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Sudden Demise of Lawrence of Alaska

Screen Shot 2013-03-24 at 08.44.12“Can your source confirm if this formal PSUA was ever completed and if so what was the audit opinion?”: “…in summary were these 2008 recommendations signed off by Lawrence of Alaska in a flawed process when indeed they had not been fully implemented -  a not uncommon occurrence worldwide in the greater Shell empire?”

(Sacked Royal Dutch Shell Executive VP David Lawrence shown right)

Screen Shot 2013-03-24 at 08.40.58

CAUSES FOR CONCERN RAISED BY BILL CAMPBELL RETIRED HSE GROUP AUDITOR, SHELL INTERNATIONAL

John – some food for thought on how the internal processes should have worked, something to think about, questions that any concerned investor should raise at the future AGM or before.

Whether it be you, or investors that you may have contact with or shareholders like myself, or the many contributors to your web site, the information you provided such as the 2008 PSUA and the DOI Report and the sudden demise of Lawrence of Alaska as usual throws up more questions than answers.  Maybe Mr Brandjes could be forthcoming on the relevant issues, in line with the principles he is expected to comply with of openness honesty and integrity in its dealings with the public generally and its stakeholders including its employees, why don’t you ask him?

HSE Audits are covered by the Shell internationally accepted standard in the SIEP 95-000 series of documents and clearly the PSUA carried out in Anchorage May 12-16 2008 did not conform to that standard.  This in itself is not important IF as is stated the team were to return in July in audit mode where they would assess the findings under serious, high, medium and low as defined in EP 95-000.  In short the number and severity of these findings would then lead to an opinion as to whether the findings were unacceptable, poor, fair or good. For example two or more Serious findings leads to an unacceptable opinion.

Can your source confirm if this formal PSUA was ever completed and if so what was the audit opinion? In short a far better comparison between the circumstances observed in 2008 and the DOI report could be established from a copy of this PSUA.  If this was not done then it is a reasonable and legitimate conclusion that the Alaskan Drilling program commenced without being properly and independently audited in line with Shell internal governance procedure.

Irrespective of this clearly if the DOI report is accurate AND IS ACCEPTED AS SUCH BY Royal Dutch Shell? then a serious failure of the governance or oversight process took place because Shell were not prepared despite their best intentions.

Now I can only think of two reasons for this

(a) the PSUA findings in fact any SIEP led independent Audit findings and respective recommendations are owned by the operating unit subject to that audit, in this case RDSA.  It’s up to their President and the Exec VP Lawrence and other Board members through their internal audit committee to satisfy themselves and verify that the recommendations made in 2008 were satisfactory completed. Did the recent Shell internal Inquiry find fault with this process and that is why Lawrence had to go?, or was it just his unfortunate comments catching up with him after the fact….in summary were these 2008 recommendations signed off by Lawrence of Alaska in a flawed process when indeed they had not been fully implemented -  a not uncommon occurrence worldwide in the greater Shell empire?

(b) or less likely, but still a possibility, were the recommendations fully enacted but then in the 4 years or so up to the 2012 misadventures with all the time and other pressures they were clearly under were essential controls degraded leading again to conditions similar to those observed in 2008.

Bill

PS

Your contributor “Texvette” quoted Odum in his Shell Blog 20 March, if what Odum said is authentic its a remarkable example of apparent ignorance of what his responsibilities were – I find it difficult to accept that this quote is accurate – is it possible to get Texvette to confirm where this quote came from?

( I recently read the following comment from Marvin Odum regarding the Alaska fiasco: ” this was a marine transit issue that occurred after completion of our exploration program and well outside our theater of operations”.)

REPLY BY JOHN

Cannot find original source as quoted by Texvette.

These are the nearest:

Mr. Odum added: “There are obviously some issues that need to be worked on, particularly the marine transport.” He said that it was too early to say what damage may have occurred to the Kulluk but that he had “great confidence in this program.”

Shell has said the grounding was a maritime transport problem. Drilling in 2012, Odum said Wednesday, was completed safely.

COMMENT BY TEXVETTE

John – The Odum quote is from the March 2013 issue of Shell Alumni News.

The article starts on page 3:

http://s03.static-shell.com/content/dam/shell-new/local/country/usa/downloads/alumni/alumninews-us-march-2013.pdf

OUTSTANDING RESPONSE BRINGS KULLUK TO SAFE HARBOR

A note from Marvin Odum – January 7, 2013
 
Many of you have followed the news about the drilling rig Kulluk, which was driven aground by violent weather while on its way to Seattle after completing the 2012 Alaska exploration season.

I’m very pleased to report that as of January 7, 2013, the Kulluk has now been successfully moved to a safe harbor on Kodiak Island. There, it will undergo a thorough safety inspection before resuming the journey to a winter harbor for repairs and scheduled post-season maintenance.

During the incident, many Shell professionals from multiple businesses and functions at locations throughout the world joined with other members of a Unified Incident Command to recover the Kulluk. Hundreds of people from the U.S. Coast Guard, Edison Chouest Offshore, Noble Drilling, Smit Salvage, the Alaska Department of Environmental Conservation and the Kodiak Island Borough were also involved.

I cannot say enough about the tireless work of all of these people—most of whom dropped personal plans over the holidays to join in the effort.
 
In remote and challenging conditions, they organized and managed a complex fleet of sea, air and land assets to bring about a safe result. Nobody was seriously injured in this entire incident. No environmental damage was done.
 
And we have representatives on the ground working closely with community members. All in all, the work to recover the vessel
has been extraordinary, and my thanks go out to everyone involved.

Safety has been and will be our top priority as the work on the Kulluk continues.

We undertake significant planning and preparation in an effort to ensure these types of incidents do not occur. So I’m very disappointed this happened, and Shell takes it very seriously. I understand that many of you have questions about the details of these events. Certainly we want to identify and understand the “how’s” and “why’s” of all aspects of the incident.
 
Those will become clearer as assessments and investigations get under way. We will fully participate in and support the Coast Guard investigation into the causes of the incident; and we will be reviewing our entire 2012 season with an eye to lessons we have learned that will make our ongoing exploration program even stronger.

At this stage, it’s too early to gauge any impact on those plans. With the Kulluk now safely recovered, we’ll carry out a detailed assessment of the vessel to understand what those impacts might be.
 
For now, it’s important to note that this was a marine transit issue that occurred after completion of our exploration program and well outside our theater of operations. It did not involve drilling operations.
 
I do not agree with what some observers have suggested—that it is impossible to drill safely in the Arctic—specifically Alaska.
 
Our 2012 record—with no significant injuries and no environmental damage—proves it can be done, as do the previous30-plus wells the industry has drilled in the waters off of the North Slope.

Alaska is an important resource for America, and I know Shell can do the job of developing that resource safely and responsibly.
 
Marvin Odum
President, Shell Oil Company

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