Well integrity management is a key part of Oil Search's process safety management process. Our approach has been considerably enhanced over the past four years as part of the Company's general risk management improvement activities, aimed at improving our understanding of risk exposure and maturing the processes used to manage risk.

Fluid leaks from wells are caused by a loss of integrity. Common causes include corrosion, erosion by the sediment in crude oil and ageing components. If the wells are situated in an earthquake prone area, such as PNG, the damage can be exacerbated. Global statistics show that the probability of a major loss of integrity in a well on production is low. However, if such a loss of integrity does occur, the safety, environmental and financial consequences can be major.

Oil Search has had a well integrity management plan in place since 2011. In early 2013, we commissioned an independent study to identify opportunities for improving the plan, which was focused on preventative maintenance and managed at field level. The study recommended committing to a higher level of focus and providing additional resources. Therefore a dedicated Well Integrity manager and Sydney based engineering team were appointed, reporting to the General Manager of Safety & Security. Their first task was to evaluate the integrity of the well stock and assess the level of Oil Search's risk exposure.

Oil Search operates 116 wells in PNG, of which 60% were drilled by the previous operator in some cases more than 20 years ago. The construction records are incomplete and construction standards have, as expected, evolved over time. Twelve months were required to evaluate the integrity of each well and assess the associated risk. The integrity assessments showed that, while the wells were built to the specifications of the time, 40% had some type of barrier failure.

The wells were prioritised by risk so that remedial efforts could be focused accordingly, and an increased focus on well monitoring commenced in 2014. While some of the wells are situated in remote locations with difficult access, the programme is comprehensive and every well is inspected at least twice a year.

A new centralised, data management system has been developed that supports daily reporting and recording of well data. The system automatically notifies personnel of a potential barrier failure if pre-set pressure trigger values are exceeded. This data management system has increased the visibility and deepened our understanding of the integrity condition of wells.

An important part of Oil Search's well integrity management strategy is a robust process for managing breaches. These capabilities were tested in 2014 when there was a gas release from the ADD-1 well. After significant investigatory work, the source was identified and the leak successfully contained. ADD-1 has been prioritised in a $60M remediation plan for high risk wells that will take place over 2015/16, along with a US$16M plan for preventative maintenance.

Future plans include taking a more holistic management approach that emphasises the lifecycle aspect of wells from design to abandonment.