North Sea oil and gas industry bosses are facing a tough challenge and mounting pressure to halve potentially fatal oil and gas releases, a key gathering of business leaders was told at Offshore Europe this morning.
Public pressure following the Macondo disaster last year had increased on the industry and the risks to businesses were now higher than in 1989, when the Exxon Valdez spill resulted in massive ecological damage.
However, industry bosses were cautious over the possibility of releasing company-specific data on spills.
The comments were made at yesterday’s Offshore Europe business breakfast at Aberdeen Exhibition and Conference Centre on leadership challenges in tackling hydrocarbon releases.
Eric Sirgo, general manager of operations for Chevron upstream Europe, told a gathering of more than 300 industry leaders, that the sector had an aim to reduce the number of hydrocarbon releases by half by 2013 – from 187 in 2010 to 93.
He said while the number has dropped across the UK over the past decade, it had flattened off.
“This is a tough tough goal but if industry, regulators and suppliers work together this is something we can achieve,” he said.
“What is it going to take? Leadership, good asset integrity and organisational capability. Those are the three things that need to be addressed to get on top of this.”
He said firms were cautious about releasing company specific data on hydrocarbon releases. However, he added: “We report everything to the regulator, but there probably is a need to report more to the general public.”
He also said there was a “financial payback” for reducing oil and gas releases by limiting shut down time.
Brian Kraus, a managing partner, at ERM (Environmental Resources Management) said pressure from the public, governments, research into the environment and an understanding of how events impact on balance sheets was putting more and more pressure on firms to reduce releases – and that the trend would increase.
The industry was facing increasing pressure from a 24/7 media spotlight following Macondo – with smaller incidents than the Exxon Valdez disaster now having a bigger impacts on businesses, such as BP and more recently Shell in the North Sea.
He added: “Most believe safety and environmental impacts will have an increasingly significant impact on business.
“Leaders have many balls in the air. The question is if leaders see health and safety and hydrocarbon releases as one of the balls in the air.”
A further issue raised was resourcing, at the regulator, the Health & Safety Executive, but also oil and gas firms, and then the complexities of doing the work, which could be impacted by weather, logistics, bed space or other work.
According to research carried out on 20 operators over three years, 70% of releases were on manned facilities, 70% were gas, 70% were during normal operations, 70% was on standard equipment and 70% was on fixed facilities.
The main route causes were maintenance, in 32% of incidents, then inadequate engineering – including at design stage – human factors and work standards.
Mr Sirgo said Chevron, which had a very good safety record, tackled the issue by creating an inspection programme.
He admitted they had fallen behind in the past in maintenance regimes but they had pulled back and were in the seventh year of an investment programme.
He said: “A lot of our problems came from (staff) normalising risk. You have got to get them to think differently, to recognise pressures of routine work.”