Posts from ‘August, 2011’

The oil sheen on the surface of the North Sea that followed the UK’s worst oil spill for a decade has finally disappeared, according to Shell, after the company managed to plug its leaking pipeline on Friday.

Government officials are now launching an investigation into the leak as part of an effort to discover how the spill came about and how to prevent such damage recurring.

Richard Lochhead, the Scottish cabinet secretary for rural affairs and the environment, also called on Shell to review its procedures for handling oil spills, after the company was heavily criticised for being too slow to disclose the leak to the public. Lochhead has written to Chris Huhne, the UK climate and energy secretary, to ask for a meeting on the procedure for communicating incidents.

Shell’s successful plugging of both the primary and secondary leaks at the Gannet Alpha platform, 112 miles east of Aberdeen, came as a Scottish newspaper revealed Shell’s poor safety record in the region.

An investigation by the Sunday Herald found that Shell had been officially censured 25 times in the past six years for breaking safety rules, giving it one of the worst safety records of any major oil company in the UK. Infringements by Shell include repeatedly failing to maintain pipelines – similar to the one that gave rise to the Gannet leak – as well as for failing to report a dangerous incident, and failing to protect workers from hazardous chemicals. The revelations cited come from records held by the government’s Health and Safety Executive (HSE), and include incidents in which Shell was fined or received an official reprimand.

Since 2005, Shell has been prosecuted four times: for an explosion at Bacton gas terminal near Norwich; an accident at Ellesmere Port in Cheshire; a collision at the Mossmorran gas plant in Fife; and a fatality on the Clipper rig in the North Sea. The company has been forced to pay out nearly £1m in fines and legal costs. No other major oil company has faced as many prosecutions in the last six years, according to the HSE. Talisman was prosecuted twice in the period, while BP, Total, Amec and Nexen were each prosecuted once, the Sunday Herald reported.

Shell said: “Safety is our foremost priority at all times. As part of that commitment, in 2004 Shell initiated a $1.2bn (£730m) project to upgrade our assets in the North Sea. This has been completed. This year alone, we plan to invest approximately $600m (£365m) in our assets in the region.”

Green campaigners reacted angrily to Shell’s record. Stuart Housden, director of RSPB Scotland, said: “Shell is a major player in UK waters. The records show however, that Shell is vulnerable to questioning around its maintenance and investment programme. Senior management must seek exemplar status and invest accordingly to achieve a rapid and lasting improvement.”

Stan Blackley, chief executive of Friends of the Earth Scotland, said: “Shell has been found guilty of serial breaches of safety rules, including failing to maintain pipelines and vital equipment properly and failing to avoid or report dangerous practices and occurrences. It’s depressing but not a surprise, since Shell already has a reputation among environmental and human rights groups for poor practice, complacency and misinformation. You only have to look at its operations in Nigeria in recent years to see evidence of that.”

The Guardian recently revealed that Shell had been responsible for spills in Nigeria far bigger than the BP disaster in the Gulf of Mexico last year.

Blackley said: “Shell’s record suggests to us that oil spills and leaks such as the recent one from the Gannet platform will continue to happen unless Shell learns from its mistakes, improves its maintenance regimes, and faces tougher penalties. The levying of a fine or requirement to pay compensation will be shrugged off by such a rich company, and the cost will be passed on to consumers or written off in some way. The executives running the business need to be held accountable for any failings or wrongdoings and, if found guilty of any breach of the law, prosecuted to the full extent of the law.”

Shell’s safety record is likely to come under scrutiny as the government’s investigation into the leak is launched this week. First, Scotland’s procurator fiscal will meet experts from the HSE and officials from the Department of Energy and Climate Change (Decc) in order to set the initial scope for the investigation. When Decc has completed the investigation, which will involve talking to divers, marine experts and Shell executives, the results will be taken back to the procurator fiscal who will have to decide whether to proceed with a criminal prosecution.

One of the key questions is whether Shell will have to pay for the government’s costs in containing the leak, including the cost of surveillance flights by Marine Scotland.

Shell said that after its divers closed a faulty relief valve on Friday, no further oil had been released. However, the pipeline – which has been secured to the seabed with 26 concrete “mattresses” – could still contain as much as 660 tonnes of oil, three times more than the nearly 220 tonnes that has already leaked. The company is looking at how to make that safe, as well as monitoring the area to ensure that no further oil is seeping out.

Decc has said a containment structure might need to be built in order to ensure that no further oil reaches the sea as the pipeline is dealt with.

Green campaigners criticised Shell for not being sufficiently open about the incident, which was discovered on Wednesday 10 August but not disclosed to the public for two days, and they said the incident raised questions over the safety of oil companies’ plans to drill in deep water in the Arctic, as the North Sea is generally supposed to be the safest in the world in terms of spills.

However, a Guardian investigation this summer found that there is an oil leak in the North Sea about once a week on average, though most of them are minor.

A spokesman for HSE said its information on safety breaches at Shell and other oil companies “should not be read as a league table” as it did not take into account the relative size of companies’ operations.

He said: “HSE has robust regulatory relationship with all offshore operators and we have an established track record of holding them to account. The offshore safety regulations in the UK already require industry to adopt high standards and additional requirements placed upon operators to undertake audits of their own management systems for managing safety, have third-party independent checks and examination undertaken of safety critical equipment and systems, and to revise and undertake thorough reviews of installation safety cases to ensure they are fit for purpose.”

Shell’s poor safety record

Oil company / prosecutions since 2005 / enforcement notices since 2005

Shell / 4 / 21

Maersk / 0 / 33

BP / 1 / 20

Talisman / 2 / 12

Petrofac / 0 / 15

Total / 1 / 7

Chevron / 0 / 9

Nexen / 1 / 5

Rowan / 0 / 8

Amec / 1 / 4

Amoco / 0 / 7

Esso / 0 / 6

Conoco / 0 / 5

Marathon / 0 / 5

Shell’s 25 safety lapses

Date / plant / situation

June 2010 / Nelson, North Sea / prohibition notice after failure to maintain pipeline in good repair

January 2010 / Clipper, North Sea / improvement notice after drinking water contaminated

October 2009 / Brent Charlie, North Sea / prohibition notice after risk of serious personal injury from toxic and flammable gas

June 2009 / Ellesmere Port, Cheshire / improvement notice because of blocked pipes and drains

June 2009 / Ellesmere Port, Cheshire / improvement notice over blockages

March 2009 / Stanlow terminal, Ellesmere Port / improvement notice after failure to provide information

December 2008, Mossmoran gas plant, Fife / improvement notice because of access problem for emergency services

December 2008 / Mossmoran gas plant, Fife / improvement notice on access for emergency services

August 2008 / Brent Bravo, North Sea / improvement notice after failure to maintain pipeline

April 2008 / Mossmoran gas plant, Fife / improvement notice to reduce risk of traffic accident

February 2008 / Bacton gas terminal, Norwich / prosecuted after explosion, fined £440,000

February 2008 / Mossmoran gas plant, Fife / improvement notice to remedy deficiencies in emergency response

November 2007 / Leman Charlie, North Sea / prohibition notice because of dangers from asbestos

June 2007 / Dunlin Alpha, North Sea / improvement notice after failure to control exposure to hazardous chemicals

June 2007 / St Fergus gas plant, Peterhead / improvement notice after breach of safety regulation

May 2007 / Anasuria production vessel, North Sea / improvement notice after failure to ensure watertight integrity

April 2007 / Dunlin Alpha, North Sea / improvement notice after failure to report a dangerous occurrence

February 2007 / Ellesmere Port, Cheshire / prosecuted after accident, fined £116,666

February 2007 / Clipper, North Sea / improvement notice after failure to maintain vital equipment

December 2006 / Mossmorran gas plant, Fife / prosecuted after accident, fined £12,000

December 2006 / Ellesmere Port, Cheshire / improvement notice because of poor maintenance

November 2006 / Clipper, North Sea / improvement notice after failure to maintain vital equipment

November 2005 / Clipper, North Sea / prosecuted after fatality, fined £150,000

September 2006 / Cormorant Alpha, North Sea / prohibition notice for inadequately guarded winch

September 2006 / Leman Alpha, North Sea / improvement notice for inadequate maintenance and control

(Source: Herald Scotland and the Health and Safety Executive)

SOURCE ARTICLE

MANILA, Philippines – Pilipinas Shell Petroleum Corp. denied it has defrauded the government of billions of pesos of excise taxes for importing a blending component for unleaded gasoline.

In a statement, the oil importer said the product in question, alkalyte, is not a finished product and therefore not subject to an excise tax.

“However, when the alkylate is further processed into finished unleaded gasoline product that is fit and ready for consumption, the finished product is subject to the payment of excise taxes before the same is released from Shell’s refinery. In other words, no excise tax is lost on the alkylate imports in question,” it said.

Zambales Rep. Mitos Magsaysay has made a case with the issue to call for the resignation of Customs Commissioner Angelito Alvarez.

In a statement today, she said: “It would seem that Alvarez wants to add another nail to his coffin with the emergence of new evidence of his incompetence in his failure to act on the allegedly misdeclared imports of Pilipinas Shell worth over P1.5 billion in excise taxes and Value Added Tax.”

“Shell, however, pointed out that no less than the Bureau of Internal Revenue has issued an “Authority to Release Imported Goods (ATRIG)” for all the alkylate importations.

“No excise taxes were paid on the shipments because they were all covered by the corresponding ATRIGs issued by the BIR, which recognized the same to be raw materials and/or blending components,” it said.

“Shell has paid all the right taxes and strongly denies having engaged in any fraudulent activity, especially smuggling, as this is very much against its business principles,” it further stated.

SOURCE ARTICLE

Comment by John Donovan

Great play was made of Shell’s claimed business principles on successive Form 20-F Declarations filed with the U.S. Securities & Exchange Commission, which later turned out to contain false (inflated) hydrocarbon reserves figures. The repeated reference to Shell’s business principles pledging honesty, integrity and transparency, was designed to bolster confidence in the false information. Shell was found guilty of securities fraud and fooling the markets. So although I have no idea whether the allegations in this case have substance, I would not be in the least reassured by Shell making reference to its business principles.

The start of their investigation comes as an analysis of oil and chemical leaks from Shell’s Gannet platforms shows that there have been at least 34 spillages since 2002, ranging from one litre to 590 barrels.

Data from surveys conducted on behalf of the Maritime and Coastguard Agency show that most of these 34 came from Shell’s Gannet Alpha platform, whose pipeline suffered the 10-day leak that ended on Friday.

It also emerged over the weekend that there was an internal investigation into Shell’s Gannet plaforms in 2003 raising concerns about unapproved repairs and unreliable fire sensors. The claims are made within papers held by Bill Campbell, a former senior Shell employee, who has questioned the company’s environmental and safety record.

Government investigators are now preparing to take a close look at Shell’s physical assets, including the underwater pipeline where the source of the leak was discovered.

As they begin to work out what went wrong, officials will this week meet Scotland’s procurator fiscal, who will eventually decide whether to prosecute, to identify the initial scope of the inquiry.