DynMcDermott Business Case Slides -- Robert W. Campbell Award

8/8/2019 DynMcDermott Business Case Slides -- Robert W. Campbell Award

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Strategic Focus on Workers, the Public

and the Environment:DynMcDermott Petroleum Operations Company



Domestic Production and Consumption

1973

Production as a Share of

Consumption 63%

200832%Total Domestic Production

Total Petroleum Consumption

M I L L I O N

B A R

R E L S P E R

D A

Y

Background: SPR



LOUISIANALOUISIANALOUISIANALOUISIANATEXASTEXASTEXASTEXAS

MISSISSIPPIMISSISSIPPIMISSISSIPPIMISSISSIPPI

HEDQUARTERSHEADQUARTERS

Gulf of MexicoGulf of MexicoGulf of Mexico

WESTHACKBERRY

WESTHACKBERRY

LAKECHARLES

LAKECHARLES

BIG HILLBIG HILLTEXAS CITYTEXAS CITY

HOUSTONHOUSTON

BATONROUGE

BATONROUGEBEAUMONT

PORT ARTHUR

BEAUMONTPORT ARTHUR BAYOU

CHOCTAW

BAYOU

CHOCTAW

BRYANMOUND

BRYANMOUND

STENNIS

WAREHOUSE

STENNIS

WAREHOUSE

FACILITY LOCATIONFACILITY LOCATION

Facility Locations

Background: SPR

NEW

ORLEANS

NEW

ORLEANS



St orag e Caver n D r a w d o w n

St orag e Cavern St orag e Cavern D r a w d o w n D r a w d o w n

Water InWater In

Oil OutOil Out Oil OutOil Out

Storage Technology

Brine OutBrine Out

OilOilOilOil

Water InWater In

Storage Cavern Leach ing Developm en t St or age Caver n St or age Caver n Leach ing Deve lopment Leach ing Deve lopment

Brine OutBrine Out

OilOilOilOil

Water InWater In

Storage Cavern Leach ing Developm en t St or age Caver n St or age Caver n Leach ing Deve lopment Leach ing Deve lopment

Background: SPR



GOCO Environment

Government Owned:

Owns physical assets

Defines program mission

Contractor Operated:

Provides employees/expertise

Day to day management and operation

DM contract: performance based fee for M&O service

ESH performance affects ~one-third of fee

All fee at risk under “Killer Clause”

Background: GOCO



Four partners formed in early 1990’s

Awarded first SPR contract April 1993

DynMcDermott Formation

30%

60%

5% 5%



DynMcDermott Business Profile

SPR Management & Operations contractor

Corporate office in New Orleans

6 physical locations in 3 states

About 500 employees

Formation through 2000

Customers key concerns

Operational readiness throughtransition

Management effectiveness and

operational efficiency Address a complacent

organizational culture



Centralized hierarchal organization (silos)

Little employee involvement, many accidents/near misses

Imposed external assessments and criteria

Lacked customer orientation

Previous ES&H Performance

Good

Enough??

1980 1990 2000 2010

50

100E v

e

n

t s

Year

120

69

Metrics

O&M M&O




Addressing Customer Concerns




Decentralized – Responsibility, Accountability, & Authority

Focus on ES&H and continuous improvement

Instill employee and customer orientation

Begin cultural shift with employee-owned behavioral approach

Initial Results…

1980 1990 2000 2010

50

100E v

e

n

t s

Year

120

69

Metrics

Better!!33% improvement


RAA

46



Strategic Approach: 2000 and Beyond

Mission Related Outcomes

Maintaining operational readiness

Major petroleum supply interruption

International Energy Program obligations

M&O contractual requirements

Safe, environmentally sound, and effectivemanagement and operation of infrastructure

Baldrige Criteria for Performance

Excellence Leadership driven

Fact based

Knowledge driven

2000 and Beyond



Systems Approach: ES&H Model

2000 and Beyond




2000 and Beyond



Integrated Systems…Further Results

1980 1990 2000 2010

50

100E v

e

n

t s

Year

120

69

Metrics

46

RAA

11

360 o

Integration

Integration – 360o

Broad employee involvement

Beyond compliance philosophy

Embraced voluntary 3rd party assessments

2000 and Beyond



Focus on the Worker

Work environment

New Orleans – office

Stennis – warehousing

Sites – 4 petroleum operationswith some office

Personal safety – petrochemicals,weather (hurricanes) & wildlife

Workers

From local communities 48 years old

14+ years on the job

In high demand

Focus on the Worker

http://spr-web/grids/main1.asp

























Worker Engagement

DM’s culture is characterized by:

Spirit of cooperation

Initiative

Innovation

Workforce empowerment

DM’s values and rewards: Continuous improvement

Responsible stewardship

Ethical behavior Employee health and safety

Workforce diversity

Focus on the Worker



Worker - Management Partnerships

Moving initiatives to outcomes

Focus on the Worker



Walking the talk

Empowered/involved workers

Include workers in strategic planning

Focus on customer satisfaction

External commitments

OSHA Voluntary Protection Program National Environmental Performance Track

Clean Texas Platinum Leader

Independent validation

ISO 14001 & 9001 Management Systems

Malcolm Baldrige National Quality Award

Robert W. Campbell Award

Focus on the Worker



Social and Economic Initiatives

Hometown entrepreneurs

ESH mentorship opportunity

Build business role models

Benefits accrue to workers and the facility

Focus on the Public



Workforce is our window to the community

Civic groups Educational institutions

Professional organizations

Charitable activities

Social/Community Initiatives

Focus on the Public



Focus on the Environment

Environmental Management System

Structured approach

Prioritize aspects and mitigates impacts

Fully integrated into business operations

Environmental Advisory Committee – a partnership

Citizens, scientists, and engineers

Unencumbered view of SPR activities

Community perspective




Compliance & Beyond

Compliance: its a baseline, not a target

Community and workers embrace

Foundation for sustained performance

Compliance

Requirement




Results: the Triple Bottom Line

Employees

Economics

Environment

Formula for success



EMPLOYEES: Changing Culture

Peer to peer coaching of behaviors

Formula for success

MP OY S R d bl j i



0

10

20

30

40

1990 1992 1994 1996 1998 2000 2002 2004 2006

No Lost Work

Lost Work

Recordable Injury Rate

DynMcDermott Tenure

I n j u r i e s

Engage line employees to improve work environment

EMPLOYEES: Recordable Injuries

Formula for success

ENVIRONMENT R bl E



ENVIRONMENT: Reportable Events

E n v i r o n m e n t a l I n c i d e n t s

1 9 8 6

1 9 8 7

1 9 8 8

1 9 8 9

1 9 9 0

1 9 9 1

1 9 9 2

1 9 9 3

1 9 9 4

1 9 9 5

1 9 9 6

1 9 9 7

1 9 9 8

1 9 9 9

2 0 0 0

2 0 0 1

2 0 0 2

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

0

10

20

30

40

50

DynMcDermott’s Tenure

Other

Contractors

Moving work out of silos and into a systems approach

Formula for success

ENVIRONMENT W R d i



ENVIRONMENT : Waste Reductions

1999 2000 2001 2002 2003 2004 2005 2006 2007

8,728

3,190

1,415

487 462183268

468567

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Hazardous Wastes

P o u n d s

1999 2000 2001 2002 2003 2004 2005 2006 2007

1,002,315

636,502607,120

484,060 449,637400,770

446,818402,616436,157

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

Sanitary Wastes

P o u

n d s

1999 2000 2001 2002 2003 2004 2005 2006 2007

24,144,083

2,400 722,401 7,560 01,046,655

5,6006,0006,132

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

Oil Field Wastes

P o u n d s

Quality improvement tools Break down to components

Integrated improvementteams

Recognition of results

Formula for success

ECONOMICS I f I j i



ECONOMICS : Impact of Injuries

Injuries have financial impacts Lost productivity

Medical costs

Formula for success

M i l l i o n D o l l a r s

1

0

3

4

2

2005 20011999 1997 1995 2007 1993 2003

Safety & Health Savings = $3,427,000


1

0

3

4

2

2005 20011999 1997 1995 2007 1993 2003


1

0

3

4

2

2005 20011999 1997 1995 2007 1993


1

0

3

4

2


1

0

3

4

2

2005 20011999 1997 1995 2007 1993 2003

Safety & Health Savings = $3,427,000Safety & Health Savings = $3,427,000

Exhibit 17: Value of Safety and Health Integration


1

0

3

4

2

2005 20011999 1997 1995 2007 1993 2003

Safety & Health Savings = $3,427,000


1

0

3

4

2

2005 20011999 1997 1995 2007 1993 2003


1

0

3

4

2

2005 20011999 1997 1995 2007 1993


1

0

3

4

2


1

0

3

4

2

2005 20011999 1997 1995 2007 1993 2003

Safety & Health Savings = $3,427,000Safety & Health Savings = $3,427,000

Exhibit 17: Value of Safety and Health Integration

ECONOMICS E i l ROI



ECONOMICS: Environmental ROI

Profiting from environmental improvement

Formula for success

1999 2000 2001 2002 2003 2004 2005 2006 2007

0

1

2

3

4

5

6


Cumulative

Costs = $346,487

$5,137,481Environmental Savings =

-Sanitary Waste -Oily Waste

-Hazardous Waste -Remediation

1999 2000 2001 2002 2003 2004 2005 2006 2007

0

1

2

3

4

5

6


Cumulative

Costs = $346,487

Cumulative

Costs = $346,487

$5,137,481Environmental Savings = $5,137,481Environmental Savings =





Exhibit 16: Value of Environmental Management System

1999 2000 2001 2002 2003 2004 2005 2006 2007

0

1

2

3

4

5

6


Cumulative

Costs = $346,487

$5,137,481Environmental Savings =



1999 2000 2001 2002 2003 2004 2005 2006 2007

0

1

2

3

4

5

6


Cumulative

Costs = $346,487

Cumulative

Costs = $346,487

$5,137,481Environmental Savings = $5,137,481Environmental Savings =





Exhibit 16: Value of Environmental Management System



ECONOMICS Th B tt Li



ECONOMICS: The Bottom Line

Productivity up 180%

Accident costs down 79%

Environmental ROI 183%

OSHE portion of contract fee (profit)

~ 1/3 or ~$32 million over 15 years

Image & Goodwill:They have value!

Intangible to the purchase decision

Positive image = well managed company

Contract success, success, success….

Formula for success

Then the Unthinkable Happened



LOUISIANALOUISIANALOUISIANALOUISIANATEXASTEXASTEXASTEXAS MISSISSIPPIMISSISSIPPIMISSISSIPPIMISSISSIPPI

NEW

ORLEANS

NEW

ORLEANS

Gulf of MexicoGulf of MexicoGulf of Mexico

WESTWEST

LAKECHARLESLAKECHARLES

BIG HILLBIG HILL

TEXAS CITYTEXAS CITY

HOUSTONHOUSTON

BATONROUGE

BATONROUGEBEAUMONT

PORT ARTHUR

BEAUMONTPORT ARTHUR BAYOU

CHOCTAWBAYOUCHOCTAW

BRYANMOUNDBRYANMOUND

STENNISWAREHOUSESTENNISWAREHOUSE

FACILITY LOCATIONFACILITY LOCATION

HACKBERR YHACKBERRY

RITA

9-24-05

RITA

9-24-05

KATRINA

8-29-05

KATRINA

8-29-05

Then the Unthinkable Happened…

Personal Tragedy Everywhere



Personal Tragedy Everywhere

Many of ouremployees lost

everythingovernight

Many Facilities in Shambles



Many Facilities in Shambles

Including commercial oil production

Creating a

NationalEnergyEmergency

Our Metrics did not Measure



Two of the most powerful hurricanes toever strike the U.S

All employees survived All but 1 employee reported in within 3 days

Despite tremendous losses

All employees retained on payroll Immediately engaged in energy emergency

Zero injuries

Zero environmental releases

Extraordinary employee loyalty!

Operational Excellence!

Our Metrics did not Measure…

In Conclusion



In Conclusion…

….High Performing Companies Empower employees

Integrate ESH with all other facets of

business

Structure their ESH managementsystem

Continually evolve and innovate

Recognize ESH as value-added

Expect to perform well beyond baselinerequirements

For more information:



For more information:

www.DynMcDermott.com

William BozzoVice President,Director, Environment, Safety, and [email protected]

http://www.dynmcdermott.com/

mailto:[email protected]

mailto:[email protected]

http://www.dynmcdermott.com/

DynMcDermott Business Case Slides -- Robert W. Campbell Award

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