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Royal Dutch Shell Plc .com: Shell report highlighted lax safety standards

From The Times
By Carl Mortished, International Business Editor
June 23, 2006

 
WHEN Shell dispatched Bill Campbell from The Hague to Aberdeen in 1999 to lead a safety audit of its North Sea platforms, the entire oil industry was in financial crisis. The price of crude had plummeted to $10 per barrel, below the cost of production, but Shell had an important money-spinner in Brent, a vast complex of offshore installations dating from the 1970s. 
 
Brent’s oil was depleting rapidly but Shell had a lucrative gas contract and the company had transformed the ageing Brent field into a major gas producer, delivering about a third of the nation’s supply.

Growing concern about North Sea safety prompted Shell to conduct a platform safety maintenance review (PSMR), appointing Mr Campbell, a senior engineer with 24 years’ experience at Shell, to assist the local audit team. Rust was a big issue in the North Sea and is more so today for steel platforms that have been in place for three decades.

Interviews with 250 people from platform to oil director level revealed an extraordinary catalogue of safety violations. Worse still, it found a lax attitude towards enforcement of safety standards.

An internal presentation of the PSMR report cited alarming instances of management failure: “Violations included falsification of maintenance records for safety critical equipment” and “Violations of operating procedures were witnessed during the audits; these violations were in one case known and accepted by the asset manager. Many violations are known about by the workforce.”

According to Mr Campbell, the team that visited Brent found that between 30 and 40 per cent of the equipment failed under test, even though the equipment was required to operate at 100 per cent reliability. The PSMR auditors recommended immediate action to reduce risk, including the shutdown of Brent Bravo. Mr Campbell suggested that three senior North Sea managers be suspended from duty pending an inquiry. Instead, the whistleblower from The Hague was sent back to head office, remaining there until his retirement in 2002.

Four years after the PSMR report, two workers died on Brent Bravo, suffocated by a gas escape while inspecting a temporary pipe repair in a platform leg. The deaths prompted a Shell internal inquiry in November 2003. The report states that the team found 472 temporary repairs of which 214 were inadequate — not being technically authorised.

Shell says it undertook improvements after the PSMR report and before the Bravo deaths but Mr Campbell disagrees: “After four years the situation at Bravo had deteriorated.” It was not until 2004 that Shell earmarked $1 billion to upgrade its North Sea assets. In the 2003 audit report a commentary on staff safety behaviour asks three bald questions: “Why are offshore crew members afraid to flag problems? Why are staff willing to continue to operate with systems in potentially dangerous condition? Have the leaders and managers ‘conditioned’ our crew members and staff not to challenge?”

Related Article: Royal Dutch Shell Plc .com: Shell accused over oil rig safety
 

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