The magazine for oil and gas professionals in the energy transition
August 2021 – open access articles The following articles are taken from Petroleum Review magazine’s August 2021 edition for promotional purposes. For full access to the magazine, become a member of the Energy Institute by visiting www.energyinst.org/join
North Sea
UKCS & NCS
North Sea prospects in challenging times These have been challenging times for North Sea oil and gas operations, faced with the coronavirus pandemic and oil price collapse. Here, we examine the prospects for the UKCS and Norwegian sectors, and the impact on merger and acquisition deals, from leading analysts at Rystad Energy.
‘L
Projects west of Shetlands like BP’s Clair South, part of the Clair Ridge project (pictured), will drive an uptick in capex in 2024 Photo: BP
ast year was an anomaly given the COVID-19 pandemic and price collapse which affected the oil and gas industry severely,’ remarks Sonya Boodoo, Vice President Upstream Research, Rystad Energy, in a detailed analysis of North Sea prospects, with fellow analyst Sara Sottilotta looking at the prospects for energy services. Exploration activity was one of the hardest hit segments and many companies took the decision to reduce discretionary activity. At the beginning of 2021 the North Sea E&P industry was optimistic and anticipated that more than
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20 exploration and appraisal wells would be completed. However, increasing numbers of companies deferred their exploration programmes. By the end of 2020 only eight wells had been completed. The only discovery last year was the 120mn boe Isabella gas discovery in the Central North Sea. This year, the sentiment continues to be cautious and some companies, like Total, have deferred exploration activity till 2022 or later. However, Rystad is cautiously optimistic and Boodoo believes: ‘The forecast numbers are expected to increase slightly.’
CNOOC is expected to be one of the busiest explorers in the UK Continental Shelf (UKCS), with two appraisal wells on the recent Glengorm discovery, one of which was already completed, and a wildcat on the Shackleton prospect. Harbour Energy (formerly Chrysaor, before the reverse take-over of Premier earlier this year) is expected to drill two prospects, Talbot and Dunnotar. Shell will also be drilling the Jaws and cross-border Edinburgh prospects later this year, while Ithaca Energy (owned by Delek) will be drilling the Fotla prospect. Equinor recently spud the Tiger Lily prospect east of Shetland, and Serica Energy is eyeing North Eigg, with plans to drill in 2022, while Petrogas is expecting to drill Birgitta in the Central North Sea. The Norwegian sector was more buoyant, yielding nearly 600mn boe in 2020. The two largest discoveries, with over 100mn boe each, are Slagugle and Warka. ConocoPhillips became the most active explorer on the Norwegian Continental Shelf (NCS) last year, operating three of the 14 discoveries, including the two largest finds. Neptune and Equinor also operated a significant share of discoveries. Meanwhile, exploration performance on the NCS (in terms of volumes per discovery) was the highest in recent years, with 33 well bores aggregating 586mn boe – double what was seen in 2019, despite roughly 50% less wells being drilled. ‘The latest well count points to strong activity comeback in 2021… with close to 50 wells likely to be completed by year end,’ says Boodoo. There is also indication of increased exploration expenditure, with 2021 budget levels comparing closely to 2019 levels. Both Lundin and Aker BP have indicated increased exploration budgets compared to 2020, and Equinor intends to drill 20–30 wells. On the UKCS, exploration expenditure is likely to remain stable until 2023. Rystad Energy estimates total spend on the UKCS dipped by 20% in 2020 compared to 2019. Capex, excluding exploration activity, fell 27% and is expected to remain fairly stable until 2023. ‘We see companies weighing their options before making final investment decisions. Considerations such as strengthening balance sheets, ESG [environmental, social and governance] target and offshore safety will remain high on the agenda,’ notes Boodoo. Pipeline of projects A pipeline of projects is on the horizon to be sanctioned by 2025. In 2020, only two developments were approved – IOG’s Core Project Phase 1
North Sea
One of the largest deals in 2020 involved Viaro Energy’s acquisition of RockRose Energy for £248mn; assets included the Blake and Ross fields in the central North Sea (pictured here being serviced by the Bleo Holm FPSO) Photo: Viaro Energy
and Wintershall’s Sillimanite field – while Ithaca Energy submitted the Abigail field development for approval. Rystad expects several projects to be approved in 2021. Tailwind Energy’s Evelyn project has been greenlighted by the OGA, and Harbour Energy’s Tolmount East is expected to be approved, as well as IOG’s Core Project Phase 2 and Hibiscus Petroleum’s Marigold. Repsol Sinopec’s Tain project is anticipated to reach FID (final investment decision) this year. Most of these projects, with the exception of Marigold, are tie-back developments. Roughly 130mn boe is likely to be sanctioned in 2021. As mentioned, many expected projects have been delayed, including Siccar Point’s Cambo development west of Shetland. Rystad expects sanctioning in 2022, as Siccar Point is trying to farm-out its interests prior to FID. Projects west of Shetland will be driving the uptick in capex in 2024 and beyond, with Cambo, BP’s Clair South and Rosebank on the horizon. Development activity is likely to surpass 2020 levels but not rebound to 2019 levels. Drilling activity also slumped by 42% in 2020, with only 65 development wells drilled, compared to 112 in 2019. Some 23 wells had been spudded by June 2021, with another 31 awaiting approval from the OGA. It is anticipated that development wells in 2021 will surpass 2020 levels. OGUK expects around 70–80 development wells to be drilled this year. In 2020, there was a 5% reduction in overall production, as a result of deferred activity and maintenance. A further 3.5% decline in output is expected in 2021, with production of about 1.5mn boe/d in 2021. On the Norwegian side, development activity was expected to falter a bit, with many operators announcing delays for projects previously expected to be sanctioned in 2020. However, the Norwegian government implemented a temporary tax regime to mitigate the effects of this. The breakeven price under the temporary tax regime
is on average around 40% lower than the main regime. AkerBP, for example, reported around $8/boe reduction and Lundin around $10/boe reduction and their IRR (internal rate of return) doubled. Prior to the announcement of the temporary tax regime, only one project – Balder X – was approved in 2020. With the introduction of the new tax regime, four projects gained approval in 2021, and 2022 is expected to be a very active year with an all-time high in projects being sanctioned. Aker BP is targeting around 550mn boe in the next two years, and Lundin is eyeing about nine potential new projects with about 200mn boe to be sanctioned by 2022. Rystad expects capex on the NCS to remain relatively stable at around NKr150bn ($17.44bn) until 2025 under the temporary tax regime and fixed price assumption. However, without the temporary tax regime, there could be a significant drop in capex, because of lack of an incentive to sanction within that time. M&A activity Given the uncertain price environment encountered last year, it was not surprising that the level of M&A activity took a dip in 2020, ‘as buyers and sellers found it difficult to navigate the bid/ask price,’ says Boodoo. Roughly $2bn in assets was traded in the UK in 2020, down from $6bn in 2019. The largest deals in 2020 involved Viaro Energy acquiring RockRose Energy for £248mn and SSE gas and exploration assets for £120mn. Transaction activity picked up pace in 2021 with the improved price environment. Enquest acquired interests in the CNOOC-operated Golden Eagle field from Suncor in a $325mn deal. NEO Energy acquired a package of non-operated UK upstream assets from ExxonMobil (seven months after it bought a clutch of Total assets) and also Zennor Petroleum’s portfolio for $1bn and $625mn respectively. NEO Energy expects to triple its oil and gas output to 100,000 boe/d in 2022–2026 on the back of the acquisitons. Meanwhile, Cairn Energy sold its minority stakes in Premier’s Catcher and Enquest’s Kraken fields to newcomer Waldorf Production for $420mn. ‘It is likely that continued M&A activity will be on the agenda and many portfolios are on offer,’ comments Boodoo. ‘One factor that drives transaction activity in the UK is tax synergies. A substantial number of companies, such as Enquest, Equinor, Cairn and Ithaca have significant tax losses to be utilised. Acquiring portfolios with
production could accelerate the utilisation of these losses, adding additional value.’ This trend was seen as a significant value add in the Golden Eagle transaction earlier this year, as well as the major Chrysaor/ Premier merger last year. ‘The flurry of M&A activity in the UK provides some much-needed optimism for the future. The new owners of these fields will be eager to push forward with incremental development and also progress development of new fields to maximise the UKCS potential,’ says Boodoo. On the Norwegian side, there have been some interesting M&A deals as well, both with large corporate deals like PGNiG’s acquisition of Ineos Norway and Longboat Energy’s entry on the NCS through a mixed portfolio acquisition, and smaller single asset and licence acquisitions like Lime Petroleum’s acquisition of Repsol’s stake in the Brage field. Rystad expects more transactions potentially to come in the light of Shell’s public statements of plans for an exit from the NCS. Shell currently has a strong position on the NCS, with the Troll and Ormen Lange fields being the largest contributor. Boodoo notes that a significant part of the Shell NCS portfolio is electrified, and divesting it seems somewhat counter-intuitive in terms of achieving their carbon emissions target. Oilfield services slump Analyst Sara Sottilotta notes that European upstream investments were running 14% lower than 2019 levels in 1Q2021. The pandemic erased $19bn in purchases of oilfield services in north-west Europe. ‘Engineering expenditure is reeling and sanctioning activity has slowed in the North Sea,’ she says. According to Rystad calculations, engineering performance, construction and installation in 2020 suffered a $2.5bn drop (30% fall) compared to 2018, due to decrease in activity. Offshore service prices dropped by 12% on average from 2019 to 2021. The subsea market is expected to be one of the key drivers of price inflation in the North Sea from 2022 onwards. North Sea expenditure is expected to remain flat in expectation of new contract awards of about $50bn – mostly in Norway ($29bn) and up to $17bn in the UKCS and others, with a ‘spending spree’ anticipated in 2024. ‘We expect sanctioning activity in the North Sea to make a serious comeback in 2022, mostly driven by offshore activity,’ says Sottilotta. So there is something to look forward to. ● Petroleum Review | August 2021 15
Bulk storage and terminals
CLIMATE CHANGE came back close to those of January. NuStar Energy, which operates a network of refined product pipelines and terminals along the Texas coast, also noted that the extreme temperatures in February caused outages or downtime among some of its customers during and after the storm. It puts the impact on its earnings for the period at some $11mn, at a time when refined product demand had begun to return towards prepandemic levels.
Winds of change Terminals have been buffeted by weather events, but operators are taking steps to make a difference in the achievement of sustainability goals, writes Peter Mackay, Principal Consultant, Meredith & Company.
O
Flooding during Hurricane Harvey, 2017 – The National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center predicts the US Gulf is likely to face more hurricanes of the severity of Harvey, which had a massive impact on the Texas coast, with significant flooding and wind damage affecting industry and homes alike Photo: Wikipedia
perators of bulk liquids terminals in the US Gulf Coast region are well accustomed to dealing with hurricanes, keeping a close eye on weather patterns from June to November and standing ready to put in place practised shutdowns in good time ahead of any major weather event. But the winter storms that struck much of North America during mid-February this year were something else. In place of high winds and torrential rain, terminals had to deal with freezing temperatures and power blackouts. Those terminal operators were not alone; winter storm Uri caused blackouts for nearly 10mn people in the US and Mexico, the largest such disruption in the US since 2003, and resulting damages estimated at $195bn or more. Also badly affected were US refiners, with throughput in the US Gulf Coast region falling to 3.9mn b/d, lower than the level recorded during Hurricane Harvey in 2017. Indeed, the US Department of Energy estimates that 20% of US refining capacity was put out of action as a result of external power
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outages, constrained natural gas supplies, logistical disruptions or damage to process units caused by sub-zero temperatures. Those storms, says Odfjell Terminals, ‘caused widespread impacts throughout the entire Houston petrochemical supply chain’. As an illustration of the extent of the disruption, Navigator Holdings, which has a 50% shareholding in the Morgan’s Point ethylene export terminal alongside Enterprise Product Partners, notes that the freeze shut down 80% of all US ethylene production and that virtually all the production plants in Texas and Louisiana had to ‘abruptly cease operations’ as they were not designed for sub-zero temperatures and lacked winterisation contingencies. Inventories were rapidly drawn down and what little production remained was going directly into domestic downstream processing; terminal export volumes were near capacity in January but fell off dramatically in February and March. While operations returned to normal within weeks, it took until June before export volumes
Weather forecast The severity of the climatic conditions in the US Gulf area during February has been identified as a symptom of global climate change. Arctic air has been warming twice as fast as the global average, disrupting long-established patterns and shifting the jet stream, allowing the polar vortex to extend its range southwards. If that is true, then more such extreme weather events are likely in years to come and operators of industrial facilities, including storage terminals, will need to learn from this year’s storms and be prepared. That is certainly the case with hurricanes, which arrive each year in the Caribbean and regularly impact facilities in the US Gulf. Indeed, so regular are they that most terminal operators conduct routine drills and exercises so that they are ready to respond to the possible contingencies. According to the International Liquid Terminal Association (ILTA), which represents the sector, its members work with federal, state and local first responders and government officials to promote safety before, during and after extreme storm events. Post-storm checklists help assess potential damage, alert local, state and federal authorities of damage, and allow operations to resume. If damage is severe, alternative sources can be assigned. The ILTA notes that the National Oceanic and Atmospheric Administration’s (NOAA) Climate Prediction Center has forecast a 60% chance of a more active than normal Atlantic hurricane season this year, having already announced an increase in what it deems an ‘average’ hurricane season, with the number rising from six to seven. This forecast suggests that the US Gulf is likely to face more hurricanes of the severity of
Bulk storage and terminals
Katrina (in 2005) and Harvey (in 2017), the second of which had a massive impact on the Texas coast, with significant flooding and wind damage affecting industry and homes alike. Hurricane Katrina raised serious questions about the ability of the refining and terminal industry to keep supplies moving during such events, when fuels are sorely needed. Here comes the flood Flooding has also been on the agenda at the UK Health & Safety Executive (HSE), which in 2018 published a delivery guide on flood preparedness inspections. In the document, HSE noted that recent flooding events affecting a number of major hazard establishments that were subject to the Control of Major Accident Hazards (COMAH) regulations had the potential to disrupt critical infrastructure and interrupt business continuity. As a result, the COMAH Competent Authority has been undertaking targeted inspections on flood preparedness since 2017 and will continue to do so through to next year. That inspection programme also leans on guidance and best practice developed by the Chemical and Downstream Oil Industries Forum (CDOIF). This document identified a number of issues that can emerge during a flooding event, including the loss of power, communications and other utilities (which may also impact emergency services), including effluent treatment; inaccessibility of a site for emergency responders; sudden and unplanned production interruptions, damage to process equipment and loss of containment; the welfare of any staff stranded on the site; and the management of floodwater, particularly when it has been contaminated by oils or chemicals. In particular, HSE noted that flooding at a storage terminal site has the potential to lift tanks off their foundations, and erode pipe supports or other steel and concrete components (including bund walls). Debris being washed around in flood water may also cause damage. These effects are possibly hard to picture for anyone who has not experienced them before, so training and drills are vital to prepare personnel to deal with a sudden inundation. Turning back the tide Bulk liquids storage terminals are often sited on or near the coast and, as such, are largely unprotected from the elements and at risk of damage and
disruptions caused by wind and water. If climate change is responsible for an increase in such threats, then terminals are also well placed to take a lead in some of the measures being developed to help mitigate those threats or turn back the tide of climate change. This has been evident for some years now, with many operators taking the opportunity to leverage their assets and capabilities to help promote environmentally friendly alternatives. For example, in 2019 the ADPO site in Antwerp installed a concentrated solar thermal (CST) energy array, which uses parabolic mirrors to concentrate the sun’s rays to generate heat. CST is said to be three times more efficient than photovoltaic (PV) technology, generating up to 400˚C for use in tank cleaning and heating. The array, developed by Azteq, was installed above the company’s car park, above a railway line and underneath a high voltage power line, providing double use of the ground area. Leading international terminal operator Vopak has put in place a range of measures aimed at improving energy efficiency, both for itself, its customers and other parties. In May this year it signed a memorandum of understanding with Keppel Data Centres, Kawasaki Heavy Industries, Linde Gas Singapore and Mitsui OSK Lines to explore the development of a concept for supply infrastructure to deliver liquefied hydrogen to Singapore, to power Keppel’s data centres, including a floating data park project that is currently under development. The scope of the project includes a production, liquefaction and export site, transport via oceangoing tankers, and an import, storage and regasification facility in Singapore. The study is expected to run to the end of this year, after which a decision will be taken on the next steps. ‘A hydrogen import terminal has the potential to transform industries like the data centre sector,’ says Kees van Seventer, President of Vopak LNG. ‘It will also support long-term emissions reduction in Singapore. Vopak is committed to support the energy transition through development of infrastructure for sustainable energy solutions, underpinned by our New Energy strategy.’ That strategy involves reducing Vopak’s activity in the traditional crude oil and refined products sectors and refocusing on new energies and gases, while maintaining its presence in the chemicals and industrial sectors (see p18).
Play together Vopak clearly understands that, as the process of decarbonisation and the energy transition continues, it will have to redefine its sphere of activity. It is far from alone in that, with terminal operators around the world looking at how they will have to adapt to handle new fuels and new technologies. One salient feature of this new energy environment, at least in the near to medium term, is the need for collaboration. There are many paths to a decarbonised future and different technologies will need to be deployed. But whatever the nature of successful future fuels, storage terminals will continue to play a fundamental role in their supply chains. Port authorities continue to be well placed to foster that collaboration, bringing together the different abilities of their varied tenants. The Port of Rotterdam, for example, has been highly active in playing its part in helping the Netherlands meet its obligations on climate change, notably in the area of hydrogen, where it is looking at establishing a transparent hydrogen exchange market, ‘HyXchange’, in partnership with Gasunie, other regional ports and market players. In the meantime, it has also completed a pre-feasibility study looking at importing green hydrogen from Iceland, which indicates that such a project could be technically feasible, financially viable and would have a significant contribution to the fight against climate change. Activities such as this show that the terminal sector is stepping up and making a contribution to the fight against climate change, not least in its own interests to head off further disruption and damage caused by extreme weather events. ●
ADPO’s concentrated solar thermal (CST) energy array, Antwerp, which uses parabolic mirrors to concentrate the sun’s rays to generate heat used in tank cleaning and heating Photo: Port of Antwerp
Petroleum Review | August 2021 23
Health and safety
PROCESS SAFETY
Staying safe Dr Stephen Bater FEI, Management Consultant, highlights the latest revisions to the Energy Institute’s process safety guidance, in transition to a zero carbon world.
T
he Energy Institute’s High-level process safety framework for process safety management has been revised and will be published in 3Q2021. Developed in 2010 by the industry for the industry, the Framework has successfully been applied to many industrial settings, including hydrocarbon storage, high hazard manufacturing and a range of complex hydrocarbon and chemical processing facilities. Since the first edition was published, many new catastrophic process safety incidents have occurred, with tragic and avoidable consequences. As world-renowned process safety expert Trevor Kletz
Renewable energy, waste and water industries Concentrated solar power Wind energy
Hydroelectric Ocean energy – tidal and wave Biomass Hydrogen Biofuels
Battery storage facilities
Anaerobic digesters
Thermal dryers Waste oil and chemical storage and reprocessing
Major accident hazard/ MATTE (major accidents to the environment) potential Fire – explosion/firewater run-off Collapse of structures, electricity hazard, vessel collision, release of associated lubricants Dam breach, electricity hazard Collapse of structures, vessel collision Fire – explosion, firewater run-off Fire – explosion, firewater run-off Fire – explosion, loss of containment, firewater run-off Fire – explosion, loss of containment, firewater run-off Fire – explosion, loss of containment, firewater run-off Fire – explosion, firewater run-off Fire – explosion, loss of containment, firewater run-off
Table 1: Potential major hazards in relatively new and emerging industries
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once observed: ‘Accidents, with a few exceptions, are not caused by lack of knowledge, but by a failure to use the knowledge that is available.’ It is clear that managing complex operations in process and high-hazard industries such as refineries and petrochemical complexes is, and always will be, challenging. Operating companies are increasing their efforts to reduce the risk of catastrophic events, such as the release of toxic, reactive or explosive chemicals that can damage the environment or plant assets, as well as attempting to prevent injury or death to employees and the general public and damage to the environment. Confirming the safety of employees, protection of the environment and physical plant assets in the event of an unexpected process incident can never be underestimated. With the transition to meet the demands of achieving net zero carbon emission goals, there has been a shift to the development of new techniques and technologies for energy and removing carbon from the economy, whilst not compromising social or economic standards to meet these challenges. This presents a new challenge to these sectors on how they manage their risk profile effectively. New opportunities Process safety management (PSM) can be defined as ‘managing the systems and procedures that prevent the uncontrolled release of energy’. It is vital to ensuring safe and continued operations to prevent major accident hazards, major accidents to the environment or damage to the operational assets. Basically, preventing and mitigating fatal, serious injury, environmental damage and catastrophic incident potential in a wide range of high-hazard industry. PSM has traditionally been associated with the oil and gas and chemical process sectors, where the PSM Framework has gained traction and there are process safety specialists embedded in many organisations to ensure that process safety is managed effectively. However, there is a range of newer emerging industries where the principles of process safety management are fully applicable but there is arguably a competency/knowledge gap that potentially could result in catastrophic incidents that are totally avoidable.
Do the leaders in these sectors ‘know what they don’t know’? There can be a paradigm shift in risk management as these sectors embrace the knowledge, systems and experience that already exist and implement the Energy Institute’s PSM Framework. Adopting PSM systems in these industries not only reduces the risk of a catastrophic incident, but also enhances productivity and reliability by reducing the likelihood of an unplanned and costly outage. To emphasise the relevance of PSM to a broader industry sector and recalibrate the view that PSM is only applicable to the traditional hydrocarbon and chemical processing industries. some examples of the potential major hazards associated with relatively new and emerging industries are outlined in Table 1. Every year there are incidents at anaerobic digestion plants and substations that have resulted in large energy releases, explosions and spillages. Several have been catastrophic and resulted in multiple fatalities, serious injuries, environmental damage and huge financial loss. To prevent these catastrophic and avoidable events industries must implement robust arrangements for the management of process safety. To help contextualise this, there are six tenets of process safety that senior leaders in high-hazard, process and renewable energy operations need to satisfy themselves that are being managed effectively: •
Major hazards are recognised and the worst potential consequences are understood throughout the business.
•
Plant and equipment are provided which is ‘fit for purpose’ to reduce the risks from the major hazards to tolerable levels.
•
Systems and procedures are provided which ensure proper operation for plant and equipment and which maintain their integrity.
•
Sufficient staff, with appropriate experience and training are provided to implement the systems and procedures.
•
Emergency procedures that respond adequately to foreseeable incidents are both in place and practised.
Health and safety
Figure 1: EI PSM Sand Cone Model Source: Energy Institute
circular economy, with new and New e-learning course emerging operations for waste and The EI launched a new water processing of large amounts e-learning training course – of waste material including Introduction to Process Safety organic, plastic, liquid and the Management (www.bit.ly/ associated material in large PRAug2021PSMcourse) – in complex facilities and potentially September 2020, providing an anaerobic digesters to produce gas. integrated overview of the 20 The hazard and risk profile elements of the PSM Framework. will shift dramatically in this Delivered on the EI’s Learning energy transition. As such, robust Management System (Moodle) 15 • Incident investigation and management systems, training modules comprise pre-recorded monitoring and auditing of training presentations, ranging performance take place to learn and competency need to be aligned to this risk profile so that from 30–60 minutes each, case from experience and promote effective arrangements are in place studies and an exercises and continuous improvement. to manage these risks. assessment component. The EI’s revised PSM Following completion of the Framework has four focus areas, course, learners will be awarded an Online support and auditing 20 elements and 200 expectations EI certificate of completion. To help existing and new users of what should be done to deliver The training course is also of the EI PSM Framework, several safe and incident-free operations aligned tools have been developed, delivered as a three-day public or and have robust arrangements in in-company classroom course. including a range of online tools place for emergency preparedness with a fully aligned KPI dashboard and response to mitigate any Fundamental focus to track PSM data effectively unplanned events. for those that cannot state with To help existing and emerging To emphasise the complex and absolute confidence ‘We are safe’ sectors manage process often fluid challenges of managing process safety effectively, the revised Framework introduces the PSM Sand Cone Model ‘History teaches us that effective process safety management is for the four focus areas – see not demonstrated by the absence of incidents, but by the presence Figure 1. The model illustrates of strong barriers. It is critical therefore that those leading major that with the complexity and hazard enterprises remain ever vigilant for weaknesses within their dynamic requirements of own process safety management systems, and routinely look for managing high-risk processes and operations there can be opportunities to strengthen their existing barriers, through the no review and improvement application of good practice.’ without risk management; no ‘This latest edition of the EI’s PSM Framework provides additional risk management without risk guidance in several areas and will be of value both to organisations identification and assessment; newly developing and implementing process safety management and no risk identification and systems, as well as those with mature arrangements already in place. assessment without process safety I would encourage you to apply the lessons from it within your own leadership. organisations.’ ● It is clear that with the Philip White – HSE Director of Regulation transition to a zero carbon world
Ever vigilant
Figure 2: Process safety expectation KPIs dashboard Source: Energy Institute
there will be significant changes in the energy industry. Some sectors will reduce in size or potentially even disappear in the long term, such as oil and gas exploration. While others will grow to deliver society’s needs, such as renewable energy technologies and the
(see Figure 2). The aim is to give all stakeholders the confidence that they can enjoy an incident-free day, every day. An online audit tool confirms the organisation’s status against the Framework’s elements and expectations, and an online e-learning course ensures that staff have the required knowledge and competence. The online application allows for a systematic and robust audit of the process safety management system by internal and external auditors. This allows for a consistent approach to the audits and reporting to identify any gaps and inform continual improvement. To be of value, senior management should be fully committed to the concept of auditing and its effective implementation within the organisation. The online audit tool allows senior management to see real-time visualisation and tracking of compliance.
safety effectively needs a few fundamental requirements. Organisations need to develop and implement a robust management system aligned to the EI’s best practice PSM framework. They need to use the associated dashboard and audit tool to give themselves the confidence that it is being managed, because it is being measured. Finally, they need to train their staff at all levels, so they have the appropriate level of competence to manage process safety. This is an important journey that an increasing number of traditional and emerging major hazard operators are embarking on as they strive to know that their process safety is under proper control and help them meet their fiscal targets. ● To download a copy of the PSM Framework, visit www.bit.ly/PRAug2021Framework For more information regarding the Framework’s online tools, contact Lee Allford, EI Manager – Process Safety & Decommissioning at e: lallford@energyinst.org
Petroleum Review | August 2021 27
