Following the Deepwater Horizon disaster in the Gulf of Mexico in April 2010, the offshore industry has focused on improving management and the response to major safety hazards. A new EU safety directive was published on 20 July. It’s the biggest shake-up of offshore health, safety and environmental management for a decade.

Operators and contractors on the UK Continental Shelf (UKCS) work in a very mature basin, with ageing platforms and subsea infrastructure, while also facing a challenging economic environment with plummeting oil prices and tighter running costs. So how big a challenge are the new safety regulations for them?

The latest health and safety report from Oil & Gas UK, which represents key industry players, highlights a growing backlog of safety-critical maintenance on offshore installations. Robert Paterson, health, safety and employment issues director at Oil & Gas UK, is quick to point out that “Industry, on the whole, is performing well across a range of safety criteria. However, ours is a major hazard sector and there’s no room for complacency.”

The average number of reportable injuries per million man-hours in the UKCS oil and gas industry rose from 1.99 in 2013 to 2.13 in 2014, according to the Reporting of Injuries, Diseases and Dangerous Occurrence Regulations. But dangerous occurrence frequencies per million man-hours fell from 5.57 to 5.39 over the same period. Unfortunately, there were two offshore fatalities last year, one on the Taqa Bratani Harding platform and another on the BP Unity platform. 

Performing better

However, according to the Health and Safety Executive, the UK offshore oil and gas industry has a lower personal injury rate and performs better than most other sectors. It had 431 non-fatal injuries per 10,000 workers on a three-year average, compared to 1,050 in manufacturing, 1,090 in transport/storage and 1,220 in construction.

Last November, the Oil & Gas UK board advised the HSE of concerns that safety-critical maintenance was being deferred, and the industry was challenged to develop a set of asset integrity-related key performance indicators to monitor risk control improvement. Although there is a growing backlog of safety-critical maintenance offshore, Paterson maintains: “Decisions on deferring maintenance are taken following robust management systems that assess risk and involve the relevant technical and engineering authorities.”

The picture is by no means bleak. UKCS operators reputedly boast the industry’s best safety regime in the world. The Oil & Gas UK report also indicated that the number of UK offshore oil and gas leaks has fallen to its lowest level on record. Provisional figures showed a total of 77 petroleum hydrocarbon releases between April 2014 and May this year, down on the 89 recorded in 2012-13 and 102 in 2013-14. But there is room for improvement.

Paterson says the UK has put in place a very comprehensive health and safety regime since the Piper Alpha platform explosion in 1988 “that has continued to evolve”. The safety case regulations were replaced in 2005. He adds: “Today the UK model of health and safety regulations is largely the template for the new EU safety directive, which is recognised as a world-class regime.”

Key change

So what are the main implications of the new EU directive for UKCS operators?

Babak Alnasser, a consultant with Xodus, which offers engineering support for leading oil and gas operators worldwide, says: “The key step change is the requirement to consider safety and environmental risks and the management of these risks together. This is the first time that the two issues will be considered together, and the Department of Energy and Climate Change and the HSE will be working together as a new joint regulatory body, the Offshore Safety Directive Regulator.”

Transposition of the directive into UK regulations in addition to safety brings new requirements relating to licensing, environmental protection, emergency response and liability. Both HSE and energy department legislation has been updated to implement the directive. Key additions include the requirement for an integrated Safety Environmental Management System (SEMS), development and implementation of corporate major accident prevention policy (CMAPP), the requirement for an internal emergency response plan, identification and management of Safety Environmental Critical Elements, and addition of environmental information within the safety case. 

Christina Horspool, environmental engineering lead at Xodus, says: “The requirement to have an integrated SEMS driven by a fit-for-purpose, bespoke CMAPP suitable for offshore UKCS operations will require sign-off from top management as well as a plan to ensure implementation. 

“Key to this will be determination of where current systems stand, where there are gaps, and how to implement and monitor the necessary changes to comply with the new requirements.” Moreover, there may then be the need to update internal procedures, guidance and documents. 

Another significant requirement will be the need to identify, manage and verify Safety Environmental Critical Elements. “An industry-wide approach is essential,” says Horspool. “Under the Offshore Safety Case Regulations 2015, there cannot be a major environmental incident – such as a major oil leak – without an associated major accident. This could result in a number of major environmental incidents not falling under the requirements, leading potentially to different approaches to the management of environmental risks.” 

The offshore workforce will need to be brought up-to-date on the new regulatory requirements, including commitment to tripartite consultation between the competent authority (in the UK this is the Offshore Safety Directive Regulator), the duty holder (the operator of a fixed production/platform operation or the owner of a mobile rig) and workers’ representatives.

Horspool says: “Meeting all of the additional requirements in the current economic situation, with reducing resources and prioritisation of increased production, will be a challenge.”

Paterson of Oil & Gas UK says: “There has always been demand for demonstration of health and safety compliance. But now we have to put all the safety and environmental information together in a safety case as a single document for presentation to the competent authority.”

The UKCS has a well-established, world-class safety regime which is seen as a model for the new EU directive, which will be rolled out to less well-developed oil and gas arenas, such as Romania, Cyprus and Malta. Paterson says: “From the UK viewpoint, a tremendous amount of the new EU directive looks familiar. We are probably the only EU member state which can meet the new offshore safety and environmental regulatory timetable.”

Graham Bennett, business development manager at Det Norske Veritas, concurs: “The impact from the new directive on current North Sea practices should be relatively low. Operators can expect incremental changes in the environmental sphere, while further work will be required on developing Major Accident Prevention Policy.

“The directive aims to minimise possible damage to the marine environment and to protect the livelihoods of coastal economies from consequential damage. In addition, EU states have to establish that the operator can provide adequate evidence that they have sufficient financial and technical provisions to cover liabilities from their operations. The provision of a single competent authority by each member state will ensure that offshore safety and environmental protection is a priority.”

Lines of responsibility

To avoid potential conflicts of interest, the competent authority will be independent from licensing and revenue collection activities, in particular. However, the Major Accident Prevention Policy is a new element, which calls on every oil and gas company wishing to operate in Europe to produce a governing statement, identifying who is responsible for realising safety and environmental protection. The policy must be aligned with the Safety Environmental Management System required by the directive.

Bennett broadly agrees with Oil & Gas UK’s statement that “decisions to defer maintenance are only being taken after a robust risk assessment”. However, he says: “The increase in backlog of safety-critical maintenance in the UKCS is an important potential leading indicator of future issues with integrity management and equipment reliability, and increases the importance of the role of the independent verifier in offshore operations.”

Bennett maintains: “Health and safety in the UKCS is a top priority with all performers. There is increasing evidence that advances are being made to improve the efficiency and reduce the cost of operations. However, asset integrity, competence, workforce engagement and leadership are as important now as they have ever been, particularly set against a backdrop of lower oil prices and ageing assets. If safety is compromised, accidents can happen and there is a massive personal, environmental and financial cost which the industry is keen to avoid.”

Cost pressures

The safety message is reflected by a spokesperson for leading oil and gas engineering firm Atkins. “UKCS operators have been careful to ring-fence safety and make commitments to it, not being compromised by cost-saving measures,” says the spokesperson. “However, whether such commitments can be met entirely depends upon the extent and duration of any cost reduction measures. 

“Although some systems are designated safety-critical, it does not follow that all maintenance carried out is critical to the safe and reliable operation of that system. Lower-priority maintenance may be re-prioritised after careful risk assessment, and there should not be any adverse effect on safety.”

Atkins’ spokesperson notes that half of the fixed platforms in the UKCS are approaching or exceed their original design life, adding: “With any ageing facilities, there is always greater potential for failure to occur. The HSE and operators are acutely aware of this and have jointly worked on a programme to investigate the impact of ageing and life extension on the risk of major accidents. 

“This is probably the greatest emerging threat to offshore workers and will have to be given high priority by all involved in the industry.”

Keeping the industry safe is a priority which the new EU directive will reinforce.