive record of the well design as it progresses from conceptual to final well
design.
The SDE shall liaise closely with the Customer to review the available information and
ensure that there is sufficient detailed material to enable the BDP to be prepared. The
review shall be an ongoing two-way process to ensure that the necessary data is obtained
for the BDP prior to proceeding with the Conceptual Well Design.

It is essential that the SDE has all the required information and
that the objectives are fully understood and agreed prior to
commencement of the design. Failure to obtain all the required
data or to fully understand the Customer goals and specifications
may result in extensive re-work of the design.

Delays in the well planning activity caused by Customer failure to supply the required data
shall be reported to the Drilling Manager for appropriate action.
Any subsequent changes to a BDP, either by the Customer or Drilling Department, shall be
discussed at the earliest opportunity, documented on the relevant BDP form and approved
by the Customer and Drilling Manager.

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
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2.2.3.4 Approve Basis for Drilling Plan

When completed, the BDP shall be reviewed and endorsed by the Drilling Manager and
approved by the Customer before commencing the Drilling Project Execution Plan and
Schedule. The purpose of this review is to ensure that the customer objectives have all been
addressed, thus ensuring an accurate, cost effective and fit for purpose design.
2.2.3.5 Prepare Drilling Project Execution Plan and Schedule

Within 10 days of approval of the BDP, the SDE shall prepare a Drilling Project Execution
Plan and Schedule. Refer to:
! DEM, Chapter 2.2.9.2, Drilling Project Execution Plan and Schedule Form.
The purpose of this plan is to ensure that all material, equipment, financial and human
resource requirements and availability are addressed.
It is of particular importance that forecast timings for the project are aligned with the
Drilling Sequence and that critical timings are highlighted, especially those for the drilling
rig and the site specific survey. The schedule timings shall be prepared as a formal
submission in the form of a bar chart.
2.2.3.6 Approve Drilling Project Execution Plan and Schedule

On completion, the Drilling Project Execution Plan and Schedule shall be reviewed and
endorsed by the Drilling Manager and approved by the Customer. This approval is the
agreement between Drilling and the Customer on the terms and scope of the project.
2.2.3.7 Create Drilling Team

As the workload increases, the Drilling Manager may assign additional drilling personnel
to form a Drilling Team (DT). The DT shall be responsible for all drilling input to the
exploration well planning and design process.
2.2.3.8 Attend Kick-off Meeting

The DT shall attend a Drilling Team Kick-off Meeting for briefing on the conceptual well
design requirements. The briefing shall be given by the Drilling Manager and the
Customer. The objective is to set the terms of reference for the conceptual design, assign
roles and responsibilities, review the available information and define the scope of work.
2.2.3.9 Review Lessons Learned

The DT shall review the Lessons Learned during the planning and design of previous wells
in order to identify improvements for the current design. In particular, past performance,
both good and bad, and HSE incidents shall be fully analysed and addressed in the current
design. This task is very important as it closes the feedback loop in the management
system. Refer to:
" Lessons Learned.

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2.2.3.10 Prepare Conceptual Well Design Options

The objective of the conceptual well design is to prepare design options for ranking and
selection of the most economical option as shown in the diagram below.
Drilling Department
Output To
Input From Customer Drilling Representative/ Drilling Team Technical Approval
Customer
QA/QC

External Factors Knowledge Base

Prospect
Environmental
Historical Input
Conditions

Customer
Information
Technical New
Geological Constraints Technology
Requirements
Available
Options Ensure
Compile All
and Technical
Petroleum Infrastructure Competitors Options
Cost Feasibility
Engineering
Estimates
Requirements

Cost Analysis
Timing In-house and
Implications Capability Timing Impact
Request for
Information
GM Approval
Duration of Most
Risk Economic
(Production
Management Option
Sharing)

Figure 4, Conceptual Well Design Overview


The conceptual well design options are prepared by a multi-disciplinary team which
includes representatives from Drilling and Exploration.
The conceptual well design options shall be prepared by the DT in accordance with:
" Well Design Manual.
2.2.3.11 Prepare Conceptual Well Design Cost Estimates

For each of the options identified, the DT shall prepare a cost estimate to facilitate
economic screening using up-to-date cost information. All assumptions used in the
preparation of the estimate shall be documented. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.

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2.2.3.12 Select and Approve Most Economic Option

The conceptual well design options and cost estimates shall be presented to the Drilling
Manager and the Customer for endorsement, and to the General Manager for selection and
approval of the most economic option.
The presentation shall be based on the following outline:
• Introduction stating well name, planned spud date, location, objectives,
appraisal/development plans, formation evaluation requirements, production testing
and suspension plans.
• Geological prognosis and expected fluid composition, highlighting any incomplete
data.
• Site specific surveys made and results obtained, previous experience in the area,
water depth, potential site hazards and justification for rig choice.
• Outline of well trajectory and targets for deviated wells, justification for reasons for
target selection and target sizes.
• Schematic showing geological column, shallow gas, top hydrocarbon, over pressure
zones and top of primary and secondary objectives.
• Stick chart showing reference wells.
• Problems encountered in reference wells and outline of proposed solutions.
• Proposed casing design, with reference to estimated formation strength and pore
pressure, explaining and justifying:
♦ Shallow gas precautions.
♦ Setting depth and number of casing strings required considering top hydrocarbons,
gas to surface pressures, kick tolerances, over pressure zones, trouble zones, and
well profile.
♦ Selected casing sizes considering minimum cost, BOP and casing standard ratings
and sizes, and required size to cater for test and completion string.
♦ Selected casing weights, grades and connections with reference to design factors.
♦ Contingencies for potential drilling problems and scope for changes (for example
deepening the well).
♦ Formation evaluation, well testing and abandonment considerations.
• Options discarded and the underlying justifications.
• Deviations from Company standards requiring Drilling Manager’s approval.
• Areas requiring further studies and optimisation.
• Any outstanding areas of concern (for example, timing, availability of rig, service
contracts, tool and materials).
• Estimate for well duration and cost.
• Request for approval to proceed with the proposed well design.

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2.2.3.13 Input to Drilling Sequence and Master Integrated Sequence

The DT shall review the Drilling Sequence and the Master Integrated Sequence (MIS) in
conjunction with CPL. The objective is to establish the availability of a suitable period for
drilling with a rig that is already on contract. If a space is not available in the sequence, the
economics of drilling with an alternative rig should be considered.
The availability of a suitable drilling rig, whether one is already on contract or not, is one
of the most problematic concerns in planning drilling activities. Rig availability and the
effect on timing and economics can have a major impact on the success of any particular
well. Therefore, this stage of the planning process is one of the most difficult and one of
the most important that the Drilling Team will encounter.
2.2.3.14 Initiate Tendering for Long Lead Items

The DT shall establish if any long lead items are required, such as a drilling rig and special
casing. If there is a requirement, the DT shall initiate the tendering process immediately
after the conceptual design has been approved. The purpose is to ensure the availability of
long lead items, to avoid delays and to avoid having to pay premium prices to ensure
availability. Refer to:
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.2.3.15 Site Specific Survey

The DT shall arrange for a site specific survey to be carried out in accordance with:
" Site Specific Survey Requirements for Drilling Locations.
The site specific survey is arranged in order to assess the suitability of a particular site to
accommodate a specific type of drilling rig. The survey ensures that the selected location
meets the safety requirements for a drilling rig to approach, take up position and carry out
drilling operations at the location.
2.2.3.16 Prepare Hazard Assessment and Environmental Impact Assessment

The DT shall prepare a hazard assessment using the Well Design Hazard Assessment form
as a guide. This should take the from of a brainstorming session where various scenarios
are tabled and the results and controls discussed. This will ensure that all risks are
acceptable and controls are built into the design. Refer to:
! DEM, Chapter 2.2.9.3, Well Design Hazard Assessment Form.
The DT shall prepare input to an Environmental Impact Assessment (EIA). The EIA is
written to assess the environmental impact to the air, water and soil caused by the activities
in each phase of a field development. The main concerns in a drilling project are the type of
mud, disposal of mud and the disposal of cuttings. The EIA shall be prepared in accordance
with:
" The Handbook of EIA Guidelines (Malaysian Department of the Environment).

DRILLING DEPARTMENT
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2.2.3.17 Approve Hazard Assessment and Environmental Impact Assessment

The Hazard Assessment and EIA shall be reviewed and endorsed by the Drilling Manager,
and approved by the Customer. This endorsement signifies management acceptance that
risks have been identified and addressed. Further action required as a result of the
assessments shall be documented in order to ensure proper tracking and close out.
2.2.3.18 Prepare Site-specific HSE Documents

The DT shall prepare the following site-specific HSE documents:


• Blow-out Contingency Plan.
• Emergency Response Plan.
• Oil-spill Contingency Plan.
" Emergency Response Plan Manual.
2.2.3.19 Prepare Final Well Design

The final well design includes detailed casing design and optimisation of bit and hydraulics
programmes, and mud and cement formulations. Formation evaluation requirements,
specific procedures and completion diagrams are also specified. The purpose of this task is
to translate the conceptual design into a set of instructions to enable the operations
personnel to construct the well.
The DT shall prepare a Final Well Design in accordance with:
" Well Design Manual.
For additional guidance on well design requirements refer to:
! DEM, Chapter 2.2.3.3.14, Prepare Detailed Well Designs.
2.2.3.20 Prepare Final Well Design Cost Estimate

A minimum of two months before spud, the DT shall prepare a cost estimate for each well
to facilitate economic screening using up-to-date cost information. All assumptions used in
the preparation of the estimates shall be documented. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.
2.2.3.21 Approve Final Well Design

On satisfactory completion, the DT shall obtain endorsement of the final well designs and
the cost estimates from the Drilling Manager and approval from the Customer.
The DT shall modify the Final Well Design and the cost estimate as required until approval
is given by all signatories.
2.2.3.22 Prepare Authorisation for Expenditure

The DT shall prepare the Authorisation for Expenditure (AFE) in accordance with:
! DEM, Chapter 2,2.7, Authorisation for Expenditure.

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2.2.3.23 Approve Authorisation for Expenditure

The DT shall submit the AFE to the Drilling Manager and Customer for endorsement, and
to the General Manger for approval. All endorsements and approvals shall comply with:
" Limits of Authority.
2.2.3.24 Initiate Tendering for Remaining Items

Immediately the Final Well Design is finalised, the DT shall initiate the contract tendering
process for all outstanding services, equipment and materials in accordance with:
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.2.3.25 Check Drilling Sequence and Master Integrated Sequence

The DT shall check the Drilling Sequence and the Master Integrated Sequence to ensure
that there is no conflict between the timing of drilling activities and other scheduled
activities.
" Drilling Sequence.
" Master Integrated Sequence.
2.2.3.26 Prepare Notice of Operation

A minimum of one month before spud, the DT shall prepare the Notice of Operation
(NOOP) in accordance with:
! DEM, Chapter 2.2.8, Notice of Operation.
2.2.3.27 Approve Notice of Operation

The DT shall submit the NOOP to the Customer and the General Manager for endorsement
and to Petronas for approval. Endorsements shall comply with:
" Limits of Authority.
2.2.3.28 Prepare Drilling Optimisation Plan

In the final lead up to spud, the DT shall prepare a Drilling Optimisation Plan in full
consultation with the suppliers and contractors to ensure that logistics and other critical
aspects of the operation are fine tuned. The purpose of this is to ensure that the following
are fully addressed prior to the pre-spud meeting:
• Definition of team and contractor members.
• Procedures and techniques specific to the operation.
• Specific concerns and critical success factors.
• Carigali/Contractor interfaces.

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2.2.3.29 Check Delivery of Rig, Services, Equipment and Materials

The DT shall monitor the availability of the drilling rig and make a final check to ensure
that all services, equipment and materials are available or alternatives have been resourced.
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.2.3.30 Hold Rig Move Meeting

A rig move meeting shall be held a minimum of one month prior to each rig move. The
purpose of the meeting is to address the following issues and ensure that the necessary
preparations are in hand:
• HSE.
• Logistics.
• Marine operations.
• Mobilisation of equipment and materials.
The meeting shall be attended by representatives of:
• The Customer.
• The Drilling Team.
• The drilling contractor and service contractors.
• Marine/supply coordinator.
• The XGT, logistics and HSE departments.
The following topics shall be reviewed and discussed at the meeting:
• Requirements for tugs, anchor handling vessels, positioning vessels.
• Anchor pattern.
• Loading of casing and bulk materials.
• Approach and anchoring procedure prepared by the drilling contractor.
• Special positioning navigation equipment requirements proposed by XGT
department.
• Special equipment requirements (piggy backs, etc).
• Timing and coordination of resources.
• Customs and immigration requirements (if any).
• Communications equipment.
For a new rig the following shall also be discussed:
• Compliance with HSE requirements based on the rig inspection action points.
• Inventory and stocktaking.
• Contractual matters outstanding.
• Familiarisation with Carigali rig move requirements.

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2.2.3.31 Hold Pre-spud Meeting

The DT shall prepare a pre-spud presentation for the following personnel:


• Customer.
• Drilling Manager.
• Drilling Team.
• Rig Superintendent.
• Drilling Supervisor.
• Contractors.
• Suppliers.
The objective of the meeting is to present the following:
• Final Well Design.
• Specific concerns and critical success factors.
• Drilling Optimisation Plan.
• Blow-out Contingency Plan.
• Emergency Response Plan.
• Oil-spill Contingency Plan.
• Hazard Assessment.
• Environmental Impact Assessment.
• Well objectives, predicted section, time depth curve and incentive curve.
• Potential technical hazards and controls.
• HSE risks and controls.
2.2.3.32 Supervise Drilling Operations

The drilling operations shall be supervised in accordance with:


! DEM, Chapter 3, Implementation.
" Drilling Operations Manual.

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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2.3 DEVELOPMENT WELL PLANNING


2.3.1 Introduction

Development well planning is required for two types of field development:


Green Field Developments

Green field developments are new fields which have been declared as commercial
propositions following exploration and appraisal. The main features of a green filed
development
At the beginning of each green field development a multi-disciplinary Project Team is
established under the leadership of a Project Manager. The Project Team exists within the
Development Division with the Project Manager reporting to the General Manager. The
Project Team includes representatives from all relevant technical disciplines who are
appointed by their respective departmental managers.
In the early stages of the conceptual phase, drilling input is provided by a Senior Drilling
Engineer appointed as Drilling Representative to the Project Team. As the workload
increases, a Drilling Team is created by the Drilling Manager. The drilling team is led by
the Drilling Team Leader (DTL) who reports to the Project Manager. Within the Project
Team, the Drilling Team works in close liaison with the petroleum engineering
representatives on well planning and with the design and construction representatives on
facilities.
Although the Drilling Team members are primarily responsible to the Project Team, the
Drilling Department provides supporting services and has a QA/QC role through reviews
and audits.
The objectives of the Project Team, and hence the Drilling Team, are to optimise data
gathering and interpretation, apply the correct technology with balanced risk management
to minimise technical unit cost and well intervention, while maximising potential well
productivity. This will assist in the objective of planning and designing wells that meet
Customer requirements, to provide maximum hydrocarbon recovery for the lowest possible
cost for the well’s life cycle, while ensuring technical feasibility with due consideration on
technical risks, without compromising health, safety and the environment.
Brown Field Developments

A brown field development is an upgrade of an existing field which is carried out under the
control of the Asset Manager. The schedule of events is similar to that for a green field
development, although the amount and type of work will depend on the upgrade
requirements. In some cases there may be no drilling input to the upgrade. Where a drilling
input is required, a similar team will be formed to that for a green field development and
the planning requirements will be similar.
Typical requirements for brown field upgrades are infill drilling, sidetracking,
recompletion, well repair, additional perforations, stimulation, acidizing and abandonment.

DRILLING DEPARTMENT
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DEM 2

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2.3.2 Activity Flow Chart

DEM 2.3
DEVELOPMENT WELL PLANNING
(Sheet 1)
Activities Petronas GM Customer DDR DT Related Activities
/Project
1. Identify Requirement for
Drilling Input to Planning Start
Process.
2. Nominate Drilling
Representative.

3. Prepare Basis for Drilling


Plan.
No
4. Approve Basis for Drilling
Plan.

5. Prepare Drilling Project


Execution Plan & Schedule.
No
6. Approve Drilling Project
Execution Plan & Schedule.

INPUT TO CONCEPTUAL PHASE


7. Create Drilling Team.

8. Attend Kick-off Meeting.

9. Review Lessons Learned.

10. Prepare Conceptual Well


WDM
Design Options.

11. Prepare Conceptual Well


No DEM 2.5
Design Cost Estimates.

12. Select and Approve Most


Economic Option.

13. Site Specific Survey.

14. Prepare Detailed Well


WDM
Designs.

15. Prepare Detailed Well


No DEM 2.5
Design Cost Estimates.

16. Approve Detailed Well


Designs.
17. Input to Drilling Sequence
and Master Integrated
INPUT TO FIELD DEVELOPMENT PLAN

Sequence.
18. Initiate Tendering for Long
DEM 2.6
Lead Items.
19. Prepare Hazard Assessment
and Environmental Impact
Assessment.
No
20. Approve Hazard Assessment
and Environmental Impact
Assessment.
21. Prepare Site-specific HSE
Documents.

Continued on Sheet 2 Sht 2

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 5, Development Well Planning Activity Flow Chart (Sheet 1)

DRILLING DEPARTMENT
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DEM 2.3
DEVELOPMENT WELL PLANNING
(Sheet 2)
Customer
Activities Petronas GM /Project DDR DT Related Activities

Continued from Sheet 1 Sht 1

22. Prepare Final Well


WDM
Designs.

23. Prepare Final Well Design


No DEM 2.5
Cost Estimates.

24. Approve Final Well


Designs.

INPUT TO NOOP
25. Prepare Authorisation for
DEM 2.7
Expenditure.
No
26. Approve Authorisation for
Expenditure.

27. Initiate Tendering for


DEM 2.6
Remaining Items.
28. Check Drilling Sequence
and Master Integrated
Sequence.
29. Prepare Notice of
DEM 2.8
Operation.
No
30. Approve Notice of
Operation.

31. Prepare Drilling


Optimisation Plan.
32. Check Delivery of Rig,
PRE-OPERATIONS

Services, Equipment and


Materials.

33. Hold Rig Move Meeting.

34. Hold Pre-spud Meeting.

35. Supervise Drilling


Finish DEM 3
Operations.

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 6, Development Well Planning Activity Flow Chart (Sheet 2)


2.3.3 Activity Descriptions

2.3.3.1 Identify Requirement for Drilling Input to Planning Process

Drilling input to the planning process is essential in the conceptual phase when drilling
expertise is required by the Customer.
It is important that Drilling are involved as early as possible in any field planning process
to ensure that the development options and reservoir drainage points take advantage of the
most efficient methods of drilling.

DRILLING DEPARTMENT
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2.3.3.2 Nominate Drilling Representative

A Senior Drilling Engineer shall be appointed from within the Drilling Department as
drilling representative to be responsible for drilling input to the conceptual well planning
and design process.
2.3.3.3 Prepare Basis for Drilling Plan

The purpose of the Basis for Drilling Plan (BDP) is to establish objectives, evaluation
requirements and design criteria based upon the information available from the Customer.
The SDE shall prepare the BDP on the BDP form. Refer to:
! DEM, Chapter 2.2.9.1, Basis for Drilling Plan Form.
The BDP should be accompanied by a Well Data Sheet for each well. Well Data Sheets
provide a comprehensive record of the well design as it progresses from conceptual,
through detailed design to final well design.
The SDE shall liaise closely with the Customer to review the available information and
ensure that there is sufficient detailed material to enable the BDP to be prepared. The
review shall be an ongoing two-way process to ensure that the necessary data is obtained
for the BDP prior to proceeding with the Conceptual Well Design.

It is essential that the Drilling Representative has all the required


information and that the objectives are fully understood and
agreed prior to commencement of the design. Failure to obtain
all the required data or to fully understand the Customer goals
and specifications may result in extensive re-work of the design.

Delays in the well planning activity caused by Customer failure to supply the required data
shall be reported to the Drilling Manager for appropriate action.
Any subsequent changes to a BDP, either by the Customer or Drilling Department, shall be
discussed at the earliest opportunity, documented on the relevant BDP form and approved
by the Customer and Drilling Manager.
2.3.3.4 Approve Basis for Drilling Plan

When completed, the BDP shall be reviewed and endorsed by the Drilling Manager and
approved by the Customer before commencing the Drilling Project Execution Plan and
Schedule. The purpose of this review is to ensure that the customer objectives have all been
addressed, thus ensuring an accurate, cost effective and fit for purpose design.

DRILLING DEPARTMENT
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DEM 2

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2.3.3.5 Prepare Drilling Project Execution Plan and Schedule

Within 10 days of approval of the BDP, the SDE shall prepare a Drilling Project Execution
Plan and Schedule. Refer to:
! DEM, Chapter 2.2.9.2, Drilling Project Execution Plan and Schedule Form.
The purpose of this plan is to ensure that all material, equipment, financial and human
resource requirements and availability are addressed and that critical timings are
highlighted. The schedule timings shall be a formal submission in the form of a bar chart
based on the timings shown in the following diagram:
CONCEPTUAL PHASE DEVELOPMENT PHASE

Budget Project FDP NOOP


approval approval approval submission

SPUD
WELL

N
Feasibility.
Contracts and materials. O
Evaluate options. FDP preparation. Development drilling
NOOP preparation. O
Project economics.
P
Basis for Well Design. Detailed Hazard assessment .
Drilling Project Execution Plan. Well Design. SIPROD.
Conceptual Well Design. Environmental Impact
Assessment.

12 months 6 months 9 months (min) 1m

Figure 7, Drilling Project Execution Schedule


2.3.3.6 Approve Drilling Project Execution Plan and Schedule

On completion, the Drilling Project Execution Plan and Schedule shall be reviewed and
endorsed by the Drilling Manager and approved by the Customer. This approval is the
agreement between Drilling and the Customer on the terms and scope of the project.
2.3.3.7 Create Drilling Team

As the workload increases on the conceptual phase, the Drilling Manager shall assign
additional drilling personnel to form a Drilling Team (DT). The DT shall be responsible for
all drilling input to the development well planning and design process.

DRILLING DEPARTMENT
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2.3.3.8 Attend Kick-off Meeting

The DT shall attend a Drilling Team Kick-off Meeting for briefing on the conceptual
design requirements. The briefing shall be given by the Drilling Manager and the Project
Manager. The objective is to set the terms of reference for the conceptual design, assign
roles and responsibilities, review the available information and define the scope of work.
2.3.3.9 Review Lessons Learned

The DT shall review the Lessons Learned during the planning and design of previous wells
in order to identify improvements for the current design. In particular, past performance
and HSE incidents shall be fully analysed and addressed in the current design. This task is
very important as it closes the feedback loop in the management system. Refer to:
" Lessons Learned.
2.3.3.10 Prepare Conceptual Well Design Options

The objective of the conceptual well design is to prepare design options for ranking and
selection of the most economical option. This process is illustrated in:
! DEM, Chapter 2.2.3.10, Figure 4, Conceptual Design Overview.
The conceptual well design options are prepared by a multi-disciplinary team which
includes representatives from drilling, petroleum engineering, design, construction and
operations. During the ranking process the conceptual well designs are considered along
with other aspects of the field concept such as the number of platforms and the type of
facilities.
The conceptual well design options shall be prepared by the DT in accordance with:
" Well Design Manual.
2.3.3.11 Prepare Conceptual Well Design Cost Estimates

For each of the options identified, the DT shall prepare a cost estimate to facilitate
economic screening using up-to-date cost information. All assumptions used in the
preparation of the estimate shall be documented. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.
2.3.3.12 Select and Approve Most Economic Option

The conceptual well design options and cost estimates shall be presented to the Drilling
Manager and the Customer for endorsement, and to the General Manager for selection and
approval of the most economic option. The selected option becomes part of the Design
Base Memorandum which forms the basis for field development planning. For details of
the presentation requirements refer to:
! DEM, Chapter 2.2.3.12.

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2.3.3.13 Site Specific Survey

The DT shall arrange for a site specific survey to be carried out in accordance with:
" Site Specific Survey Requirements for Drilling Locations.
The site specific survey is arranged in order to assess the suitability of a particular site to
accommodate a specific type of drilling rig. The survey ensures that the selected location
meets the safety requirements for a drilling rig to approach, take up position and carry out
drilling operations at the location.
2.3.3.14 Prepare Detailed Well Designs

The detailed well design (DWD) consolidates the results of the optimisation studies of the
multi-disciplinary team and the development strategy decided in the conceptual design
phase. The DWD is prepared as part of the Field Development Plan (FDP) for Company
and Government approval. The casing scheme and rig type chosen are specified in the
DWD for tendering of rig and service contracts.
The first objective of the detailed well design is to complete the casing design so that the
tendering process for long lead items can be commenced. In the event that lead times for
contracting rig and procuring materials are critical, early approval for detailed well design,
prior to FDP approval, may be necessary.
When notification is received to proceed with the FDP, the DT prepares a DWD for each
well in accordance with:
" Well Design Manual.
In the preparation of the DWD, the DT shall pay particular attention to the following:
• Ensure potential problems and contingencies are addressed.
• All HSE issues have been addressed.
• Customer objectives detailed in the BDP are met.
• The DWD conforms to all relevant standards and policies.
• Design integrity is incorporated.
• The well design is fit-for-purpose and cost effective.

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During the course of the detailed well design the points outlined below shall be taken into
account at all stages. These points shall also be reviewed at the mid-point of the design
process and immediately prior to submission for approval.
• Summarise progress of project, highlighting milestones achieved in the Project
Team, forward planning and timing. Review project schedule including hold points
and milestones.
• Highlight areas of concern, outstanding studies, pending decisions, potential for
scope change, project timing.
• Requirement for early approvals for tendering contracts and procuring materials.
• Comparison of well design options chosen and discarded.
• Prepare basis for minimum cost well (the cheapest possible well design assuming the
slimmest design and minimal scope perceived by drilling). This can be used to
demonstrate to the Customer the cheapest option and the additional cost of their
requested scope.
• Justification for the proposed well design option stating technical, economic and
Company resource factors.
• Highlight potential for improvement applying relevant technology and procedures.
Check that input from contractors and suppliers has been incorporated. Check if
studies, research or development are required to implement new technology.
• Specify the amount of standardisation achieved on hole sizes, casing and completion
items.
• Quantify assessment of risks for shallow gas, highest hydrocarbon, overpressure,
omitting intermediate casing strings, formation stability and amount of contingency
envisaged. Compare risks with anticipated cost savings.
• Ensure Customer requirements and scope are being met, including reservoir
management, ultimate recovery and formation evaluation, in order to reduce
operational risks and costs.
• Identify and assess viable techniques to ensure expected quality can be assured in
areas where success is critical. For example, landing well in target area, minimisation
of formation damage, production of good quality logs, achievement of zonal
isolation, and pressure integrity of completion. Ensure that the well and completion
design optimise intervention costs and risks of early workovers. Ensure that the
design and material selection match the anticipated well life.
• Outline the procurement strategies including the scope for partnering, quality and
performance incentives. Ensure that the contractors are invited to contribute to the
design, performance optimisation, execution plan and procedures. Ensure that time is
available for tendering for services and that the required rig will be available. Check
the rig rate, deadlines for awarding rig contract and procurement of long lead items.
• Ensure that there are adequate plans for simultaneous operations and that conflict
with construction activities is minimised.

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2.3.3.15 Prepare Detailed Well Design Cost Estimates

The DT shall prepare a cost estimate for each well to facilitate economic screening using
up-to-date cost information. All assumptions used in the preparation of the estimates shall
be documented. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.
2.3.3.16 Approve Detailed Well Designs

The DT shall submit the detailed well design and cost estimate to the Drilling Manager and
Customer for endorsement, and to the General Manager for approval. All endorsements
and approvals shall comply with:
" Limits of Authority.
2.3.3.17 Input to Drilling Sequence and Master Integrated Sequence

The DT shall review the Drilling Sequence and the Master Integrated Sequence (MIS) in
conjunction with CPL. The objective is to establish the availability of a suitable period for
drilling with a rig that is already on contract. If a space is not available in the sequence, the
economics of drilling with an alternative rig should be considered.
The availability of a suitable drilling rig, whether one is already on contract or not, is one
of the most problematic concerns in planning drilling activities. Rig availability and the
effect on timing and economics can mean the difference between success and failure for
any particular well. Therefore, this stage of the planning process is one of the most difficult
and one of the most important that the Drilling Team will encounter.
2.3.3.18 Initiate Tendering for Long Lead Items

Immediately the detailed well design is approved, the DT shall initiate the tendering
process for casing, for other long lead items and, if necessary, for the drilling rig. If a
drilling rig is to be contracted at this stage, the specifications for it shall be fit for purpose.
The objective of early tendering is to ensure the availability of casing and other long lead
items, to avoid delays and having to pay premium prices at a later date to ensure
availability. Refer to:
! DEM, Chapter 2.2.6, Tendering and Contract Management.
Note: Material selection and delivery time are greatly increased if there is a corrosive
condition to be considered.
2.3.3.19 Prepare Hazard Assessment and Environmental Impact Assessment

The DT shall prepare a hazard assessment using the Well Design Hazard Assessment form
as a guide. This should take the from of a brainstorming session where various scenarios
are tabled and the results and controls discussed. This will ensure that all risks are
acceptable and controls are built into the design. Refer to:
! DEM, Chapter 2.2.9.3, Well Design Hazard Assessment Form.

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The DT shall prepare input to an Environmental Impact Assessment (EIA). The EIA is
written to assess the environmental impact to the air, water and soil caused by the activities
in each phase of a field development. The main concerns in a drilling project are the type of
mud, the disposal of mud and the disposal of cuttings. The EIA shall be prepared in
accordance with:
" The Handbook of EIA Guidelines (Malaysian Department of the Environment).
2.3.3.20 Approve Hazard Assessment and Environmental Impact Assessment

The Hazard Assessment and EIA shall be reviewed and endorsed by the Drilling Manager,
and approved by the Project Manager. This endorsement signifies management acceptance
that risks have been identified and addressed. Further action required as a result of the
assessments shall be documented in order to ensure proper tracking and close out.
2.3.3.21 Prepare Site-specific HSE Documents

The DT shall prepare the following site-specific HSE documents:


• Simultaneous Production and Drilling Document (SIPROD).
• Blow-out Contingency Plan.
• Emergency Response Plan.
• Oil-spill Contingency Plan.
" Emergency Response Plan Manual.
2.3.3.22 Prepare Final Well Designs

The final well design optimises well trajectories, bit and hydraulics programmes, and mud
and cement formulations. Formation evaluation requirements, specific procedures and
completion diagrams are also specified. At this stage the casing design will only require
fine tuning. The purpose of this task is to translate the detailed design into a set of
instructions to enable the operations personnel to construct each individual well on the
development. At this time consideration may also be given to preparing a specific field
operations manual.
The DT shall prepare a Final Well Design for each well in accordance with:
" Well Design Manual.
2.3.3.23 Prepare Final Well Design Cost Estimates

A minimum of two months before spud, the DT shall prepare a cost estimate for each well
to facilitate economic screening using up-to-date cost information. All assumptions used in
the preparation of the estimates shall be documented. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.

DRILLING DEPARTMENT
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DEM 2

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2.3.3.24 Approve Final Well Designs

On satisfactory completion, the DT shall obtain endorsement of the final well designs and
the cost estimates from the Drilling Manager and approval from the Project Manager.
The DT shall modify the Final Well Design and the cost estimate as required until approval
is given by all signatories.
2.3.3.25 Prepare Authorisation for Expenditure

The DT shall prepare the Authorisation for Expenditure (AFE) in accordance with:
! DEM, Chapter 2,2.7, Authorisation for Expenditure.
2.3.3.26 Approve Authorisation for Expenditure

The DT shall submit the AFE to the Drilling Manager and the Project Manager for
endorsement, and to the General Manger for approval. All endorsements and approvals
shall comply with:
" Limits of Authority.
2.3.3.27 Initiate Tendering for Remaining Items

Immediately the Final Well Design is finalised, the DT shall initiate the contract tendering
process for all outstanding services, equipment and materials in accordance with:
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.3.3.28 Check Drilling Sequence and Master Integrated Sequence

The DT shall check the Drilling Sequence and the Master Integrated Sequence to ensure
that there is no conflict between the timing of drilling activities and other scheduled
activities.
" Drilling Sequence.
" Master Integrated Sequence.
2.3.3.29 Prepare Notice of Operation

A minimum of one month before spud, the DT shall prepare the Notice of Operation
(NOOP) in accordance with:
! DEM, Chapter 2.2.8, Notice of Operation.
2.3.3.30 Approve Notice of Operation

The DT shall submit the NOOP to the Project Manager and the General Manager for
endorsement and to Petronas for approval. Endorsements shall comply with:
" Limits of Authority.

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DEM 2

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2.3.3.31 Prepare Drilling Optimisation Plan

In the final lead up to spud, the DT shall prepare a Drilling Optimisation Plan in full
consultation with the suppliers and contractors. The purpose of this is to ensure that all
Carigali/Contractor interfaces are fully addressed prior to the pre-spud meeting and that
logistics and other critical aspects of the operation are fine tuned.
2.3.3.32 Check Delivery of Rig, Services, Equipment and Materials

The DT shall monitor the availability of the drilling rig and make a final check to ensure
that all services, equipment and materials are available or that alternatives have been
resourced.
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.3.3.33 Hold Rig Move Meeting

A rig move meeting shall be held a minimum of one month prior to each rig move. The
purpose of the meeting is to address the following issues and ensure that the necessary
preparations are in hand:
• HSE.
• Logistics.
• Marine operations.
• Mobilisation of equipment and materials.
The meeting shall be attended by representatives of:
• The Customer.
• The drilling team.
• The drilling contractor.
• Service contractors.
• Marine/supply coordinator.
• The production, XGT, logistics and HSE departments.
The following topics shall be reviewed and discussed at the meeting:
• Requirements for tugs, anchor handling vessels, positioning vessels.
• Anchor pattern.
• Loading of casing and bulk materials.
• Approach and anchoring procedure prepared by the drilling contractor.
• Special positioning navigation equipment requirements proposed by XGT
department.
• Special equipment requirements (piggy backs, etc).
• Timing and coordination of resources.
• SIPROD requirements.
• Customs and immigration requirements (if any).
• Communications equipment.

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For a new rig the following shall also be discussed:


• Compliance with HSE requirements based on the audit action points.
• Inventory and stocktaking.
• Contractual matters outstanding.
• Familiarisation with Carigali rig move requirements.
2.3.3.34 Hold Pre-spud Meeting

The DT shall prepare a pre-spud presentation for the following personnel:


• Project Manager.
• Drilling Manager.
• Drilling Team.
• Rig Superintendent.
• Drilling Supervisor.
• Contractors.
• Suppliers.
The objective of the meeting is to present the following:
• Final Well Designs.
• Specific concerns and critical success factors.
• Drilling Optimisation Plan.
• Simultaneous Production and Drilling Document (SIPROD).
• Blow-out Contingency Plan.
• Emergency Response Plan.
• Oil-spill Contingency Plan.
• Hazard Assessment.
• Environmental Impact Assessment.
• Well objectives, predicted section, time depth curve and incentive curve.
• Potential technical hazards and controls.
• HSE risks and controls.
2.3.3.35 Supervise Drilling Operations

The drilling operations shall be supervised in accordance with:


! DEM, Chapter 3, Implementation.
" Drilling Operations Manual.

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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2.4 COMPLETION/WORKOVER PROGRAMME PLANNING


2.4.1 Introduction

Notification of the requirement for a completion/workover programme originates from the


Petroleum Engineering Department. Drilling input to the programme is provided by a team
of drilling engineers appointed by the Drilling Manager.
The objectives of the team are to ensure that planning, execution, evaluation and review of
all activities is carried out in a structured and comprehensive manner which considers all
technical and commercial aspects in compliance with established policies, in order to
optimise the production of hydrocarbons at the lowest possible cost.
The team members must ensure that completion/workover programme planning is carried
out in accordance with the process illustrated in the following activity flow chart and
accompanying description.

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2.4.2 Activity Flow Chart

DEM 2.4 COMPLETION/WORKOVER


(Sheet 1) PROGRAMME PLANNING
Activities Petronas GM Customer DDR DT Related Activities
1. Identify Requirement for
Drilling Input to Planning Start
Process.

2. Create Drilling Team.

3. Attend Kick-off Meeting.

4. Review Lessons Learned.

5. Prepare Basis for


Completion/Workover
Programme.
No
6. Approve Basis for
Completion/Workover
Programme.

7. Site Specific Survey.

8. Prepare Drilling Project


Execution Plan and
Schedule.
No
9. Approve Drilling Project
Execution Plan and
Schedule.
10. Prepare Detailed
Completion/Workover
Programme Design.
11. Prepare Detailed Completion/
Workover Programme Design No DEM 2.5
Cost Estimate.
12. Approve Detailed
Completion/Workover
Programme Design.
13. Prepare Hazard Assessment
and Environmental Impact
Assessment.
No
14. Approve Hazard Assessment
and Environmental Impact
Assessment.
15. Prepare Site-specific HSE
Documents.

Continued on Sheet 2 Sht 2

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 8, Completion/Workover Programme Planning Activity Flow Chart (Sheet 1)

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DEM 2

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DEM 2.4 COMPLETION/WORKOVER


(Sheet 2) PROGRAMME PLANNING
Activities Petronas GM Customer DDR DT Related Activities

Continued from Sheet 1 Sht 1

16. Prepare Authorisation for


DEM 2.7
Expenditure.
No
17. Approve Authorisation for
Expenditure.
18. Initiate Tendering for Rig,
Services, Equipment and DEM 2.6
Materials.
19. Check Drilling Sequence
and Master Integrated
Sequence.
20. Prepare Notice of
DEM 2.8
Operation.
No
21. Approve Notice of
Operation.
22. Check Delivery of Rig,
Services, Equipment and
Materials.

23. Hold Rig Move Meeting.

24. Hold Pre-operations


Meeting.

25. Supervise Drilling


Finish DEM 3
Operations.

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 9, Completion/Workover Programme Planning Activity Flow Chart (Sheet 2)


2.4.3 Activity Descriptions

2.4.3.1 Identify Requirement for Drilling Input to Planning Process

Drilling input to the planning process is required in the early stages of the conceptual phase
when drilling expertise is required by Petroleum Engineering (the Customer).
2.4.3.2 Create Drilling Team

The Drilling Manager shall assign drilling personnel to a Drilling Team (DT) which shall
be responsible for all drilling input to the completion/workover programme design process.

DRILLING DEPARTMENT
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2.4.3.3 Attend Kick-off Meeting

The DT shall attend a Kick-off Meeting for briefing on the completion/workover


programme design requirements. The briefing shall be given by the Drilling Manager and
the Customer. The objective is to set the terms of reference for the completion/workover
programme design, assign roles and responsibilities, review the available information and
define the scope of work.
2.4.3.4 Review Lessons Learned

The DT shall review the Lessons Learned during the planning and design of previous
completion/workover programmes in order to identify improvements for the current design.
In particular, all HSE incidents shall be fully analysed and addressed in the current design.
This task is very important as it closes the feedback loop in the management system. Refer
to:
" Lessons Learned.
2.4.3.5 Prepare Basis for Completion/Workover Programme

The purpose of the Basis for Completion/Workover Programme (BCWP) is to establish


objectives, evaluation requirements and design criteria based upon the information
available from the Customer.
The DT shall prepare the BCWP on the following form:
! DEM, Chapter 2.2.9.4, Basis for Completion/Workover Programme Form.
The DT shall liaise closely with the Customer to review the available information and
ensure that there is sufficient detailed material to enable the BCWP to be prepared. The
review shall be an ongoing two-way process to ensure that the necessary data is obtained
for the BCWP prior to proceeding with the completion/workover programme design.

It is essential that the Drilling Team has all the required information and that the
objectives are fully understood and agreed prior to commencement of the design.
Failure to obtain all the required data or to fully understand the Customer goals
and specifications may result in extensive re-work of the design.

Delays in the programme design activity caused by Customer failure to supply the required
data shall be reported to the Drilling Manager for appropriate action.
Any subsequent changes to a BCWP, either by the Customer or Drilling Department, shall
be discussed at the earliest opportunity, documented on the relevant BCWP form and
approved by the Customer and Drilling Manager.

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2.4.3.6 Approve Basis for Completion/Workover Programme

When completed, the BCWP shall be reviewed and endorsed by the Drilling Manager and
approved by the Customer before commencing the Drilling Project Execution Plan and
Schedule. The purpose of this review is to ensure that the customer objectives have all been
addressed, thus ensuring an accurate, cost effective and fit for purpose design.
2.4.3.7 Site Specific Survey

The DT shall arrange for a site specific survey to be carried out in accordance with:
" Site Specific Survey Requirements for Drilling Locations.
The site specific survey is arranged in order to assess the suitability of a particular site to
accommodate a specific type of drilling rig or tender. The survey ensures that the selected
location meets the safety requirements for the rig or tender to approach, take up position
and carry out drilling operations at the location.
2.4.3.8 Prepare Drilling Project Execution Plan and Schedule

Within 10 days of approval of the BCWP, the DT shall prepare a Drilling Project
Execution Plan and Schedule. Refer to:
! DEM, Chapter 2.2.9.2, Drilling Project Execution Plan and Schedule Form.
The purpose of this plan is to ensure that all material, equipment, financial and human
resource requirements and availability are addressed and that critical timings are
highlighted. The schedule timings shall be a formal submission in the form of a bar chart.
2.4.3.9 Approve Drilling Project Execution Plan and Schedule

On completion, the Drilling Project Execution Plan and Schedule shall be reviewed and
endorsed by the Drilling Manager and approved by the Customer. This approval is the
agreement between Drilling and the Customer on the terms and scope of the project.
2.4.3.10 Prepare Detailed Completion/Workover Programme Design

The detailed programme design is prepared for Company and Government approval and
the design details are specified in the tendering and contracting process. The Detailed
Completion/Workover Programme Design is prepared by the DT and the Customer. In the
preparation of the detailed programme, the DT and the Customer shall pay particular
attention to the following:
• Ensure potential problems and contingencies are addressed.
• All HSE issues have been addressed.
• Customer objectives detailed in the BCWP are met.
• The programme design conforms to all relevant standards and policies.
• Design integrity is incorporated.
• The programme design is fit-for-purpose and cost effective.

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The following options and considerations shall be addressed during the programme design:
• Add on slots.
• Add on structures.
• Extended reach wells.
• Subsea wells tired back to platform.
• Multi lateral wells.
• Recompletions.
• Conventional sidetracks.
2.4.3.11 Prepare Detailed Completion/Workover Programme Design Cost Estimate

The DT and the Customer shall prepare a cost estimate to facilitate economic screening
using up-to-date cost information. All assumptions used in the preparation of the estimate
shall be documented. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.
2.4.3.12 Approve Detailed Completion/Workover Programme Design

The DT and the Customer shall submit the detailed completion/workover programme
design and cost estimate to the Drilling Manager for endorsement, and to the General
Manager for approval. All endorsements and approvals shall comply with:
" Limits of Authority.
2.4.3.13 Prepare Hazard Assessment and Environmental Impact Assessment

The DT shall prepare a hazard assessment using the Well Design Hazard Assessment form
as a guide. This should take the from of a brainstorming session where various scenarios
are tabled and the results and controls discussed. This will ensure that all risks are
acceptable and controls are built into the design. Refer to:
! DEM, Chapter 2.2.9.3, Well Design Hazard Assessment Form.
The DT shall prepare input to an Environmental Impact Assessment (EIA). The EIA is
written to assess the environmental impact to the air, water and soil caused by the planned
activities. The main concerns in a drilling project are the type of mud, disposal of mud and
the disposal of cuttings. The EIA shall be prepared in accordance with:
" The Handbook of EIA Guidelines (Malaysian Department of the Environment).
2.4.3.14 Approve Hazard Assessment and Environmental Impact Assessment

The Hazard Assessment and EIA shall be reviewed and endorsed by the Drilling Manager,
and approved by the Customer. This endorsement signifies management acceptance that
risks have been identified and addressed. Further action required as a result of the
assessments shall be documented in order to ensure proper tracking and close out.

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2.4.3.15 Prepare Site-specific HSE Documents

The DT shall prepare the following site-specific HSE documents:


• Simultaneous Production and Drilling Document (SIPROD).
• Blow-out Contingency Plan.
• Emergency Response Plan.
• Oil-spill Contingency Plan.
" Emergency Response Plan Manual.
2.4.3.16 Prepare Authorisation for Expenditure

The DT shall prepare the Authorisation for Expenditure (AFE) in accordance with:
! DEM, Chapter 2,2.7, Authorisation for Expenditure.
2.4.3.17 Approve Authorisation for Expenditure

The DT shall submit the AFE to the Drilling Manager and the Customer for endorsement,
and to the General Manger for approval. All endorsements and approvals shall comply
with:
" Limits of Authority.
2.4.3.18 Initiate Tendering for Rig, Services, Equipment and Materials

Immediately the completion/workover programme design is finalised, the DT shall initiate


the contract tendering process, where required, for the drilling rig, services, equipment and
materials in accordance with:
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.4.3.19 Check Drilling Sequence and Master Integrated Sequence

The DT shall check the Drilling Sequence and the Master Integrated Sequence to ensure
that there is no conflict between the completion/workover programme and other scheduled
activities.
" Drilling Sequence.
" Master Integrated Sequence.
2.4.3.20 Prepare Notice of Operation

A minimum of one month before operations are due to commence, the DT shall prepare the
Notice of Operation (NOOP) in accordance with:
! DEM, Chapter 2.2.8, Notice of Operation.

DRILLING DEPARTMENT
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2.4.3.21 Approve Notice of Operation

The DT shall submit the NOOP to the Customer and the General Manager for endorsement
and to Petronas for approval. Endorsements shall comply with:
" Limits of Authority.
2.4.3.22 Prepare Drilling Optimisation Plan

In the final lead up to operations, the DT shall prepare a Drilling Optimisation Plan in full
consultation with the suppliers and contractors. The purpose of this is to ensure that all
Carigali/Contractor interfaces are fully addressed prior to the pre-operations meeting and
that logistics and other critical aspects of the operation are fine tuned.
2.4.3.23 Check Delivery of Rig, Services, Equipment and Materials

The DT shall monitor the availability of the drilling rig and make a final check to ensure
that all services, equipment and materials are available or that alternatives have been
resourced.
! DEM, Chapter 2.2.6, Tendering and Contract Management.
2.4.3.24 Hold Rig Move Meeting

A rig move meeting shall be held a minimum of one month prior to each rig move. The
purpose of the meeting is to address HSE issues and ensure that the necessary preparations
are in hand. The meeting shall be attended by representatives of:
• The Customer.
• The drilling team.
• The drilling contractor.
• The boat company.
• The production, construction, XGT, logistics and HSE departments.
The meeting shall discuss the following:
• Platform status and any shutdown requirements.
• Approach and anchoring procedure prepared by the drilling contractor.
• Special positioning navigation equipment requirements proposed by XGT
department.
• Special equipment requirements (piggy backs, etc).
• Timing and coordination of resources.
For a new rig the following shall also be discussed:
• Compliance with HSE requirements based on the audit action points.
• Inventory and stocktaking.
• Contractual matters outstanding.
• Familiarisation with Carigali rig move requirements.

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2.4.3.25 Hold Pre-operations Meeting

The DT shall prepare a pre-operations presentation for the following personnel:


• Customer.
• Drilling Manager.
• Drilling Team.
• Rig Superintendent.
• Drilling Supervisor.
• Contractors.
• Suppliers.
The objective of the meeting is to present the following:
• Completion/Workover Programme.
• Site-specific Drilling Manual.
• Simultaneous Production and Drilling Document (SIPROD).
• Blow-out Contingency Plan.
• Emergency Response Plan.
• Oil-spill Contingency Plan.
• Hazard Assessment.
• Environmental Impact Assessment.
• Potential technical hazards and controls.
• HSE risks and controls.
2.4.3.26 Supervise Drilling Operations

The drilling operations shall be supervised in accordance with:


! DEM, Chapter 3, Implementation.
" Drilling Operations Manual.

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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2.5 BUDGET FORECASTS AND COST CONTROL


2.5.1 Introduction

This procedure defines the tasks and responsibilities necessary for drilling personnel to
prepare drilling cost estimates for various requirements and levels of accuracy.
Drilling cost estimates are required to justify funding of activities and as a means of
establishing a basis for cost control during the various planning processes.
The following procedure shall be applied to ensure consistency of drilling cost estimates
between planning processes and to ensure the necessary level of accuracy required for
drilling planning. All drilling cost estimates shall comply with:
" Limits of Authority.
2.5.2 Activity Flow Chart

BUDGET FORECASTS
DEM 2.5
AND COST CONTROL
Activities Customer DT Related Activities
1. Initiate Requirement for Drilling Cost DEM 2.2
Start DEM 2.3
Estimate. DEM 2.4

2. Establish Drilling Cost Estimate


Accuracy Requirement.

3. Prepare Basis for Drilling Cost Estimate.


No
4. Review and Approve Basis for Drilling
Cost Estimate.

5. Prepare Drilling Cost Estimate.

6. Prepare Drilling Cost Estimate


Summary.
No
7. Review and Endorse Drilling Cost
Estimate Summary.

8. Apply Drilling Cost Estimate to DEM 2.2


Finish DEM 2.3
Appropriate Planning Process. DEM 2.4

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 10, Budget Forecasts and Cost Control Activity Flow Chart

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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2.5.3 Activity Descriptions

2.5.3.1 Initiate Requirement for Drilling Cost Estimate

For each planning process, a drilling cost estimate shall be prepared by the DT at the stages
indicated in the following table:

Stage Exploration Development Completion/


Wells Wells Workover
Programmes
Preparation and selection of conceptual Yes
design options.
Preparation of detailed design. Yes Yes
Preparation of final well design and Yes Yes Yes
Authorisation for Expenditure.
Table 1, Drilling Cost Estimate Requirements
Refer to the following:
! DEM, Chapter 2.2.2, Exploration Well Planning.
! DEM, Chapter 2.2.3, Development Well Planning.
! DEM, Chapter 2.2.4, Completion/Workover Programme Planning.
2.5.3.2 Establish Drilling Cost Estimate Accuracy Requirement

The DT shall establish the accuracy requirement for the drilling cost estimate as follows:

Application Accuracy
Preparation and selection of conceptual design options. (35%)
Preparation of detailed well design. (20%)
Preparation of Authorisation for Expenditure. (10%)
Table 2, Drilling Cost Estimate Accuracy Requirements
2.5.3.3 Prepare Basis for Drilling Cost Estimate

The DT shall prepare a basis for drilling cost estimate using the following form:
! DEM, Chapter 2.2.9.5, Basis for Drilling Cost Estimate.
2.5.3.4 Review and Approve Basis for Drilling Cost Estimate

The Customer shall review the basis for drilling cost estimate and approve it when satisfied
that the scope and accuracy are adequately covered. If these requirements are not met, the
DT shall rework the cost estimate until it is acceptable for approval.

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2.5.3.5 Prepare Drilling Cost Estimate

The DT shall prepare a drilling cost estimate using the following form:
! DEM, Chapter 2.2.9.6, Drilling Cost Estimate.
Where appropriate, the DT shall include an itemised listing under each main heading
shown in the drilling cost estimate summary. Refer to:
! DEM, Chapter 2.2.9.7, Drilling Cost Estimate Summary Form.
The cost estimate shall be based on a combination of the following:
• Current day rate tariff or tariff projections.
• Actual cost of hardware (casing, completions, etc).
• Historical costs for mud, bits, cement, services, etc.
When using historical costs, care must be taken that the wells from which the costs are
taken are recent (ie, less than five years old) and are similar to the well being considered,
particularly with regard to:
• Casing schematic.
• Rig type.
• Mud type.
• Pressure profile.
• Depths.
Estimated costs shall be allocated entirely to one of the following categories or shared
between them as appropriate:
• Dry hole basis.
• Formation evaluation.
• Production testing.
2.5.3.6 Prepare Drilling Cost Estimate Summary

The DT shall prepare a drilling cost estimate summary based on the detailed estimate using
the following form:
! DEM, Chapter 2.2.9.7, Drilling Cost Estimate Summary Form.
2.5.3.7 Review and Endorse Drilling Cost Estimate Summary

The Customer shall review the drilling cost estimate summary and endorse it when
satisfied that all requirements have been met.
2.5.3.8 Apply the Drilling Cost Estimate to Appropriate Planning Process

On completion, the drilling cost estimate is applied to the appropriate planning process.

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
DEM 2

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2.6 TENDERING AND CONTRACT MANAGEMENT


2.6.1 Introduction

Drilling contracts are required for the provision of rigs, services, equipment and materials.
This procedure defines the tasks and responsibilities necessary for drilling personnel
participating in the tendering and contracting process which is owned by Commercial
Procurement Department (exploration wells) and Development Procurement Department
(development wells and completions/workovers).
The objectives of tendering and contracting are to control costs, ensure cost effectiveness,
and reduce business and commercial risks by ensuring that comprehensive terms,
conditions and schedules are specified and agreed.
This procedure shall be applied to ensure that the tendering and contracting processes
conform to Carigali policies and standards and that the following business practices are
applied at all times:
• Impartiality.
• Confidentiality.
• Auditability.
All tendering and contract approvals shall comply with:
" Limits of Authority.
Application of this procedure will ensure that the integrity of the Company and its
employees is preserved, and that the risk of misconduct is minimised.
Requirements for tenders and contracts arise from the exploration, development and
completion/workover planning processes. In the case of exploration wells, smaller
developments and completions/workovers, drilling tendering and contracting is
consolidated under the umbrella principle. The drilling activities are carried out by the
Drilling Department with input from drilling engineers assigned to the various projects.
For some major projects, where the Project Manager has elected that tendering and
contracting shall be carried out by members of the project team on a project specific basis.
The drilling team members shall provide the tendering and contracting input and the
Drilling Department shall provide an advisory role on request together with a QA/QC
function.
It is important to consider the type of contract which will be the most effective in terms of:
• Cost.
• Fit for purpose technology.
• Availability of internal resources.

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The following contract types must be considered:


• Partnering The contractor and company jointly form the project team. The
responsibility for planning and execution is shared.
• Turnkey The contractor assumes all the risk and drills a well to a set of
specifications and QA/QC criteria provided by the company.
• Incentive A win-win situation is developed where the contractor is rewarded in
accordance with an agreed formula.
• Integrated Different services are provided by the same contractor.

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DEM 2

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2.6.2 Activity Flow Chart

DEM 2.6 TENDERING AND CONTRACT MANAGEMENT

Drilling CPM/ GM/


Activities Team DDR TC CFA LCS Petronas Bidders Related Activities
DPM MD

1. Initiate Tendering and Contracting DEM 2.2


Start DEM 2.3
Process. DEM 2.4

2. Specify Requirements.
Note
The process depicted in this activity flow chart applies to planning activities where
3. Consolidate Requirements. drilling contracts are consolidated under the umbrella principle.
Where a contract is specific to a major project, the drilling input is provided by the
4. Pre-qualify Bidders. drilling team members and the role of DDR is reduced to mainly QA/QC and advisory
activities. In these cases, the rest of the process remains the same.
These variations are explained fully in the accompanying description.
5. Prepare Bidders List.

6. Prepare Bid Package.

7. Functional Review Meeting.

8. Technical & Commercial Evaluation


Criteria.

9. Prepare Contracting Strategy.


No
10. Endorse Contracting Strategy (Exp).
Approve Contracting Strategy (Dev).
No

11. Approve Contracting Strategy (Exp). Development Wells Only Exploration Wells Only

12. Dispatch Bid Package to Bidders.

13. Receive Bid Packages.

14. Submit Bid Proposal.

15. Receive Bid Proposal.

16. Technical and Commercial Evaluation


of Bids.
No

17. Make Recommendation for Award.


No

18. Approve Recommendation for Award.

19. Pre-award Meeting.

20. Prepare Letter of Award.

21. Finalise Contract.

22. Review Contract.

23. Contract Signature by Bidder.

24. Contract Signature by Management.

DEM 2.2
25. Distribute Contract. Finish DEM 2.3
DEM 2.4

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 11, Tendering and Contracting Activity Flow Chart

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2.6.3 Activity Descriptions

2.6.3.1 Initiate Tendering and Contracting Process

The tendering and contracting process shall be initiated as a result of one of the following
planning processes:
! DEM, Chapter 2.2.2, Exploration Well Planning.
! DEM, Chapter 2.2.3, Development Well Planning.
! DEM, Chapter 2.2.4, Completion/Workover Programme Planning.
Throughout this process the DT in the drilling team or in the Drilling Contracts Section
shall maintain a record of the progress of each tendering and contracting process on the
following check list:
! DEM, Chapter 2.2.9.8, Tendering and Contracting Check List.
2.6.3.2 Specify Requirements

The DT in the drilling team shall detail the technical specifications for the rig, services,
equipment and materials required on the following form:
" Survey Questionnaire.
The questionnaire shall be obtained from:
• Commercial Procurement Department (CPM) for exploration wells.
• Development Procurement Department (DPM) for development wells and
completions/workovers.
2.6.3.3 Consolidate Requirements

For major projects where the drilling team are carrying out the tendering and contracting
activities, this step shall be omitted.
The Drilling Contracts Section, in conjunction with CPM or DPM as appropriate, shall
consolidate the drilling requirements for all other drilling projects into a small number of
contracts for the provision of rigs, equipment, equipment and materials.
2.6.3.4 Pre-qualify Bidders

Potential bidders shall be pre-qualified by the DT (major projects) or Drilling Contracts


Section (consolidated projects) in conjunction with CPM or DPM as appropriate.
Pre-qualification shall be based on a market survey of potential bidders which, in turn,
shall be based on:
" Quarterly Bidders List.
The Quarterly Bidders List shall be obtained from CPM or DPM as appropriate.

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2.6.3.5 Prepare Bidders List

The DT or the Drilling Contracts Section shall prepare a Bidders List in conjunction with
CPM or DPM. The bidders list shall be based on the pre-qualification exercise above.
2.6.3.6 Prepare Bid Package

The DT or the Drilling Contracts Section shall prepare a Bid Package in conjunction with
CPM or DPM. The Bid Package shall contain:
• Instructions and Information to Bidder.
• Proposal Form.
• Bidder’s Questionnaire.
• Exceptions Form.
• Contract Form.
• Special Provisions and Scope of Work.
• Equipment, Materials, Supplies and Services to be Provided by Contractor.
• Summary of Responsibilities.
• Contract Price and Depreciation Schedule.
• Operations and Applicable Rates.
• Contractor’s Minimum Personnel.
• Requirement and Base Cost.
• Basic Safety Requirement.
• Performance Guarantee Format.
• Bank Guarantee Format.
2.6.3.7 Functional Review Meeting

The DT and the Drilling Contracts Section shall attend a functional review meeting in an
advisory capacity with CPM or DPM, Finance Department (CFA) and Legal Department
(LCS).
2.6.3.8 Technical and Commercial Evaluation Criteria

The DT and the Drilling Contracts Section shall prepare the technical and commercial
evaluation criteria in conjunction with CPM or DPM.
The objective of technical evaluation is to ensure that the technical content of the tender
meets or exceeds the following:
• The specifications contained in the scope of work in the tender document.
• Normal oilfield practice for Malaysia.
• Carigali HSE requirements.
• Petronas PDO requirements.
• Government legislative requirements.

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A checklist shall be prepared which contains the above topics divided into more detailed
categories in relation to the complexity of the well. For example, a drilling rig checklist
would extend to several pages concentrating on equipment, whereas a tender for coring
equipment would concentrate on the quality requirements.
Each item on the checklist should be marked:
• Meets requirements.
• Exceeds requirements.
• Does not meet requirements.
Where any item exceeds the requirements, an assessment should be made on whether it is
worth paying a premium price for this. Drilling engineers must bear in mind that, in
general, items should be fit for purpose unless a clear HSE or technical benefit can be
demonstrated when an item does not meet requirements. An assessment shall be made as to
whether this will affect the overall suitability and is worth considering if a low cost is
obtained.
During the technical evaluation the tenderer shall be required to submit more information if
necessary. All contracts must be made by the commercial departments in accordance with
Carigali procedures.
The output from this task shall be a brief review of each tender discussing where it exceeds
or fall short of requirements and a ranking of the contractors. In making this ranking a
tenderer which exceeds technical requirements should not be placed above one which
meets requirements if it is not worth a premium price.
2.6.3.9 Prepare Tender Committee Submission

The DT and the Drilling Contracts Section shall prepare the Tender Committee Submission
in conjunction with CPM or DPM. The Tender Committee Submission should contain:
• Objective.
• Drilling Programme.
• Drilling Schedule.
• Scope of Work.
• Cost Estimate.
• Procurement Mode.
• Highlights of Bid Document.
• Market Survey Result.
• Summary of Survey Result.
• Recommended Bidders List.
• Procurement Schedule.
• Technical Evaluation Criteria.
• Evaluation Team Members.
• Recommendation.
• Bidders Profile.

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2.6.3.10 Endorse/Approve Tender Committee Submission

For exploration wells CPM shall submit the Tender Committee Submission to the relevant
tender committee for endorsement. For development wells and completions/workovers
DPM shall submit the Tender Committee Submission to the relevant tender committee for
approval. The relevant tender committee is dependent on the value of the tender, refer to
the table below.

Value (MR) Exploration Development


150 thousand to 1 million TC-3 CPTC-3
1 million to 5 million TC-2 CPTC-2
5 million to 15 million TC-1 CPTC-1
>15 million Major Tender Committee (MTC)
Table 3, Tender Committees
Note: In the following procedure, steps 2.2.6.3.11 to 2.2.6.3.15 (shown in Figure 11),
have been omitted as they take place outside the Drilling Department.
2.6.3.16 Technical and Commercial Evaluation of Bids

The DT and the Drilling Contracts Section shall carry out a technical and commercial
evaluation of the bids in conjunction with DPM, CFA and Petronas. The evaluation shall
include a technical inspection of the rig, services, equipment and materials by the DT and
the Drilling Department.
Note: The remaining steps take place outside the Drilling Department. This is part of a
process owned by other departments which does not involve the Drilling
Department, except for step 2.6.3.19 which requires a DT representative and the
Drilling Manager to attend the pre-award meeting to answer any relevant
questions.

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2.7 AUTHORISATION FOR EXPENDITURE


2.7.1 Introduction

This procedure defines the tasks and responsibilities necessary for drilling personnel to
prepare Authorisations for Expenditure (AFEs) for various requirements.
AFEs are the formal means of acquiring funding for drilling activities.
The following procedure shall be applied to ensure the necessary level of accuracy required
by the drilling planning processes and to ensure consistency between them.
Preparation of each AFE is preceded by preparation of a drilling cost estimate within the
relevant planning process. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.
2.7.2 Activity Flow Chart

AUTHORISATION FOR
DEM 2.7
EXPENDITURE
Activities Customer DDR DT Related Activities
DEM 2.2
1. Initiate Requirement for AFE. Start DEM 2.3
DEM 2.4

2. Prepare AFE.

3. Review AFE. No

4. Endorse AFE.
No

5. Review AFE.

6. Approve AFE.

7. Apply AFE to Appropriate Planning DEM 2.2


Finish DEM 2.3
Process. DEM 2.4

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 12, Authorisation for Expenditure Activity Flow Chart

DRILLING DEPARTMENT
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DEM 2

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2.7.3 Activity Descriptions

2.7.3.1 Initiate Requirement for Authorisation for Expenditure

The requirement for an AFE originates from one of the following processes:
! DEM, Chapter 2.2.2, Exploration Well Planning.
! DEM, Chapter 2.2.3, Development Well Planning.
! DEM, Chapter 2.2.4, Completion/Workover Programme Planning.
2.7.3.2 Prepare Authorisation for Expenditure

The DT shall prepare the AFE on the standard form supplied by CFA.
The complete AFE shall consist of the above form together with the approved drilling cost
estimate. Refer to:
! DEM, Chapter 2.2.5, Budget Forecasts and Cost Control.
On completion, the DT shall submit the AFE to the Drilling Manager for review.
2.7.3.3 Review Authorisation for Expenditure

The Drilling Manager shall review the AFE to ensure that the scope and accuracy are
adequately covered. The Drilling Manager shall ensure that the AFE accuracy reflects the
cost estimate which provided the input.
2.7.3.4 Endorse Authorisation for Expenditure

When satisfied that the scope and accuracy are correct, the Drilling Manager shall endorse
the AFE.
On completion of endorsement, the Drilling Manager shall submit the AFE to the
Customer for endorsement. For details of the Customers refer to the table below.

Well Type Customer


Exploration GM (Exploration)
Development (Green Field) GM (Development)
Development (Brown Field) GM (PMO)
Completion/Workover Petroleum Engineering
Table 4, Customers
2.7.3.5 Review Authorisation for Expenditure

The Customer shall review the AFE and approve it when satisfied that all requirements
have been met. The Customer shall return the AFE to the Drilling Manager for amendment
until it is correct and ready for approval.

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2.7.3.6 Approve Authorisation for Expenditure

When satisfied that the scope and accuracy are correct, the Customer shall approve the
AFE.
2.7.3.7 Apply the Authorisation for Expenditure to Appropriate Planning Process

On approval by the Customer, the DT shall apply the AFE to the appropriate planning
process.

DRILLING DEPARTMENT
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DEM 2

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2.8 NOTICE OF OPERATION


2.8.1 Introduction

This procedure defines the tasks and responsibilities necessary for drilling personnel to
prepare a Notice of Operation (NOOP) in order to obtain the regulatory permission for
drilling operations.
The following procedure shall be applied to ensure the necessary level of accuracy required
by the drilling planning processes and to ensure consistency between them.
NOOP preparation is carried out by members of the appropriate drilling team with
assistance from the following personnel as required:
• Petroleum Engineering Department.
• Drilling Department.
2.8.2 Activity Flow Chart

DEM 2.8 NOTICE OF OPERATION

Activities RS DT Related Activities


DEM 2.2
1. Initiate Requirement for NOOP. Start DEM 2.3
DEM 2.4

2. Prepare NOOP.

3. Review NOOP. No

4. Endorse NOOP.

5. Apply NOOP to Appropriate Planning DEM 2.2


Finish DEM 2.3
Process. DEM 2.4

SYMBOLS Entry/Exit Point Task/ Responsibility Decision

Figure 13, Notice of Operation Activity Flow Chart

DRILLING DEPARTMENT
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DEM 2

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2.8.3 Activity Descriptions

2.8.3.1 Initiate Requirement for Notice of Operation

The requirement for a NOOP originates from one of the following processes:
! DEM, Chapter 2.2.2, Exploration Well Planning.
! DEM, Chapter 2.2.3, Development Well Planning.
! DEM, Chapter 2.2.4, Completion/Workover Programme Planning.
2.8.3.2 Prepare Notice of Operation

The DT shall prepare the NOOP using the following as a checklist and guide:
! DEM, Chapter 2.2.9.9, Notice of Operation Cover Sheet.
The contents of the NOOP shall be prepared in accordance with:
" Well Design Manual, Chapter 5, Final Well Design.
" Procedures for Drilling Operations.
The DT shall ensure that the NOOP is completed one month prior to the spud date and that
all the documents listed on the cover sheet are completed and attached.
On completion, the DT shall sign the NOOP and submit it to the Rig Superintendent for
endorsement.
2.8.3.3 Review Notice of Operation

The Rig Superintendent shall review the NOOP and ensure that it is completed one month
prior to the spud date, that all the documents listed on the cover sheet are completed and
attached and that the NOOP complies with:
" Well Design Manual, Chapter 2, Well Design Standards.
" Procedures for Drilling Operations.
If these requirements are not met, the Rig Superintendent shall return the NOOP to the DT
for amendment until it meets the requirements.
2.8.3.4 Endorse Notice of Operation

On completion, the Rig Superintendent shall endorse the NOOP and return it to the DT.
2.8.3.5 Apply the Notice of Operation to the Appropriate Planning Process

The DT shall apply the NOOP to the appropriate planning process.

DRILLING DEPARTMENT
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2.9 FORMS
2.9.1 Basis for Drilling Plan Form

PETRONAS

CARIGALI

BASIS FOR DRILLING PLAN


DRILLING

OBJECTIVES
The purpose of this form is to ensure common understanding of the objectives of the well design and planning processes.
The form shall be completed and approved prior to commencing conceptual well design.

Field name Lithological prognosis

Location Reservoir pressure

Nearest offset wells Reservoir temperature

Type of targets/wells Overpressure

Selective or Plans for horizontal,


commingled drainage multi-lateral wells

Number of drainage TVD/ reach


points

Number of drilling Evaluation


structures requirements

Proposed number of Number of logs


development wells

Required well reach/ Coring/well testing


angle

Zone isolation Types of completions


requirements

Oil gravity Tubing size

Gas gravity Potential hazards

Potential for CO2 Shallow gas


production

Potential for H2S Highest hydrocarbon


production

STAGE SIGNATURE POSITION DATE

Initiated
DT

Endorsed
DDR

Approved
Customer

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2.9.2 Drilling Project Execution Plan and Schedule Form

PETRONAS

CARIGALI
DRILLING PROJECT
EXECUTION PLAN AND SCHEDULE
DRILLING

OBJECTIVES
The purpose of this form is to map the key milestones to be achieved that will ensure successful completion of the well planning and
design process.

Project name

EXECUTION PLAN

Brief description of the


project including summary of
cost estimate, objectives and
priorities.

Roles and responsibilities of


team members, levels of
authority, and interfaces with
Petronas.

Contracting and procurement


strategies.

Monitoring and control of


key aspects including HSE,
hold points, documentation
requirements, audits, reviews
and KPIs.

SCHEDULE

EVENT FORECAST DATE EVENT FORECAST DATE

Project approval NOOP submission

FDP approval Spud first well

STAGE SIGNATURE POSITION DATE

Initiated
DT

Endorsed
DDR

Approved
Customer

DRILLING DEPARTMENT
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DEM 2

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2.9.3 Well Design Hazard Assessment Form

PETRONAS

CARIGALI
WELL DESIGN
HAZARD ASSESSMENT
DRILLING

OBJECTIVES
The purpose of this form is to ensure that potentially hazardous situations are identified and that the necessary controls are in place.

Project name

POTENTIAL HAZARD ASSESSMENT CONTROLS IN PLACE

Shallow gas

Collision potential

Overpressure

H2S

Casing design factors

Kick capacity

Deviations from Carigali


policies and standards

STAGE SIGNATURE POSITION DATE

Initiated
DT

Endorsed
DDR

Approved
Customer

DRILLING DEPARTMENT
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2.9.4 Basis for Completion/Workover Programme Form

PETRONAS

CARIGALI BASIS FOR


COMPLETION/WORKOVER
DRILLING
PROGRAMME

OBJECTIVES
The purpose of this form is to ensure common understanding of the objectives of the completion/workover programme planning
processes.

Well name Current well status

Proposed perforated
interval Brief completion/
workover activity
Reference log description

Sand control
Reservoir properties requirements

Formation Stimulation
requirements

Datum Outflow performance


and desired tubing size

Temperature Artificial lift


requirements
Initial reservoir Downhole pumping
pressure requirements

Initial OWC Zonal isolation

Initial GOR Expected water


production
Current or expected Abandonment criteria
pressure
Current or expected Downhole pressure
OWC monitoring requirement
Current or expected Production logging
GOR requirement

Oil gravity Well performance

Gas gravity Production figures at


end
Oil volume formation Cumulative
factor production

CO2 Current production

H2S Current water


production

Other relevant
information

STAGE SIGNATURE POSITION DATE

Initiated
DT

Endorsed
DDR

Approved
Customer

DRILLING DEPARTMENT
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2.9.5 Basis for Drilling Cost Estimate Form

PETRONAS

CARIGALI
BASIS FOR
DRILLING COST ESTIMATE
DRILLING

OBJECTIVES
The purpose of this form is to summarise the data on which the drilling cost estimate is based.

Well/project name

Reason for estimate

Depth

26in drive pipe (m mddf)

20in casing (m mddf)

13 3/8in casing (m mddf)

9 5/8 casing (m mddf)

7 in liner

Well type (ver or dev)

Dry hole basis (days)

Production tests (days)

Total (days)

Water depth (m)

Rig (jack-up or floating)

Coring required (yes or no)

Liner hanging (yes or no)

Exchange rate (USD : MYR)

STAGE SIGNATURE POSITION DATE

Initiated
DT

Approved
Customer

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD
2.9.6
MANUAL
DRILLING
ENGINEERING

PETRONAS

CARIGALI

DRILLING COST ESTIMATE


DRILLING

Well/project name Reason for estimate Sheet no Date

FORM'N
Drilling Cost Estimate Form

BUDGET COST/UNIT COST/UNIT COST DRY BASIS TESTING TOTAL


ITEM DESCRIPTION UNIT Q'TY EVAL REMARK
REFERENCE (USD) (MYR) (MYR) (MYR '000) (MYR '000) (MYR '000)
(MYR '000)

PETRONAS CARIGALI SDN BHD


DRILLING DEPARTMENT
PLANNING AND SCHEDULING

PROPRIETARY INFORMATION - For Authorised Company Use Only


Issue 1
DEM 2

July 1996
Page 59 of 62
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2.9.7 Drilling Cost Estimate Summary Form

PETRONAS

CARIGALI
DRILLING COST ESTIMATE
SUMMARY
DRILLING

OBJECTIVES
The purpose of this form is to summarise the drilling cost estimate.

Well/project name Reason for estimate

AFE no Accuracy (%) Exchange rate (USD:MYR)

Duration (days) Rig name

BUDGET COST ESTIMATE


NO CATEGORY ITEM DESCRIPTION
REFERENCE (MYR '000)

1. TANGIBLES Tubing
Wellhead
Casing accessories
Completion equipment

2. SUPPLIES Cement
Bits
Fuel, water & lubricant
Other materials & supplies

3. CONTRACTED Rig
SERVICES D/drlg, b/hole, sur & MWD
Mud logging
Electric logging
Cementation services
Mud engineering
Wellhead services
Fishing
Other drilling services
Coring services
Tubular handling
Liner hanging
Weather forecasting
D/string tool rental
Inspection services
Wireline services
Filtration services
Stimulation services

4. ALLOCATED Supply vessels


CHARGES Standby vessels
Supervision
Supply base
Helibase
Communications

5. MISCELLANEOUS Insurance

Total

STAGE SIGNATURE POSITION DATE

Initiated
DT
Endorsed (Exploration)
Approved (Development)
Approved (Comp/workover) Customer

Approved (Exploration)
DDR

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2.9.8 Tendering and Contracting Check List

PETRONAS

CARIGALI
TENDERING & CONTRACTING
CHECK LIST
DRILLING

OBJECTIVES
The purpose of this form is to provide a record of the key steps required for completion of the tendering and contracting process.

Type of Tender/Contract Tender/Contract Name

Exploration Well
Location Tender Number
Development Well

Completion/Workover Initiation Date Contract Number

STAGE REMARKS DATE

Specify Requirements

Consolidate Requirements

Pre-qualify Bidders

Prepare Bidders List

Prepare Bid Package

Functional Review Meeting

Technical & Commercial Evaluation Criteria

Prepare Contracting Strategy

Endorse Contracting Strategy (Exp)

Approve Contracting Strategy (Dev)

Approve Contracting Strategy (Exp)

Dispatch Bid Package to Bidders

Receive Bid Packages

Submit Bid Proposal

Receive Bid Proposal

Technical Evaluation of Bids

Technical Inspection

Technical and Commercial Evaluation of Bid

Make Recommendation for Award

Approve Recommendation for Award

Pre-award Meeting

Prepare Letter of Award

Finalise Contract

Review Contract

Contract Signature by Bidder

Contract Signature by Management

Distribute Contract

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DEM 2

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2.9.9 Notice of Operation Cover Sheet

PETRONAS

CARIGALI

NOTICE OF OPERATION
DRILLING

OBJECTIVES
The purpose of this document is to gain formal approval for intended drilling operations and to provide official notification of the
operations.

Well/project name

CONTENTS

PAGE

1 Well Summary.

2 Formation Tops/Pressure and Mud Weight Prognosis.

3 Mud and Logging Programmes.

4 Casing and Cementing Programme.

ATTACHMENTS

1 Directional Data/Well Path Plot.

2 Completion Programme.

3 Completion Schematic.

4 Depth versus Days Plot.

5 AFE Cost Estimate.

6 Supplementary Requirements/Comments.

7 Related Programme/Procedure References.

8 Well Location Montage.

APPROVALS

STAGE SIGNATURE POSITION DATE

Prepared DT

Endorsed Customer

Endorsed GM

Approved Petronas

DRILLING DEPARTMENT
PETRONAS CARIGALI SDN BHD

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