Health and Safety
Safety is a fundamental principle and a company-wide commitment at H&P. Our commitment to safety goes way beyond inspirational statements and ongoing employee training. At H&P we start much earlier in the process and embed safety into our operations by embedding it into our designs in what we call Safety by Design. It is hard to over-emphasize the importance of this starting point.
Safety is designed into our rigs
Back in 1998 we convened a group of internal experts—H&P engineers, operations personnel, Health, Safety & Environment staff and external fabrication experts—and asked them to start with a ‘blank sheet of paper’ to design rigs with safety as one of the most important variable. (See Rig Safety https://www.hpinc.com/focused-needs-our-customers)
Safety-by-Design brings focus to protecting our workers and customers, by:
- Identifying hazards and working to eliminate them in the design phase
- Using leading-edge technology to enhance efficiency and thus reduce the number and severity of safety risks
- Standardizing designs that can reduce the variability in the types of rigs we use so that our employees have the greatest familiarity with them instead of having to master a wider variety of types
- Designing and configuring loads and interconnects with rig moves in mind. By integrating equipment to the greatest extent possible, we minimize risks associated with moves and risks associated with double handling
We have steadily rolled out our Safety by Design program ever since. We have sold or decommissioned our mechanical rigs as we have added new A.C. drive rigs (ones designed by our new program) to our fleet. The decommissioning of our seven remaining mechanical rigs in fiscal 2011 marked the end of a multi-year evolution in the high-grading of our fleet from mechanical rigs to high-efficiency, high-performance A.C. rigs. Since 1998, we have built 232 FlexRig3s, 88 FlexRig4s, and 53 FlexRig5s with all 373 of those delivered to the field.
As we said at the opening of this section, is hard to over-emphasize the importance of incorporating safety into our rig designs: while we engage in robust systems and processes to promote safety in the field, we think our unique approach to making safety our starting point sets us apart and helps convey to our shareholders that we are serious about the stability of earnings and risk management that depend on being a leader in safety.
Safety programs, practices and monitoring
We lead the industry not only with our drilling equipment but also with our training, systems and processes that support our field operations. A staff of professional technicians monitors our rigs 24 hours a day, 7 days a week in H&P’s Center of Excellence (CoE).
Located in the Tulsa corporate office, the CoE is H&P's central information hub, responsible for maintaining, monitoring and supporting every domestic and international FlexRig at H&P. The CoE Call Center and Real-time Monitoring groups are staffed with systems technicians who partner with field personnel to troubleshoot rig events and leverage knowledge from experts in multiple disciplines throughout the company. In addition, experienced engineers monitor safety critical alarms and perform daily safety performance and data analysis throughout the fleet.
In addition to our own internally developed safety systems, we incorporate numerous third-party standards and third-party certified reviews into our safety programs. We use the International Association of Drilling Contractors (IADC) rig pass accreditation system for new employee orientation programs. Many of our customers require Rig Pass to verify that our employees have met the basic Operator requirements, defined by safety and training professionals, before allowing them to work on their locations. H&P’s new employee induction exceeds the IADC Rig Pass requirements for subjects covered and duration of orientation before an employee is sent to the field to support rig, yard or shop operations.
Safety through big data analysis
We also harness the data that we continually accumulate ourselves, as well as the data we obtain from ever-growing external databases to inform our safety—and our other health, environmental, and human capital decisions. We believe in science-based decision making and continual learning and improvement. As one of many ways to ensure a safe work environment, we therefore utilize an electronic Job Safety Analysis (eJSA) system that includes up-to-date operational procedures. H&P disseminates IADC and in-house safety alerts, incident reports, and weekly training presentations for many rig tasks and high-risk exposures. Proactive equipment maintenance, servicing and inventory management are administered through our electronic Enterprise Asset Management (EAM) and Supply Chain Management (SCM) systems. Our VP of Operations Support Services is responsible for these management systems, and this position reports directly to the CEO. This level of seniority reflects how central it is to us that safety is embedded throughout our operations and throughout our supply chain.
Executive and board oversight of health and safety
At H&P, we want each of our employees to go home to their loved ones safe and healthy every day. We know that any safety shortfall can cause human tragedy and lasting reputational and financial damage. And we know that demonstrating commitment at the top is essential to achieving any corporate-wide goal, which safety is. So our board of directors is active in its oversight and our executives are active in their management of health and safety.
To ensure that our health and safety management covers the entire company and is fully integrated across all operations, we have 10 cross functional Steering Committees for our core processes in HSE at H&P. Each core process has a distinct role in the controlling and removing of safety risk exposure at H&P. Each steering team is to oversee and provide guidance for their core process. The 10 core processes are:
- Pre-Job Planning
- Audits and Inspections
- Incident Investigations
- Life Belts (Rules to Live By) & Consequence Management
- COACH and Scenario Learning (COACH is H&P’s People-based /Behavioral Based Safety program focused on safe and at-risk work practices)
- Recognition and Reward
- Standards & Guidelines and Permitted Operations
- Metrics and KPIs
- Data Analysis
The Safety Leadership Team (SLT) oversees the 10 Steering Committees. The SLT has bi-weekly conference calls and quarterly face to face meetings to review the work of the steering teams and approve recommendations. All recommendations from the steering teams must be approved by the SLT. Operations VP’s are debriefed on SLT meeting discussions and decisions. VP or Executive Leadership Team approval is sought on issues with major organizational impact.
We have a dedicated Vice President of Health, Safety & Environment who works with these committees as well as having responsibility for HSE more generally. Our HSE VP, like our VP of Operations Support Services, reports directly to the CEO, further enabling seamless integration of these functions. This reporting structure also makes clear to every employee how core safety is to H&P.
In addition, we conduct quarterly reviews of enterprise risk with our entire executive leadership team. These reviews include a number of safety categories and details regarding risk monitoring and ongoing mitigation strategies. Our CEO is part of these reviews.
Finally, our CEO reports to our board of directors at least quarterly on safety efforts. These presentations provide the following:
- Data on safety training – number and types of training by job type
- Data on safety awards made to employees for their proactive efforts to control and remove workplace exposures BEFORE any incident occurs
- Data showing improvement of seatbelt use among employees (a critical 2018 safety goal)
- Data showing our incident and accident rates relative to industry data including serious injury rates (SIF), total recordable incident rate (TRIR) and lost time incident rate (LTIR)
- Internal safety performance targets
To convey the importance of safety company-wide, the CEO personally publishes the company’s safety goals for the coming year to ALL employees through a CEO letter.
Health and safety incorporated into executive compensation and corporate goals
Safety targets are integrated into our executive compensation program to ensure all incentives are aligned with our commitment to safety. For example, our executive bonus plan for fiscal year 2018 includes these goals:
- Continue implementation of Control and Remove Exposures (CARE) initiatives (the name of our overall safety management system).
- Utilize trends in SIF-potential incidents as a leading indicator to control and remove exposures.
- Sustained improvement in reduction of fatalities and life-altering incidents and less severe injuries requires focus on the critical issues and SIF precursors.
As importantly, employees are expected to strive to meet internal safety performance targets on a daily basis. Employees are reminded of our safety goals and objectives at the Monday Morning Meetings held in the district and country offices on a weekly basis, weekly Safety Leadership Workshops held for field and office employees, and Rig Safety Management Team meetings held weekly on each rig. Meeting performance targets—or failing to do so—can influence employees’ assessments and ability to obtain promotions.
Employees who cannot or do not adhere to our standards not only do not progress at H&P, they do not stay. The fact that continued employment is contingent on adhering to our safety standards is probably the biggest incentive we have to offer to create and maintain the safest possible operations. It is therefore unfortunate that it is one of the most difficult practices for shareholders to see, since performance reviews and promotions cannot be conducted publicly. Conversely, employees who actively control and remove serious injury and potential fatality exposures are recognized, rewarded and promoted.
Health and Safety Certifications
H&P uses a variety of external reviews and certifications to inform, benchmark, and confirm that our health and safety practices and quality management systems are at best practice levels. These include:
- HSE training is IADC Rig Pass accredited
- Quality control vetting of HSE policies and procedures by customer-selected third parties
- ISO 9001 certification for the provision of management support for certain oil and gas contract drilling services, including the following processes among others:
- Health, safety and environmental
- Preventative maintenance (RAMS)
- Supply chain management
- Offshore training
Although these numerous independent third-party certifications and/or benchmarks are important, we pride ourselves on creating best practices from which our customers, other industry participants, and certifying bodies can learn.