A new offshore safety directive, issued by the European Union, has been adopted across the continent. Remi Eriksen, CEO DNV Maritime Oil & Gas, and Graham Bennett, VP DNV, business development director, division Europe and North Africa, take a look at the consequences.
The Macondo incident in 2010 shook the offshore industry to its core, not just across every oil and gas company, but also in government and regulatory circles.
The 25th anniversary of the Piper Alpha disaster in July 2013, the continued fallout from Macondo and the continued occurrence of other offshore incidents, have heightened media and public interest in offshore safety. This put pressure on the European Union (EU) to exercise stronger governance over offshore oil and gas operations.
Consequently, on June 10, 2013, after nearly two years of industry and stakeholder consultations, the EU for the first time adopted a directive on safety for offshore oil and gas activities.
DNV has been monitoring the development of the directive over the last two years. It has also provided input on the directive, both to the European Commission directly and also indirectly via consultations with industry bodies.
Defining clearer responsibilities for safety and environmental protection
The directive will apply to existing and future installations and operations of both production and non-production installations. Clear rules are set for the whole lifecycle of all exploration and production activities from design, drilling, development, and production to the final removal of offshore installations.
DNV’s evaluation of the new regulatory framework concludes it has many of the elements necessary to reduce the probability of major accidents offshore and to limit their consequences should they occur. However, the realization of the directive into national legislation by the member states will dictate its real effectiveness.
In the event of offshore pollution events, the directive aims to minimize possible damage to the marine environment, and to protect the livelihoods of coastal communities and economies from consequential damage.
EU Member States are required to establish that operators provide adequate evidence that they have sufficient financial and technical provisions to cover liabilities from their operations. It establishes minimum conditions for safe offshore exploration and development and requires improvements to the response mechanisms in the event of a major accident.
Each CA’s main roles are to assess and accept or reject major hazard reports, including internal emergency response plans, and notifications prepared by offshore operators, to perform inspections and investigations, and to establish systems for the anonymous reporting of safety concerns.
The CA will be legally empowered for taking effective, proportionate and transparent enforcement action, including, where appropriate, temporary cessation of operations. To avoid potential conflicts of interest, the CA will be independent, especially from licensing and revenue collection activities.
A new element required by the directive is the creation of the major accident prevention policy (MAPP), which is a governing statement produced by every oil and gas company with a head office in Europe, or who wishes to operate in European waters.
As a corporate statement of intent, it also identifies who is responsible for realizing safety and environmental protection, and closely aligns with the safety and environmental management system (SEMS), which is also required by the directive.
The directive recommends that EU-based companies apply the directive on a voluntary basis to their operations overseas, but operators should note that whatever they commit to in their MAPP, must also be applied outside EU waters.
Leveraging North Sea offshore experience across the EU
Although the directive observes that no member state currently incorporates all relevant best practices in legislation, some of the offshore regulatory regimes governing the North Sea are more closely aligned with the directive’s approach than others.
The North Sea countries have obtained significant experience from their well-established offshore industry. Norway, although not an EU Member State, provided input to the EU institutions during the drafting of the directive, but has at the same time reached the conclusion that the directive falls outside the scope of the European Economic Area agreement and that it will therefore not be applicable to offshore activities on the Norwegian Continental Shelf.
Norway and the UK implemented different legislative regimes after the catastrophic Aleksander Kielland event in 1980 and the Piper Alpha disaster in 1988, respectively. However, what their offshore safety regimes have in common is that both legislations are performance-based.
In these regimes, performance requirements and acceptance criteria are specified and industry must document that their specific solutions meet such requirements, for example in terms of acceptable risk levels. Significant emphasis is placed on risk assessment and focus on the verification of critical barriers.
Following the Cullen Inquiry on the Piper Alpha accident, the UK implemented the Offshore Safety Case regulations. One of the key changes by the new directive is that the safety cases will now become the major hazards report, and these will be required to cover both safety and environmental impacts and will define both safety and environmental critical elements, and the associated independent verification scheme.
The definition of an environmental critical element is not clarified in the directive, though this could encompass anything from spill containment to remediation.
Further work will need to be completed in this area by the CAs in each of the member states. Although the impact from the directive on current North Sea practices should be relatively low, operators can expect incremental changes in the environmental sphere, while further work will also be required on developing and implementing the MAPP.
Directive implementation challenges
Substantial effort could be required to implement the directive across other EU member states with oil and gas operations.
In particular, countries such as Cyprus, Malta and Greece are quickly developing a significant offshore activity and these countries can benefit from the safety experience obtained from North Sea operations. These member states will need to develop an implementation plan for the new directive, in conjunction with increased levels of offshore activities over the next two years.
By the very nature of its closed maritime environment, a substantial spill in the Mediterranean could possibly have a catastrophic impact on a number of coastlines with large environmental, social and financial consequences. The directive addresses cross-border safety and environmental events to ensure that these are dealt with in an effective and efficient manner.
However, the directive allows different implementation legislation across EU states and this could cause inefficiencies, for example in moving a drilling rig from the UK sector to the East Mediterranean to conduct drilling operations.
The necessity to gain repeated approval for an operator’s major hazard report, verification scheme, etc., from country to country, may mean a lack of consistency that could result in lengthy and costly delays without benefit to offshore safety.
Both industry and regulators will have to consider developing an acceptable “template” that can be used across the EU for the owners and operators of such installations.
EU member states will have 24 months from the date of transposition, in July 2013, to implement the directive; including the establishment of a CA. The directive includes an additional 12 months translational provision for non-production installations, such as mobile offshore units.
For operators with an existing fixed installation offshore, the directive must be introduced at the point of the next routine submission of the safety case or 60 months, whichever is the soonest.
Alignment with improved safety management approach
The major hazard report is one of the CA’s most practical tools to exert regulatory control over offshore operations. The success of its safety case predecessor is anchored in root cause analyses of historic accidents.
Investigations into major accidents concluded that these accidents were caused by known risks for which a number of safety measures had been planned and implemented.
However, the accidents occurred as a result of multiple barrier failures, often in combination with a lack of, or inadequate barriers in certain areas.
The safety barriers’ performances must be defined, their status continuously monitored, and acted upon when deviating from the set targets. Although preventive barriers are preferred, mitigating barriers are also important. Therefore, improved emergency response solutions are part of the portfolio of instruments to limit harm to people, the environment and assets.
The barrier approach, increasingly adopted by oil and gas companies today, uses the bow-tie risk model as it’s under-pinning. Bow tie diagrams can greatly assist with the identification of critical barriers and the development of the necessary verification schemes required by the new directive.
This sets out in a simple figure the scenarios that may occur; the top event (i.e. the undesired loss of control or undesired event), the threats that cause this (left) and the consequences that might arise (right).
In between the threats and the top event are the prevention barriers which stop a threat from propagating through to the top event. Similarly, between the top event and the effects are the mitigation barriers which reduce the magnitude of the potential consequences.
The scheme is further extended by depicting the barrier decay mechanisms, which also show what specific controls are put in place to prevent degradation, e.g. training, competence, inspection, preventive maintenance (See illustration).
It is critical that an offshore safety regime properly accounts for technological, organizational and human factor defenses—or barriers—in the prevention and mitigation of accidents throughout the installation’s lifetime.
Actively involving the offshore workforce in major hazards management, and explaining their role in effective barrier management is a key benefit of this approach.
Ideally, companies should have near real-time status on each barrier to manage their activities safely. A problem is to know what barriers have been degraded over time, due to various failure mechanisms.
Surveys, inspections, independent verification, preventive maintenance and audits are all good techniques to assess status of barriers but these occur at a low frequency (once a year).
DNV has developed the BSCAT methodology that provides much more frequent updates< on the barrier status. BSCAT is the barrier-based extension/ to the organization’s SCAT (Systematic Cause Analysis Technique) method.
Every incident or near miss means that some barriers have failed, and since many facilities experience a high frequency (e.g. over 100 a year) actual or near-miss events, analyzing these for barrier failures can provide the most frequent and up-to-date barrier status.
The effort required is not much more than routine investigations and it reinforces the role of risk assessment supervisors and staff for every incident. The status of barriers is identified as amongst the most useful leading indicators for major hazard accident risks. The combined BSCAT approach and bow tie risk management integrate well into existing standards such as API 754 and OGP 456.
The traditional approach for systematic cause analysis is complex as several failures need to be mapped simultaneously. This method can be both error-prone and hard/ to comprehend.
The BSCAT approach makes analysis easier by looking at one barrier failure at a time. A single barrier fails for less complex reasons than all barriers failing. The focus on individual barrier performance promotes data collection and analysis at barrier level, with frequent updates on barrier status.
Towards a safer offshore future
With the implementation of the EU directive, Europe’s offshore industry can look forward to a more harmonized safety and environment regulation across EU member states. Countries with emerging offshore developments will benefit from regulatory and operational experience obtained in more mature areas such as the North Sea.
T new directive and the high public expectations and zero tolerance for major hazard accidents, require companies to put particular emphasis on advanced barrier management in their offshore operations.
Modern techniques such as the bowtie risk management in combination with frequent updates on barrier status, such as DNV’s BSCAT approach, support the directive’s implementation and will lead to a safer offshore future. OE
|Remi Eriksen is CEO of DNV Maritime and Oil & Gas and a member of the DNV executive committee. His technical expertise lies within maritime and offshore technology as well as gas value chains.|
|Graham Bennett is a VP of DNV, with specific responsibility for Business Development for DNV’s Europe & North Africa Division. A qualified mechanical engineer, Graham has led several incident investigations in the major hazard industries, and subsequently assisted the companies concerned with recovery programs.|