If the HSE’s latest 100-page epistle on the status of North Sea safety was a school report, it would probably say John has made quite good progress of late, but he must concentrate more if he is to realise his real potential.
The long anticipated KP3 Review report does indeed indicate that the UK’s offshore industry is in better shape from a safety standpoint than a couple of years ago. But it warns that there is no scope for bosses to sit back and think that they have done enough for the time being.
The HSE warns in this report: “There remain obstacles which will challenge the industry to maintain the rate of improvement witnessed in the last two years.
That said, the UK’s safety body clearly intends to hold the North Sea offshore industry to its HSE pledges.
As the review says: “The industry has given a public commitment that the lessons of the past have been learned and it will not repeat the mistakes which created the offshore installation integrity crisis highlighted by KP3.
“There is an expectation from the regulator that future planning will endeavour to anticipate these issues and put in place robust systems to ensure that asset integrity is appropriately prioritised, even during periods of depressed oil price.”
With the impacts of recession and dramatic lurches in oil prices, the temptation to cut operation expenditure to the bone is obvious, and it is evident that there has been a lot of this going on – much of it quietly.
Examples highlighted by the trade unions include BP announcing significant cuts to workers terms and conditions, coupled with proposed changes to maintenance strategies; plus Shell announcing about a 20% cut to engineering and maintenance support staff onshore, and many more companies shelving all planned engineering projects while cutting staffing levels and staff packages.
This is not good news and is presumably causing concern at the HSE, where a changing of the guard is under way, with the current Offshore Safety Division (OSD) chief, Ian Whewell, standing down at the end of this month.
Without a doubt, there has been a major effort made by the operators to get their act in order offshore. What is frightening, however, is that they were basically forced into it, otherwise doubtless some installations would, by now, have been shut down by the HSE. Some may recall Whewell’s tough talking two years ago at Offshore Europe 2007. What is also worrying is that, while the pursuance of good operational standards goes hand in hand with safety, the companies have to be pushed, or at least it seems necessary in some cases.
Energy has picked through the KP3 Review, which covers so very much – from getting to grips with unplanned escapes of hydrocarbons to platform and systems integrity, including getting to grips with rust, to management’s grip on what safety actually means and to workforce engagement and involvement. Time and again, it calls for more effort.
Analysis was carried out of the hydrocarbon releases from 1996 to 2009. Sadly, however, the report says that the trend for steady reductions in major and significant hydrocarbon releases seen up to the period 2005-06 was not sustained, with no progress made over the period 2006-08, though progress has since resumed. Nonetheless, there continue to be about 60 significant hydrocarbon releases annually.
This ties in with the condition of safety-critical elements (SCEs) of production facilities and the need to ensure that maintenance management systems do indeed ensure that safety-critical maintenance is carried out on time rather than pursue a course of planned non-maintenance. SCEs are those parts of an installation and its plant that exist to prevent, control or mitigate major accident hazards the failure of which could cause or contribute substantially to a major accident.
The HSE says: “Despite the progress identified in the industry report, there is still evidence that maintenance of safety-critical hardware could be improved. Priority should always be given to the timely repair of degraded SCEs rather than undue reliance on operational risk assessment and deferral management systems.”
It warns: “It is clear that current progress in the management of asset integrity needs to be maintained if the frequency of significant hydrocarbon releases is to be further reduced.”
Rust kills platforms and some installations are notorious among North Sea workers because of the way in which their operators have failed to keep secondary and tertiary steel structures properly protected, so leading to metalwork rotting away.
The HSE says that, after four years of effort, not enough has been done, though the message has sunk in with some management.
The report states: “There is strong evidence of extensive remedial work.”
It says, too: “During the case-study inspections offshore, considerable evidence was found of asset integrity being improved, with old plant being replaced, structural repairs being made and planned, and with fabric maintenance and paint programmes under way. However, there was still more to do and it was noted that work commenced in many cases had not all been completed.
“The ageing infrastructure will provide a continuing and major challenge, and industry may struggle to keep up with fabric maintenance demands. This view is supported by the fact that OSD has taken regular enforcement action on this topic, both during KP3 and since.”
As fabric maintenance issues continue to be of concern, the HSE warns that this aspect will be further pursued by its inspectors. It points out that “stronger and more effective” monitoring and audit systems are required by the industry to help make sure asset integrity remains at required standards.
HSE’s inspectors continued to find issues with regard to the condition and functioning of safety-critical systems, including temporary refuge (TR) related equipment. Those with long memories will recall this as being an important issue raised in Lord Cullen’s report on the Piper Alpha disaster of 20 years ago.
The KP3 Review points out that testing the effective functioning of safety-critical systems is essential to provide confidence that they will perform as intended.
The review notes: “The OSD verification project indicates that there are continuing problems with verifying the performance of some safety-critical elements of major hazard risk control systems, as the relevant performance standards could not be measured effectively. This topic will continue to be of concern and will form part of ongoing OSD intervention activities.”
Leadership remains an underlying issue that management has to get to grips with.
Indeed, the original KP3 report observed that senior managers needed to improve their understanding of safety risks arising from continued operation of facilities that have degraded SCEs.
It called for a “bold step” to be taken in setting common objectives for measuring and managing the completion of maintenance.
In its KP3 Review, the HSE gives credit for progress made, but then its observations read like a classic school report: “This is a challenging area of work and industry is encouraged to continue to focus effort in this area.”
It notes that the industry has voluntarily developed two cross-industry asset integrity KPIs (key performance indicators) and had achieved apparently good participation by the end of the first year of data collection.
Another underlying issue, the engineering function, has gained both recognition by the operators and, happily, made progress – except in the drilling sector, as the HSE acknowledges that it has “always had a stronger engineering function and, consequently, had not needed to make significant adjustments in this area”.
The HSE is positive about what has been achieved; and offshore personnel appear satisfied with the support they received from technical authorities and that the technical authorities are involved in deferrals and risk assessment of impaired SCEs.
“The review concluded that there have been real changes to, and strengthening of, the technical authority function in a number of companies which are showing tangible benefits. Feedback from offshore personnel indicates that they perceive a clear benefit as a result of these changes.”
However, the HSE warns: “The challenge remaining for industry is to ensure that the enhancements to the technical authorities’ role and resources are replicated uniformly and consistently across the industry. The risk is that the dedication of resource in this area will be allowed to decline as a result of changing economic factors present in the industry.”
Unfortunately, the OSD found that learning and sharing within companies and the use of data to improve the effective management of health and safety still requires continued effort.
It says, too, that, from the HSE’s perspective and experience, it is apparent that major hazard management auditing and the effective use of audit results is yet to be fully developed to a mature and effective level across the industry as a whole, although there are examples of good practice.
“The OSD verification project has identified that the industry is not using the intelligence and professionalism provided by its independent competent person (ICP) verification activities to gain maximum benefits in managing asset integrity.”
The OSD found, too, that some companies still do not effectively share information across the business and there remains ineffective cross-business learning from audit and verification activities.
The division warns: “Progress can only be sustained in the long term when change is embedded within each company’s operational processes. This can range from the establishment of asset integrity management boards to the sharing of KPIs. The industry needs to make more efforts to break down the barriers which are preventing better integration of ICP verification activities into individual offshore operators’ safety management systems.”
One of the perhaps surprising findings of the HSE’s latest work is that the review case studies revealed “no significant evidence of recruitment issues”, but that the loss of experienced staff will continue to be an issue, as will knowledge management.
The OSD says: “It is therefore important that industry focuses on securing and ensuring that there is a fully competent workforce at all times. The economic cycles in the global oil&gas industry have significant influence on recruitment and preservation of necessary competence in the industry. This needs to be recognised and effectively managed to ensure that the necessary skills base is always retained.”
Get the culture right and there is the view that this paves the way to solving challenges successfully. Moreover, the HSE says that efforts made lately by the UK offshore industry’s bosses, if successful, “will impact positively on safety culture offshore”. This includes new guidance on the NRB (not required back) issue, which was only recently properly admitted to by North Sea bosses and which remains a concern, according to OSD.
It seems that the need for greater workforce involvement is finally getting through to management, with a “high degree” of engagement of personnel, albeit within the safety representatives and safety committees systems.
However, the OSD points out that it is clear that more work needs to be done in the area of workforce consultation, particularly concerning safety cases, and “in looking for ways of making the role of safety representatives and the functioning of safety committees more effective”.
Within the envelope of culture, the division reports persistent concern about asset integrity and its management within the changing nature of ownership on the UKCS.
It warns that the shift towards small companies taking on ageing infrastructure and squeezing the last drops of commercial oil&gas out of depleted fields brings its own dangers.
“It is vital that maintenance histories are secured and legacy information passed to the new operators, and OSD will take particular interest in securing this continuity of data and effective transfer of corporate memory on asset integrity.”
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