Report of Activity 2008
Oil Spill Response Limited
LONDON (Registered OfďŹ ce) One Great Cumberland Place London W1H 7AL United Kingdom T +44 (0)20 7724 0102 F +44 (0)20 7724 0103 E london@oilspillresponse.com
BAHRAIN P O Box 54211 Manama Kingdom of Bahrain T +973 1773 0961 F +973 1773 0058 E bahrain@oilspillresponse.com
SOUTHAMPTON Lower William Street Southampton SO14 5QE United Kingdom T +44 (0)23 8033 1551 F +44 (0)23 8033 1972 E southampton@oilspillresponse.com
ABERDEEN Marine House Blaikies Quay Aberdeen AB11 5EZ United Kingdom T +44 (0)1224 72 6859 F +44 (0)1224 72 6860 E aberdeen@oilspillresponse.com
SINGAPORE 2 Jalan Samulun Singapore 629120 T +65 6266 1566 F +65 6266 2312 E singapore@oilspillresponse.com
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REPORT OF ACTIVITY 2008
CEO’s Message
CONTENTS
out. You will see in the People section that we continue to grow a rich and diverse workforce to cope with this demand.
1
CEO’s Message
2
Overview
I am very pleased to present to you our Report of Activity for 2008, the purpose of which is to clearly demonstrate how we have performed over the past 12 months.
Information in the Preparedness section illustrates significant growth in all aspects including equipment hire, training and consultancy activities: over 20% across the board. We monitor these areas of activity and it is interesting to note the increased focus on Offshore and Upstream work, a reflection of the high levels of energy in the oil industry. We provide services to all parts of our members’ business – on and offshore and throughout the supply chain from exploration to shipping and terminals – and it is the expertise of our people that is relied upon to provide quick and cost-effective preparedness solutions.
2008 has been extraordinarily busy with more responses than ever before, and many occasions when we have handled multiple events. Having over the past few years changed our structure to recruit and develop more expertise, we are seeing the demand for our people and their unique capabilities increasing all the time. We are now used much more in the planning and management of events starting with our Technical Advisors being called out for advice and continuing through to the project close
We have a section this year on the extensive Advocacy work we do. Engaging with governments to promote effective oil spill preparedness integrated with industry is important for us all. Without continuously reinforcing the importance of the Tiered response structure, the need for effective industry/ government relationships and the fundamental value of planning, we are in danger of losing the gains we have made over the years in effective spill response.
Key Performance Measures
HSSEQ
Response
4
Health, Safety, Security, Environment & Quality (HSSEQ)
5
Response
6
Preparedness
7
Advocacy
8
Our People
9
Membership & Finance
Preparedness
Advocacy
Our People
The Membership and Finance section looks at management of costs, as we strive to improve the value of our service to members whilst containing the level of our fees. We have done a great job as the statistics show, but the real proof is in the increase in membership during 2008. This report demonstrates just how much we have done over the last year, the significant opportunities for you to engage with us and the very high quality of expertise that rests in our people. I look forward to reporting again in 2009 with even more developments.
Archie Smith Chief Executive and Director
Membership & Finance
Mission Statement The mission of Oil Spill Response is to provide resources to respond to oil spills efficiently and effectively on a global basis.
Charter Oil Spill Response will continue its pursuit of excellence in providing cost effective oil spill response, training and consultancy services. Oil Spill Response will work towards improving communication, awareness of resources and capabilities, and where appropriate, encourage mutual support among the global population of international tier three oil spill co-operatives. These efforts will enhance Oil Spill Response’s ability to deliver the quality of services required by its Shareholders.
R EPORT O F A C T I V I T Y 2 0 0 8 1
REPORT OF ACTIVITY 2008
REPORT OF ACTIVITY 2008
Overview
Shareholders
Our Global Activities
Oil Spill Response
Associate Members
is the world’s largest
U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U
international oil spill preparedness and response organisation, with regional bases in Europe, Asia, and the Middle East. Our total number of Members stands at 112 accounting for over 60% of the world’s oil production. Collectively we have accumulated over 350 years’ response experience, having attended in excess of 300 spills.
2
Afren Energy plc Antrim Energy Atash company LLP BAPCo Bailiwick of Guernsey Botas International Limited Bow Valley Petroleum Bridge Resources Cairn Energy India CAFHI Centrica Storage Century Exploration Chrysaor Limited Dana Petroleum Dragon Oil Encore Oil Endeavour Energy Energy Resources Technology Eon-Ruhgas EurOil Fairfield Energy Ltd Gaz de France Genesis Government of Gibraltar Great Lakes & Dredging Guam Response Services Ltd Gujarat State Petroleum Corp Hardy E&P India Inc Harwich Haven Authority HM Naval Portsmouth Hunt Oil Company Husky Oil China Ltd Iranian Oil (UK) Irish Coast Guard Ithaca Japex Libya Kosmos Energy LLC Lundin Services Maersk Oil North Sea
U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U U UÊ U U U U U U U
Murphy Sarawak Oil Co. Ltd Nautical Petroleum Nido Petroleum Philippines Nippon Oil Noble Energy Oil Ex Co OMV OPET Ophir Services PA Resources Petrobras –PEMID Petrofac Development Petronas Carigali Vietnam Ltd Petronas Carigali Mauritania PowerSeraya Ltd Premier Oil Providence Resources PT Arah Prana PT Kawasan Industri Dumai Reliance Industries Ltd Repsol Exploration SA RWE Dea UK Ltd Salamander Energy Santos Sasol Petroleum Serica Energy plc Silverstone Energy Singapore Petroleum Company Spanish Coast Guard Stratic Energy Sterling Resources TAQA Tullow Exploration Tupras Valiant Petroleum Venture Vermillion Wintershall AG Xcite Energy
New Members Advocacy Exercises Spill Response Improving Preparedness
Key Performance Measures Oil Spill Response’s strategy is to grow our expertise to provide the highest level of service in oil spill preparedness and response. We continually measure our performance and our position in the industry to ensure we are doing the right thing for you, our Members, in the best manner possible. The key performance measures in this report highlight the significant achievements in 2008 and the very high levels of activity. This report also illustrates our commitment to developing an experienced operational workforce with an appropriate mix of competence accredited qualifications that we need to meet your ever increasing demands.
3
REPORT OF ACTIVITY 2008
REPORT OF ACTIVITY 2008
Health, Safety, Security, Environment & Quality (HSSEQ)
Response
Throughout 2008 Oil Spill Response has maintained a strong focus on its HSSEQ performance. Our UK and Singapore operations continue to be accredited to ISO9001, ISO14001 and OHSAS18001 standards by Lloyds Register Quality Assurance. In spite of a recent Lost Time Accident (LTA) in October, we have nonetheless achieved a non LTA period of more than one year, covering all activities for staff, training delegates and subcontractors. Our environmental initiatives have continued with the implementation of waste paper recycling in Singapore and a range of water saving measures in the UK.
In 2008 we have had in excess of 30 spill incidents; one of the highest frequencies in the history of the company. These have been a mixture of offshore, marine incidents and facility related incidents in a truly international collection of locations. What is slightly unusual is the high number of upstream related events. Throughout the year Operations staff have been engaged with clients in support of both emergency and project phase activities and in some cases these deployments have continued for periods well beyond the initial emergency operations as OSRL/EARL staff manage the ongoing response whilst normal operations are resumed. In some cases deployments have continued for six months. This has placed a real challenge on the operations teams, particularly given the times when multiple incidents were occurring, but the integrity of the Service Level Agreement (SLA) has been maintained throughout.
Lost Time Accidents ( to end Q3 2008 )
Material / Waste Recycling Rate
No. of Hazard Identification & Near – Miss Reports Raised
14
300
Classification of Spills ( no. of spills )
271 12 08
47% 26%
200
8 06
162
29%
100
94
50 03
25
320 280
15
19%
04 2
360
Days Engaged in Spills
358
268
252
505
271
400 300
200
10
160
200
5
120
100
0 03
14%
600 500
313
301
240
150
25%
05
400
30
20
6 4
35 250
10 07
Responders’ Years of Experience ( accumulated years )
05
06
07
08
113
17
80 04
146 81
03
04
05
06
07
08
0
04
05
06
07
08
0
0 03
04
05
06
07
08
0%
10%
20%
30%
40%
50%
06
07
08
Offshore Upstream Inland Downstream
Pipeline Shipping
Onland Upstream
Stated as rolling one year per 1,000,000 man hours worked HIGHLIGHTS OF THE YEAR HIGHLIGHTS OF THE YEAR The Company measures its occupational safety performance by the number of lost time accidents calculated per one million man hours and reported near misses Oil Spill Response’s Directors and Management set employee and others (i.e. training delegates, sub-contractors, etc.) safety as our Company’s top priority In 2008 to date, we have invested more than 2,240 staff hours in relevant HSE training
HIGHLIGHTS OF THE YEAR As an environmentally focused company, we constantly challenge ourselves to raise our standards of environmental stewardship During 2008, we continued to run an internal Environment and Energy group to drive improvements in a wide range of environmental issues In 2008, the waste recycling rate has increased by an additional 21% over 2007 This improvement included a boost in paper recycling rate in Singapore of over 23%, 80% reduction in gas consumption and a saving of over 100,000 litres of water per annum in Southampton
HIGHLIGHTS OF THE YEAR Oil Spill Response continues to be pro-active in focusing on near misses and hazard identification in order to provide ‘early warnings’ which will allow us to avoid any major incidents In 2008, there was a significant increase of 67% in the number of near miss/hazard ID reports raised The reduction in Accident reports to 18 minor accidents has led to a ratio of 13:1 against non lost time accidents. This figure is well above the industry norm
The safety and security of our staff has been a key consideration during the year. In today’s world, with many of the places that we visit having security and political difficulties, it is crucial to have the systems in place to ensure the safety of staff and deal with emergencies as they arise. 2008 has given rise to a number of situations where security, safety and medical support have been required, but in all cases appropriate actions were taken to resolve the situation.
Having attended more than 300 spills, the organisation has collectively accumulated over 350 years of response experience
In 2008, the service was used 14 times and in all cases was well received as it provided assurance in times of crisis
This trend will be monitored to assess any impact on our response capability and capacity
HIGHLIGHTS OF THE YEAR
80
The provision of this service has enabled us to support Members in the very early stages of an actual or potential incident
Extended engagement of responders in clients’ operations has been in particularly high demand, so as to allow operators to return to their usual business. In a number of instances this has continued for a period of months
No. of Responders
Use of Technical Advisor in 2008
Formally adopted as a change to the SLA in June 2008, this service which provides technical advice free to Members for the first 48 hours of an incident has proved a great success
4
In 2008, Oil Spill Response was engaged in spill activity for a total of 505 days, an increase of 346% over 2007
During the incidents, our staff have been involved in everything from operational deployment to contractor supervision and spill management
There was a small number of port-related incidents, but with Oil Spill Response withdrawing from the UKR operations arena, our future involvement will likely be limited to only port incidents where our Members are involved
HIGHLIGHTS OF THE YEAR
Environmental and safety issues are integral to Oil Spill Response’s way of operations.
HIGHLIGHTS OF THE YEAR
The high number of incidents in 2008 has provided our staff with considerable opportunities to develop their operational experience
Tanker-related incidents continue to decrease, consistent with international experience and trends indicated by ITOPF statistics. However, there has been a marked increase in the number of exploration and production-linked incidents
14 inwatteer Raain R ng tiinng esti Haarrvves H me me heem Scche S
HIGHLIGHTS OF THE YEAR
The nature of the spills attended to in 2008 by Oil Spill Response has varied from our historical experience
69
70 60
55
62
56
50
The disposal of the UK Tier 2 response business has led to a small reduction in the number of dedicated responders
40 30
Our recruitment programme remains active to ensure we meet our SLA commitment to our Members with experienced and trained personnel
20 10 0
The quality of our staff continues to be recognised within the oil industry as evidenced by a number of staff taking up positions with Member companies
05
06
07
08
2008 was a busy period that greatly tested the capabilities and capacity of the Operations teams. 5
REPORT OF ACTIVITY 2008
REPORT OF ACTIVITY 2008
Preparedness
Advocacy
No. of Project Services Delivered ( by industry classification )
3
13 14
4 16 12
19 30
18
2007
2008 has been a very active year for Preparedness activities ranging from training, audits and contingency planning to the secondment of people and equipment hire. Whilst the high oil industry activity in the exploration sector has driven demand with a noticeable move to new and developing locations, there is an increasing demand for long term oil spill response solutions for existing locations and activities. The core of all our Preparedness activities is the expertise and real experience of our people. This is proven in the Net Promoter Score feedback from the users of our services being consistently high.
15
Status of OPRC Ratification ( November 2008 )
70
56
2008
We undertake a wide range of activities to promote the adoption of the fundamental principles of tiered response, on behalf of our members. Using a variety of platforms and media we engage with governments and other stakeholders to encourage practical implementation of the key objectives of the International Convention on Oil Pollution Preparedness, Response and Cooperation (OPRC) and other initiatives needed to establish mutually beneficial partnerships between the responsible authorities and the supporting oil industry.
116 152
Pipeline
Government
Downstream
Shipping
Ports and Harbours
Inland Upstream Offshore Upstream
HIGHLIGHTS OF THE YEAR Oil Spill Response’s preparedness activities have increased from 237 projects in 2007 to 301 projects in 2008, an increase of 27% Our comprehensive and integrated preparedness solutions, focusing on the complete range of needs of our customers has helped us to achieve continuous growth across the Industry
Our number of preparedness activities has again showed an increase of 27% compared to 2007.
Having regional representation in Asia Pacific, Middle East, North and West Africa and Aberdeen and hence being closer to our Members, has also significantly advanced the number of our preparedness services delivered to Members
No. of Outsourcing Services Delivered
No. of Consultancy Services Delivered
OPRC 90
Training 2,500
160
2008 80 projects
2007 93 projects
2007 57 projects
2,000
120 100
1,500
80 60
1,000
40 20
500
0 0
20
40
60
80
100
120
140
0
10
20
30
40
50
60
70
80
90
03
04
05
06
No. of Courses HIGHLIGHTS OF THE YEAR In 2008, the demand for the provision of specialist equipment and personnel to provide cover for E&P projects amounted to 115 projects delivered, an increase of 23% over 2007 Offshore and coastal equipment has been in particularly high demand for exploration projects undertaken in Asia Pacific, Middle East, North and West Africa The delivery of turnkey solutions involving Consultancy and Training work linked with bespoke equipment packages and personnel demonstrate the move to ‘integrated solutions’
6
HIGHLIGHTS OF THE YEAR
07
08
0
No. of Delegates
HIGHLIGHTS OF THE YEAR
Oil Spill Response’s consultancy services continue to grow from 57 projects in 2007 to 80 projects in 2008. This is an increase of 40%
Our Training team improved its performance again in 2008, reflected in a continued increase in the number of delegates and courses delivered
The year saw a steep rise in the demand for our consultancy teams to undertake practical equipment and response readiness audits for new and ongoing projects. Work has been undertaken in areas including Russia, West Africa, and Indonesia
Already the leading oil spill training provider, Oil Spill Response is accelerating its plans for growth in the future and broadening the range of courses and locations offered. In 2008, we introduced new courses like the UK Response and Control Course, Shipping Course, and Hazardous and Noxious Substances (HNS) awareness course
Oil spill modelling projects continue to add value to our Members. Projects include modelling for a major pipeline development project in the Mediterranean and Black Sea
In the last five years, Oil Spill Response has delivered more than 600 courses to a total number of 9,951 delegates across the continents, principally Europe, Asia Pacific, and the Middle East
No. of Delegates
2008 115 projects
No. of Courses
140
The above map shows countries which have ratified the OPRC Convention which is an important first step towards building preparedness, however it is the practical implementation thereafter which is the key to success. Through our Advocacy programme we actively promote the Tiered Preparedness and Response philosophy, to encourage an efficient structure of resource availability based upon risk. We also encourage the development of national policies on dispersant use, recalling our experience that without these considerations, the
decision-making process at the time of a spill may preclude use of this important response strategy. Moreover, our members benefit from our international recognition as a trusted and valued representative of industry best-practice in spill response. Activities through which we can leverage these key advocacy messages include meetings, conferences, workshops and other events designed to engage stakeholders and facilitate a debate on the high-level issues of preparedness and response.
Oil Spill Response has advocated the industry consensus view at over 30 international/national events in 2008. 7
REPORT OF ACTIVITY 2008
REPORT OF ACTIVITY 2008
Our People
Membership & Finance Overall in 2008 we have increased our global resources to meet the demands of our customers. We have seen another increase in the number of secondments of our personnel to member companies and introduced regional representatives in Indonesia, West Africa and Libya.
Unity In Diversity
This year has been a particularly busy one; our people were challenged to make the most out of their skills and knowledge.
Our People by Language Skills ( English excluded )
Others 15%
Arabic 5% French 17%
Melayu 15%
It has enabled us to show our strengths in terms of teamwork and dealing with a diversity of projects. Our new recruits have had exposure to a variety of training and we continue to aim to increase the skills level throughout our sites. We aim to move more staff between our bases to enable them to have a greater understanding of all working environments.
Gender Ratio
Diverse Workforce
160
160
140
140
120
120
100
100
80
80
60
60
40
40
20
20
0
0
03
04
05
06
07
08
03
04
05
06
07
08
Japanese 12% Mandarin 36%
Male
Engineering Officer
Female
Engineering Apprentice
Deck Officer Graduate
Other (incl Admin)
HIGHLIGHTS OF THE YEAR From an organisation that started life in the 1980s as a pure response organisation waiting for a call to mobilise, Oil Spill Response has evolved into a fully integrated company of some 139 professional staff providing a comprehensive range of services to customers globally Diversity is important in a global organisation and the increasing diversity within our workforce is one of our key strengths, broadening our language capability and cultural awareness of our expanding markets
2008 has seen a steady growth in membership and as at December 2008 the total number of Members stands at 112 accounting for over 60% of the world’s oil production. No. of Members
Our combination of good cost management, increasing contribution from preparedness activities and growth in membership continues to enable us to keep the increase in subscriptions to within inflation.
In 2008, the main increase has been in the linguistic ability of our staff. Our aim for 2009 is to continue increasing the skills in this area so that we can deliver our comprehensive range of services in even more locations around the world
Subscription Rate per 100 Shares £70,000
No. of Secondments
£60,000
Man Days Training
Membership by Industry Class
140
120
120
100
100
80
80
60
60
40
40
20
20 0
04
03
06
05
No. of Participants
07
08
0
03
04
05
Others
Government
Storage
Shipping
06
07
08
Refining
No. of Associates E&P
Energy
HIGHLIGHTS OF THE YEAR We welcomed Dubai Petroleum Establishment and Sonangol P&P as new Shareholder companies as well as a further 17 Associate Members We continue to see an increase in our Members undertaking exploration activities as the industry looks to new territories to replace depleting reserves and increases production It is the continued support and contribution of our Members which gives us the opportunity to invest in expanding our services to meet industry’s needs Our ongoing search for feedback from our customers continues and we commit to meeting each Member on an annual basis. This provides the opportunity to discuss the Members’ needs, their response procedures and our role thereby ensuring both parties can work together effectively in the event of an incident
In 2008 we have again operated efficiently with Net Costs to Shareholders (NCS) expected to close the year 1.1% favourable to Budget and 1.6% lower than 2007. This result reflects a combination of good cost management across the company and continued growth in contribution from our expanding range of Preparedness activities. Active management of the development of the business is aided by our Balanced Scorecard reporting system and this is now a mature and reliable means of measuring our financial, operational, HSSEQ performance and customer engagement.
£50,000
The prime resource for Oil Spill Response is people and we are committed to ensuring we have the best and most highly trained and motivated people in the industry.
SIX staff were seconded to Members in 2008 HIGHLIGHTS OF THE YEAR Oil Spill Response has had staff on secondments both for short term and longer established rotations to meet a customer’s need. This has enabled us to give further opportunities for individuals to increase their skills This year has seen continuous high demand from Members for both short term and long term assignments. We have had staff seconded to countries including China, Kazakhstan, New Zealand and Russia Within the organisation, Oil Spill Response familiarises staff with the company’s greater working operations through staff exchanges that allow one to learn about the activities and our other bases
8
2007 1,227 Training Days
FOUR staff were seconded between the UK and Singapore base in 2008
£40,000
HIGHLIGHTS OF THE YEAR The prime resource for oil spill response is people and we are committed to ensuring we have the best and the most highly trained and motivated people in the industry To this end we pursue a high level of internal and external training. In 2008, our man-days training indicates a significant increase of 50% Again we continue to strive to improve our skills base. We have had continued assessment of our response staff with our competency based training and have run initial training with six new response specialists, each completing the “Response Specialist” occupational standard
Preparedness Turnover by Department (£’000)
£20,000 £10,000 £0
2008 1,667 Training Days
Preparedness Turnover by Geographic Area (£’000)
£30,000
04
05
06
07
08
Subscription Rate per 100 Shares Inflation- uplifted Subs Rate
HIGHLIGHTS OF THE YEAR The continued growth in membership combined with our strong financial performance enabled us to keep the subscription rate unchanged in 2008 at £66,450 per 100 shares Looking ahead to 2009, despite pressure from adverse exchange rate movements, the impact of the worsening economic environment and oil price volatility, the subscription rate will remain flat for another year, bringing the average increase over the past five years to less than 1%
09
£7,000
£7,000
£6,000
£6,000
£5,000
£5,000
£4,000
£4,000
£3,000
£3,000
£2,000
£2,000
£1,000
£1,000
£0
03
04
UK Middle East
05
Asia Pacific USA
06
07
Europe Rest of World
08
£0
03
04
Consultancy
05
Training
06
07
08
Projects
HIGHLIGHTS OF THE YEAR A key factor in achieving low increases in our subscription rates over the years has been the progressive growth that we have delivered in our Preparedness activities Preparedness turnover was £6.4m, a 16% increase over 2007. This is a result of both broadening the range of services that we offer and engaging more Members in more locations 2008 was an especially good year for Business Projects, benefiting from a number of long-term personnel secondments and equipment hire projects
Other training also included appraisal training, management competence, risk assessment and essential safety training 9