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Safety Czar for Shell


JULY 30, 2007, 2:05 PM ET
Shell appointed a global safety executive, after suffering 37 fatalities in 2006, more than double the number had by its major competitors.

Kieron McFadyen, a 20-year company veteran, was appointed to instill safety standards and assess risk, especially for remote locations, where the majority of fatalities occurred. “As our portfolio changes … we go into new areas where we are not familiar with the culture,” he told Dow Jones Newswires. “We need to go through the assumption that it ain’t going to be easier.”

The 37 deaths last year compared with seven at BP, 10 at Exxon Mobil Corp. and 12 at Chevron Corp. But as we discussed earlier this year in Energy Roundup, these tallies aren’t necessarily the best measure of a company’s safety record, as they don’t account for factors like possible differences in the way companies count deaths.

Mr. McFadyen agreed, saying that “it’s difficult to make comparisons between Shell and our peers on numbers alone.”

But unexpected dangers in remote locations were behind Shell’s higher fatality rate, as high oil prices and increased demand are pushing companies to rely more on unstable regions in Africa, Asia, the Middle East and the former Soviet Union — which accounted for 72% of Shell’s assets at the end of 2006. Excluding its 50% stake in Russian venture TNK-BP Holding, rival BP gets only 19% of its reserves from the same areas.

Shell has 108,000 employees and uses another 300,000 contractors. Their exposure toviolence in the Niger Delta of Nigeria is well known. In Oman, drivers face the risk of sudden sand storms. Shell recently adopted standards on road safety and wants contractors to apply them as well, especially given that around 80 % of last year’s fatalities were the result of failure to follow company rules like wearing a seat belt.

Mr. McFadyen, who left school with no qualifications and eventually worked his way to an engineering degree, says he’s well suited for the job. “I am someone who worked with tools and eventually educated myself,” he said.
— Dow Jones Newswires

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