Maria saraceni operational risks in today's oil and gas industry feb 2013

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Maria saraceni operational risks in today's oil and gas industry feb 2013

  1. 1. Operational Risks in Today’s Oil and Gas Industry Maria Saraceni Barrister, Francis Burt Chambers February 2013 UNCLASSIFIED
  2. 2. Risk Overview• Geopolitical / terrorism / insurgent attacks• Geographic• Geological• Asset Management• Information Technology overload• Price / Cost• Shareholder expectations• Supply & demand• Ageing Infrastructure• Environmental• Transparency Issues ( bribery, corruption)• Operational hazards (blowouts, spills, personal injury, etc.)• Relationships with stakeholders (investors, shareholders, governments, regulators, unions, workforce, media, etc.)• Adverse weather conditions• Regulatory complexity• Workforce UNCLASSIFIED
  3. 3. OSH Risks• “ There is a need for a shared commitment by governments, regulators and industry to take meaningful steps to avoid incidents like Montara and Macondo in the future, and that this objective can only be achieved if they work together to promote ongoing improvement in skills development, competence and a culture of compliance. The recent international offshore petroleum regulators and operators summit also reaffirmed the critical role of an independent, well-resourced regulator to challenge industry to be rigorous in its operations, practices and prevention and mitigation techniques.” Jane Cutler, NOPSEMA , March 2012 UNCLASSIFIED
  4. 4. OS & H UNCLASSIFIED
  5. 5. OSH Aspects of Risk• Improve overall risk perception• Develop pro-active safety performance lead indicators• More effective emergency management• Consistent regulatory framework• Asset integrity• Process Safety• Competency levels• Contractor engagement• Effectiveness of Safety Case Regime UNCLASSIFIED
  6. 6. OSH aspects of risk (cont)• Occupational health (shift-work arrangements and health effects, fatigue, stress, psychological well-being, physical stressors, exposure to flammable / poisonous chemicals e.g. Benzene, food quality, adequacy of accommodation, etc)• Occupational safety (identifying hazards; assessing risks and making changes)• Drug & alcohol testing• Manage process safety as an integrated and comprehensive system• Process safety knowledge and expertise• Process safety culture• Safety culture• Safety leadership / senior management commitment UNCLASSIFIED
  7. 7. OS & H“… it’s obvious how Chevron has lost months and billions of dollars.On any normal project, workers pick up their safety glasses from the site store.There is usually a choice and workers take the best fit. Not on the Chevronproject. The geniuses in the HSE department have decided workers are unable tomake complex decisions about which safety glasses fit them. A “safety glassestechnician” spends several minutes with each worker discussing the intricaciesof various brands of glasses and which would best fit the particular shape ofhead owned by that particular worker.It sounds like a Monty Python movie, but this is resource construction, theChevron way...”Chris Cain, WA Branch SecretaryFeb. 13, 2013Maritime Union of Australia UNCLASSIFIED
  8. 8. Workforce Risks“The lack of hair” in management boards of…oil and gascompanies highlights the coming labour shortage in the sector.”Y. Hussain, 11 Dec 2012, CanadaILO Tripartite Declaration of Principles concerningMultinational Enterprises and Social Policy (MNEDeclaration) has 5 areas:- General policies- Employment- Training- Conditions of work and life- Industrial relations UNCLASSIFIED
  9. 9. Workforce Aspects of Risk• High performance work practices including empowering employees with higher task autonomy• Reducing job titles and layers of management• Implementing extensive training programs• Higher employee selectivity• Performance-based pay• Implementing profit sharing.• Inadequate regional infrastructure (inc. airports) in WA• Increased demand for temporary accommodation• Diversity (women, indigenous , youth etc.)• Flexibility UNCLASSIFIED
  10. 10. Workforce Aspects of Risk (cont)• Skills shortages• Job security• Outsourcing / contract labour• Poaching of competitors employees• Insufficient trained personnel• Lack of skilled engineers & technologists• Work / life balance• Ageing workforce• Working conditions (remuneration, pay equality ,fringe benefits ,working hours, annual leave)• Long distance commuting workers• Shift-work arrangements UNCLASSIFIED
  11. 11. Workforce Aspects of Risk (cont)• Workforce involvement• Employee / employer relations• Demographic Transformation ( from Baby Boomers to Gen-Y)• Employee migration (FIFO)• Substitution of technology for labour• Immigration policy UNCLASSIFIED
  12. 12. Workforce Aspects of Risk (cont)“There may be no other industry today that demands a morediverse set of human, political, mechanical and technologicalcapabilities than the oil and gas exploration and productionindustry…(A)s the environment grows more diverse andunforgiving and the challenge is more complex, skilled humanresources are ageing and growing scarce.’Meeting the Challenges of Today’s Oil and Gas exploration and production industry: IBMConsulting Services, 2004 UNCLASSIFIED
  13. 13. UNCLASSIFIED
  14. 14. Industrial Relations Aspects of Risks• Unionisation• Collective / green-field agreements• Permissible matters in collective agreements• Industrial action• Dispute resolution• Contract labour• Union right of entry UNCLASSIFIED
  15. 15. Industrial Relations Aspects of Risk (cont) UNCLASSIFIED
  16. 16. Questions?Maria SaraceniBarristerFrancis Burt Chambersmariasaraceni@francisburt.com.au0412 500 583 UNCLASSIFIED

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