This sector strategy covers the work activities associated with the exploration and extraction of oil and gas offshore in the United Kingdom Continental Shelf (UKCS). The sector plays a major role in ensuring the security of energy supplies for the nation.
Currently, offshore oil and gas from the UKCS satisfies about 66% of the UK's primary energy demand. Key factors that may influence future investment in the UKCS are the oil price, the fiscal regime (taxation), technical capability to recover harder to reach reserves, UK Government's energy policy, further regulatory burdens (health and safety as well as environmental), and the attractiveness of investing in other parts of the world.
The maturing and ageing nature of offshore installations in the UKCS present particular and increasing challenges to the delivery of high standards of health and safety.
The offshore industry is regulated through a permissioning regime. At the heart of this are the Offshore Installations (Safety Case) Regulations 2005. These and other associated goal-setting regulations were developed and made following Lord Cullen’s inquiry into the Piper Alpha Disaster in 1988, when 167 people lost their lives. The Safety Case Regulations require those who have duties under the law, known as dutyholders, to demonstrate that they have identified the major accident hazards, assessed the major accident risks and implemented control measures and to ensure compliance with all relevant statutory provisions.
Today’s Safety Case Regulations impose less administrative burdens on industry due to changes following a legislative review taking account of lessons and practice ten years after the regulations came into force.
Other legislation that applies offshore includes the Offshore Installations (Prevention of Fire and Explosion and Emergency Response) Regulations 1995, the Offshore Installations and Wells (Design and Construction, etc) Regulations 1996, the Health and Safety at Work etc Act 1974 and a range of conventional safety regulations made under the Act.
Other regulators with an interest in offshore activities:
Following the Deepwater Horizon (Macondo) accident in the Gulf of Mexico in April 2010 the European Commission published proposals for Europe-wide offshore legislation on offshore safety and environmental protection, to ensure that the risk of a similar incident is further reduced. These proposals are likely to be finalised and implemented by 2015.
The UKCS includes some of the most challenging and hostile working environments for oil and gas extraction in the world. The main areas of work-related health and safety risk include:
A significant proportion of offshore installations are approaching or have exceeded their original design life, and as a consequence of extending field life many of the existing assets will continue well beyond original anticipated operational life.
Dutyholders should ensure that their installations are maintained fit for purpose and must effectively manage the hazards and risks associated with ageing installations and extended life beyond design.
Industry bodies play an important role in promoting good practice to help dutyholders address the issues arising from ageing plant. HSE will contribute through engaging with the industry bodies and undertaking its mandatory work of a programme of safety case assessment, inspection, enforcement, and sector targeted key programmes / projects.
Dutyholders need to ensure effective implementation of their legally required major hazard written schemes of examination through verification by independent competent persons. Such arrangements are key to managing major hazard risks through all stages of the life cycle of an installation or well.
There are challenges in attracting and keeping sufficient experienced recruits into the industry. The average age of the offshore workforce is around 41 years.
Competence has received particular attention since the Deepwater Horizon (Macondo) accident in the Gulf of Mexico in 2010. In the UK, the Oil Spill Prevention & Response Advisory Group (OSPRAG) was created, involving industry, regulators and trade unions, to review existing standards and learn the lessons from the US. Both industry and the regulator will need to ensure that the lessons from the work of OSPRAG are adopted.
OSPRAG (and subsequently the Wells Life Cycle Practices Forum) has concentrated on developing clear standards for key positions. The industry's training standards body, OPITO, administers an offshore apprenticeship scheme, runs competency transformation programmes and promotes offshore career opportunities in schools and universities.
Senior managers / leaders of dutyholder organisations need to understand the hazards and risks of their assets together with the applicable legislation. Effective leadership is key to managing major hazard safety.
A variety of business models are now used across the UKCS, such as contracting out management and operations with complex financial and ownership arrangements.
The past decade has seen a number of the established offshore operators and owners sell on some of their installations to new smaller operators / owners who are new to the UKCS. This, on occasions, presents issues arising from their lack of in-depth knowledge of the regulatory permissioning requirements. It can give rise to some new operators / owners not providing sufficient detail in their Design Notifications and Safety Cases on how risks from major accident hazards are reduced and managed.
HSE as the regulator is tasked with assessing safety cases and an inspection, investigative and enforcement role under the Health and Safety at Work etc Act. Dutyholders contribute to meeting strategic goals, aims and objectives by working with trade associations and other industry groups such as Step Change to:
The industry supports the goal-setting approach requiring dutyholders to identify their major hazards, assess the risks and put in place control measures, the requirement to have independent competent persons to participate in major hazard written schemes of examination, and the need to implement good quality audit and review of their own compliance with the arrangements described in Safety Cases. All these aspects emphasise and recognise that those who create the risks are responsible for managing the risks.
The UK's offshore regulatory permissioning approach has been copied in many parts of the world. While the UKCS is seen as one of the most regulated parts of the world to conduct business, businesses recognise the benefits of adopting and imposing some elements of it while working in less-regulated parts, eg developing installation-specific Safety Cases for their own assurance where none are required by law. In the drilling mobile worldwide market, having a UK-accepted Safety Case for a mobile drilling rig is seen as a marketing tool even if the drilling company has no intentions of ever using the rig on the UKCS.
The industry recognises the need for regulation and enforcement against individual companies when things go wrong. This reflects the importance that each company and the industry as a whole places on maintaining a good reputation not only in the UK but the impact it can have on a company’s global operations, and ultimately its financial performance.
To be an efficient and effective regulator HSE relies on being able to recruit, train, and retain a mix of experience and specialist skills. This mix of experience and skills covers regulatory and engineering specialisms and the management of major hazard industries.
HSE’s goals, aims and objectives are primarily focused on reducing the likelihood of another low frequency–high impact event like Piper Alpha.
The need to have a stable, confident offshore economically attractive place to do business for global oil companies is strategic to the success of the UK's economy and the security of its energy supplies. The UK regulatory regime and HSE's goals, aims, objectives and strategies continue to provide assurance to the wider public and government to enable the safe and sustainable exploration and exploitation of hydrocarbons on the UKCS.
The North Sea is now a mature basin, with much of the easily winnable oil and gas exploited. Significant reserves remain, but these are often smaller, in more challenging fields in deeper waters or at high temperatures / pressures.
While the central North Sea currently dominates operations (60% of total production), over the next decade there is potential for the West of Shetland (estimated 20% of UK oil and gas reserves) to become the core area for production operations.
The introduction of new designs or technology to cope with the greater technical challenges of maturing oil and gas reserves and deeper and more inaccessible fields require increasing expert scrutiny from the regulator. In addition to this, HSE has noted that most emerging energy technologies (EETs), eg activities associated with combustible gas storage, carbon dioxide storage and underground coal gasification, also involve new and developing technologies. As these develop HSE will ensure it has the necessary regulatory powers to ensure work activities associated with these technologies are covered by legislation. This is being addressed by the proposed introduction of the Health and Safety at Work etc Act 1974 (Application outside Great Britain) Order 2013.
Decommissioning is already underway and has resulted in a new service sector. This is not yet widespread and is only likely to represent a notable activity from about 2017 onwards. Over the course of the next two decades it will involve the decommissioning of:
Decommissioning brings significant occupational and conventional health and safety risks. These centre on deconstruction, large heavy lifts and management of significant numbers of multiple worksites. As this activity becomes more prevalent, the industry will need to ensure that the significant hazards and risks are understood and controlled through demonstrations in the dismantling safety case and application at the worksites.
The timescales and extent of decommissioning will be fluid as new technology may extend the life of some of installations and economic factors may delay the process for others. Decommissioning will take decades, with new fields, including deep-sea exploration, coming online, as others are being decommissioned.
To ensure that dutyholders routinely provide assurance to themselves, regulators and society that they are successfully managing the prevention of low frequency–high impact catastrophic accidents through the permisioning regime.
At Board level, the operators / owners of offshore installations are able to demonstrate effective leadership processes, giving appropriate priority to safety considerations and communicating this throughout their organisations so that there is clear and recognised accountability for health and safety performance.
Employers are sufficiently competent to identify and proactively manage their risks; employees understand the risks and their role in dealing with them; everyone is committed to maintaining critical controls and safe working practices.
Offshore operators address the most significant work-related health issues.
Worker involvement and legally required consultation in health and safety matters offshore is effectively promoted and implemented.
Sustained compliance with the law is promoted throughout the sector by targeted interventions leading to proportional enforcement in accordance with HSE's enforcement policy.
HSE to deliver regulatory mandatory work such as assessment of Safety Cases, inspection of notifications as part of the permissioning regime, inspections, and investigations for the offshore oil and gas sector.
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