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Financial Times: Safety record is put in spotlight: ’37 died while working for Royal Dutch Shell’

By Ed Crooks
Published: March 20 2007 02:00 | Last updated: March 20 2007 02:00

Any doubts about how safety-conscious the oil and gas industry is are quickly dispelled by a visit to any BG Group office. There, a five-point stair safety code urges people to hold the handrail, avoid using a mobile phone or BlackBerry, take one step at a time, walk not run, and not to let objects obscure their vision.

Such codes may seem trivial but they are part of a culture that has developed in an industry where accidents are frequent and sometimes catastrophic.

In 2005, for example, the US upstream oil and gas industry, which excludes refineries, such as Texas City, lost 98 people, the same as in 2004.

The industry’s safety record will come under scrutiny again today when the US Chemical Safety and Hazard Investigation Board publishes its report into the March 2005 explosion at the Texas City refinery that killed 15 people.

The CSB is expected to go further than the January report from the panel led by James Baker, the former secretary of state, in its criticism of BP, and its conclusions will be studied throughout the world.

What is not likely to be so widely noticed, however, is that BP is far from uniquely bad among the oil and gas “super-majors” for its record of workforce deaths.

Last year, seven employees and contractors died while working for BP, but 37 died while working for Royal Dutch Shell. Deaths for BP were even lower than for ExxonMobil, which is generally recognised as the industry leader for safety.

Even in 2005, the year of Texas City, Shell lost nine more workers than BP. But many of Shell’s deaths have been in Nigeria or Russia, out of the media spotlight and the legal structures of the US, so they have received nothing like the same scrutiny. BG lost six contractors that year.

Shell has described the number of deaths as unacceptable and launched a safety drive. Its fatality rate has been falling over the past decade, as it has for the industry as a whole. BG has also launched a safety review with a target of “zero injuries”.

The International Association of Oil and Gas Producers (OGP), which collected data from 39 upstream exploration and production companies, including all the big names, operating in 75 countries, reported that fatalities fell in 2005 to 3.5 for each 100m hours worked, down from 5.2 in 2004.

“Five years ago, we would not have been able to say that fatal incidents were declining, but in the past three of four years there has been a reduction,” says Don Smith of the OGP. “The hope is that the procedures companies have put in place to limit more minor injuries have begun to reduce the more serious incidents as well.”

However, he is cautious about assuming that the improvement will last. Figures for fatalities tend to be erratic and a single accident could make a big difference.

Some of the efforts made by companies do appear to be paying off. More than a third of deaths are typically from road accidents, for example: the fatal injury reports compiled by the OGP are a litany of delivery drivers falling asleep at the wheel, tankers driving too fast or on the wrong side of the road, failing brakes and so on.

ExxonMobil has cut its road accident rate in half since 2000 with a driving safety initiative that includes banning the use of mobile phones while driving. In 2005 its drivers worldwide had 0.76 incidents for every 1m miles driven, less than20 per cent of the average for the US distribution industry.

BP has launched a similar effort, which helped cut its road deaths from 10 in 2005 to just two last year.

However, figures from the US Bureau of Labor Statistics put mining and oil and gas extraction second among the most hazardous industries in the country in terms of deaths per employee, after agriculture, forestry and fishing.

Indeed, the industry is inherently dangerous. It involves handling explosive and inflammable materials, often at high pressures and temperatures, and often in spectacularly inhospitable environments, whether for reasons of natural extremity or political instability.

Nine of Shell’s 37 deaths last year were the result of kidnappings and attacks by militants in Nigeria.

Like BG, several of the big oil companies aim to reduce deaths to zero. “Nobody gets hurt,” as ExxonMobil puts it in its safety slogan. But while the industry works as it does, that ambition will be very difficult to achieve.

Copyright The Financial Times Limited 2007

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