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Classification and registration of offshore drilling units
Almost every vessel, barge, or floating object, including mobile offshore drilling units (MODUs), must have classification and registration certificates of compliance to the rules and regulations, as dictated and published by the classification society and country of registration.
Most insurance underwriters require classification for the vessel to qualify for marine insurance. If the vessel is not fully classified, underwriting insurance companies will not insure the property, leaving the owner and his financial institution “self-insured.” The vessel owner may consider the risk of a financial loss resulting from self-insurance, but his bank will not. Most operators will also require a drilling contractor to have classification on the MODU to show the unit’s condition and seaworthiness. In other words, MODUs must be fully “in” classification to obtain full insurance coverage, to obtain bank loans, and to comply with the operator’s contract requirements.
Classification societies are usually privately owned for-profit companies that work closely with, though fully independently of, government bodies. There are twelve societies, all belonging to the International Association of Classification Societies (IACS). The primary societies are:
- ABS (American)
- Det Norske Veritas (DNV, Norwegian)
- Lloyd’s Register of Shipping (Lloyd’s Registry, English)
Other members are located in France, China, Italy, Germany, Korea, Japan, Russia, Croatia, and India. It is very rare to see a MODU that is not classified by one of the three primary societies, with ABS having most of the units. Classification as an indication of seaworthiness and vessel condition was started in the late 1600s in England. ABS origin has been traced back to 1862. The first rules and regulations for MODUs appeared in 1968, and were written by ABS.
MODU classification process
When a MODU applies for classification, usually during initial construction, it is a costly and rigorous exercise requiring months of effort by the owner, the design team or engineering company, and the classification society. The process consists of a “design review” and an on-site inspection to verify that the design is built as engineered and according to the society’s published rules.
Once classified, the unit will have periodic inspections that the owner and operator must plan for and schedule, so that the MODU does not fall out of classification or interfere with the operator’s drilling and/or well-completion program. There are:
- “Annuals” (once-per-year “walk around” unless a problem is found)
- Yearly surveys
- 2½-year surveys often called underwater inspection in lieu of drydocking (UWILD)
- A“special survey” (every 5 years and usually requiring a drydock)
These surveys include inspections of:
- The steel structure and hull condition
- Safety at sea
- Corrosion protection
- Power and electric equipment and wiring
- Communication on and from the MODU
- Detection systems for fire and gas
- Crew level
- Mooring equipment
- Operating manual and emergency procedures
Evolution of international classification organizations
In the 1940s and 1950s, it became apparent that, by working together and developing common rules and regulations, the shipping industry could become safer, operate with higher principles, become more efficient, and exercise better pollution control. Thus, the Intl. Maritime Organization (IMO), an industry group that is not part of classification or registry, was assembled.
Under the IMO, several regulations, guidelines, and rules have been developed and adopted by a number of countries that have become part of the requirements for vessel and MODU registration. Included under the IMO umbrella are the following:
|Safety of Life at Sea (SOLAS)||Deals primarily with safety issues and communications|
|MODU code||Deals primarily with construction and equipment|
|Maritime Pollution (MARPOL)||Deals with pollution control and prevention|
|International Safety Management (ISO)||Focuses on safety for self-propelled vessels and MODUs|
Member nations of the IMO adopt the codes and enforce them through classification societies’ efforts and fees charged the drilling contractor. Registration requirements often include the IMO codes.
Registration concerns the country of home port for the unit. Each country of registry has rules and regulations centered mainly on:
- Lifting and cargo gear
- Pollution containment
Post MODU classification and registration
When a MODU has a classification and registration, it must comply with the rules and regulations of the country in which it operates. For example, a MODU may have an ABS Classification, Marshall Islands Registration for all the equipment, and registry for crewing in Germany, but, when it enters the United States to drill a well in the GOM(Gulf of Mexico), it must comply with the U.S.A. regulations as enforced and surveyed by the U.S. Coast Guard. In addition, the operator must obtain permits to drill from the Mineral Management Service (MMS), which also inspects the MODU for MMS rules and regulations compliance. The well to be drilled and MODU must meet the MMS requirements concerning equipment, procedures, and crew training. The Environmental Protection Agency (EPA), Occupational Safety and Health Agency (OSHA), and a few other agencies may enter the picture. The operator and contractor should work together to comply with the necessary rules and regulations.
Some countries, such as the United Kingdom (England), Norway, and Australia, require a “safety case” for the MODU to operate within their waters. Safety cases usually are expanded documentation, equipment and systems, and training centered on classification and registration rules, but dovetailed into those particular countries’ laws. Developing a safety case requires considerable time and money, and should be anticipated and planned for in detail far ahead of its implementation on the MODU. It is not unusual to devote 6 to 12 months(or more) and over half a million dollars to fully develop a documented safety case for a single MODU. The safety case is required to obtain the necessary country’s approval for the MODU to drill in its waters. Fortunately, consulting companies that specialize in the development of safety cases are available.
Industry organizations, such as the American Petroleum Inst.(API) and International Standards Organization (ISO), also have a major influence on the upstream oil and gas industry. These organizations write specifications and recommended practices (RPs) for the industry to follow. These documents usually deal with equipment, procedures, and operating systems. The documents are generally written by the industry for industry use, and are widely quoted by the societies, registries, operators, and drilling contractors.
In summary, 30 years ago, in the infancy of the offshore oil and gas business, none of the above was required. However, after a number of incidents and tragedies, insurance underwriters, operators, drilling contractors, and governmental bodies have developed a fairly tight system to ensure better safety and environmentally friendly systems for the benefit and health of all.