EP 2002-1500

-8-

Restricted to Shell Personnel Only

2. 2.1.

ORGANISATION OF WELL CONTROL OPERATIONS Personnel Responsibilities

Well control operations may involve many individuals working as a team. The responsibilities of each individual must be clearly defined and they must have the training and skills to enable them to perform their allocated duties. This section gives examples of how various responsibilities may be assigned. 2.1.1. Person In Charge of Well Control

It is imperative that this Person In Charge is clearly identified before operations commence and that he is totally aware of his duties and responsibility to ensure that operations are conducted in a manner to provide for complete well control. The deputy and stand-in to the Person in Charge should also be clearly identified. This responsibility for the execution of well control operations may lie with the Shell or Contractor Representative as laid out in Company procedures consistent with Government Regulations. The responsibilities of the Person In Charge in no way reduce those of other supervisory staff with regard to well control. Pre-Kick Duties may include: Ensure that any conflict of policy is resolved; Ensure that policies are followed, instructions are properly given and to make sure that they are fully understood and effectively implemented; Acquaint himself with the locality in which he is drilling; Review the drilling programme in detail; Advise his supervisors of any aspects of the prognosis or well plan which may cause the loss of well control and take appropriate action to avoid such events; Maintain a system of well control data sheets to be ready for immediate use if required; Ensure that units (SI or field units) are used consistently throughout the drilling rig and be consistent with the drilling programme; Check on the adequacy of well control training of supervisory staff on site and relevant personnel on the rig floor; Ensure that all operations conducted with equipment associated with pressure control are carried out in a safe and efficient manner; Be acquainted with the contingency plans relating to fire, blowout, pollution and spillage on or around the location; Include a full knowledge of H2S procedures in areas where a possibility of H2S occurrence exists and to verify that all contractors on site are suitably equipped and trained; Organise regular kick and other well control drills and report crew performance;

EP 2002-1500

-9-

Restricted to Shell Personnel Only

Delegate duties and responsibilities as required. Once the well is shut-in, to organise a pre-job meeting with all key personnel involved in the well control operation and provide specific well control procedures; To monitor and supervise the implementation of these procedures; To be present on the drillfloor at the start of well control operations (either the Shell Rep or the Contractor Toolpusher to be present on the drill floor for the duration of the operation). Maintain communication with the Operations Base; Assign the responsibility of keeping a diary of events; Produce reports as required by local procedures or regulations. Contractor Toolpusher (if not the Person in Charge) Overall responsibility for implementation of the well control operation; Must ensure Driller and crews are correctly deployed; Must be present on the rig floor at the start of operations; Must facilitate an optimum crew handover during well control operations. Driller Responsible for detection of kicks and losses; Responsible for making the well safe; Responsible for implementing agreed contingency procedures. Responsible for notifying Contractor & Company representatives at the earliest opportunity. Responsible for supervising the crew during well control operations. Mud Engineer Responsible for maintaining the mud condition. Cementer (if present) Must ensure the cement unit is ready for operation. Mud Logging Engineers (if present) Co-responsible (with Driller) for initial kick detection; To monitor and record all parameters during the well control operation, including; Time Shut-in pressures

Post Kick

2.1.2. 2.1.3. 2.1.4. 2.1.5. 2.1.6.

EP 2002-1500

- 10 -

Restricted to Shell Personnel Only

2.1.7. 2.1.8. 2.1.9.

Pump strokes (total and SPM) Pump pressure Casing pressure Gas H2S Pit volumes

Keep a full and detailed record of the operation. Early Kick Detection Engineers (if present) Responsible for monitoring inflow/outflow at all times; Responsible for notifying the Driller in the case of a differential flow alarm. Subsea Engineer (where appropriate) Must be available for consultation at all times during any well control operation; Responsible for supervision of Subsea BOP system operation. Well Service Supervisor

During workover or well intervention operations, the status of Person In Charge may be delegated to the Well Service Supervisor. Well control may differ from drilling in that activities may involve snubbing units, slickline, electric line or coiled tubing and operations are often on a live well. His duties will be to: Pre-Kick Ensure all pressure control equipment is fit for purpose and properly rigged up and pressure tested; Interface between contractor, company and 3rd party personnel; Ensure all check valves etc. required for pipe/tubulars in use are available; Ensure adequate stocks of brine are available if required; Coordinate all service personnel involved; To calculate kill parameters; To supervise well kill; Produce a kill report if required. Other Roles

Post Kick

2.1.10.

Other operations including marine and logistics associated with a well control situation are not detailed in this manual and should be included in relevant contingency procedures.

EP 2002-1500

- 11 -

Restricted to Shell Personnel Only

2.2.

Well Planning for Well Control

Successful execution of well control operations is highly dependent on thorough planning. This section deals with issues related to well control that must be addressed in the well planning stage. 2.2.1. Introduction

Well control is an integral part of the well planning process, be it for a new well or a reentry. The drilling programme will cover well control risks in detail These risks and subsequent mitigation will focus on keeping the well under control during all phases of the operation. To be successful, subsurface conditions must be predicted, detected, and controlled. Consideration must be given to; the potential hazards to be encountered; uncertainties related to formation parameters; maintaining Primary Control; the equipment to be used; the procedures to be followed; training of the crew.

Advance planning should include an equipment and operations procedure checklist. The items on the checklist will depend on the prognosed hazards, company policies, government regulations, and anticipated use of the well control equipment. Any specific operating practices / procedures / recommendations should be included in the drilling programme. The first step is to assemble the available data, then evaluate the information and predict what hazards can be expected. The well programme should provide the means to manage the risks of these hazards to ALARP (as low as reasonably practical) and mitigation steps (contingency plans) should be in place to deal with them should any escalation or different circumstances be experienced. 2.2.2. Predicted Conditions

The well casing and tubing programme will have been designed in compliance with the Shell Casing and Tubing Design Guide. Any well control assumptions used in programming operations must be consistent with those used in that design. Data Availability and Gathering Most Operating Companies will have agreed minimum data requirements as input into the well planning process. The following types of data are typical minimum of what is required and include but is not limited to; Bathymetric surveys including information on existing structures Seismic information and interpretation, including shallow gas surveys; For re-entry, existing Well Status/Integrity and proximity of other wells;

EP 2002-1500

- 12 -

Restricted to Shell Personnel Only

Offset lithology, porosity, permeability, stability and information on previous drilling problems etc.; Identification of weak formation or loss zones; Formation fluid type, hydrocarbon depths, gas zones, H2S, CO2; Data gathering requirements (DST, Logging, mud logging, coring etc.) Other subsea or surface hazards such as mobile salt formations, water flows etc.;

Formation Pressure All available engineering, geophysical and geological information should be analyzed to predict formation fracture gradients, pore pressure, and shallow hazards. Offset well data may help indicate the possibility of charged or depleted formations. From pressure profiles developed plans can then be prepared for handling under and overpressured formations, both shallow and deep. This pressure and formation strength data are fundamental to the design of the drilling programme, drilling fluids required, casing strings, and selection of best operating practices. Casing Programmes Casing programmes in offset wells, offset fields, and regional wells, combined with geological and formation pressure data, are essential in planning a well. The casing design is only valid for formation strength and pore pressure assumptions used in planning the well. The casing design may need to be revalidated should unexpected changes occur. When work is to be done on an existing well the condition of the casing will need to be assessed And any worn or corroded casing should be downgraded using techniques detailed in the Shell Casing and Tubing Design Guide. Drilling Data Utilisation A number of methods or indicators can be used to detect abnormal pressure while drilling, these include but are not limited to: drilling rate or 'd' exponent; sloughing shale; shale density; gas units in drilling fluid; drilling fluid properties;

Formation strength leak-off/limit tests should be included in the programme. The importance of gathering pressure and strength data whilst drilling cannot be overstated. Wireline formation tests provide reliable direct pressure measurement and should be considered for critical wells. 2.2.3. Primary Well Control

Drilling fluid of suitable density and volume to maintain an overbalance on formation pore pressure is necessary to maintain primary control. Maintenance of Overbalance This overbalance can be effected by drilled solids and/or influx of fluids. For this reason controlled drilling rates are advisable in certain cases where fast drilling is possible or the

EP 2002-1500

- 13 -

Restricted to Shell Personnel Only

amount of overbalance is critical. The use of a PWD tool can assist in accurate determination of dynamic BHP. Underbalanced Drilling This is a specialized application used where conditions are well known, predictable and risks can be managed. In this case Primary well control is achieved with a combination of drilling fluids (may be near-balance or underbalanced) and a rotating BOP. Contingency plans to return to an overbalanced situation should normally be in place in case of problems. Drilling Fluid Monitoring Equipment It is essential to monitor the quality and quantity of drilling fluid in the system. Measuring devices that will monitor the active surface and down-hole drilling fluid volumes should be provided. Several methods of combining different types of equipment can be used, depending upon the well requirements. These may include: pump stroke counters; flow line sensors with alarms; pit level recorders with alarms; trip gain-and-loss meters; trip tanks. flow meters, particularly for Slim hole kick detection; PWD

Quality of drilling fluid is extremely important. Provisions should be made to measure the density, viscosity, and other fluid properties as required. A mud logging unit may also be employed to monitor these and other pressure indicating parameters mentioned above. Fluid Storage Capacity Adequate supplies of fluids are necessary for well control operations. Logistics and storage should be thoroughly reviewed and planned, especially offshore where space on a drilling rig or platform is limited. Priority should be considered for storage of adequate supplies of base fluids, weighting material, and lost circulation materials. Procedures and fluid recipes should be pre-planned and readily available. It may be desirable to have kill weight or LCM fluids pre-mixed and available during certain operations such as drilling into a suspected shallow gas formation or a transition zone. In floating drilling operations, plans should be made to recover and store riser fluids during planned and emergency disconnects, especially when using oil or synthetic based drilling fluids and certain heavy brines. Service Operations Well intervention or service operations need to be planned in a similar manner to any other well operation. These include, but are not limited to: logging, coring, fishing, drill stem testing, slick-line, and coiled tubing operations (refer to API RP 5C7: Recommended Practice for Coiled Tubing Operations in Oil and Gas Well Services). Considerations for all these operations include: Procedures for securing the well; Monitoring well fluid levels when in and out of hole; Avoiding surge and swabbing;

EP 2002-1500

- 14 -

Restricted to Shell Personnel Only

2.2.4.

Procedures for stuck pipe and /or fishing operations; Contingency plans in case of problems; Blowout Prevention Equipment Selection

A blowout prevention equipment system comprises all the equipment components required for well control. These systems include BOPs, choke and kill lines, choke manifold, degassers, flare lines, closing unit, marine riser (if applicable), and any auxiliary equipment. Their primary function is to confine well fluids to the well bore, provide means to add fluid to the well bore, and allow controlled volumes to be withdrawn while allowing controlled pipe movement. The selection of equipment for a particular well is dictated by many factors including, but not necessarily limited to, casing and drill string design, anticipated pressures, environment, space, governmental regulations, and availability. Following are some general guidelines: The rated working pressure of ram-type BOPs should exceed the maximum anticipated surface pressure. Provisions should be made for closing BOPs on all sizes of drill pipe, drill collars and casing that may be used. Schematic drawings should be available in Drilling Contractor or Operating Company Drilling Manuals showing equipment and arrangement of the wellhead, BOP stack, valves, lines, manifold, and accessory equipment required for each hole section. These drawings should clearly indicate the location, size, and type of rams. Any changes to these standards or well specific operational requirements should be detailed in the well programme. The location of the various rams in the stack-up should be determined after careful consideration of the expected use of the stack and application of risk assessment analysis. The rationale behind any changes in ram configuration should be agreed with the drilling contractor and stated in the well programme detailing specific functions and redundancy. Whenever possible the BOP type, size and ram confoguration should be chosen to minimise the number of ram changes throughout the drilling or well intervention program. Due to changes in the size of drillpipe in use, or for example the requirement to be able to use a fixed ram to provide blowout prevention during casing running, it may be necessary to change the position or size and type of a number of BOP rams. When this is necessary great care must be taken to provide 2 independent, adequately and correctly tested barriers between each potential sources of hydrocarbons. If hydrogen sulfide is predicted or suspected, materials used in the down hole and surface equipment must be resistant to hydrogen embrittlement (sulfide stress cracking). The following references are recommended: API RP 7G: Recommended Practice for Drill Stem Design and Operating Limits; API RP 49: Recommended Practice for Safe Drilling of Wells Containing Hydrogen Sulfide; API RP 53: Recommended Practice for Blowout Prevention Equipment Systems for Drilling Wells; API Spec 16A: Specification for Drill Through Equipment; and NACE Standard MR-01-75: Sulfide Stress Cracking Resistant Metallic Material for Oil Field Equipment. Additional considerations for blowout prevention equipment selection are: distance between rams so pipe can be stripped, sheared or hung off;

EP 2002-1500

- 15 -

Restricted to Shell Personnel Only

sizing of lines and valves to minimize friction losses and backpressure during well killing operations; special marine applications.

Additional information on BOP equipment systems is available in API RP 53: Recommended Practice for Blowout Prevention Equipment Systems for Drilling Wells (reader should check for the latest edition). Information on marine riser systems is available in API RP 16Q: Recommended Practice for Design, Selection, Operation and Maintenance of Marine Drilling Riser Systems (reader should check for the latest edition). 2.2.5. Well Control Procedures

Once all the well data are gathered and a general well plan is complete, attention should focus on response to potential well control events during drilling, completion and workover operations. Procedures must be in place to handle each of the typical situations shown below. These procedures would normally be expected to be included in Operating Company manuals however any well specific requirements which are not covered should be detailed in the well programme. Pre-kick data requirements and collection for each stage of operations. This includes adequate surveys to establish the well path and bottom hole position; Diverter procedures; BOP close-in procedure selection at each stage; Kicks while tripping pipe in and out of the hole; Kicks while tripping in the hole with casing and liner; Kicks while out of the hole;

The details of principles and some alternate recommended practices to deal with these events are to be found in this manual. 2.2.6. Shallow Gas

Well proposals should always include a statement on the probability of encountering shallow gas. This statement should not only use the 'shallow gas survey', but include an assessment drawn from the exploration seismic data, historical well data, the geological probability of a shallow cap rock, coal formations, and any surface indications/seepages. (Shallow gas procedures are discussed in Section 5.3) 2.2.7. Simultaneous Operations

Plans for simultaneous operations may be considered when drilling and workover operations are conducted in close proximity with other operations. Examples include: a drilling and production site, an offshore drilling and production platform or jack-up operations on a producing platform. Where one installation Management of work system would be employed for more than one operation, i.e. wirelining, coiled tubing and drilling from a fixed platform while producing from adjacent wells, the operation is often referred to as simultaneous (simultaneous use of one PTW system). Where a number of installation Management of work systems will be

EP 2002-1500

- 16 -

Restricted to Shell Personnel Only

employed i.e. Jack-up working over a fixed installation, operations are often referred to as combined. These combined operations all have additional exposure due to the presence of oil and gas processing facilities, pipelines, pipeline connections, and producing wells as well as the potential for additional production and service personnel. Consideration should be given to shut-in of producing wells and oil and gas processing facilities during certain high risk operations such as secondary well control, moving the rig, top hole drilling (collision risk), hoisting loads near or above producing wellheads, piping, or process vessels unless additional protection has been provided. It is recommended to produce a site specific Simultaneous Operations Plan dealing with interface management and an operations Matrix, which clarifies which types and levels of activities may be conducted concurrently. An example of a Concurrent Operations Matrix (Shell Expro NBU) is given in Section 2.5. 2.2.8. Well Specific Contingency Issues

While Operating Company contingency plans will need to be in place to cover emergencies it is essential that the well programme addresses any well specific issues that may impact on more generic plans. Typical well specific issues that may need to be addressed include but are not limited to; 2.2.9. Logistics Site access/egress in case of emergency and possible relief well site Specialised transportation or equipment requirements H2S Training and Instruction

Well control situations, especially those involving shallow gas flows, can develop quickly and be difficult to detect early. All concerned personnel should be familiar with the well control system components and installation and be capable of reacting quickly and efficiently to potential situations requiring its use. The following general guidelines are offered for personnel training and instruction: Formal training and instruction in well control theory and procedures is recommended for all safety critical positions at supervisor and driller levels or equivalent. Contracts should specify competence and training requirements and systems should be in place to ensure validated certification exists. For complex wells where advanced well control procedures are to be followed, well and rig-specific training should be provided based on the procedures established. This is the responsibility of the Operating Company. The following section is for information only and describes a number of training schemes currently in use worldwide.

Industry Association Training The International Association of Drilling Contractors (IADC) has implemented two training programmes for industry. RIG PASS Accreditation System The programme identifies core elements of training programmes for new rig employees and recognizes programmes that adhere to those elements. Completion of a RIG PASS accredited programme confirms that personnel have

EP 2002-1500

- 17 -

Restricted to Shell Personnel Only

met basic requirements defined by safety and training professionals in the drilling industry, irrespective of the rig location. WellCAP Programme The programme emphasizes the knowledge and practical skills critical to successful well control. It uses quality benchmarks developed together with operators, drilling contractors, professional trainers and well control specialists. WellCAP ensures that well control training schools adhere to a core curriculum developed by industry. Accreditation is achieved only after an extensive review of a providers curriculum, testing practices, faculty, facilities, and administrative procedures. International Well Control Forum Accreditation System accepted widely that requires participants to achieve a minimum grade in a written test of their knowledge of well control principles, procedures and equipment. Formal (re) training is not mandatory for biannual re-certification. IWCF certification is often set as the minimum acceptable standard by Governmental Agencies. 2.3. Well Planning Checklist

The following describes details which should be checked and considered during the well planning phase. These criteria feed into the Risk Matrix in Section 2.4 and are numbered accordingly. 2.3.1. Shallow Gas

Every effort should be made to establish the likelihood of shallow gas at the drilling location. Typical probabilities would be: 2.3.2. No evidence of shallow gas; Regional observations; Locally observed phenomena; Shallow seismic anomaly on shot point; Oil seeps; Seabed pockmarks; Observed gas seeps. Overpressure

The probability of abnormal formation pressure must be investigated at a number of levels: Geological Environment The geological setting of the well location may indicate a tendency towards overpressured sequences. This subject should be discussed with the subsurface team, however typical problem areas include Currently subsiding basins e.g. Gulf of Mexico Significant thickness of recent sediments e.g. Central North Sea Adjacent mountains with possible aquifer continuity Deep graben features

EP 2002-1500

- 18 -

Restricted to Shell Personnel Only

Significant thickness of evaporite sequences e.g. Southern North Sea Observed halokinetic effects (i.e. salt domes with possible dolomite rafting) e.g. Southern North Sea Compressional tectonics e.g. Columbia

Subsurface Geology Geological hazards which may impact well control should be assessed as thoroughly as possible from offset data. Typical hazards may include: Thief zones loss of drilling fluid and therefore primary control High ratio of shale to sand in sequence may result in trapped pressure High bottom hole temperatures often associated with abnormal pore pressure Highly permeable sections lead to differential sticking Reactive / swelling shales can result in swabbing Faults can act as a conduit for high pressures

Offset Pore Pressure Data The well design will include an analysis of offset data in order to determine the pore pressures to be expected. The results will be used to design both the mud programme and casing scheme. The quality of the offset data will impact confidence in the pressure interpretation, i.e. 2.3.3. Regional observation Overpressure encountered in adjacent fields; Deep seismic cut-back on shot point good evidence if rock sequence is understood; Field observation reasonable probability that pressures will be similar across the field; Fault block observation very high probability if the well is in the same tectonic unit; Adjacent well almost a certainty. Anticipated Pressure Magnitude

Zones of overpressure are seldom pressured at a single gradient, the exceptions being permeable carbonates sealed within massive salt sections. Commonly, in an overpressured zone the pressure will vary sharply with depth due to localised partial depletion. In highly overpressured sequences, the range of individual pressures will be greatest, with occasional hydrostatically pressured horizons possible. The resulting erratic pressure profile is difficult to interpolate between wells. This variable pore pressure over a range of depths can cause well control problems due to alternate loss-gain scenarios resulting from an inability to maintain primary control. Anticipated pore pressure should be quantified in ranges, for example:

EP 2002-1500

- 19 -

Restricted to Shell Personnel Only

psi/ft <0.47 0.47<0.62 0.62<0.73 0.73<0.83 0.83<0.94 >0.94

kPa/m <10.6 10.6<14.1 14.1<16.5 16.5<18.8 18.8<21.2 >21.2

ppg <9 9<12 12<14 14<16 16<18 >18

Figure 2.3.1 Ranges for anticipated pressure magnitude 2.3.4. H2S (in well stream)

Expected H2S levels are critical both to health, environmental and equipment selection. The anticipated concentration should be estimated, i.e.: 2.3.5. 0 0 - 50 ppm 50 - 100 ppm 100 - 500 ppm 500 - 1000 ppm 1000 - 5000 ppm Well Fluid Type

It is important that the type of fluid or gas to be encountered is known as this may affect well control, for example: 2.3.6. Connate water / native brine No additional risk; Heavy oil No significant additional risk; Light oil Higher density contrast leading to migration; High GOR Can be a problem if bubble point is reached during a kill; Dry gas Least dense influx, highly mobile leading to migration problems; Condensate / retrograde fluids can be a serious risk due to phase and therefore volume changes which can affect bottom hole pressure; Mud Type Water base is generally most benign if in good condition. However, poor inhibition can lead to swabbing. With gas kicks, gas migration must be dealt with. In deep water the potential for gas hydrates must be mitigated;

The choice of drilling fluid can impact well control:

EP 2002-1500

- 20 -

Restricted to Shell Personnel Only

Oil based mud (OBM) generally maintains good hole conditions but gas can dissolve in the oil phase down hole and (if undetected) subsequent release at shallower depths poses a significant risk due to rapid unconfined expansion. Numerous circulations may be required to de-gas after a kick; Synthetic oil based mud (SOBM) covers a number of proprietary products which in general have the shale inhibition properties of OBM with similar risks to OBM; PHPA mud has excellent shale inhibition but can be prone to swabbing if a top-drive is not in use as the string has to be worked back every 30m-60m (100 to 200ft); Native mud usually has poor shale inhibition and poor fluid loss therefore high swabbing tendency; Crude oil cannot be weighted easily and can transport gas in solution masking pit gains; Spud mud typically has no weight above hydrostatic and can be highly prone to gumbo formation and subsequent swabbing; Bottom Hole Temperature Muds (particularly OBM and POBM) are thinned with resultant Barite drop out; Mud expands when static giving indications of false influxes and making the volumetric monitoring of trips difficult; High temperatures are typically associated with retrograde fluids which can cause problems maintaining primary control. These generally involve gas influxes which hit dew-point high in the hole resulting in a loss of volume. In more extreme cases, a liquid influx can pass through both the bubble point and dew point while being circulated to surface.

2.3.7.

High BHTs can be a problem in terms of well control for a number reasons:

MWD/PWD tools may not operate at higher temperatures. NOTE: Temperature should be estimated as BHT at the anticipated problem zone (and/or reservoir) rather than as a gradient 2.3.8. Fracture Margin

This is the lowest fracture gradient in the open hole (often at the shoe) minus the bottom hole pore pressure gradient. The fracture gradient is calculated during the well design process from the interpreted pore pressure, overburden and the matrix strength of the rock. The margin is essentially a safety factor between the fracture pressure at the weakest point in the open hole and the highest pore pressure to be encountered in that hole section. The shoe margin at each casing point must also therefore be calculated at the design stage, i.e.:

EP 2002-1500

- 21 -

Restricted to Shell Personnel Only

psi/ft 0.31 0.21 0.10 0.05 <0.05

kPa/m 7.1 4.7 2.4 1.2 <1.2

ppg 6 4 2 1 <1

Figure 2.3.2 Typical fracture margins 2.3.9. Well Geometry

There is an industry wide move towards slim-hole well designs, driven by savings in tubulars, mud, cement and rig rate. While slim wells are common place, they pose a well control hazard due to their smaller geometry, i.e. a kick will: Occupy a longer section of annulus per bbl; Exert more pressure at the shoe per bbl; Have a greater likelihood of unloading the hole.

The traditional casing scheme must be taken as a base case and any slimming down of the profile must be evaluated as to how much additional risk is imposed. There are a limited number of classifications (traditional, semi-slim and slim) and the scoring used on the Risk and Level assessment must be made on professional judgement. 2.3.10. Well Profile

The two or three dimensional profile of the well can have a major impact on well control: Vertical well no additional risk; Deviated (low angle, low radius) no significant additional risk; Deviated (medium angle, medium radius) can be problems with gas pooling on the high side of the hole in dog-legs etc.; High angle ERD potential for continuous gas phase on the high side; Horizontal possibility of very high influx volumes; Multi-lateral potentially two or more different pressure regimes leading to complex kill procedures. Maximum Design Pressure

2.3.11.

The BOP must be selected to cope with the maximum anticipated surface pressure plus a safety margin. For use in the Risks and Levels Matrix (2.4), the calculated design pressure must be used, not the actual rating of the BOP stack to be used. Due to rig availability, highly rated stacks are often used drilling very low risk wells. Use of the actual stack rating could unnecessarily bias the well towards a Complex status. Typical stack ratings are: 2kpsi - generally confined to sub-hydrostatic wells on land;

EP 2002-1500

- 22 -

Restricted to Shell Personnel Only

3kpsi - normally used for very low pressure land wells; 5kpsi - a 'standard' rating; 10kpsi - high pressure rating; 15kpsi and above - very high rating. (HPHT wells). Rig Location

2.3.12.

This section combines two factors into the Risk and Level matrix. The surface location scores against ease of access and egress, supply of chemicals and support services. The water depth incorporates risks from choke line length, hydrates and accumulator requirements. The range of locations include: Land - Easy access; Land - Limited access; Offshore - bottom supported, inland; Offshore - bottom supported; Offshore, floating rig , <1500ft / 500m water depth; Offshore, floating rig, 1500ft / 500m < 6000ft / 2000m water depth; Offshore, floating rig, > 6000ft / 2000m water depth; Remediation Risk

2.3.13.

The pollution impact of a major well control situation is difficult to express as a numeric range due to the number of possible permutations. Each well location must be evaluated on the specific consequences that could result and is scored according to professional judgement. The risk in this instance is the cost to SIEP or affiliates of remediation work, For example, criteria associated with the two end members of the series could be: Low Risk Base Case: Remote desert region; No agriculture; Minimal habitation; Restricted surface run-off; Deep, concealed water table; Densely populated area; Intense agriculture; Shallow, exposed water table; Coastal or inland waterways; Conserved environments, e.g. rainforest, national parks, coral reefs etc.; High value real estate.

Typical High Risk Factors:

EP 2002-1500

- 23 -

Restricted to Shell Personnel Only

2.3.14.

Environmental Exposure

In a similar manner to the Remediation Risk, the Environmental Exposure is difficult to express as a linear scale and must be presented as a base case and a series of hazards. The risk in this case is local environmental or climatic impact on well control. These may be direct on operations or on the supply of stock and equipment. Again, professional judgement must be used to determine the risk rating: Low Risk Base Case: 2.4. Land location; Good transport / communications; Temperate climate; Gentle relief; Politically stable. Remote location; Deep water; Strong currents; Arctic conditions; Typhoon / hurricane prone region; High tidal range; Mountainous topography; Difficult transport; Civil unrest. Risks and Levels in Well Control

Additional Risks May Include:

This section demonstrates a method of determination of a relative risk value for a planned well. Wells with high relative risk will require a higher level of planning and control.

NOTE: This risk value or hazard quotient is only used to help highlight and raise awareness of the possible well control risk in the well. (as some OUs do for stuck pipe risk, financial risk etc.) 2.4.1. Well Classification

For design purposes, wells are classified as Level 1,2 or Level 3 (as per SIEP EP 20009073, Shell Casing and Tubing design Guide). For well control issues, no similar definitive classification is possible because of the diversity of risks and the relative impact that each has on the overall plan. A continuous range exists from a low risk standard well to a very high risk complex well at the other end of the spectrum.

EP 2002-1500

- 24 -

Restricted to Shell Personnel Only

Low Risk Standard Well Comprises 'traditional' well designs with low risk ratings typified by: Well known area; High fracture margins; Few potential hazards; Easy access and escape. High Risk Complex Well This well type encompasses a greater degree of risk imposed by either well conditions, profile or location. Typical examples will include: Unknown area; Deepwater locations; Low fracture margins; Tortuous and/or long well designs High formation pressures; Shallow gas prone areas; Known hazards eg. H2S, High Temperature etc. 2.4.2. Assessment Process

The following pages illustrate a system of evaluation by assigning a score for a number of hazards defined by the well design. Individual risk scores are determined from the Hazard Rating Matrix. Regardless of the indicated relative risk, under no circumstances should design or execution of well control operations be less than the minimum standards recommended throughout this manual.

EP 2002-1500

- 25 -

Restricted to Shell Personnel Only

2.4.3.
No.
1

Hazard Rating Matrix

1
No Evidence

3
Regional Phenomena

5
Local Phenomena

6
Oil Seeps

8
Shallow Seismic Anomaly Field Wide Observed

9
Seabed Pock Marks Fault Block Observed 0.83<0.94psi/ft 18.8<21.2kPa/m 16<18ppg Dry Gas

10
Observed Gas Seep Adjacent Well

Over Pressure Risk Anticipated Pressure Risk

No Evidence

Seismic CutBack on Shot Point 0.47<0.62psi/ft 10.6<14.1kPa/m 9<12ppg 0-50ppm Heavy Oil Light Oil 0.62<0.73psi/ft 14.1<16.5kPa/m 12<14ppg <500ppm 0.73<0.83psi/ft 16.5<18.8kPa/m 14<16ppg <1000ppm High GOR

4 5

<0.47psi/ft <10.6kPa/m <9ppg Zero Water / Brine

6 7 8

Mud Type Bottom Hole Temperature Shoe Margin

WBM <40C <100F >0.31psi/ft >7.1kPa/m >6ppg Traditional Vertical 2k Land Easy Access Low Risk Base Case Low Risk Base Case

Pseudo Oil

IOEM 40<65C 100<150F 0.21>0.10psi/ft 4.7>2.4kPa/m 4>2ppg Low angle Low radius 5k

PHPA 65<95C 150<200F

Native Mud 95<120C 200<250F 0.1>0.05psi/ft 2.4>1.2kPa/m 2>1ppg ERD 10k 15k Floater 500<2000m Water Depth High Level Impact Serious Conditions

Lease Crude

>0.94psi/ft >21.2kPa/m >18ppg >1000ppm Condensate / Retrograde Fluids Spud Mud >150C >300F <0.05psi/ft <1.2kPa/m <1ppg Slim-Hole Multi- Lateral >15k Floater >2000m Water Depth Exxon Valdez Scale Extreme Conditions

0.31>0.21psi/ft 7.1>4.7kPa/m 6>4ppg

9 10 11 12

Well Geometry Well Profile Maximum Design Pressure Rig Location

Semi-Slim Med angle Med radius

Horizontal

Land Limited Access

Inland Bottom Supported Low Level Impact Minimal Adversity

Offshore Bottom Supported Medium Level Impact Significant Adversity

Floater <500m Water Depth

13

Remediation Risk Environmental Exposure

14

EP 2002-1500

- 26 -

Restricted to Shell Personnel Only

2.4.4.

Hazard Quotient Evaluation Table No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 HAZARD Shallow Gas Overpressure Anticipated Pressure Magnitude H2S Well Fluid Type Mud Type Bottom Hole Temperature Shoe Margin Well Geometry Well Profile Maximum Design Pressure Rig Location Remediation Risk Environmental Exposure Score

NOTE: The purpose in assessing a hazard quotient is to evaluate potential areas of concern during the well design process. The results can be used to compare wells or sections of a well. The objective is to raise awareness of the level of well control risk, and to identify factors which may: Increase the probability of a kick on a particular well Add complexity to any subsequent well control operations Once identified, risk from high scored hazards should be mitigated by changes to the well design or by the application of specific procedures / controls.

EP 2002-1500

- 27 -

Restricted to Shell Personnel Only

2.5.

Example of Concurrent Operations Policy Risk Level 0 2 0 2 1 2 1 3

Shell Expro NBU Concurrent Operations Document (Extract) Operation Drilling or workover with conventional rig (No risk of hydrocarbons) Drilling or workover with conventional rig (Risk of hydrocarbons) Drilling or Workover with HWU, CTU or Hybrid (No risk of hydrocarbons) Drilling or Workover with HWU, CTU or Hybrid (Risk of hydrocarbons) Wireline intervention through Tree (Actuated UMGV with ability to cut wire) Wireline intervention through Tree (Actuated UMGV compromised) Other Non-subsurface Operations, Requiring Category 2 Hot Work Permits (except Open Electrics) in associated areas, opening hydrocarbon systems. Other Non-subsurface Operations, Category 1 Hot Work/Heavy Lifting/Opening Electrics in associated areas or opening a hydrocarbon system with one of the barriers jeopardised The combined risk must not exceed 3 for concurrent operations to take place without specific review. The risk level does not take into consideration an escalation factor such as adverse weather conditions or if one or more safety systems fail or are temporarily disabled etc. Because of the complexity, the precise limitations on working conditions must be established on site. Conducting operations with a combined risk level greater than 3 is permitted when it can be demonstrated that appropriate measures are in place to manage any situation that may increase risks significantly above those envisaged, is likely to occur. The key to successful concurrent operations with minimum increase in risk is to identify the potential problems/clashes and develop a means of managing these to minimise the risk. This may involve delaying one operation until a high risk or critical activity (such as cementing) is completed on the other operation. It is also vital that when a problem does occur there is an agreed method to ensure that other activities are managed appropriately to reduce the potential for escalation should complications arise.

EP 2002-1500

- 28 -

Restricted to Shell Personnel Only

Note: This page has been left blank intentionally