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Cost Effective Outcomes from FPSO Safety Case
 

Cost Effective Outcomes from FPSO Safety Case

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Brendan Fitzgerald, Managing Director, Vanguard Solutions and Joe Patrick, Oil & Gas Consultant, Hunter Oil talk about the cost effective FPSO safety

Brendan Fitzgerald, Managing Director, Vanguard Solutions and Joe Patrick, Oil & Gas Consultant, Hunter Oil talk about the cost effective FPSO safety

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    Cost Effective Outcomes from FPSO Safety Case Cost Effective Outcomes from FPSO Safety Case Presentation Transcript

    • Cost Effective Outcomes from FPSO Safety CaseBy:Brendan Fitzgerald, Managing Director, Vanguard SolutionsJoe Patrick, Managing Director, Hunter OilPaul Breen, Technical Director, Vanguard Solutions FPSO Congress September 2010
    • Cost Effective Outcomes from FPSO Safety Case• Brief History• What is a Safety Case?• The Management of Safety• Why do we need a Safety Case?• Benefits of doing a Safety Case• Safety Cases – Lessons Learned?• A suggested Blue Print for success• ConclusionsCost Effective Outcomes from FPSO 2 FPSO Congress 2010 SingaporeSafety Case
    • A Brief History Safety Cases are required in various industries in Europe and Australasia.• European Union Major Hazard Facilities – Seveso 1 (1982) & Seveso 2 (1996)• UK Railways 2000 & amended 2003• European Union Railway Safety Directive (2004/49/EC)• Australia Major Hazard Facilities National Standard 1996 & Updated 2002Cost Effective Outcomes from FPSO 3 FPSO Congress 2010 SingaporeSafety Case
    • A Brief History OFFSHORE SAFETY CASE REQUIREMENTS• UK Offshore Installations (Safety Case) Regulations 1992 & Updated 2005• Australia Offshore Facilities 1992, 1996, 2005 & 2009• New Zealand Offshore Facilities 1993 & 1999• Timor Leste Offshore Facilities - 2003Cost Effective Outcomes from FPSO 4 FPSO Congress 2010 SingaporeSafety Case
    • A Brief History OTHER AREAS OF SAFETY CASE USE• UK Defence Forces• Australian Defence Forces• Some oil companies apply Safety Case worldwide, e.g. BHP, Shell and Woodside.Cost Effective Outcomes from FPSO 5 FPSO Congress 2010 SingaporeSafety Case
    • A Brief History“Safety Case still represents best means of managing major hazards offshore”• International Review panel – 2008• Bills & Agostini – 2009Cost Effective Outcomes from FPSO 6 FPSO Congress 2010 SingaporeSafety Case
    • What is a Safety Case? “A consistent and coherent set of arguments used to justify the safety of a system at all stages in its lifecycle”• H. Conlin et al, Trans IChemE, Part B, July 2004Cost Effective Outcomes from FPSO 7 FPSO Congress 2010 SingaporeSafety Case
    • What is a Safety Case? A safety case is a document produced by the operator of a facility which: • Identifies the hazards and risks; • Describes how the risks are controlled; and • Describes the safety management system in place to ensure the controls are effectively and consistently applied.http://www.nopsa.gov.au/safety.asp under the heading "Safety Case Approach"Cost Effective Outcomes from FPSO 8 FPSO Congress 2010 SingaporeSafety Case
    • What is a Safety Case? Safety case is a process, not just a document • It introduces a need for an audit trail with documented decisions • Brings a greater awareness of hazards and their management • It always involves a culture changeCost Effective Outcomes from FPSO 9 FPSO Congress 2010 SingaporeSafety Case
    • The Management of SafetyH.W. Heinrich Industrial Accident Prevention: A Scientific Approach, 1931Cost Effective Outcomes from FPSO 10 FPSO Congress 2010 SingaporeSafety Case
    • The Management of Safety Commonly used modification from HeinrichCost Effective Outcomes from FPSO 11 FPSO Congress 2010 SingaporeSafety Case
    • The Management of Safety Fatal Fall Rig Explodes Fall from Stairs Serious LeakWe needWe needanotheranothermodel!model! Not holding the handrail Jop Groeneweg, Leiden University, 2010 APPEA Safety ConferenceCost Effective Outcomes from FPSO 12 FPSO Congress 2010 SingaporeSafety Case
    • The Management of Safety Fatal Fall Rig ExplodesFall from Stairs Serious Leak No Handrail Minor Leak Personal Process Safety Safety Jop Groeneweg, Leiden University, 2010 APPEA Safety Conference Cost Effective Outcomes from FPSO 13 FPSO Congress 2010 Singapore Safety Case
    • The Management of Safety These are two different processes. So management systems must recognise they are two different processes ... with different drivers. Personal Process Safety SafetyCost Effective Outcomes from FPSO 14 FPSO Congress 2010 SingaporeSafety Case
    • The Management of Safety Different elements of safety management systems address personal safety from those that address process safety So it is not enough to say that SMS addresses safety.Cost Effective Outcomes from FPSO 15 FPSO Congress 2010 SingaporeSafety Case
    • The Management of SafetyRecent observations suggest that industry focus is on slips, trips and falls … Fatal Fall … with reducing attention paid to maintenance of technical integrity and major Fall from Stairs hazard controls. Rig Explodes No Handrail Serious Leak Minor Leak Personal Process Safety SafetyCost Effective Outcomes from FPSO 16 FPSO Congress 2010 SingaporeSafety Case
    • The Management of Safety“But the more profound problem is a failure toput risks in perspective. BP and othercompanies tend to measure safety andenvironmental compliance on a day-to-day,checklist basis, to the point of basingexecutive bonuses on those metrics. But evenif worker accident rates fall to zero, that mayreveal nothing about the risk of a majordisaster.”Andrew Hopkins, Energy Bulletin, 10 May 2010Cost Effective Outcomes from FPSO 17 FPSO Congress 2010 SingaporeSafety Case
    • The Management of Safety Traditional means of the management of safety has been prescriptive in nature.Widely accepted failings of prescription include:• Quickly out of date as industry changes• Industry only performs to minimum – no incentive to exceedCost Effective Outcomes from FPSO 18 FPSO Congress 2010 SingaporeSafety Case
    • The Management of SafetyWidely accepted failings of prescription include:• Industry lets regulator work out what is needed and comply verbatim – so operator fails to identify or understand the hazards and risks they are supposed to manage – controls may be inadequate or inappropriate• Prescriptive regulations become a hurdle to be cleared, with the focus on the hurdle, not on managing the hazardCost Effective Outcomes from FPSO 19 FPSO Congress 2010 SingaporeSafety Case
    • The Management of SafetyPiper Alpha Inquiry report, Lord Cullen criticised attitude to management of risk from a high pressure gas fire:The witnesses’ reliance on merely a qualitativeopinion showed, in my view, a dangerouslysuperficial approach to a major hazard.… … I consider that management were remiss in notenquiring further into the risks of a rupture of one ofthe gas risers and in such an event the risk ofstructural damage and injury to personnel.Cost Effective Outcomes from FPSO 20 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? Do we really understand our facilities? Here are some you may recognise!Cost Effective Outcomes from FPSO 21 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 27 July 2005, Mumbai High North – 22 fatalitiesCost Effective Outcomes from FPSO 22 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? August to November 2009, Montara – total loss of WHP and rig - unknown environmental impactCost Effective Outcomes from FPSO 23 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 20 April 2010 – Deepwater Horizon Macondo Blowout – 11 fatalities, massive & unknown environmental impactCost Effective Outcomes from FPSO 24 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? That’s all well and good – but what has that got to do with FPSOs?Cost Effective Outcomes from FPSO 25 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 8 August 2010, MT Gagasan Merak FSO – Cargo tank explosion – 4 injuredCost Effective Outcomes from FPSO 26 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 2009, Formosaproduct Brick Product Tanker – Ship CollisionCost Effective Outcomes from FPSO 27 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 28 August 2009, Tanker Elli breaks back in ballasting error for tank entryCost Effective Outcomes from FPSO 28 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? Ship collisions don’t happen with offshore facilities, do they?Cost Effective Outcomes from FPSO 29 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 11 August 2010 – Kodeco Platform – unknown vessel collisionCost Effective Outcomes from FPSO 30 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case? 8 June 2009 – Big Orange XVIII collision with Ekofisk ComplexCost Effective Outcomes from FPSO 31 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case?– You’ve carefully thought out all the angles– You’ve done it a thousand times– It comes naturally to you– You know what you’re doing, it’s what you’ve been trained to do your whole life.– Nothing could possibly go wrong, right? Cost Effective Outcomes from FPSO 32 FPSO Congress 2010 Singapore Safety Case
    • Think AgainCost Effective Outcomes from FPSO 33 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case?• How do you demonstrate adequacy of safety management to Company Board otherwise?• Demands of duty of care – how do you demonstrate adequacy without a Safety Case?• ISO 9000 process & ISO 31000 elements link directly to the Safety Case process• So good quality management requires a Safety Case!!Cost Effective Outcomes from FPSO 34 FPSO Congress 2010 SingaporeSafety Case
    • Why do we need a Safety Case?• International companies – consistency of application across assets ( e.g. Shell, BP, Union Carbide)• How do you demonstrate safety in design without Safety Case? – Are standards / Class enough?• So if just apply codes and standards, what other hazards/ risk mitigation measures would be missed?• How else could hazards and the SMS be linked?• HAZOP is an integrity assurance process – not hazard identification!! Cost Effective Outcomes from FPSO 35 FPSO Congress 2010 Singapore Safety Case
    • Safety Cases – lessons learned? The Enemies of Safety are : Complacency Arrogance Ignorance Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007Cost Effective Outcomes from FPSO 36 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned?Factors in Complacency• Discounting risk• Over-relying on redundancy• Unrealistic risk assessment• Ignoring low-probability, high-consequence events• Assuming risk decreases over time• Ignoring warning signs Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007Reflecting on recent major accident events -does any of the above sound familiar ?Cost Effective Outcomes from FPSO 37 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned?Managing TradeoffsGood risk management requiresunderstanding the outcomes, implications,impact and tradeoffs between: • Schedule • Cost • Performance • Safety Do we effectively put this into practice ? Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007Cost Effective Outcomes from FPSO 38 FPSO Congress 2010 SingaporeSafety Case
    • Example: Schedule Pressure and Safety Priority 1.4 1.2 1 Overly aggressive High 0.8 schedule enforcement hasSchedule Pressure 0.6 0.4 0.2 little effect on completion 0 time (<2%) & cost, but has 1.4 a large negative impact on 1.2 1 safety 0.8 Low 0.6 0.4 Priority of safety activities 0.2 0 has a large positive impact, Low High including a positive cost impact (less rework) Safety Priority Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, June 2007 Cost Effective Outcomes from FPSO 39 FPSO Congress 2010 Singapore Safety Case
    • Safety Cases – lessons learned? Impact of Safety CaseCost To influence Project Costs Cost of implementing Safety Case Generic impact of late change on hardware changes Project cost with time Concept Detailed Construction Operations Design Cost Effective Outcomes from FPSO 40 FPSO Congress 2010 Singapore Safety Case
    • Safety Cases – lessons learned?• Blowdown philosophy set early, with late application of safety case – identified problem resulting in expensive change• People / competence / skills gaps – a major ongoing issue - with an ageing workforce how do we effectively manage current and future projects and operations?• Managing the wrong thing – i.e. managing the detail and overlooking the big picture (example is OHS vs MAE risk)Cost Effective Outcomes from FPSO 41 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned?• The Myth of major shutdown / In-Water Surveys with no time off riser – how many projects achieve it?• But we build this into the design basis and hence into the risk profile….Cost Effective Outcomes from FPSO 42 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned? Oil Company and FPSO Contractor Relationships• Typical contract arrangement gives minimal incentives for overall safe performance, but generally penalties for being unsafe!• The FPSO Contractor is contractually incentivized to keep producing - they generally lose money if production stops – is there another way?• The Safety Case can and should give the FPSO Contractor a route to cost recovery!Cost Effective Outcomes from FPSO 43 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned? Oil Company and FPSO Contractor Relationships• Lump sum / low cost Safety Case v quality and understanding• The outcomes of the Safety Case are not known till well after the contract is signed – is lump sum a fair and realistic contract strategy?Cost Effective Outcomes from FPSO 44 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned?Some problems with Safety Case implementationQuote from Conlin et al:Often the Safety Case is produced by following a prescriptive setof instructions which stifle true thought about whether definedactivities are as safe as they need to be because it is easier towrite a Safety Case that way and then to audit the Safety Caseagainst the internal procedure.Cost Effective Outcomes from FPSO 45 FPSO Congress 2010 SingaporeSafety Case
    • Safety Cases – lessons learned?Some problems with Safety Case implementationAnd further from Conlin et al:Because of the practice of describing the organisationthat is in place rather than debating what options havebeen considered, the fact that safety science(engineering?) has had insufficient input into thedesign is not being revealed. Cost Effective Outcomes from FPSO 46 FPSO Congress 2010 Singapore Safety Case
    • Safety Cases – lessons learned?Some problems with Safety Case implementationSafety Cases are not off-the-shelf, production lineexercises in documentation.To be effective, the safety case process must beallowed to take its course, to examine critically andinteract with the design and the organisation.Just producing a book, ticking a box, does not meetthe intent! Cost Effective Outcomes from FPSO 47 FPSO Congress 2010 Singapore Safety Case
    • Safety Cases – lessons learned?Some problems with Safety Case implementationIf you want a Ferrari, but only specify something withwheels and an engine, don’t complain when a secondhand Toyota needing maintenance work appears onthe driveway!Cost Effective Outcomes from FPSO 48 FPSO Congress 2010 SingaporeSafety Case
    • A suggested Blue Print for Success• Management leadership – must have this to work• Apply realistic schedule and budget• Develop and apply safety design philosophy• Do it early!• Embed experienced Safety Engineer in engineering design team as interface to Formal Safety Assessment team• Apply risk based decision-making process• Create an audit trailCost Effective Outcomes from FPSO 49 FPSO Congress 2010 SingaporeSafety Case
    • A suggested Blue Print for Success• Safety Engineering will provide linkage across the interfaces • Marine • Production • Mooring • Subsea • Sub-surface• Expect & support this!Cost Effective Outcomes from FPSO 50 FPSO Congress 2010 SingaporeSafety Case
    • A suggested Blue Print for SuccessFor Operations:• Operating envelope / management of risk – i.e. the Safety Case should define the operating envelope and hence allows you to understand the area in which your operational risk controls need to be applied and are designed to work.• How do you know you are operating outside the envelope if you have not defined it or passed the knowledge on to operations!Cost Effective Outcomes from FPSO 51 FPSO Congress 2010 SingaporeSafety Case
    • Benefits of Doing a Safety Case?• Manage carry forward of residual risk – the Safety Case provides a means of doing this in a way that allows the residual risk to be actively managed rather than forgotten.• Basis for SMS – i.e. the Safety Case will provide a means of linking the facility, the hazards identified, the operations and the hazard and risk controls, whether via hardware or the SMS• Clarify and manage separation of OHS risk (personal safety) and MAE risk (process safety) – the two triangles rather than one.Cost Effective Outcomes from FPSO 52 FPSO Congress 2010 SingaporeSafety Case
    • Benefits of Doing a Safety Case?• Identifies low probability / high consequence events and assists to understand and manage them• Provides an Audit Trail for: quality, safety, development and risk management deliverables• Do it early enough and you should get optimum design (from safety, risk & cost viewpoint)• Without Safety Case, would you ever have a blast wall?Cost Effective Outcomes from FPSO 53 FPSO Congress 2010 SingaporeSafety Case
    • Benefits of Doing a Safety Case?• Enable targeted maintenance – i.e. to safety critical elements through performance standards• So the Safety Case should allow you to efficiently focus resources – i.e. manage the right thing!• Culture change – always occurs with safety case process, always positiveCost Effective Outcomes from FPSO 54 FPSO Congress 2010 SingaporeSafety Case
    • Conclusions1. The Safety Case is not a silver bullet cure for all ills. It does offer, however, the best means available for effective management of major hazard risks and process safety.2. Effective development and implementation of the Safety Case process requires significant effort by any organisation. This effort is well worthwhile as it can deliver: – Cost benefits in project performance – Increased performance in operations, due to greater reliability in plant, equipment and resources – Improved communication of hazard management for the lifetime of the facility (i.e. a corporate memory!) Cost Effective Outcomes from FPSO 55 FPSO Congress 2010 Singapore Safety Case
    • Conclusions3. Safety Case provides a competent and auditable process for senior management to demonstrate management of development, project and operational risk to satisfy corporate requirements4. There is a trend that our industry may be focussing on occupational HSE with diminished attention to management of residual and process risk. Safety Case provides management focus to overcome this.Cost Effective Outcomes from FPSO 56 FPSO Congress 2010 SingaporeSafety Case
    • Conclusions5. Quality and quantity of risk assessment combined with industry shortages of skilled personnel is a concerning issue going forward6. With ongoing cost, schedule and implementation pressures there are better ways to contract and manage the preparation of Safety Cases.Cost Effective Outcomes from FPSO 57 FPSO Congress 2010 SingaporeSafety Case
    • References/1 Seveso I. 1982. Directive 82/501/EEC on the control of industrial major accident hazards involving dangerous goods, 1982. European Economic Community. Seveso II. 1996. Council Directive 96/82/EC of 9 December 1996 on the control of major-accident hazards involving dangerous substances. European Community. Control of Major Hazard Facilities – National Standard NOHSC:1014(2002). National Occupational Health and Safety Commission declared under s.38(1) of the National Occupational Health and Safety Commission Act 1985. Commonwealth of Australia. The Offshore Installations (Safety Case) Regulations 2005. Statutory Instrument 2005 No. 3117. London: HMSO. ISBN 0 11 073610 9. Petroleum (Submerged Lands) Act 1967, Schedule of Specific Requirements as to Offshore Petroleum Exploration and Production 1992. Commonwealth of Australia. Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities) Regulations 1996. Statutory Rules 1996 No. 298 as amended made under the Petroleum (Submerged Lands) Act 1967. Commonwealth of Australia. Draft Petroleum Regulations 1993. Petroleum Inspectorate, Ministry of Commerce, New Zealand, made under the Health and Safety in Employment Act 1992, Department of Labour, New Zealand. Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999, made under the Health and Safety in Employment Act 1992, Department of Labour, New Zealand. Offshore Petroleum (Safety) Regulations 2009 made under Offshore Petroleum and Greenhouse Gas Storage Act 2006. Commonwealth of Australia Interim Regulations issued under Article 37 of the Interim Petroleum Mining Code, Specific Requirements as to Petroleum Exploration and Exploitation in the Joint Petroleum Development Area, Timor Sea Designated Authority for the Joint Petroleum Development Area. Dili, Timor Leste.Cost Effective Outcomes from FPSO 58 FPSO Congress 2010 SingaporeSafety Case
    • References/2 Railway Safety Directive. 2004. Directive 2004/49/EC of the European Parliament and of the Council of 29 April 2004 on safety on the Community’s railways and amending Council Directive 95/18/EC on the licensing of railway undertakings and Directive 2001/14/EC on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification. Future Arrangements for the Regulation of Offshore Petroleum Safety – Australian Offshore Petroleum Safety Case Review, 2001. Department of Industry Science & Resources. Commonwealth of Australia. Bills, K. and Agostini, D. 2009. Offshore Petroleum Safety Regulation – Better practice and the effectiveness of the National Offshore Petroleum Safety Authority, Australian Government, Commonwealth of Australia. H Conlin, PG Brabazon & K Lee, Exploring the Role and Content of the Safety Case, Trans IChemE, Part B, July 2004 H.W. Heinrich Industrial Accident Prevention: A Scientific Approach, 1931 Jop Groeneweg, Leiden University, 2010 APPEA Safety Conference Andrew Hopkins, Energy Bulletin, 10 May 2010 Lord Cullen. 1990. The Public Inquiry into the Piper Alpha Disaster. Department of Energy, London: HMSO. ISBN 0 10 113102. Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007Cost Effective Outcomes from FPSO 59 FPSO Congress 2010 SingaporeSafety Case