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OILC.Org: SHELL: ‘This is a company when left to its own devices takes any short cut, bodges any repair and fiddles any statistic’

BLOWOUT magazine: Voice of the offshore worker

Extract from Editorial in Issue 77: 1st Quarter 2008

It is time to raise the game all-round and there are suggestions that the HSE may adopt a ‘no more mister nice guy’ approach. It has the tools to hand. A framework for proportionate enforcement of health and safety regulations is available to all HSE Inspectors as set out in the Enforcement Management Model (EMM). This guides Inspectors on actions to take when unsafe conditions or breaches of health and safety law are evident.

Inspectors may not necessarily take formal action by issuing Improvement or Prohibition Notices, or Prosecutions, in all cases. Simple advice may be enough. But advice is wasted on duty holders not inclined to heed it, as KP3 confirms.

KP3 found 143 red lights related to major failings in management systems, plant and equipment and breaches of regulations. Not all would require the inspector to take formal action. That said, it does appear that HSE took a somewhat more relaxed approach to
enforcement than was optionally available to inspectors under the terms of the EMM.

From April 2004 to March 2007, 39 Notices relating to maintenance of Safety Critical Elements were issued.

Some of these would be the result of routine inspection rather than the outcome of visits made as part of the KP3 project. But 39 Notices issued compared to the 143 red lights listed in KP3 shows a significantly lower enforcement rate than might have been
expected had the EMM principles been more rigorously applied.

Taking one example, the HVAC dampers, the KP3 report lists 20 red lights but the HSE Notices Database shows only two Improvement Notices issued, and these some months after HSE were made aware of the specific failures.

Such a low number of Notices issued concurrently with the identification of the much larger number of serious failings cannot be acceptable in light of what the KP3 report tells us about this industry. However, we in OILC take encouragement from Mr Whewell’s
tough talk since the publication of KP3 and accordingly each day log on and monitor the Notices Database in anticipation of seeing action.

ad news always gets prominence over the good. Bad news we report in this edition we would have preferred not to. Eighty-three installations on the UKCS were inspected as part of the HSE KP3 program over a 3-year period and found to be seriously deficient in safety critical areas. The good news is that 35 installations inspected were found to be functioning adequately and were broadly compliant with the law — proof that the required level of operational safety is attainable in the UK offshore oilfield.

Our job in OILC is to speak plainly for our members and the offshore population generally should they be exposed to unreasonable risk or bad employment practices. There is ample evidence of both on the UKCS. Some readers may find the content and tone in this edition overly negative in places, not sufficiently balanced with the good news of which, we are glad to admit, there is plenty.

With oil at a hundred bucks or thereabouts a barrel the fag end of the UK oilfield should be a prosperous and fairly long drawn out affair — if we get the safety and people issues right. By all means hold the handrail, but let’s get real. Major cash and manpower resources will have to be committed to maintenance or neglected hardware will become irreparable junk.

For much of the past thirty years UK oil and gas has been sold for a pittance, $8 a barrel at one point. Sixty per cent or more of recoverable UKCS hydrocarbons are depleted and what remains will increasingly cost more to get out.

But do the sums based on a $70-$75 dollar barrel and you discover that while two thirds of the oil — the easy oil — has been consumed, two thirds of the money may be yet to come. Gas, presently depleting faster than oil, will continue to put serious cash into the operators’ coffers for years to come — but not if poor maintenance trashes the hardware in the meantime.

Shell is partially bailing out and selling off some older platforms but it intends to retain the cream of the infrastructure, and the pipelines. Pipeline tariffs will enable the company to tax other operators who need to get their oil and gas ashore. So Shell will be around and coining it in for years to come. But the HSE needs to keep a tighter reign. This is a company when left to its own devices takes any short cut, bodges any repair and fiddles any statistic to boost the bottom line.

The incoming smaller operators, even those taking over Shell’s older assets, will likely be policed by the HSE with greater rigour than ever Shell had to contend with. Read the KP3 report and you will know why. Something is not fair about that.

HSE gave Shell a too-easy ride for too long but hopefully the impression emerging over the past year or so of a more robust approach by the regulator proves to be concrete. It cannot be right that having grown fat on the easy oil for 30 years Shell is allowed to walk off leaving others to mend and make do with infrastructure that was allowed to deteriorate to an unacceptable condition under its stewardship. High oil prices are here to stay and it is obvious that a higher proportion of revenue must be committed to maintenance.

Shell’s share should be backdated.

http://www.oilc.org/blowout77.pdf

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