As the industry develops the need for stringent risk and disaster management programmes is becoming increasingly important
The oil and gas industry is inherently dangerous, and while companies implement risk assessments and disaster and crisis management procedures the consequences of pipeline leaks or explosions, well failures, plant explosions, gas leaks, or fires at facilities are all too obvious.
While you can plan and prepare, accidents are inevitable, and in a rapidly growing and increasingly complex industry companies must ensure they invest in and continually evolve effective risk assessment and disaster management plans and procedures.
The Macondo disaster highlighted the consequences of serious emergencies in oil and gas operations, having far-ranging and long-lasting effects for BP, the Gulf of Mexico region, the public, and the global industry as a whole.
Subsequent investigations noted serious deficiencies in oil and gas companies’ disaster management plans, deep-rooted failures in risk management in the offshore sector, and raised doubts about the entire safety culture throughout the global offshore industry.
“One of the surprises that emerged in the investigation of the Deepwater Horizon incident was the lack of standards in the industry, which is now being addressed,” says Clare Colhurn, CEO of leading provider of contractual risk management solutions, 8over8.
“If we compare the rate or the number of disaster incidents in oil and gas to other capital intensive verticals such as commercial aviation then we would say that the industry has been too slow at adopting and enforcing risk assessment and management. Risk can be managed successfully without reducing profits long-term and it is unfortunate that it has taken several disasters to awaken the industry to this stark realisation.”
Applying a ‘lessons learned’ approach to disaster management is a failing of businesses, with companies often reacting to a crisis rather than maintaining preventative measures or procedures. A lack of desire to invest in ‘low probability, high consequence’ events, and static, non-evolving contingency plans, means that disaster management must be a key focus for companies.
Since Deepwater Horizon the global industry has worked hard to repair a damaged reputation by reviewing its processes, its contingency plans and emergency response procedures, and its disaster management programmes. In the Middle East, where oil and gas exploration and production is developing rapidly, there has been considerable investment in recent years into health and safety procedures, emergency response and disaster planning.
For a region that is set to play a vital role in meeting future energy demands, disaster and emergency plans are critical, as companies are now recognising.
“Although this is an industry-wide issue, there is a particular perception that the Middle East is still a developing market, and therefore behind when it comes to managing risk,” explains Andrew Ryan, Vice President – Middle East and Central Asia, Air Energi, which provides market leading workforce solutions to operators, engineering and service companies.
“What is often overlooked is that most of the region’s national oil companies (NOCs) will partner with major international players when it comes to large development projects. This crucially enables them to draw on the knowledge, expertise and best practices of international operators.”
Industry growth is driving operational risks for businesses, as rapid acceleration of E&P brings more complexity, more difficult projects in remote or harsh areas, and a shortage of skilled workers that are trained in specific or relevant HSE and emergency procedures.
For operators in the Middle East these complexities are at the forefront, with growth in the region set to continue the challenges of an increasingly complex, more strictly regulated and higher-pressure global environment making it essential for companies to focus on constantly evolving their disaster and risk management procedures.
Article continues on next page …
In response to this evolving market Andrew says that companies are taking a proactive approach to building an evolving and superior disaster management environment.
“Over the past eight years we have experienced a significant increase in the demand for health, safety, security and environment (HSSE) and risk-based roles, and the proportion of consultants employed within these positions in the Middle East is significantly higher than a decade ago. This is particularly true in countries such as Iraq.”
An effective disaster management plan must be constantly evolving to reflect the changing industry and the accompanying evolving risk management environment. If it stands still or is not regularly and continuously updated then any contingency plans in place risk becoming outdated and redundant.
Not only must companies remain compliant with the ongoing and continuous regulatory pressure and changes, which have increased in their frequency since Deepwater Horizon, but also they must overcome growing complexity within their businesses to save lives, minimise downtime and reduce losses.
While it is impossible to plan for every eventuality, effective disaster management and risk prevention must be built into a company’s structure at the very start of a project.
“It is absolutely essential that risk management processes are embedded in company culture,” Clare agrees. “The key aspects to an effective disaster management programme for oil companies include commitment from the company’s leaders, change procedures, hazard analysis, communications systems, and lessons learned. You need control structures and strong feedback loops that are constantly monitored. Preventing accidents requires designing an effective safety control structure that eliminates or reduces the impact of such adverse events.”
Building disaster management procedures requires constant investment to ensure that plans, training, and equipment remains up to date, in accordance to the correct regulations and in ready-to-use condition.
This means ongoing investment in initial risk assessments and planning at the early stages of a project, training and certification of workforce from senior level downwards to remove any complacency or lack of commitment to safety, developing and improving hazard analysis and safety systems, in effective communication capabilities, investing in third party safety management systems and integrating safety engineers into operational decision making, learning from events, regular maintenance, and working with regulators and risk analysis and HSE third parties to achieve certification in accordance to regulators.
Companies are increasingly investing in automated technology to correctly manage their information and ensure that relevant programmes and emergency plans are available and up-to-date in the event of an emergency situation.
“As a leader of a software company I can see the crucial role that technology has to play in enabling the conduit of effective risk management process to geographically dispersed teams, monitoring the enforcement of these processes, reporting on the same and providing EWIs of breaches of these processes,” Clare highlights.
Alongside automated equipment and the latest software ongoing development and investment must be made into emergency equipment, oil spill prevention systems such as blowout preventers and enhanced well casing equipment, through emergency oil spill response systems, to fire detection equipment, communication equipment and rapid response teams on rigs and offshore facilities.
Companies must be prepared to invest if they are serious about ensuring their disaster response and management keeps pace with the industry. “Ultimately there are many drivers for oil companies to invest in technology to improve safety above the legal requirements,” says Ali Aleali, business development manager at FireVu.
“Companies must remember that above everything else, the cost of a disaster in terms of lives, environment and infrastructure outweighs the cost of investing in safety technology.”
