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Sakhalin II & Brent Bravo debacles: time for Brinded to resign?

Brinded 

(Malcolm Brinded, Chief Executive, Shell Exploration & Production)

21 September 2006

Part One (By a Shell Insider)

There are some important similarities between Sakhalin and the Brent maintenance issues which you may wish to bring to the attention of your readers.

SAKHALIN

Brinded was advised against the Sakhalin development by his Exploration and Production technical staff on the basis of economic and risk considerations in the 1990′s. Even at $9bn the Sakhalin project was considered marginal, especially given the uncertainties of operating in a frontier environment. 

The desperate need to “book” reserves meant that the project had to be approved. So when the “Exploration and Production” group failed to give the answer that Brinded wanted to hear, the project was passed to the “Gas and Power” group who signed up with the Russians on almost exactly the same terms that had already been rejected by the “Exploration and Production” group. The Russians agreed to reimburse the $9bn estimated cost. Shell are now asking the Russians to reimburse more than twice the cost stipulated in the contract, and Shell are crying “foul” when the Russians refuse to do so.

The “Exploration and Production” group were right in their assessment, and Brinded was wrong. The Russians are saying that at $20bn the Sakhalin project is sub-economic. This is exactly what Brinded was told by his Exploration and Production staff ten years ago. Brinded should now take responsibility for the results.

BRENT

Brinded was advised by his Exploration and Production technical staff that the Brent platform needed maintenance work, but chose to ignore the advice as it would have meant a reduction in oil production while the required repairs were carried out. 

The “Exploration and Production” group were right in their assessment, and Brinded was wrong. And people have died as a result. Brinded should now take responsibility for the results.

Part 2 (By John Donovan)

The advice which Brinded received in respect of the Brent Bravo platform was from Bill Campbell in his then capacity as Group Auditor for the Royal Dutch Shell Group.  After Mr Campbell had carried out an inspection of the safety regime on the platform, he warned Brinded that safety documents had been falsified and repairs bodged. His advice was ignored and two workers subsequently lost their lives. A Fatal Accident Inquiry found that the deaths were avoidable. Shell admitted responsibility for the deaths and paid a £900,000 fine imposed by HSE. 

Brinded held senior positions in Shell Expro for a number of years.  I had some dealings with him in 1999 when I brought directly to his attention irrefutable documentary evidence of a scam perpetrated by Shell management on companies bidding for a major Shell contract. Brinded chose to ignore the evidence. Many honest companies who thought they were participating in a fair tendering process were cheated. The Shell manager who masterminded the scam had a long track record of stealing intellectual property on behalf of Shell management. To my astonishment, he claimed and received backing from the highest levels of Shell. I invited Brinded to dissociate himself from endorsement of such underhand activity. Brinded turned his usual blind eye.  That was when I realised that Brinded is dishonest and incompetent.  However, such flaws appear to have been perceived as an asset by his fellow Shell executives and Brinded continued his rise to the top of Shell management. 

Brinded took over as head of Shell Exploration and Production in March 2004 after Walter van de Vijver was forced to resign as a consequence of the hydrocarbon reserves fraud. It was essential at that point to restore trust and stability by not saying anything that might end up causing further damage to Shell’s credibility. Brinded was supposed to be a safe pair of hands.  However, his credibility (and Shell’s) evaporated each time he was forced to announce further downgrades despite assurances he had publicly given to Shell shareholders.  Nearly a third of Shell’s booked reserves vanished. 

A few days ago the following comment was posted on our “Live Chat” facility:

“If they do not fire Brinded now, they will never fire anyone for incompetence and/or lying.” 

I entirely share that view.

 

2 Comments on “Sakhalin II & Brent Bravo debacles: time for Brinded to resign?”

  1. #1 RUTH JAMES
    on Jan 18th, 2007 at 08:29

    NEGLECT ON QC INSPECTORS IN BTIP TEAM 19-12-2006

    In Jesus Name,

    We, The SPDC Inspectors in BTIP sincerely wish all SPDC Management and Staff Merry Christmas and Prosperous 2007.

    Amen!

    It is with deep sense of seriousness and concern that we, the entire Inspectors currently engaged with the Bonny Terminal Integrated Project (BTIP), deem it necessary to call the attention of the most revered officers of the management of Shell Petroleum Development Company Of Nigeria Limited (SPDC) and that of the Head offices in Hague over the endless insults, neglect, relegation, degradation and enslavement of the Quality Control Engineers whose performances on the project cannot be overemphasized.

    It beats the imagination of the least oil field technician to learn that qualified, tested and experienced Engineers who constitute the SPDC Inspectors inspecting contractor workers who are better remunerated and well taken care of as evident in BTIP earn salaries as follows——–

    SALARY SCALE FOR BTIP INSPECTORS
    Salary per month (Naira) Outstation Allowance per day (Naira)
    QC Inspector Seventy-four thousand (N74,000) Fourty(N40)
    SQC Inspector Ninety thousand (N90,000) Fourty(N40)

    Does this in any way strike a feeling of pause to you as human being who will certainly die one day and leave this sinful and corrupt world?

    This is better imagined than happening!
    What a slavery!!

    In the foregoing, we hereby itemize our problems and neglect as follows:

    · Non inclusion of inspectors in BTIP (DMB) good welfare packages viz: End of year / Xmas gift voucher, Provision of BTIP HSE gin-jackets, Provision of SPDC PPES Provision of drinking water on sites, etc
    · Poor outstation allowance
    · Non provision of dry ration to BTIP Inspectors
    · Refusal to provide the inspectors with access to internet facilities
    · Endless inspection contract with continuous old rate payment of 1998
    · Non payment of 13th month salary as applicable in the SPDC System
    · Non payment of end of contract bonus as in SPDC major contracts.

    We have tried as humble beings and not militants to discuss these problems with DMB, but there seemed no solution hence our decision to cry out loud to SPDC management.

    We pray these will meet your kind consideration and quick response as to avoid inspectors disrupting operations in Bonny Terminal within the next seven days.

    For & on behalf Of SPDC Inspectors In Bonny Terminal Integrated Project (DMB) Team.

  2. #2 RUTH JAMES
    on Jan 18th, 2007 at 08:29

    NEGLECT ON QC INSPECTORS IN BTIP TEAM 19-12-2006

    In Jesus Name,

    We, The SPDC Inspectors in BTIP sincerely wish all SPDC Management and Staff Merry Christmas and Prosperous 2007.

    Amen!

    It is with deep sense of seriousness and concern that we, the entire Inspectors currently engaged with the Bonny Terminal Integrated Project (BTIP), deem it necessary to call the attention of the most revered officers of the management of Shell Petroleum Development Company Of Nigeria Limited (SPDC) and that of the Head offices in Hague over the endless insults, neglect, relegation, degradation and enslavement of the Quality Control Engineers whose performances on the project cannot be overemphasized.

    It beats the imagination of the least oil field technician to learn that qualified, tested and experienced Engineers who constitute the SPDC Inspectors inspecting contractor workers who are better remunerated and well taken care of as evident in BTIP earn salaries as follows——–

    SALARY SCALE FOR BTIP INSPECTORS
    Salary per month (Naira) Outstation Allowance per day (Naira)
    QC Inspector Seventy-four thousand (N74,000) Fourty(N40)
    SQC Inspector Ninety thousand (N90,000) Fourty(N40)

    Does this in any way strike a feeling of pause to you as human being who will certainly die one day and leave this sinful and corrupt world?

    This is better imagined than happening!
    What a slavery!!

    In the foregoing, we hereby itemize our problems and neglect as follows:

    · Non inclusion of inspectors in BTIP (DMB) good welfare packages viz: End of year / Xmas gift voucher, Provision of BTIP HSE gin-jackets, Provision of SPDC PPES Provision of drinking water on sites, etc
    · Poor outstation allowance
    · Non provision of dry ration to BTIP Inspectors
    · Refusal to provide the inspectors with access to internet facilities
    · Endless inspection contract with continuous old rate payment of 1998
    · Non payment of 13th month salary as applicable in the SPDC System
    · Non payment of end of contract bonus as in SPDC major contracts.

    We have tried as humble beings and not militants to discuss these problems with DMB, but there seemed no solution hence our decision to cry out loud to SPDC management.

    We pray these will meet your kind consideration and quick response as to avoid inspectors disrupting operations in Bonny Terminal within the next seven days.

    For & on behalf Of SPDC Inspectors In Bonny Terminal Integrated Project (DMB) Team.

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