Thank you for the opportunity to appear before the Standing Committee on Natural Resources.
On behalf of Chevron Canada, I am pleased to share with the committee details of the deepwater exploration program that we successfully executed during the summer of 2010 in the Orphan Basin off the coast of Newfoundland and Labrador. We completed this drilling program without incurring a single lost-time incident.
Before I talk in greater detail about the Lona 0-55 well, I would like to explain how Chevron’s commitment to uncompromising standards of operational excellence gave us the confidence to proceed with this well, despite the uncertainty that followed the Deepwater Horizon incident in the Gulf of Mexico.
Chevron Canada Limited is a wholly owned subsidiary of Chevron Corporation, one of the world’s leading integrated energy companies. Chevron employs 60,000 professional men and women who are committed to delivering safe, efficient, reliable, and affordable energy sources to the communities and economies around the world.
We have been operating in Canada since 1938. Headquartered in Calgary, with an office in St. John’s, our upstream arm is focused on exploration and production activities in Atlantic Canada, Alberta, and the Canadian Arctic. Chevron’s corporate vision is to be the global energy company most admired for our people, our partnerships, and our performance. Protecting people and the environment is one of our seven shared values, along with integrity, trust, diversity, ingenuity, partnership, and high performance. Ensuring the health and safety of our employees, contractors, and the communities in which we live and work is a foundational value I and the employees of Chevron Canada commit to daily.
Chevron’s global systematic approach to ensure safe, healthy, environmentally responsible, reliable, and efficient operations is our operational excellence management system. The constant corporate-wide application of this system has created a step change in our performance and our ability to manage risks. Chevron’s commitment to operational excellence is summarized in our ten tenets of operations. The tenets are prefaced by two principles: do it safely or not at all, and there's always time to do it right.
I'd also like to share with you one important aspect that characterizes our overall approach to ensuring safe and incident-free operations. It’s called “stop-work authority”. It obligates any employee, contractor, or business partner to stop work if they suspect an unsafe condition or are just unsure of what is happening. During the Lona drilling program, more than 400 stop-work authorities were exercised. In each case, work was halted until the operations staff confirmed that no unsafe work conditions existed.
Chevron drilled the Lona O-55 exploration well approximately 430 kilometres northeast of St. John’s in a water depth of 2,600 metres between the months of May and September of 2010. This was Chevron’s second well in the Orphan Basin. The Lona well underwent two levels of environmental assessment. Regulatory approval was in place for all aspects of the program.
In response to the Deepwater Horizon incident, the Canada-Newfoundland and Labrador Offshore Petroleum Board, C-NLOPB, instituted a number of additional regulatory oversight measures on the Lona operation. Chevron complied fully with all of these measures. In appendix III of our submission, you will also see a detailed list of additional steps taken by Chevron in this well program to ensure safe and incident-free operations. In some cases, these additional steps had already been built into our well plan, while others were implemented by us as a result of the April 20 Gulf of Mexico incident. Allow me to highlight a few of those measures.
From February 8-10, 2010, Chevron management hosted a three-day safety leadership workshop in St. John’s involving all Orphan Basin project contractors and observed by the C-NLOPB.
In April, Chevron led a risk assessment meeting facilitated by an external deepwater organization to review step-by-step well design and contingencies.
On May 1, prior to commencing operations and after taking possession of the drill ship, Chevron conducted two seven-hour safety sessions, one for each of two crews on board the Stena Carron, to deliver Chevron’s commitment to an incident-free operation.
Chevron added additional functional tests to the secondary well control systems.
The blowout preventer was fully pressure-tested on surface and after subsea installation in the 2,600 metres of water. Prior to drilling into the potential hydrocarbon zone, Chevron conducted a second emergency response exercise to ensure that all the emergency protocols were in place and functioning. The C-NLOPB was witness to this exercise. The well abandonment technique was reviewed upon final casing configuration when total depth was reached, to adjust for any new information gained while drilling the Lona O-55 well.
Prior to drilling the Lona O-55 well offshore Newfoundland and Labrador, Chevron Canada had expressed a high degree of confidence in our ability to safely execute this challenging deepwater exploration well. As I indicated in my opening remarks, we succeeded in this endeavour, completing the Lona well without a single lost-time incident. This performance was achieved by our adherence to Chevron’s uncompromising safety standards in all aspects of our drilling program, and by our compliance to all special oversight measures instituted by the Canada-Newfoundland and Labrador Offshore Petroleum Board. Indeed, throughout the planning and execution of the Lona well, our steadfast focus on ensuring safe and incident-free operations was underscored by our operational excellence tenets “Do it safely or not at all” and “There is always time to do it right”.
Thank you for your time. I will now be pleased to answer your questions.