Thank you for inviting me to speak at your conference today. This is the first time that I have spoken to an International Marine Contractors Association audience although I have addressed other audiences with similar interests to your own on a number of previous occasions. I was at the Oil and Gas UK awards a few weeks ago and it was clear to see there just how much innovation is going on in the offshore oil and gas industry. I have also spoken previously to people with a strong interest in Wind Energy and am very much aware of the challenges that this presents onshore, but even more so when you move offshore.
My plan today is to speak about our, HSE’s, strategy for the whole of the offshore industry and in particular the implementation of the new European Union Offshore Directive. But I also want to talk about how you, and the organisations you work for, create the right culture that puts safety at the forefront of what you do.
The industry has taken a lot of positive steps forward in the last few years – not only in oil and gas but offshore renewable energy as well. We have a new sector strategy for offshore oil and gas which focuses on major hazards and we continue to engage with stakeholders across the sector through Oil and Gas UK, Step Change and other fora. I understand that the G9 Offshore Wind Health and Safety Group have identified Marine Safety as a priority topic, and IMCA will be producing its own guidance on this. You have our full support for this – it is good to see the industry taking a lead for itself in this way.
It is essential that the whole offshore industry gets a firm grip on safety and the whole industry must agree what are the key advances we need to make. It is important to make real sustainable change which means getting the underlying culture right and not a series of quick win initiatives whose value quickly decays. We also need to ensure that learning is transferred whenever and wherever it makes sense –
We don’t need any more big reminders such as Piper Alpha or Macondo and we certainly don’t need each sector to be putting themselves in a position where each has to learn its own lessons the hard way.
The main challenges facing the offshore oil and gas industry are containing hydrocarbons and controlling the risk of explosion – dealing with ageing installations and asset integrity - and the more challenging environments of deep water and high temperature drilling.
HSE’s strategy for regulating oil and gas on the UK Continental Shelf focuses on major accident hazards - principally hydrocarbon containment and structural integrity, with leadership, competence and workforce engagement underpinning these.
But we must also recognise just who makes up the workforce offshore today. The current oil and gas workforce is made up of some 85% contractors which means that all of you are very much part of the oil and gas industry as we see it.
Which means that you, the industry, has recognised the importance of controlling hydrocarbon releases and challenged yourself to reduce them. But this still requires commitment and leadership. By April 2013 the industry had almost achieved its target of reducing releases by 50%. But, as I am sure you are all aware, by the end of last year HCRs had risen by 30% compared to the year before.
The recent drop in oil price is a particular cause for concern. Last time we saw this happen - in the 1990s – it led directly to essential maintenance work being put off and assets neglected. The first decade of the 21st century has been dominated by the need to play catch-up to halt the deterioration caused by the period of neglect and we must make sure that the cycle does not repeat itself. You as contractors are going to feel the squeeze soon, if not already from your clients – on your costs and resources.
I doubt very much that you will be asked explicitly to cut back or compromise on safety but if costs are squeezed the temptation to cut back on maintenance work is an almost inevitable consequence – but it is one which you must resist and one that we will be watching very closely.
We talk a lot about learning lessons – there is a crucial lesson here from the past which needs to be taken on board by everyone, about the systemic and cultural failures which led to living with deteriorating assets, poor communication and a workforce operating under stress and pressure. It requires you to step up to your role as leaders in your industry.
Most leadership courses teach us about the need to exhibit confidence. If we want people to follow our leadership then we must set clear expectations, we should have a vision for the future and we should inspire others. But in all of the businesses that you work in – extracting and processing natural resources, or creating the technology to use new, more sustainable, resources – you must also be mindful of the hazards and risks. As contractors you may feel that your degrees of freedom are limited by constraints imposed by your clients. Leadership in health and safety in this sector is not about having all of the answers – it is about knowing the right questions to ask and knowing how to respond when concerns are raised and being prepared to say “No” if what you are asked to do is not right and will compromise the safety of your people or the assets themselves.
Your role is to make it clear when the right safety priorities are not being addressed and properly monitored, not to reassure that “all is well” – even when it isn’t.
Performance measures are important – because the organisation will act on what is reported – but they must be the right measures. Absence of lost time injuries is not an effective measure that process safety/asset integrity is being properly managed. Hydrocarbon releases are one way of identifying when things are not as they should be but so are backlogs of safety critical maintenance activity – and these should be made very visible to everyone – because it will create unease, not reassurance – and that’s exactly what we need .
You don’t need to be an expert in health and safety to ask difficult questions. You can - and should - ask your staff to tell you what are the most safety critical issues and ask them what systems are or should be in place to ensure the integrity and where they are not. Indicators of process safety don’t need to be complicated – simple measures which are easily understood and mean something to everyone will have much greater impact.
Leadership in health, safety and environment is not something that you do “in addition” to exercising corporate governance, financial management, market intelligence, workforce leadership and demonstrating your performance as a “good contractor”– it is absolutely fundamental and integral to being a good contractor – it must be a core value – not a priority. Frontline leadership in health safety and environment is about showing that you care and that you are concerned – and showing that to all of your stakeholders – your workforce, your shareholders, your customers/clients, your competitors, local communities and the broader public.
As Marine Contractors your roles extend well beyond operation of the production rig itself. Besides hydrocarbon containment, you will be engaged in a whole variety of activities around stability and station-keeping and avoiding collision. Your activities need to demonstrate an appreciation of the full risk profile for marine operations near installations. There is always the danger of ship impact, blast pressure, and the attendant danger of sea and weather conditions. Your activities include diver safety and the challenges of transferring people and equipment from the beach to offshore installations. There must be understanding and communication of these broader issues, and that requires leadership and a good safety culture.
The age of many installations means they require a higher frequency of inspection and maintenance. This then leads to an increase in the numbers of personnel required on board, which places greater pressure on existing accommodation.
To address the maintenance and remedial work required in the North Sea a number of operators have started using the walk to work concept where a dynamically positioned vessel is used to act as both a crew change vessel and an accommodation unit.
This is in addition to the more traditional ‘flotel’ which continues to be employed across a range of construction, maintenance and decommissioning activities. However there is an increasing trend in size and capacity, and it is not unusual for them to carry 300 to 400 persons on board.
Care is needed in the selection of such vessels for this activity. Some flotels arrive from other parts of the world where the environment is not as harsh as the North Sea during winter months. We saw an incident only a few weeks ago where a vessel had to downman while repairs were carried out after it sustained green-water damage.
Alongside ageing and maintenance issues we will see an increasingly large decommissioning workload. This means questions have to be asked about whether the right equipment is available, such as heavy lift cranes or lift ships and also that the right level of competency is in place to deliver this work safely.
There are issues associated with vessel impact, with some older installations or lighter jack ups unable to meet the current accepted impact standards and the introduction of larger attendant vessels. For example, we have concerns that some of the jack up construction vessels originally intended for windfarm work but deployed as accommodation on conventional offshore installations may be less able to withstand a collision from an attendant vessel than conventional offshore jack ups.
And as I mentioned earlier, oil exploration and production are moving to deeper waters with far more challenging environments, which places mooring systems under higher dynamic loads or requires more reliance upon dynamic positioning.
I note that several of the sessions over the next two days address precisely this dynamic positioning and the challenges of extreme weather.
The need to drill and operate in deeper waters west of Shetland for example, exposes units, many of which are ageing, to harsh environments and more severe motion issues.
Some of these projects require potentially larger and more sophisticated vessels during construction and operation to service these installations.
There are also a number of new techniques using various floating installations to continue to recover hydrocarbons from depleted reservoirs. This brings its own challenges in operating safely and effectively, particularly the higher risk of collision with shuttle tankers and other vessels.
Whenever vessels, whether supply boats, flotels or jack-ups approach to operate alongside and depart from fixed installations there is a risk of impact.
The oil and gas industry is global, so it’s in everyone’s interest to adopt approaches that maximise learning - learn lessons, challenge what is done and encourage continuous improvement.
I know that IMCA is heavily involved in sharing knowledge and developing training to raise awareness and competency standards. Your work with certification and training for divers is well known. Some of you will be aware that HSE will soon be publishing its revised Offshore Diving Approved Code of Practice after consultation with the offshore diving sector, including IMCA.
Those of you involved in diving may recall the Bibby Topaz incident where a diver was rescued following the vessel drifting. HSE’s investigation found inherent failings with the DP software control logic. We pursued this with the manufacturer and issued a Safety Notice, whilst IMCA issued their own Safety Flash and the manufactures warning of the issues and the actions required to prevent a similar event.
This incident and the successful recovery of the stranded diver did highlight the effectiveness of the rescue measures in place. However other incidents have shown that the industry needs to practice and improve the recovery of divers in emergency situations. A frequent feature of accident reports is subsea lifting, with divers in close attendance. These are complex operations and require properly trained and competent personnel, the correct equipment and meticulous planning to be successfully executed.
The fleet of diving support vessels (DSVs) that operates in UK waters has a range of age/technology/complexity issues, however generally vessels are towards the top end of the global market as a result of UK legislation to drive up standards.
The latest DSVs have digitally controlled diving and saturation systems. These systems are life critical, which brings new issues to the table with the security and reliability of software and upgrades as well as the competence of operators and maintainers now dealing with very different systems to the more traditional hands-on legacy dive and saturation control systems. Again, I note that there are sessions addressing these issues.
For more than 20 years now, since Piper Alpha in the North Sea, the UK has operated a safety case approach to major hazards industries. It has proven itself to be very effective – it does not offer guarantees – but it does provide a high level of assurance. It is a regime which is very clear about roles and responsibilities of both the regulated and the regulator. The regulator assesses the capability of the organisation and tests the measures in place before granting permission to operate. Permission can be withdrawn at any time in the event that the system is found to be wanting. But the responsibility for identifying and managing the risks rest very clearly with the dutyholders – with you – the leaders at every level in the organisation. The safety case is your document – not the regulator’s. It should be used and disseminated throughout the whole organisation – everyone should know what part they play in maintaining the integrity of the system. It should be your “contract” not only with the regulator but with all of your workforce and your stakeholders – your means of explaining what your organisation must do, what the risks are and the roles that everyone must play in collectively managing those risks. For the safety case to be used in this way it must be written with this purpose in mind – it must be easy to understand and to communicate – not full of technical jargon and mathematical formulae.
We are very pleased that the new EU Offshore Directive which we are in the process of implementing with our co-regulators in DECC, is built upon maintaining those core principles of the safety case approach.
We, at HSE, acknowledge that you have strong views about how you want to be regulated and it is right that you should hold us to account on our performance as regulators just as we do with you on your performance as dutyholders. In 2013, a number of you expressed concern when we set up the Energy Division within HSE but I am confident that, 2 years on, you see that our commitment to regulating offshore safety has not changed. Susan Mackenzie has brought new thinking and ideas to the table about how we utilise our limited resources more effectively, but I also know very well that you have continued to feel pressured by us as the regulator to focus on doing the right things. Susan has moved on to become Director across all Major Hazards on and offshore so you will still be seeing a lot of her, but I am also delighted that Tony Hetherington will now be taking on the role of Head of Energy Division and will be providing continuity of our thinking and our approach.
We know that for you in business, some of the degrees of separation that you see in your regulators are less than ideal. I know from my own experience in industry that health safety and environment is seen as a fully integrated agenda for all of you – I want to assure you that we will continue to work closely with DECC, other regulators who operate in offshore territories and other government colleagues to deliver the most joined up service we possibly can. I also believe that it is important that we ensure that we can continue to share knowledge and resources – between on and offshore, across national and international boundaries and between sectors. The less boundaries and barriers to knowledge sharing and collaboration we create the better – that principle applies to us as regulators just as much as it does to all of you.
It is heartening to see IMCA actively engaged with the offshore renewable industry to raise standards. It is clear that the number of Offshore wind installations around the UK is set to grow – and rapidly. Many fo the challenges you face in this renewable energy sector are similar to those of the offshore oil and gas industry but there are also many unique features. In the last 18 months or so, there have been a number of incidents with transfer vessels. Fortunately there have been no fatalities but these incidents, including collisions with marker buoys, wind turbines and cables etc, and reveal some serious questions about the competence of masters and crew and the extent of health and safety management systems for monitoring and auditing performance.
Some of the construction and assembly challenges which you face in the offshore renewable sector are formidable and maintenance work will continue to require the placement of people – often in ones or twos on isolated installations which are normally unmanned and where access is difficult and physically challenging.
IMCA’s work on an improved competence framework is particularly encouraging, and you have a real opportunity not only to develop the right standards in this rapidly expanding sector but to raise those standards globally, while guarding against accommodating less robust standards from elsewhere. Here in the UK the standards must be in line with our legislative requirements and we must promote those standards elsewhere in the world. This is about raising the bar – not lowest common denominator.
The industry’s leaders are responsible and must demonstrate their commitment by ‘walking the talk’ – across the whole spectrum of risks which your people face in working offshore. As well as managing risks from HCRs on operating platforms, the industry needs to develop leading indicators to demonstrate that necessary control measures are in place, guard against repeating cycles of neglect due to cost pressures, transfer good practices from one part of the industry to another and set new standards. That’s a long and challenging list but I am confident that you are up to the task and I can promise you our support in all of it.
Thank you for inviting me to speak to you and I wish you a successful conference.