Creating efficiencies for oil well applications – Canadian Government Executive

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May 7, 2012

Creating efficiencies for oil well applications

As reported previously in CGE (Nov 2010), the Government of Saskatchewan is undertaking a renewal of its public service workplace that includes the introduction of the Lean methodology and techniques across the public service. Lean is a method of improving workplace practices. The following provides a closer look at a specific Lean initiative in Saskatchewan’s Ministry of Energy and Resources.

 

Saskatchewan’s oil and gas sector is booming, and the amount of industry activity in the province has reached an all-time high. This brings with it an opportunity to create efficiencies in how oil and gas drilling applications are processed by the province’s Ministry of Energy and Resources, particularly the Engineering Services Branch.

The branch is responsible for ensuring proper management and conservation of oil and gas resources for the province. Oil and gas companies submit applications for approval of horizontal well plans, wastewater disposal wells and off-target wells. Until the branch’s approval is in hand, a company cannot begin work on these activities.

The ministry knew that Engineering Branch staff had been processing around 3,000 applications per year and faced a growing backlog of about 500 applications last autumn. Staff were concerned they weren’t providing effective and efficient service to clients.

Each transaction was taking 30 days or more to complete. “Industry was frustrated with how long applications would take to process,” said Cam Pelzer, the Ministry of Energy and Resource’s director of planning, evaluation and external relations, and its Lean leader (an expert resource chosen to assist ministry teams with Lean initiatives). “Investments in producing wells were being delayed which can have a negative impact on the province’s economic climate.”

Not only was the process frustrating to industry, branch staff themselves were scrambling to keep up. “We were at a point where staff were overworked and stressed and were falling further and further behind,” said Twyla MacDougall, assistant deputy minister of corporate and financial services and the ministry’s Lean champion. “We knew something had to change.”

The ministry decided to apply the Lean methodology to the branch’s well drilling approval process. A team was assembled in November 2010 to assess the well applications process with a focus on horizontal well applications, the highest volumes of applications received and the largest contributor to the backlog.

“We were confident that once we determined a better process for the horizontal well applications we could adapt it to the other applications we process,” Pelzer said.

June Draude, the Minister Responsible for the Public Service Commission, and the Cabinet sponsor of the Lean initiative, praised the group – indeed, all of the Lean groups – for initiating projects and making changes. “It’s one thing to see that change is needed, but it’s another to have the courage to formally identify a process that could be improved,” Minister Draude said. “The Lean initiative demonstrates the commitment employees have to providing excellent programs and services to the people of Saskatchewan.”

Through the Lean value stream mapping process, the Energy and Resources project team identified two major problems with the horizontal well application process: a large number of applications that contained inaccurate or insufficient information, and inefficiencies in the internal administration process, which was largely paper-based.

“We identified 15 improvements we could make to our process from start to finish,” Pelzer said. “Our overall goal is to improve the service we’re providing to our clients so they believe we add value to their work rather than view the ministry as a potential roadblock.”

A key improvement for the team was to revisit and standardize their application forms, a move that will aid industry in providing accurate and complete information the first time. The team also created a public database to track approvals, and will be e-mailing approvals, rather than sending them by mail.

Full implementation of the team’s suggestions will allow:

  • A 67 percent reduction in the overall time between when an application is received to when notification is delivered to the applicant (from over 30 days down to 10 days); and
  • A 97 percent reduction to the time it takes to conduct the technical review portion of a horizontal well application (from over 30 days to one day).

“This is just the beginning of transitions that we expect will benefit our customers. Industry is quite enthusiastic about the changes we’ve introduced, and we’re getting fewer applications that are incomplete or inaccurate,” Pelzer said. “The volume of horizontal applications continues to grow and we’re confident our new processes will keep any future backlogs to a minimum.”

 

Colleen Hawkesford is the senior communications consultant for the Saskatchewan Public Service Commission (colleen.hawkesford@gov.sk.ca).

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