Regulators Tell Oil Firms to Improve Safety

By | October 5, 2011

Oil and gas companies must improve the way they deal with safety issues in the wake of the Gulf of Mexico and Montara oil spills, regulators said at a two-day conference on safety in the sector.

The issue has come to the fore in the wake of the last year’s BP Macondo oil spill that killed 11 people in the gulf and the 2009 accident at a well in the Montara field operated by Thailand’s PTT in the Timor Sea off Australia.

“Why do we wait until there is a major accident for things to happen?” Magne Ognedal, head of the Norwegian Petroleum Safety Authority Norway (PSA), asked representatives of oil majors, industry lobbies and safety agencies.

“The likelihood of a major incident in the European Union is not insignificant. It can be reduced,” said Jan Panek, a senior official in the European Commission’s Directorate for Energy .

He added: “Accidents do happen in the EU and happen more frequently than what the big headlines in the press suggest, whether it is Piper Alpha, Montara or Macondo.”

Piper Alpha was an oil rig in the North Sea that caught fire in 1988, killing 167 people, while Macondo refers to the name of the well drilled by BP in the Gulf of Mexico .

The causes of these two accidents were strikingly similar, one psychologist specialising in safety culture said, noting that reading the investigative report in the BP spill was like reading the Cullen report on Piper Alpha.

“The lessons are not being learned,” said Mark Fleming of Saint Mary’s University in Halifax, Canada. “A lack of decent risk management, poor safety culture, a lack of commitment from management — it is the same issues from an organisational perspective.”

Regulators said oil firms should comply with current rules and procedures, train their staffs better and improve the way they drill wells, maintain facilities and conduct routine procedures.

Their recommendations will be announced in the coming days.

The British safety regulator said there were around 70 major or significant hydrocarbon releases per year in the British part of the North Sea — “significant” meaning that the release could cause multiple fatalities and escalate further .

“The causes are usually pretty standard… it is not rocket science,” Steve Walker, head of the offshore safety division at UK Health and Safety, told Reuters.

“It is lack of assessing risk, lack of control of the work, people cutting in the wrong pipework, people doing a shoddy job, making or breaking pipework, corrosion that should have been anticipated and monitored.”

Even in Norway, whose safety regime is considered one of the best worldwide, oil companies can do more to ensure safety, the country’s oil safety watchdog said, adding that the BP oil spill holds lessons for everyone operating in the Nordic country.

“Neither our petroleum industry nor our government can be satisfied with the present position,” Ognedal of the PSA told the conference.

Norway is concerned by the way oil companies now manage wells, he told Reuters, calling for improved expertise along with better management of well barriers, such as blowout preventers, shutdown valves and other measures.

Norway’s DNO and Britain’s Premier Oil were both denied permission to drill wells in the past as they failed to show they could do it properly, Ognedal said.

He ruled out, however, an overhaul of the country’s safety regime, which he felt was unnecessary. So did his British counterpart.


U.S. authorities are looking to regulate the contractors of oil companies that work offshore, a senior federal official said, a change from current practice under which the regulator mainly scrutinises operators.

“There is a virtue in the administrative clarity in going only against the operators and not confusing the picture,” Michael Bromwich, director of the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement, told reporters.

“But in those instances when the violations by contractors are bad enough … we should go after them as well.”

The European Commission is looking at whether to introduce new rules and safety regulations, the commission official said without adding when an announcement could be made.

“Possible EU action should involve promotion of best practice, strict and clear liability regimes in all EU waters, transparency and public oversight, effective emergency mechanisms,” he told the conference. “We must fill in a void that exists at the European level.”

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