Achieving QA/QC Excellence

Tom Redlinger is the Chief Operating Officer at T H Hill Associates, Inc., an engineering firm providing the oil and gas industry with a dedicated source for Quality Assurance (QA)/Quality Control (QC) services, engineering expertise, and training assistance. In his role, Mr. Redlinger helps guide the client’s technical decisions that T H Hill makes with regard to standards and quality implementation. Mr. Redlinger also works directly with T H Hill’s client base to identify quality trends and standards gaps in an effort to determine where they are seeing risk and where a quality management program could improve their operations

Inspectioneering recently had the opportunity to speak with Mr. Redlinger about QA/QC practices in the O&G business and what companies can do to create programs that are both effective and sustainable. We hope you find the exchange as interesting as we did.

How do you define Quality Assurance (QA)? Is Quality Control (QC) a separate concept or do you consider them interrelated?

TR:  QA and QC are absolutely interrelated. When I think about QA, I am thinking about all aspects of a program including design, management, process, people, testing, etc. It is a very strategic and analytical path to achieve quality output. And that most definitely includes the QC aspect: inspection, review, additional testing, etc. Those QC pieces are embedded across every aspect of the QA process.

For T H Hill, QA/QC programs are different than most. We conduct some procedures that would be clearly defined as QC, such as making sure measurements are correct, looking for faults in equipment, and identifying problems and defects in materials. However, the majority of our business comes from working directly with the oil and gas vendor community to review and evaluate their respective QA processes. First and foremost, are their quality plans set correctly? For example, our technicians apply QC techniques to test the vendor’s QA process and ensure it is followed correctly.

Why are effective QA/QC practices so important for owner-operators in the oil and gas industry? 

TR:  If you look at the oil and gas industry versus other industries, QA/QC programs have substantial room to improve from a reliability standpoint. The current average NPT in the industry is upwards of 30 percent, and 6-10 percent of NPT comes from equipment failure. That is where the effectiveness of QA/QC programs come in. When programs are put into place to improve QA/QC, operators see immediate value. Whether it is value garnered from the performance, cost side, or improved mitigation of safety, environment and technical risks, QA/QC programs dramatically improve equipment reliability when applied correctly.

What are some specific risks associated with poorly designed or manufactured equipment?

TR:  It varies by the client, their operations and the amount of anticipated technical risk. For instance, if extreme pressures are present during drilling operations, getting QA right at the beginning will have an impact on how safe the drilling operations will be.

How does one determine the scope of their quality program (i.e., How much QA is enough?)?

TR:  This question is typically raised when asking “is it possible to drill a perfect well?” or “is an error-free performance acceptable?” In the oil and gas industry there has been a history of operators being willing to take some amount of performance-related incidents as a trade-off for QA mechanisms or other quality programs. However, there is also interest to “engineer-out” quality risk. In this instance, T H Hill’s clients take guidance from us on the appropriate scope of QA/QC. QA/QC is at the heart of what we do and given our long and vast experience, we have a pretty good sense of what is effective from a QA scope. For example, we look at the latest critical drilling issues, the most concerning trends and what is happening globally across the industry. From that analysis, we are able to make the most accurate recommendations on behalf of our clients so that in return, they get the best value from our services.

Additionally, there are two other scenarios to consider. In some of our clients’ organizations, there is a corporate culture that has already been developed in an effort to improve the mitigation of risk. As such, you will see the culture drive decisions on how much QA is needed.  There are also organizations driven by personal or activity based risk where a procurement manager, supply chain manager, someone on the drilling team wants their particular component of an operation to be successful.

There is a connection between the amount of effort you spend making sure your QA program is scoped correctly and the benefit derived from it. The problem with QA, because it is not 100 percent predictable, is that drilling teams sometimes operate outside of its normal expected parameters. Operators push equipment and systems to their technical limits and beyond. Because of that, equipment failures happen that may not be related to whether or not the equipment was put together and inspected correctly. It may be that in our current market conditions, human errors and drilling requirements pushed our equipment beyond their limitations.

Briefly describe some of the biggest challenges your clients are currently facing. How is T H Hill helping to overcome these challenges?

TR:  The biggest challenge right now is change due to the price of oil dramatically dropping. If you speak with any of T H Hill’s clients today, it is common to hear they have reviewed and reassessed how they are drilling their wells. Operators are trying to figure out how they can drill faster and be more effective at a new cost point. Therefore, when they look at changing their drilling program and their equipment profile, they are also looking to identify lower cost vendors. So where they may have been building wells the same way and at the same cost for the past two to three years, they now are reviewing every decision made. That is where T H Hill helps play a substantial partnership role for clients.  For example, if an operator is looking at new equipment profiles or trying to do things with different types of equipment, we can help implement new QA/QC plans resulting from the change. We can also help clients with failure analysis to determine whether or not a correct or incorrect assumption has been made based on what is technically appropriate for the situation.

Another fact in the industry is that fewer drilling rigs are running. The US has gone from having 1,800 rigs in operation to 800. Therefore, if you were an operator who had 30 rigs running and one rig is not running due to a quality issue, it could cost upwards of $1 million per day to mitigate but there were still 29 active units. Let’s say that the same company today has reduced their number of active rigs to 10, and the same one rig developed a non-operational technical problem. Now 10 percent of their drilling fleet is down due to a quality issue. Operators simply can’t afford that risk in these current market conditions. With the enhanced controls on cost and limited drilling resources available to operators, doing it correctly the first time is so much more important.

Has the decrease in oil price significantly affected your business? Your clients'?

TR:  When the price of oil started to fall last year, T H Hill had quite a few conversations with our clients on whether we thought the reduction in price would improve or reduce quality. We thought as the price came down, there would be improvement. But in reality, over the past year the industry has started to trend toward things that actually detracted from quality. We have watched QA/QC groups get hit very hard due to cost and operational reductions; we’ve even seen entire QA/QC departments dissipate. What is most unfortunate, and rather scary, is we are now eight months into the market downturn, equipment is wearing out and failures are rapidly increasing. Unfortunately, we have witnessed drilling and completion operations and equipment fail because controls pertinent to the process are being skipped, the preventative maintenance is being deferred or replacement parts were inaccessible.

What Codes, Standards, and/or Regulations govern QA practices in the United States?

TR:  In our industry, the API Q2 document (a new, risk-based quality management system approach that focuses on competency, service design, contingency planning, supply chain controls, preventive maintenance, inspection, service quality plans and management of change) most impacts our world. API Q2 came out post-Macondo and was designed to work with the service companies to abide and implement QA principles. Today, more operators are pushing the implementation of the API Q2 and T H Hill seamlessly supports this program. For example, the DS-1® drill string and inspection standard that T H Hill has created, particularly Volume Four on quality management systems for drilling specialty systems and how to put them in place, is an effective mechanism to make sure operators are applying API Q2 correctly. We have also helped our clients write their own quality plans around specific equipment not covered by API Q2. API Q2 creates the general framework for the creation of QA programs for those particular items, but there are not a lot of standards or regulations primarily focused on QA in the US. T H Hill helps to fill that gap.

If you could provide one tip to companies trying to establish or revamp their QA/QC program, what would it be?

TR:  Don’t go into an exhaustive, time-consuming study right away. When looking to establish or revamp a program, we recommend clients conduct a six-month pilot study where initial key performance indicators, cost-evaluations, and data measurements are identified over the course of performing the pilot. The results of the pilot typically demonstrate the benefits and risk in the supply chain.  In contrast, historically recorded QA/QC and operational information leaves numerous questions. Clients become overwhelmed or cannot connect the process with the potential value. Therefore, we recommend they look at the highest areas of QA/QC risk and address their known or implied program risks immediately before taking on the full quality management system.