Offshore Petroleum Safety: Priorities for 2010 and Beyond Jane - - PDF document
SEAAOC 2010 Offshore Petroleum Safety: Priorities for 2010 and Beyond Jane Cutler Chief Executive Officer 24 September 2010 Thank you for the opportunity to say a few words to emphasis that to be a vibrant and growing industry contributing
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Jane Cutler Chief Executive Officer
24 September 2010
Thank you for the opportunity to say a few words to emphasis that to be a vibrant and growing industry contributing to the well being of all Australian’s we must first be a safe industry.
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Today I will talk a little about NOPSA, reflect on industry performance and recent challenges and suggest some areas of focus going forwards.
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Piper Alpha - I show this for a number of reasons: As a reminder:
I show this as a reminder that many of the circumstances that led to the Piper Alpha disaster are happening today, here in Australia. Fortunately not all in the same location, at the same time. But to give some simple examples:
should be shut in if the fire protection systems are offline.
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Whilst many of the outcomes from the Cullen Inquiry, such as Safety Cases, form the basis of our approach to safety in the Australian offshore industry, one of the important principles highlighted was clarity of responsibilities. In our Australian system, the responsibility for safety lies with those best placed to manage safety. In other words the Operators of facilities are responsible for the safety of their facilities and those working on them.
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NOPSA’s role as regulator is to provide independent and robust challenge. At the core of our functions we ask Operators three things: 1) “Are you doing enough to be safe?” A Safety Case is not simply a document that is thrown in through the door of the regulator for approval. It is one point in a process that starts at the time of the earliest discussions about the possibility of developing a particular resource and continues until after decommissioning of the facility. A Safety Case is just one part of the process that documents the specific and detailed thinking that has been undertaken by that particular operator for the specific facility (generic cut and paste of information and references to other facilities
2) “Are you doing what you said your would do?” We inspect facilities, rather like an audit and verify on a sampling basis. 3) When something goes wrong we ask, “What happened? Why? What can we learn? Did anyone break the law? Is enforcement needed?”
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NOPSA
33 OHS Inspectors 20 Support staff
INDUSTRY
33 Operators 170 Facilities
180 Assessments 366 Incidents
38 Accidents 328 Dangerous Occurrences
180 Assessments 94 Inspections 6 Major Investigations 93 Minor Investigations 267 Incident reviews 28 Enforcement actions
This gives you a sense of the scale of NOPSA. We are currently recruiting for five new inspectors to support an increase in the number of inspections
For the record we reject about 10% of Safety Cases. Almost none get through without requests for further information.
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4 8 12 16 2005 2006 2007 2008 2009 1/1/10 to 30/6/10 Rate
per million hours
Per million hours
Now moving to industry performance, this graph refers only to facilities in NOPSA’s jurisdiction. This is an important graph for two reasons:
safely.
reducing personal injury rates over the last few years. But lower personal injury rates, less slips, trips and falls does not mean a lower risk of exploding oil rigs!
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5 10 15 20 25 30 35 2005 2006 2007 2008 2009 1/1/10 to 30/6/10 Number
Liquid >12500 L Liquid >80 ‐ 12500 L Gas >300 kg Gas >1 ‐ 300 kg
Unfortunately we can see here that there has been an increase in hydrocarbon releases over the first six months of this year. Given that any hydrocarbon release – no matter how small – shows a loss of control, this is a concern and is a focus of our attention.
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2005 2006 2007 2008 2009 Q1 2010
Procedures - Not Followed Preventive Maintenance Preventive Maintenance Preventive Maintenance Procedures - Not Followed Procedures - Not Followed Preventive Maintenance Procedures - Not Followed Design Specs Procedures - Not Followed Design Specs Design Specs Preventive Maintenance Training - Understanding Design Specs Procedures - Not Followed Human Engineering - Machine Interface Design Specs Preventive Maintenance
Turning now to the root causes of all incidents and accidents reported to NOPSA – you can see there is a pattern. We can see that there are three areas to work on:
it how you write it.
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Fatal and Major Injuries
NOTE – The UK bulletin provides provisional data for 2009/10……annual Offshore Injury and Incident Statistics Report will be produced later this year. The UK’s Health and Safety Executive (HSE) definition of ‘Major Injury’ is comparable to NOPSA definition (both as per International Regulators Forum). The HSE, regulator of the UK sector of the North Sea are also seeing interesting trends in their industry performance data. After almost a decade of improvements in industry performance the most recent financial year sees an upkick in injury numbers.
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Hydrocarbon Releases
HSE volumes used to categorise hydrocarbon releases are comparable but with rate included: MAJOR: (i) Gas Releases: EITHER [Quantity released > 300 kg] OR [Mass release rate>1kg/s AND Duration >5 mins] SIGNIFICANT: (Those between major and minor) (i) Gas Releases: Capable of jet fires of five to 10 metres lasting for between two to five minutes, or release rates between 0.1 to 1.0 kg/s lasting two to five minutes giving explosive clouds of between 10 and 3000 m3 in size. MINOR: (i) Gas Releases: EITHER [Quantity released < 1 kg] OR [Mass release rate <0.1 kg/s AND Duration < 2 mins] Also concerning the UK regulator is the increase in hydrocarbon releases in the most recent financial year.
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Words inspired by "Safety culture is how the night shift operates when it is alone without management watching" Jean-Marc Jaubert, head of safety at French major Total, quoted in the Chemical Engineer July/August 2010. NOPSA has started work in this area. We have used the methodology used by the Baker Inquiry into the Texas City disaster. A survey comprising a series of questions in eight topic areas was given to the offshore workforce during inspections on eight facilities as well as senior management onshore.
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100 200 300 400 500 600 700 800 1 2 3 4 5 6 7 8 Average to date Facility
Aggregate Facility Score
Process Safety Culture Survey
Benchmark score is not included as not all categories have benchmarks A series of questions was asked in eight topic areas, producing wide variation in scores between
facilities.
Two topic areas had 50% or more of facilities scoring below the benchmark:
Operator. In summary, our preliminary results show wide variation in results between facilities here in Australia.
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From this performance data and recent incidents you can see there are some clear safety improvement opportunities.
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And it wont surprise you to see NOPSA’s current focus areas. We will be paying particular attention to these areas in our:
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“The past seldom obliges by revealing to us when wildness will break out in the future…”
Quote from: Against the Gods: The Remarkable Story of Risk, PL Bernstein This photo is the ENSCO 51 in the Gulf of Mexico – 1 March 2001. There are many similarities with the Montara incident. Despite deluging the facility with water, it ignited after about 20 hours. Fortunately, the flow stopped of its own accord.
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Immediate Cause: Primary cementing integrity failure Root Cause: Systemic failure of management systems, non-compliance with
As for Montara, we await the public release of the COI report in the near future. NOPSA lodged a brief of evidence with the Commonwealth Department or Public Prosecutions (CDPP) in June. CDPP are working through their processes to determine how best to approach any potential prosecution. There is a lot of information available on the public record and from this we can conclude that:
compliance with operating procedures. The standards processes and procedures seem to have been in place but not adhered to for some reason.
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Source Deepwater Horizon Accident Investigation Report September 8, 2010 BP Many pages of writing and pictures and detailed discussion of the technical aspects of drilling, and well control have entered our living rooms. There have been many inquiries and reports. I commend the 30-day report to you as giving some insights into matters to which we should all pay attention. The BP investigation report, released earlier this month, gives a clear factual account of what happens and how the disaster occurred. _______________ Key findings:
been established;
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Once events had reached this point the result was inevitable. Diversion to the mud gas separator resulted in gas venting onto the rig. The fire and gas system did not prevent hydrocarbon ignition (there were insufficient measures to prevent gas ingestion into enclosed non-hazardous area containing ignition sources). The BOP emergency mode did not seal the well. BP report contains some salient lessons but doesn’t answer the question WHY… For each of the eight findings there are some deeper and more challenging questions.
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18 12 9 5 5 4 1 Cementing Equipment failure Casing failure Formation fracture Swabbing Stuck Pipe Drill into other well
Factors Contributing to Blowouts
Data sourced from Drilling Contractor, July/August 2007
I’ll make a personal observation here: blow-outs have been around for a long time. Recent data says cement has been a factor in 46% of blowouts. I would suggest that whilst technology has moved on, the basic principles
critical barrier…barriers are important...and it is not a barrier unless it is proven!
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Now, before we get too myopic about deepwater drilling we should remember that Montara was a Jack-up in shallow water. We should also pay attention to some recent incidents that have not received so much publicity. The Aban Pearl took in water, capsized and sank. Fortunately there were no fatalities or injuries, according to reports. Some of you know this rig as the Treasure Seeker built in 1977 in Norway. We have no further information – if you have some please share it with us. Speculating, on the basis of no information, there was a hull integrity breach in combination with bilge/balast issues. Now before you say it couldn’t happen here:
Australia;
upgrade to MODU codes in 1989; and
please think about how you can assure yourself that your facility has integrity when we are unable to learn the lessons from this incident.
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What we know: two dead as a result of a life boat drop during maintenance. No further information available. Again, without the associated information, how can we learn from this?
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I have included this for two reasons: first, a well control incident in Norway now receives much more publicity than ever before but it’s a good news story. There was loss of well control, non essential personnel were evacuated and well control was regained.
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You can see here the catastrophic crane failure. One fatality, two seriously injured. There is good information and an investigation report on the internet – recommended reading for anyone operating with a crane.
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More recently, this incident in China, where 34 workers were rescued. Damage caused by severe weather conditions. There is some uncertainty or lack of clarity as to whether the rig was operating
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– Media spotlight – Loss of reputation & community trust – Insurance and liability – Cost increases – Can smaller companies and minor partners pay and survive? – Which entity is ultimately responsible for safety? – Minimum standards vs best practice
Together these incidents have a wide range of implications for the industry:
in my back yard” and pressure is building for increased regulation.
How that may manifest here – such as bank guarantees, bonds – is not yet clear.
US, higher criminal / civil penalties. A consortium of the four majors is proposing to spend US $1billion on a rapid deployment spill containment system. Perhaps we should pause and reflect whether the money would be better spent on prevention of the incident rather than managing the consequence.
raised? Will minor partners be able to pay in the event of a problem? If not, why have a minor partner? Will there be industry consolidation?
There is an opportunity for a proactive stance and I would encourage the Australian Petroleum Production and Exploration Association (APPEA) to implement the initiatives highlighted by Belinda and encourage APPEA to communicate clearly and proactively the results of the industry initiatives.
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–Independence of safety regulator –Regulatory capture –Performance based vs prescriptive requirements –Quality of staff / challenge / inspection / training
There are also implications for governments and regulators.
and the need to strengthen regulatory capture.
versus a prescriptive approach; perhaps the answer lies in a combination.
importance of obtaining good staff, independent challenge, high quality inspections and training. We need well trained, experienced and capable regulators if they are to credibly challenge some of the best and brightest within the industry.
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be deteriorating?
the industry?
facilities – what about the culture of those who design facilities and allocate budgets to construct & maintain them?
Finally I would like to leave you with five questions to consider: As an aside to the fourth point, we could look at the safety culture of those in the financial services industry who say “compliance with the law is enough”…but is that enough in a performance-based regime?
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How are we going to work together to lift industry performance so we regain trust and community confidence?
And most importantly…