1. Lloyd’s Register services to the energy industry
GoM Accident and its impact on
Pre-Salt development
Daniel (Danny) Walker
VP Compliance Services
Lloyd’s Register North America Inc.
26th October 2010

2. Lloyd’s Register services to the energy industry
Terms of reference – MONTARA INCIDENT
Uncontrolled release of Hydrocarbons from
the Montara unmanned Wellhead Platform
– Ashmore Cartier region (Timor Sea) 690
miles West of Darwin – August 2009
www.nopsa.gov.au
Initial Investigation findings: Root Cause
Analysis
•Systematic Failure of MANAGEMENT
SYSTEMS
•Non-Compliance with Operational
process’ and procedures

3. Lloyd’s Register services to the energy industry
Terms of reference – DEEPWATER HORIZON
Explosion and Fire on MODU “Deepwater
Horizon” – 60 miles Offshore Louisiana –
April 2010
www.boemre.gov
Initial Investigation findings: POSSIBLE
Root Causes
•Equipment Design/Maintenance
•Operational safety culture
•Procedures and Process training
(Competence)

4. Lloyd’s Register services to the energy industry
Implications for developing Pre-Salt Reserves
• Operators
 Media spotlight
 Loss of reputation and Community trust
 Insurance and liability (unlimited liability)
 Cost increases
 Long term viability for smaller companies
 Minimum standards vs best practice

5. Lloyd’s Register services to the energy industry
WELL INTEGRITY = PRESSURE CONTAINMENT =
BARRIERS
30 CFR PART 250 (OCTOBER 14 2010)

6. Lloyd’s Register services to the energy industry
30 CFR Part 250 – Immediate mandatory changes to
the Prescriptive requirements in the GoM
The Primary purpose of this interim final rule is to clarify and
incorporate safeguards that will decrease the likelihood of a
blowout during drilling operations on the Ouetr Continental Shelf
(OCS)
The interim final rule implements certain safety measures
recommended in the report entitled “Increased Safety Measures
for Energy Development on the OCS” dated May 27 2010.
The Rule becomes effective October 14 2010
Additionally, please refer to the following BOEMRE Factsheets:
The Workplace Safety Rule on Safety and
Environmental Management Systems (SEMS)
The Drilling Safety Rule

7. Lloyd’s Register services to the energy industry
The safeguards address well bore integrity and well control
equipment
1. Establish new casing installation requirements
2. Establish new cementing requirements (Incorporate API RP 65 – Part 2, Isolating Potential Flow
Zones During Well Construction)
3. Require independent third party verification of blind-shear ram capability
4. Require independent third party verification of subsea BOP stack capability
5. Require new casing and cementing integrity tests
6. Establish new requirements for subsea secondary BOP intervention
7. Require function testing for subsea secondary BOP intervention
8. Require documentation for BOP inspections and maintenance
9. Require a Registered Professional Engineer to certify casing and cementing requirements, and
10. Establish new requirements for specific well control training to include deepwater operations

8. Lloyd’s Register services to the energy industry
Implications for developing Pre-Salt Reserves
• REGULATORS
 Independence of safety regulator
 Prescriptive or Performance based regulatory environment (or a
combination of both)
 International Regulation (IMO)
 Competence

9. Lloyd’s Register services to the energy industry
Implications for developing Pre-Salt Reserves
• Materials Management Service (MMS) Reorganization
• Bureau of Ocean Energy Management: A new bureau under the supervision of the Assistant
Secretary for Land and Minerals Management that will be responsible for the sustainable
development of OCS conventional and renewable energy resources, including resource
evaluation, planning, and other activities related to leasing.
• Bureau of Safety and Environmental Enforcement: A bureau under the supervision of the
Assistant Secretary for Land and Minerals Management that will be responsible for
ensuring comprehensive oversight, safety, and environmental protection in all offshore
energy activities.
• Office of Natural Resources Revenue: An office under the supervision of the Assistant
Secretary for Policy, Management and Budget that will be responsible for the royalty and
revenue management function including the collection and distribution of revenue, auditing
and compliance, and asset management.

10. Lloyd’s Register services to the energy industry
The safe operation of a facility is the responsibility of the facility
operator
The primary responsibility for ensuring health and safety lies
with those who create risks and those who work with them
1. What is the role of the regulator in all of this
2. Use the identification and mitigation of Risk AS a minimum standard
3. Meeting Regulatory requirements is NOT a minimum standard
4. Compliance with prescriptive regulation is ONLY a compliance issue
5. To what extent are regulations responsible for setting the threshold for safety
6. Are you doing enough to ensure safety
7. Are you doing what you have indicated you would do
8. What level of enforcement is required
9. Is there a minimum threshold required for operator competence

11. Lloyd’s Register services to the energy industry
Objective/Performance based (or goal setting) regimes, (including the UK safety case regime), are based on
the principle that the legislation sets the broad safety goals to be attained and the operator of the facility
develops the most appropriate methods of achieving those goals. A basic assumption is the premise that the
ongoing management of safety is the responsibility of the operator and not the regulator.
Any goal setting is not just minimum requirement, it is the basis
of a mature & continuously improving safety culture wihin an
organization.
Accidents and Dangerous Occurences 2008 - 2009 Root Causes Deck and Drilling Lifting MajorInjuries 2007-2009 (UK Offshore
Sector)
Preventitive maintenance
Other
Procedures Not Followed Supervision
Planning
Design Specifications Design Review
Incorrect Procedures
Risk Assessment
Hazard Awareness
UK Offshore (HSE figures) Australia Offshore (NOPSA Figures)

12. Lloyd’s Register services to the energy industry
For more information please visit: www.lrenergy.org
Danny Walker
VP Compliance Services
LRNA Inc
Danny.Walker@lr.org
+1 281 675 3119