The PSA expects the industry to deal with its economic challenges without affecting safety, says director general Anne Myhrvold. “On the contrary, cost cuts and efficiency enhancement processes must help to strengthen safe operation.”
Weakening will not be accepted
After several years of rapid growth, Norway’s petroleum sector now faces a downturn. The big topic just a year ago was how the industry could find enough people. Now the time has come to cut back and adjust.
“We understand why the industry is now taking action to save money and get costs under control, but we require that it ensures quality at all levels and phases of the business,” says Myhrvold.
“This is a question of setting the right priorities and tailoring the use of resource to the work which needs to be done.
“It’s enough to mention the increasingly demanding operation of facilities in mature parts of the North and Norwegian Seas, big modifications on existing fields and new developments like Johan Sverdrup.”
She adds that the industry also faces new and stronger challenges which must be tackled as it moves into unexplored regions in the far north of the NCS.
“In addition, a great deal of maintenance remains outstanding. The most recent figures from our RNNP report, presented in April, show that the backlog of preventive and corrective maintenance totals 100 000 and 2 500 000 hours respectively.”
Myhrvold asks how the industry is handling this position, how it can manage to catch up with all these hours – and what will happen if upkeep gets cut back even further.
“It’s important that the companies have a sufficiently good basis for their decisions, and that they fully understand the potential short- and long-term consequences of their actions.”
She emphasises that the PSA will follow up the priorities set by the industry in this area. “We see a lot of talk about enhancing efficiency through standardised solutions, for instance.
“I think there’s much to be gained here, but it’s important to strike a balance between standardisation and the need for new technology to help reduce risk and boost safety.”
The RNNP study on trends in risk level in the petroleum activity shows that developments are moving in a positive direction, but that the picture is nuanced.
Measures which have contributed to a high level of safety must be maintained by the industry, and an extra commitment is needed in a number of areas.
According to Myhrvold, these relate in particular to adopting new knowledge and ensuring continuous improvement in operating safely – as required by the regulations.
“The present level of safety in the industry is based on clear regulatory requirements and responsible players,” she observes. “And these regulations provide room for manoeuvre.
“They specify how safe the activity must be, but not how this is to be achieved. Each player is responsible for choosing their specific solutions.
“It’s nevertheless important to emphasise the demand for continuous improvement. This is a fundamental principle in the regulations – and an important part of the Norwegian model.”
Myhrvold emphasises that the requirement for continuous improvement means the industry cannot relax, but must constantly work to reduce risk and develop new and better solutions.
Both individual players and the industry as a whole must contribute here. And the demand for continuous improvement also applies when making savings and cutting costs.
“It means the industry has to pursue two objectives when costs are to be reduced,” Myhrvold says. “Their measures must not only yield a financial benefit, but also help to boost safety.
“Clear goals are crucial, and will govern change work. But we don’t feel the industry is being sufficiently explicit that it’ll achieve safety gains with its current cost-saving processes.
“It says that these cuts won’t have any negative consequences for safety, but that attitude is far too passive.”
“We believe risk analyses and documentation are two areas where both safety and financial gains can be made,” says Finn Carlsen, director of professional competence at the PSA.
“These aspects must become more appropriate to the task. Action here would reveal that much of what’s produced today is unnecessary.”
Companies are required to implement risk assessments and analyses in every phase of their operations. The results of these will contribute to decision bases.
Carlsen points out that such evaluations are important tools for maintaining a prudent level of safety and for contributing to continuous improvement.
“But the question is whether all of them are suitable in the sense that they actually help to support the decision taken. Is the right method used? How do they handle uncertainty?
“It might seem now and again that the companies are more concerned with carrying out a risk assessment than with its results.
We believe risk analyses and documentation are two areas where both safety and financial gains can be made.
Carlsen says the same applies to documentation. The volume of documents generated in developing and operating fields and facilities on the NCS has expanded dramatically since 2000.
“Why this increase? What purpose do all these documents serve? A lot of this doesn’t reflect demands in regulations or standards, but internal company requirements.
“Both risk analyses and documentation can and must become more suitable. That’ll achieve both increased safety and better use of resources.”
The PSA’s overall goal is to define the terms for and supervise that players in the petroleum industry maintain a high level of HSE and emergency response, and thereby also help to create the biggest possible value for Norwegian society.
Norway’s political ambition of being a world leader for HSE in the oil and gas sector imposes an obligation on all parties in the industry to work constructively to maintain and improve safety.
“That ambition influences us as a regulator – how we work and fulfil our role, in part by developing the regulations,” says Anne Vatten, director for legal and regulatory affairs at the PSA.
“Safety for people and the environment comes first. Economics are and must be subordinated to this. But it’s clear that we don’t want costs to be unreasonable in relation to benefit.
“So financial considerations are taken into account in our decisions. But the basic requirement is that work on safety must be long-term and unaffected by changes in investment or oil prices. Safety is not a balancing item.”