White Paper
Four steps to successful
Well Integrity Management
Well Integrity is characterised by an
operating well that has full functionality
and two qualified well barrier envelopes.
Any deviation from this state is a minor
or major well integrity issue. Common
integrity issues are often related to leaks
in tubulars or valves, but can also be
related to reservoir issues such as loss of
zonal control. Any factor that leads to a
functional failure is a loss of well integrity.
The challenge is of course to define all
possible scenarios.
The consequence of poor Well Integrity
History gives us a number of severe
examples of losing integrity in wells,
for example, the Phillips Petroleum’s
Bravo blowout in 1977, Saga Petroleum’s
underground blowout in 1989, Statoil’s
blowout on Snorre in 2004, BP’s Macondo
blowout in the Gulf of Mexico in 2010
and Total’s Elgin platform G4 well
blowout in 2012, which resulted in a year’s
production shut-down of the platform
and a £1.1m fine after 6000 tonnes of gas
leaked1. These and other, less prominently
reported incidents demonstrate that even
sophisticated energy companies are not
able to ‘get it right’ all the time.
These events demonstrate the importance
of successful Well Integrity Management
as a critical and evolving theme.
https://www.theguardian.com/business/2015/dec/22/oil-company-total-fined-1m-north-sea-gas-leak
1
2
http://www.iso.org/iso/catalogue_detail.htm?csnumber=57056
3
http://www.standard.no/no/Nettbutikk/produktkatalogen/Produktpresentasjon/?ProductID=644901
Since the number of high profile
incidents in the late 1980s and the
early 1990s, well integrity has topped
the worry-list of all senior managers,
and with good reason. Well integrity
failure can have a major adverse
impact on:
• Asset revenue, cashflow and
profitability, as well as liabilities
from safety and environmental
damage
• Withdrawal of a company’s
“license to operate”
• Shareholder value; partly due to
reputational damage.
Well Integrity defined
There are different definitions of well
integrity. The most widely accepted
definition of well integrity is given by
NORSOK D-0102:
“Application of technical, operational and
organisational solutions to reduce risk of
uncontrolled release of formation fluids
throughout the life cycle of a well”.
Another accepted definition is given by
ISO TS 16530-23:
“Containment and the prevention of the
escape of fluids (i.e. liquids or gases) to
subterranean formations or surface’’.
An evolving discipline
Oil and gas wells have been drilled and
operated from the mid-19th century, but
it is really only since the 1990s that ‘Well
Integrity’, as a discipline, began evolving
as companies, regulators and agencies
identified the issue and began raising
awareness.
Independently and collaboratively,
engineers quickly determined that a robust
well integrity process would need to cover
the entire life cycle of the well - from
well design, construction and in-service,
through to abandonment. Depending
on the hydrocarbon composition, well
complexity, regulatory oversight, and
company approach, there is considerable
variance around the globe as to how
Well Integrity Management has been
implemented. The resulting level, or quality,
of a particular Well Integrity Management
System (WIMS) will have been, and
continue to be, influenced by these factors
and will range from non-existent, through
cursory adherence to regulatory minimum
standard, through to industry leading.
Working together
for a safer world
Benefits of effective Well Integrity
As already highlighted, well integrity
processes are still evolving in many
organisations, with only those subjected
to regulatory requirements, or owning
well stock with obvious integrity
issues, having generally recognised the
importance of setting up coherent Well
Integrity Management processes.
Yet implementation of a successful WIMS
has significant positive impacts. These
include:
• Improved HSE
• Protection of asset reputation and
rights to operate
• Extended well life and increased
production
• Reduced workover and intervention
costs
• Improved well documentation
• Improved cross-organisational
communication
• Enhanced engineering.
Addressing the global problem
Industry research indicates that a large
number of wells are affected by integrity
problems. The severity and frequency of
well integrity problems strongly depends
on the region (geological and regulatory
framework), the fluids handled and the
age of the wells. This situation can only
get worse as wells age, as more wells
are drilled and operated in harsher
environments, and as watercut increases.
The number of wells globally estimated to be affected by integrity problems
Globally
NORWEGIAN
38% 4
CS
of oil and gas wells 18%6
are affected by
integrity issues
GOM
45%5
UKCS
34%7
4
OTM Consulting 2009, SPE Review, Issue268, March 2013.
5
US Minerals Management Service survey, 2004. Study of 14,927 active wells
6
Norwegian Petroleum Safety Authority (NPSA), 2006 – Study included 7 operators and 406 wells.
7
SPE forum North Sea Well Integrity Challenges, 2009. Study of 4,700 active wells.
8
2006 by the Norwegian Petroleum Safety Authority, titled “PSA Well Integrity Survey Phase 1 Summary Report”. – Study included 7 operators and 406 wells
9
U.S Energy Information Service, Short-term Energy Outlook. https://www.eia.gov/forecasts/steo/report/global_oil.cfm
Of course, with wells being designed
to have at least two barriers, even if
one fails it only means that the safety
factor is reduced – though perhaps to an
unacceptable level. It does not mean that
there has been, or even will be, a leak,
simply that the operator has to monitor
the well’s condition very closely and to act
quickly if a further fault is detected.
When well integrity issues are discussed,
the tendency is to focus on the immediate
technical issues at hand (eg: how did
the tubing corrode?). But there are also
softer issues, though just as pressing,
which often receive insufficient attention,
particularly the presence of effective
related processes and the existence
of organisational structures, such as
dedicated Well Integrity teams, which are
able to deliver those processes and also
the value of independent well life cycle
well examination.
It is clear that the integrity management
of global well stocks is in need of
improvement, with some regions /
countries / operators more in control than
others.
When we consider that the data in the
statistics are a result of well monitoring
(presumably as part of a well integrity
process), then they are alarming
enough. When we take into account the
considerable number of wells currently in
service across the world, where sparse or
7%8
of the wells in
Norway are completely
shut due to integrity
issues, equating to
a 7% loss of
production.
no Well Integrity Management processes
(and consequently no monitoring
of wells) are in place (no regulatory
requirement, no operator management
system requirement, etc.), then it must
also be the case that a considerable
percentage of these wells will have
unrecognised / unreported well integrity
issues – making the statistics for wells
with integrity issues even more alarming.
Four steps to successful Well Integrity
Management
1. Defining the business case
In addition to being a major capital
investment when it is initially drilled
and completed, an oil and gas well
will remain a significant engineering
asset to the operator throughout its
life cycle. In order to ensure maximum
availability and performance from it, a
well will require condition monitoring
and periodic maintenance throughout its
life cycle – Well Integrity Management.
In the same way that ignoring servicing
and maintenance of your business vehicle
can result in inconvenient vehicle non
availability (loss of revenue and possibly
loss of reputation) as well as serious costs
of emergency repair, then ignoring Well
Integrity Management can and does
result in exactly the same situation.
Lost = Loss of
production revenue
Loss of well = Loss of
containment resulting reputation
in pollution of the
environment
Emergency well repairs = Inflated
and legal penalties repair costs
Earlier we highlighted at any one time,
7% of wells in the Norwegian sector are
closed in part due to “well integrity”
issues. It’s not unreasonable to assume
that this 7% figure may be applicable
in a global context, simplistically the
implications for the global well integrity
issue are as follows:
• Global oil production for 2016 will be
+/-33 billion9 BBL / year
• 7% loss in production at $50 / BBL
represents $116 billion “regret cost”
for industry due to well integrity
issues and is equivalent to the GDP
of Hungary!
The results of lack of attention to Well
Integrity Management can range from
loss of production in the benign case,
to financial and reputational loss in the
severe case, and irreversible damage to
the environment and human life in the
worst case.
For the business case, we need to completing a new well. A sound and This reduction in activity has led to
understand that: robust Well Integrity Management plan equally significant cost reduction and
• The operating life of a well is finite can significantly help to improve well large scale head count reduction across
and specific to every well. intervention planning and in depressed the board. The result of this is that
• The commercial value of a well to the market conditions, well interventions experienced drilling and wells personnel
asset will decline over time. should form the back bone of a well are significantly reduced in number.
• Degradation of the well and cost of planning schedule.
maintenance and repair will eventually Looking at figure 1, the distribution of
exceed the value of the well and result 3. Enhancing competency upstream losses in the 100 largest “losses
in cessation of operation. Well Integrity Management has list”, we can see there was a significant
become both a specialised branch of frequency of losses in the years 1986 to
2. Managing Well Integrity in late life well engineering, as well as an integral 1988 and a cluster of high-value losses
Late life management of well stock will component of operator asset integrity between 2008 and 2010. Both of these
consider the balance between value and planning. instances occurred either during or
cost of operation. The late-life operation immediately after significant reductions
of wells may have indeterminate To the uninitiated, Well Integrity in the crude oil price.
duration, influenced by multiple factors, Management appears to have its own
and may involve intermittent operation language (such are the number of Across the industry, there is a concern,
of such wells. End of life is when it is acronyms and standards involved in the from a process safety and loss control
formally accepted that the wells will subject) – Well Integrity Management point of view, that lower revenues
never be operated again. remains a black art to most industry from oil and gas production and falling
professionals – many well engineers demand generally result in reductions in
One of the key requirements of Well included. It could be argued that we investment in systems, personnel to the
Integrity Management is to minimise are in danger of over complicating a point that a reduction in both equipment
the risk of loss of well containment to As relatively straight forward process. maintenance and loss of experienced
Low As Reasonably Practicable (ALARP). personnel could result in compromises to
A well that is no longer operated and Simply put, Well Integrity is a specialist asset and well integrity.
is redundant should be assessed to field of well engineering, but the
determine whether the major accident specialist knowledge can be both learned Even prior to this latest industry down-
hazards and risks associated with the and taught. It is interesting to note that turn, this dilution of well expertise has
well can be reduced below what was on the subject of Well Integrity, Oil and long been of concern to the UK HSE Wells
considered acceptable for a well which Gas UK now recommends that Well Group and in their 2010 -13 Strategy and
was flowing. Reassessment of available Integrity is taught in academic syllabi Business Plan10 citing the following risks:
and additional barriers; disconnection and also incorporated in industry well • Reduced competency
and isolation, and revised monitoring and control training – this initiative must be • Reduced tolerances and safety factors
verification may identify potential risk applauded and widely communicated • Inadequate maintenance
reduction measures and a requirement to globally. • Inadequate understanding of leading
change the operating status of the well. edge technology
In the current industry climate and • Not complying with programme &
All wells shall continue to be subject to in specific regards to competency of poor management of change
Well Integrity Management until finally personnel in Well Integrity Management, • Poorly conducted operations & low
abandoned – that said, oil and gas wells the fall in oil price has resulted in commitment to effective safety
are long term engineering investments significantly reduced revenue and activity management systems
and well interventions (ie: tubing change- – particularly so within the wells related • Unsuitable design
out, re-perforation, acid stimulation) teams. • Inadequate subsurface information
costs considerably less than drilling and • Ageing infrastructure.

Figure 1: Crude oil price versus upstream losses by year – 1974-2015 (Source: Marsh Research11)
Total value of upstream losses (US$ million) – 2015 values

120 2000
Year-end price of Brent crude (US$/barrel)

100

Low oil price 1500

80

60 1000

Low oil price Low oil price

40

500
20

0
0
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

http://www.hse.gov.uk/offshore/wellsgroup.pdf
10

Marsh Research https://www.marsh.com/us/insights/research/the-100-largest-losses-in-the-hyrdocarbon-industry-1974-2015.html

11
It should also be noted that the IWCF
(International Well Control Forum)
have determined that there are a larger
volume of well integrity and control
incidents taking place during Intervention
operations, compared to drilling. The
upstream oil and gas industry has been,
even in the current climate, drilling (or
new well construction) focused. A rise in
well production/intervention incidents
suggests a renewed operational focus on
the ageing well stock is not only necessary
for safety and integrity concerns, but
also to efficiently extend the life of wells
during a downturn of upstream activity.
4. Adopting Well Examination within
Well Integrity Management
Within the global wells community, well
examination is often treated as “a local
regulatory requirement” and not applied
across global well operations (which
are designed / constructed / operated
to internal corporate standards). The
obvious underlying implication here is
that independent well examination is not
seen as adding value to Well Integrity
Management.
Within the EU, the European Parliament
Directive 2013/30/EU on Safety of
Offshore Oil and Gas Operations
specifically requires that EU member
states implement full well life cycle
independent well examination. This
EU directive has been implemented
in UK offshore waters as the Safety
Case Regulations (SCR’s) 2015 (well
examination also applies ONSHORE in the
UK via DCR 1996 regs).
The Offshore Installations (Offshore Safety Directive) (Safety Case etc.) Regulations 2015 http://www.hse.gov.uk/offshore/assets/pdfs/safety-case-regs.pdf
12
The scope of independent well
examination extends across the full
well life cycle. The legal definition for
“independent” is normally interpreted
to mean that whilst many operators
elect to utilise the services of fully
independent third party expert well
examination companies, a small
number of the larger operators choose
to employ a well examiner within their
organisation – the “independence”
requirement in such a case is most
often met by placing the well examiner
within the HSEQ department.
Establishment of well
examination scheme
“The well operator must establish
a scheme (a “well examination
scheme”) for ensuring, by the
means described in paragraph (2),
that the well is so designed and
constructed, and is maintained in
such repair and condition, that:
(a) so far as is reasonably
practicable, there can be no
unplanned escape of fluids from
the well; and
(b) risks to the health and safety of
persons from it or anything in it, or
in strata to which it is connected,
are as low as is reasonably
practicable.” 12
It should be noted that the operator
“owns” the well examination scheme,
NOT the well examiner, a common
misconception.
At face value and as it currently stands,
only those countries which have adopted
a “goal setting” legislative model would
necessarily feature full well life cycle well
examination as a “standard”. In cases
where it does, however, then the WIMS
would describe and feature the role and
work scope of the independent well
examiner.
Legislative regimes are not the sole
arbitrator of “standards” applicable to
the oil and gas sector. Company and
industry standards – EU (BS), API and ISO
will also feature.
ISO (the International Organisation
for Standardisation) is a worldwide
federation of national standards
bodies (ISO member bodies). The work
of preparing International Standards
is normally carried out through ISO
technical committees. In the case of
WIMS, the ISO technical specification
for well integrity (ISO TS 16530 – Part 2:
Well Integrity for the operational phase)
is frequently referenced within operator
WIMS.
In this technical specification, there is an
often over looked requirement regarding
organisational structure (7.1 – Resources,
roles, responsibilities and authority levels)
which states:
“The Well Operator shall assign the role
of a well integrity technical authority/
subject matter expert positioned
outside of operations line management,
to provide an independent technical
review and recommendations on well
integrity issues.”
This is generally interpreted to mean
that an operator’s organisation should
have access to a suitably knowledgeable
(competent) and independent well
integrity Technical Authority (TA).
In cost constrained times, it is worth
recognising that both the “competence”
and “independence” of such a well
integrity TA can be met by means of
a full well life cycle well examination
service – especially “pay only as you use
it” specialist third party well examination
service providers.
Benefits of Well Examination
Regardless of global location, well
examination provides an auditable and
independent process for demonstrating
full compliance with local regulations,
company policies and good industry
practice in relation to the full life cycle of
well operations.

Furthermore, integrating the well

examination process into the complete
verification process provides a unique
level of continuity, a level of efficiency,
simplification in the process and
ultimately a cost saving.

• Compliance with UK and EU

industry legislation, industry best
practise and company policies
• Ensure the pressure boundary of
the well is controlled by means of
suitable well control equipment
• Better understanding of risk
• Third party independent assurance
• Reduced blow-out insurance

More than risk reducing

It can be concluded that Well Integrity
Management is more than just about
reducing risk of uncontrolled leaks
and complying with legislation and
regulation.

Yes, there is an onus on the

environmental and safety element, as
there should be in every aspect of an
operation, especially when the outcome
of a catastrophic event can be loss of
life. However production loss, shut-ins,
expensive workovers and the impact on
the bottom line should also act as a driver
in this cost conscious, low oil price era and
be a key incentive for implementing and
effectively managing well integrity and
well examination programmes.

To find out more about how we can enhance the integrity of your wells, please visit
www.lr.org/oilandgas, contact us at oilandgas@lr.org or call +44 (0)1224 267400.

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