I had intended to pay a lot of attention to the Atlantic Frontier in this issue of Energy … as I generally do at this time of year.
However, with two major oilfield disasters, a serious North Sea near miss and milestone research by The Robert Gordon University on behalf of OPITO on international health and safety standards across upstream petroleum, safety dominates this issue and the Atlantic Frontier is postponed.
I make no apology, especially given the damning observations made over the past couple of weeks or so by senior figures/bodies engaged with investigating the very serious Macondo (US Gulf of Mexico), Montara (Timor Sea) and Gullfaks C (Norwegian North Sea) incidents, all of which took place within the space of barely a year, albeit Montara started to unravel some months earlier.
Indeed, given the backgrounds to each, the unravelling process started a long time previous with all three … in the procedures and practices that paved the way to the inevitable.
One wonders how many other “accidents” are waiting to happen, especially offshore, whether on rigs or production installations.
I am struck by the severity of the comments to emerge from the inquiry process regarding each of the three.
The inquiry report states that the manner in which the operator PTTEPAA operated the Montara oilfield “did not come within a ‘bull’s roar’ of sensible oilfield practice”.
“The blow-out was not a reflection of one unfortunate incident, or of bad luck. What happened with the H1 Well was an accident waiting to happen. The company’s systems and processes were so deficient and its key personnel so lacking in basic competence that the blow-out can properly be said to have been an event waiting to occur,” says the report.
“Indeed, during the course of its public hearing, the inquiry discovered that not one of the five Montara wells currently complies with the company’s well construction standards. So poor has PTTEPAA’s performance been on the Montara oilfield, the Inquiry considers it is imperative that remedial action be instituted.”
As for the regulator’s role, the following speaks volumes. “The approach taken by the Northern Territories Department of Resources in part reflective of a profound misunderstanding of what is required of a regulator under the modern-day objective (as opposed to prescriptive) approach to regulatory oversight.”
“The Inquiry has been struck by the substantial divergence within Australia in regulatory practices, with all jurisdictions purporting to follow the objective, non-prescriptive approach to regulation.”
In my view, this shows how little attention may have been paid internationally to the outcomes of the UK’s Piper Alpha Inquiry 21 years ago.
This was and remains the headline grabber. Hardly surprising given the deaths and the fact that the BP-operated Macondo-1 well was being drilled just a few miles off the US coast and not out of Western sight and Western mind in the Timor Sea.
As we report on Page Three, Bill Reilly, a co-chair of the Commission of Inquiry into the loss of the Deepwater Horizon drilling rig, which is due to report next month, calls for a “top-to-bottom” reform within the three companies at the heart of this affair: BP, Halliburton and Transocean.
He talks of a “sweep of bad decisions” and a culture of complacency – indeed that there was “not a culture of safety on that rig”.
Interestingly, Reilly notes that the investigators didn’t rule out a cost dimension (bear in mind BP has a reputation for cost-cutting zeal) but that they weren’t prepared to attribute mercenary motives to the men killed on the rig and who therefore cannot speak for themselves.
Reilly didn’t mince his words and perhaps more than hinted that Macondo was not necessarily a one-off, rather it might indicate something larger, a “systemic problem in the oil and gas industry”.
In my view, there is certainly a systemic problem in the US and I believe this is reflected in the hasty reorganisation of the regulatory machinery that supposedly governs the American industry and ensures it conducts its business safely.
Turning to Gullfaks C, I, like many others, nurse a belief that Statoil is among the most responsible players in the offshore industry. But is that faith in fact misplaced? Perhaps.
For sure, the Norwegian authorities are not at all happy with Statoil right now, not given the remarks made by the Petroleum Safety Authority last month.
As our headline states on Page Five, only luck saved Statoil from a major disaster in the North Sea just one month after the Deepwater Horizon blow-out.
The incident, which led to an evacuation of the Gullfaks C platform after loss of well control, was judged by the PSA to be “very serious”.
Indeed I would argue that the Gullfaks C incident is especially serious as it was allowed to happen against the backdrop of probably the most rigorous national safety regime anywhere.
The PSA report tells just how close Statoil came to disaster.
“Only chance averted a sub-surface blowout and/or explosion, and prevented the incident from developing into a major accident.
“Serious deficiencies have been identified in Statoil’s planning of this Gullfaks well and in management checks that the work was being done in an acceptable manner.”
The PSA and union leaders have now warned of a maintenance backlog in Norwegian operations. That is unacceptable. And, by the way, it is unacceptable in the UK sector too.
It is clear that even Statoil has been dragging its heels given that the PSA has questioned why measures implemented after a gas blow-out on the Snorre platform in 2004 had failed to prevent the latest incident and gave Statoil until this month to come up with a plan.
Montara, Macondo, Gullfaks C. What next from an industry that asks us to trust it?
However, as the Aberdeen Business School at Robert Gordon University’s research on behalf of OPITO tells, there appears to be a genuine will within the upstream sector worldwide to at the very least establish a decent set of baseline safety and environment standards.
Both OPITO and ABS are to be congratulated on this pathfinding work and I hope that both will be able to expand and build on it.
There will be much more on safety in the January edition of Energy. Speak next year.