I am delighted that this conference, which was originally planned for the spring but was prevented by the Icelandic volcanic ash cloud, has been rescheduled and that I have this opportunity to speak to you today.
It’s clearly an understatement when I say a great deal has happened since then. Most significantly of course was the tragedy on board the Deepwater Horizon platform in the Gulf of Mexico that killed 11 workers and caused serious pollution along the US Gulf coast. This major incident also threw the media spotlight onto deepwater drilling, the offshore oil and gas industry more broadly and has set the agenda for much of the discussion and debate that will surround offshore safety and environmental protection for the foreseeable future. This morning, I want to reflect on some of the early lessons from this incident as well as considering some other recent developments whilst also sharing with you a few of my thoughts on what I believe can be achieved through cooperation, harmonisation and sharing of good practice among European Offshore regulators. But this morning, above all, I want to put this into the context of leadership and its importance for regulators and industry alike.
About 6 months ago, I had the privilege to be invited to speak at Oil and Gas UK’s inaugural health and safety awards event here in Aberdeen. There I saw success and innovation being celebrated and good practice being shared among operators and contractors in the offshore industry. This reminded me of how important it is for leaders to create opportunities, like this conference, where we can come together to share our views and ideas and strive to continually improve the industries within which we work.
The offshore industry in the North Sea employs close to 100,000 people, with around 30,000 of them covered by the UK regulator. The majority of these workers are contractors who are not directly employed by the operators. In addition, the workforce is international and mobile beyond the confines of the North Sea.
In this environment, it is essential that we create a culture where good practice is shared – not just within companies or among UK-based operators but certainly among all those who are engaged in operating in the North Sea. We must also ensure that we learn from experience elsewhere and that those who operate in the North Sea find ways to share our experiences with others. The risks inherent in working in this type of environment, and the grave consequences if things go wrong, are such that we simply cannot afford to miss the opportunity to learn lessons, knowledge and experience between operators and also between regulators.
If we didn’t know it already, the Deepwater Horizon incident has reinforced the need for us all to work together and to consider the implications for the oil and gas industry and its regulatory regimes. I can report that HSE, as part of the UK Government’s response to Deepwater Horizon, is taking a range of steps to learn and share the lessons from the Gulf of Mexico. HSE is a member of the Oil Spill Prevention and Response Advisory Group, which was set up by industry shortly after the Deepwater Horizon blowout to review the UK’s ability to prevent and respond to oil spills. The group provides a key forum for monitoring and learning lessons from the various investigations into the Gulf of Mexico incident. HSE has also established links with the other offshore regulators within Europe via the North Sea Offshore Authorities Forum, and more widely through the International Regulators Forum. HSE has chosen to engage in the broadest conversation so that it can determine and implement any lessons that relate to the UK regime.
I know that many of you are also helping with this response, and I thank you all for your efforts. However, our work has just started. Strong leadership will be required to ensure that any resulting lessons learnt are embedding within the industry for the long-term and no matter where the work is carried out. If we do this, then our regulatory regime will remain robust, safety standards offshore will improve and we will further strengthen the industry’s health and safety culture.
Today you will discuss the challenges of ageing infrastructure and extension of operating life. Our respective countries rely heavily upon safe and continuous operation in the North Sea to meet energy and fuel requirements. These energy supplies are of enormous economic importance and this will remain the case for a number of years to come. We should have all learned lessons in the past regarding the dangers of making assumptions about how long assets will be required to operate. In the 1990s, assumptions about limited future lifespan of assets led to serious neglect of asset integrity and basic maintenance. And, as we all know, the cost of catch-up when wrong assumptions are made can be very high.
To counter the risk of this, we recently launched our Ageing and Life Extension Inspection Programme, also known as KP4. This subject is a key priority for HSE, and is running in parallel with our work on Asset Integrity. The programme aims to: raise awareness of the importance of ageing in the integrity and management process; and develop guidance on the management of ageing.
Full details of the programme and an extensive range of information on Ageing and Life Extension is available on HSE’s website. The intention is that by sharing this information and best practice we will encourage others to take ownership and promote the importance of managing risks in this critical area.
That said, the UK Government is clear about the need to adopt new approaches to energy generation both to ensure security of supply and a low carbon future. Although these will be different energy technologies many of the engineering challenges which they will face will benefit from learning from your experience. The offshore oil and gas industry has the experience, skills and expertise to make a significant contribution to achieving this especially in the areas of Carbon, Capture and Storage and offshore wind farms. But this will require us to all think about new operational practices in the North Sea. Life extension and new uses for old equipment are all perfectly possible – provided the equipment is properly maintained, looked after, and that the design integrity is not compromised by new requirements or applications. Many of these decisions and challenges will be easier to address if we pool our knowledge and resources and as far as possible adopt common standards and approaches.
That is why I believe the work of the North Sea Offshore Authorities Forum is so important - precisely because it provides that collaborative forum for safety authorities in countries with offshore petroleum activities in the North Sea to work together and to share knowledge and experience.
The various NSOAF working groups that have been set up provide a platform for information to be exchanged and for the development of common positions and joint initiatives. I am very pleased that the European Commission also recognises the value of NSOAF. This is proven by its decision to establish a dialogue with the forum following Deepwater Horizon. This has already led to a conference with NSOAF in which good regulatory practice was shared. Indeed, I know that the latest Commission proposals intimate that it sees NSOAF as a model which other regions, such as the Mediterranean states, could easily adopt.
Last year, within Great Britain, the Health and Safety Executive launched a new strategy for health and safety in the 21st Century. One of the central themes of the strategy was the recognition that regulators alone cannot deliver an effective health and safety system. It requires everyone to recognise their responsibilities and then play their respective parts – regulators, operators, employers, employees and many more.
But the strategy also puts leadership (at the) front and centre – because without leadership other essential elements of the system – employee engagement, increased competence and the creation of the right culture – simply do not happen.
Back in 2007 when I made my first visit to Aberdeen as Chair of HSE it was to launch the KP3 report, of which I’m sure you’re all familiar with. At the time I said that:
“In light of the findings of the KP3 report, asset integrity will continue
to be one of the main priorities of HSE’s Offshore Division but it must also be clear that it is for the industry itself to show leadership and face up to its responsibilities”.
What I said almost 3 years ago remains true today. Of course it is for the industry to show leadership in the areas where it has prime responsibility – in managing the risks that it creates and which remain inherent in its operations. Since the launch of the KP3, I have been greatly encouraged by the leadership I have seen emerging from the industry. There is a strong commitment to training and involvement, to learning and sharing lessons. But this commitment must be sustained in the long term and it must be spread more broadly if we are to ensure that we don’t see history repeat itself with another cycle where improved short-term performance leads to complacency and reduced investment.
But we, as regulators, also have a role to play in ensuring that this cyclical “decay” does not happen. We too need to lead. By setting the standards and explaining clearly what we expect. The more that we can work together to: develop consistency, learn from one another, and promote the sharing of good practice – particularly after Deepwater Horizon – the more effective we will be as leaders and as regulators. This will allow us to demonstrate stronger leadership to the industry as a whole.
Whatever the future may hold (for us), we can be certain that this NSOAF has a crucial role to play and that the contributions of regulators, companies and associations will continue to be important. We all have a common purpose – ensuring safe and secure long-term operation in the offshore industry and particularly in the North Sea.
Thank you again for this opportunity to speak at the start of your conference. I wish you all an interesting and productive day.