FPSO Safety Case

Cost Effective Outcomes from

FPSO Safety Case

By:

Brendan Fitzgerald, Managing Director, Vanguard Solutions

Joe Patrick, Managing Director, Hunter Oil

Paul Breen, Technical Director, Vanguard Solutions

Cost Effective Outcomes from FPSO Safety

Case

•

Brief History

•

What is a Safety Case?

•

The Management of Safety

•

Why do we need a Safety Case?

•

Benefits of doing a Safety Case

•

Safety Cases – Lessons Learned?

•

A suggested Blue Print for success

A Brief History

•

European Union Major Hazard Facilities –

Seveso 1 (1982) & Seveso 2 (1996)

•

UK Railways 2000 & amended 2003

•

European Union Railway Safety Directive

(2004/49/EC)

•

Australia Major Hazard Facilities National

Standard 1996 & Updated 2002

Safety Cases are required in various

industries in Europe and Australasia.

A Brief History

•

UK Offshore Installations (Safety Case)

Regulations 1992 & Updated 2005

•

Australia Offshore Facilities 1992, 1996, 2005

& 2009

•

New Zealand Offshore Facilities 1993 & 1999

•

Timor Leste Offshore Facilities - 2003

A Brief History

•

UK Defence Forces

•

Australian Defence Forces

•

Some oil companies apply Safety Case

worldwide, e.g. BHP, Shell and Woodside.

A Brief History

•

International Review panel – 2008

• Bills & Agostini – 2009

“Safety Case still represents best means

of managing major hazards offshore”

What is a Safety Case?

• H. Conlin et al, Trans IChemE, Part B, July 2004

“A consistent and coherent set of

arguments used to justify the safety of a

system at all stages in its lifecycle”

What is a Safety Case?

http://www.nopsa.gov.au/safety.asp under the heading "Safety Case Approach"

•

Identifies the hazards and risks;

•

Describes how the risks are controlled;

and

•

Describes the safety management system

in place to ensure the controls are

effectively and consistently applied

.

A safety case is a document produced by

the operator of a facility which:

What is a Safety Case?

Safety case is a process, not just a

document

•

It introduces a need for an audit trail with

documented decisions

•

Brings a greater awareness of hazards and

their management

The Management of Safety

The Management of Safety

The Management of Safety

Jop Groeneweg, Leiden University, 2010 APPEA Safety Conference

Not holding the handrail

Fall from Stairs

Fatal Fall

Serious Leak

Rig Explodes

We need

another

model!

We need

another

model!

The Management of Safety

Personal

Safety

Fall from Stairs

Fatal Fall

No Handrail

Process

Safety

Rig Explodes

Serious Leak

Minor Leak

The Management of Safety

Personal

Safety

Process

Safety

These are two different

processes.

So management systems

must recognise they are

two different processes ...

The Management of Safety

Different elements of safety

management systems

address personal safety from

those that address process

safety

So it is not enough to say

that SMS addresses safety.

The Management of Safety

Recent observations suggest that industry focus is on slips, trips and falls …

Personal Safety Fall from Stairs

Fatal Fall No Handrail Process Safety Rig Explodes Serious Leak Minor Leak

… with reducing attention paid to maintenance of

technical integrity and major hazard controls.

“But the more profound problem is a failure to

put risks in perspective. BP and other

companies tend to measure safety and

environmental compliance on a day-to-day,

checklist basis, to the point of basing

executive bonuses on those metrics. But even

if worker accident rates fall to zero, that may

reveal nothing about the risk of a major

disaster.”

The Management of Safety

Widely accepted failings of prescription include:

Traditional means of the management of safety

has been prescriptive in nature.

The Management of Safety

• Quickly out of date as industry changes

• Industry only performs to minimum – no incentive to

Widely accepted failings of prescription include:

The Management of Safety

• Industry lets regulator work out what is needed and

comply verbatim – so operator fails to identify or understand the hazards and risks they are

supposed to manage – controls may be inadequate or inappropriate

• Prescriptive regulations become a hurdle to be

cleared, with the focus on the hurdle, not on managing the hazard

The witnesses’ reliance on merely a qualitative

opinion showed, in my view, a dangerously

superficial approach to a major hazard.

Piper Alpha Inquiry report, Lord Cullen criticised attitude to management of risk from a high pressure gas fire:

The Management of Safety

… … I consider that management were remiss in not enquiring further into the risks of a rupture of one of the gas risers and in such an event the risk of

Why do we need a Safety Case?

Do we really understand our facilities?

Why do we need a Safety Case?

Why do we need a Safety Case?

Why do we need a Safety Case?

20 April 2010 – Deepwater Horizon Macondo Blowout – 11 fatalities, massive & unknown environmental impact

Why do we need a Safety Case?

That’s all well and good – but what has

that got to do with FPSOs?

Why do we need a Safety Case?

8 August 2010, MT Gagasan Merak FSO – Cargo tank explosion – 4 injured

Why do we need a Safety Case?

Why do we need a Safety Case?

28 August 2009, Tanker Elli breaks back in ballasting error for tank entry

Why do we need a Safety Case?

Ship collisions don’t happen with

offshore facilities, do they?

Why do we need a Safety Case?

Why do we need a Safety Case?

–

Nothing could possibly go wrong,

right?

–

You’ve carefully thought out all the angles

–

It comes naturally to you

–

You’ve done it a thousand times

–

You know what you’re doing, it’s what

you’ve been trained to do your whole life.

Why do we need a Safety Case?

• How do you demonstrate adequacy of safety

management to Company Board otherwise?

• ISO 9000 process & ISO 31000 elements link directly

to the Safety Case process

• So good quality management requires a Safety Case!!

• Demands of duty of care – how do you demonstrate

Why do we need a Safety Case?

• International companies – consistency of application

across assets ( e.g. Shell, BP, Union Carbide)

• How do you demonstrate safety in design without

Safety Case? – Are standards / Class enough?

• How else could hazards and the SMS be linked?

• HAZOP is an integrity assurance process – not hazard

identification!!

• So if just apply codes and standards, what other

hazards/ risk mitigation measures would be missed?

Safety Cases – lessons learned?

The Enemies of Safety are : Complacency

Arrogance Ignorance

Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007

Factors in Complacency

• Discounting risk

• Over-relying on redundancy

• Unrealistic risk assessment

• Ignoring low-probability, high-consequence events

• Assuming risk decreases over time

• Ignoring warning signs

Reflecting on recent major accident events -does any of the above sound familiar ?

Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007

• Schedule

• Cost

• Performance

• Safety

Professor Nancy Leveson, MIT, “Future Trends in Process Safety”, Honeywell User Group Summit, June 2007

Do we effectively put this into practice ?

Managing Tradeoffs

Good risk management requires

understanding the outcomes, implications,

impact and tradeoffs between:

Example: Schedule Pressure and Safety Priority

schedule enforcement has little effect on completion time (<2%) & cost, but has a large negative impact on safety

Priority of safety activities has a large positive impact, including a positive cost

Cost

Generic impact of late change on

Project cost with time Impact of Safety Case

To influence Project Costs

Concept Construction Operations

Cost of implementing Safety Case

hardware changes

Detailed Design

• Blowdown philosophy set early, with late application of safety case – identified problem resulting in

expensive change

Safety Cases – lessons learned?

• People / competence / skills gaps – a major ongoing

issue - with an ageing workforce how do we

effectively manage current and future projects and operations?

• Managing the wrong thing – i.e. managing the detail

and overlooking the big picture (example is OHS vs MAE risk)

• The Myth of major shutdown / In-Water Surveys with no time off riser – how many projects achieve it?

Safety Cases – lessons learned?

• But we build this into the design basis and hence into

Oil Company and FPSO Contractor Relationships

Safety Cases – lessons learned?

• Typical contract arrangement gives minimal

incentives for overall safe performance, but generally penalties for being unsafe!

• The FPSO Contractor is contractually incentivized to

keep producing - they generally lose money if production stops – is there another way?

• The Safety Case can and should give the FPSO

Safety Cases – lessons learned?

• Lump sum / low cost Safety Case v quality and

understanding

• The outcomes of the Safety Case are not known till

well after the contract is signed – is lump sum a fair and realistic contract strategy?

Quote from Conlin et al:

Often the Safety Case is produced by following a prescriptive set of instructions which stifle true thought about whether defined activities are as safe as they need to be because it is easier to write a Safety Case that way and then to audit the Safety Case against the internal procedure.

Safety Cases – lessons learned?

And further from Conlin et al:

Because of the practice of describing the organisation that is in place rather than debating what options have been considered, the fact that safety science

(engineering?) has had insufficient input into the design is not being revealed.

Safety Cases – lessons learned?

Safety Cases are not off-the-shelf, production line exercises in documentation.

Safety Cases – lessons learned?

Some problems with Safety Case implementation

Just producing a book, ticking a box, does not meet the intent!

To be effective, the safety case process must be allowed to take its course, to examine critically and interact with the design and the organisation.

Safety Cases – lessons learned?

If you want a Ferrari, but only specify something with wheels and an engine, don’t complain when a second hand Toyota needing maintenance work appears on the driveway!

A suggested Blue Print for Success

• Management leadership – must have this to work • Apply realistic schedule and budget

• Develop and apply safety design philosophy • Do it early!

• Embed experienced Safety Engineer in engineering design team as interface to Formal Safety

Assessment team

• Apply risk based decision-making process • Create an audit trail

A suggested Blue Print for Success

• Safety Engineering will provide linkage across the interfaces • Marine • Production • Mooring • Subsea • Sub-surface

A suggested Blue Print for Success

• Operating envelope / management of risk – i.e. the

Safety Case should define the operating envelope and hence allows you to understand the area in which your operational risk controls need to be applied and are designed to work.

• How do you know you are operating outside the

envelope if you have not defined it or passed the knowledge on to operations!

• Manage carry forward of residual risk – the Safety Case provides a means of doing this in a way that allows the residual risk to be actively managed rather than forgotten.

• Basis for SMS – i.e. the Safety Case will provide a

means of linking the facility, the hazards identified, the operations and the hazard and risk controls, whether via hardware or the SMS

• Clarify and manage separation of OHS risk

(personal safety) and MAE risk (process safety) – the two triangles rather than one.

Benefits of Doing a Safety Case?

• Identifies low probability / high consequence events

and assists to understand and manage them

• Provides an Audit Trail for: quality, safety,

development and risk management deliverables

• Do it early enough and you should get optimum

design (from safety, risk & cost viewpoint)

• Without Safety Case, would you ever have a blast

Benefits of Doing a Safety Case?

• Enable targeted maintenance – i.e. to safety

critical elements through performance standards

• Culture change – always occurs with safety case

process, always positive

• So the Safety Case should allow you to efficiently

1. The Safety Case is not a silver bullet cure for all ills. It does offer, however, the best means available for

effective management of major hazard risks and process safety.

Conclusions

2. Effective development and implementation of the

Safety Case process requires significant effort by any organisation. This effort is well worthwhile as it can deliver:

– Cost benefits in project performance

– Increased performance in operations, due to greater reliability in plant, equipment and resources

– Improved communication of hazard management for the lifetime of the facility (i.e. a corporate memory!)

3. Safety Case provides a competent and auditable process for senior management to demonstrate management of development, project and

operational risk to satisfy corporate requirements

Conclusions

4. There is a trend that our industry may be focussing on occupational HSE with diminished attention to management of residual and process risk. Safety Case provides management focus to overcome this.

5. Quality and quantity of risk assessment combined with industry shortages of skilled personnel is a concerning issue going forward

Conclusions

6. With ongoing cost, schedule and implementation

pressures there are better ways to contract and manage the preparation of Safety Cases.

References/1

Seveso I. 1982. Directive 82/501/EEC on the control of industrial major accident hazards involving dangerous goods, 1982. European Economic Community.

Seveso II. 1996. Council Directive 96/82/EC of 9 December 1996 on the control of major-accident hazards involving dangerous substances. European Community.

Control of Major Hazard Facilities – National Standard NOHSC:1014(2002). National Occupational Health and Safety Commission declared under s.38(1) of the National Occupational Health and Safety Commission Act 1985. Commonwealth of Australia.

The Offshore Installations (Safety Case) Regulations 2005. Statutory Instrument 2005 No. 3117. London: HMSO. ISBN 0 11 073610 9.

Petroleum (Submerged Lands) Act 1967, Schedule of Specific Requirements as to Offshore Petroleum Exploration and Production 1992. Commonwealth of Australia.

Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities) Regulations 1996. Statutory Rules 1996 No. 298 as amended made under the Petroleum (Submerged Lands) Act 1967. Commonwealth of Australia. Draft Petroleum Regulations 1993. Petroleum Inspectorate, Ministry of Commerce, New Zealand, made under the Health and Safety in Employment Act 1992, Department of Labour, New Zealand.

Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999, made under the Health and Safety in Employment Act 1992, Department of Labour, New Zealand.

Offshore Petroleum (Safety) Regulations 2009 made under Offshore Petroleum and Greenhouse Gas Storage Act 2006. Commonwealth of Australia Interim Regulations issued under Article 37 of the Interim Petroleum Mining Code, Specific Requirements as to Petroleum Exploration and Exploitation in the Joint Petroleum Development Area, Timor Sea Designated Authority for the Joint Petroleum Development Area. Dili, Timor Leste.

References/2

Railway Safety Directive. 2004. Directive 2004/49/EC of the European Parliament and of the Council of 29 April 2004 on safety on the Community’s railways and amending Council Directive 95/18/EC on the licensing of railway undertakings and Directive 2001/14/EC on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification.

Future Arrangements for the Regulation of Offshore Petroleum Safety – Australian Offshore Petroleum Safety Case Review, 2001. Department of Industry Science & Resources. Commonwealth of Australia.

Bills, K. and Agostini, D. 2009. Offshore Petroleum Safety Regulation – Better practice and the effectiveness of the National Offshore Petroleum Safety Authority, Australian Government, Commonwealth of Australia.

H Conlin, PG Brabazon & K Lee, Exploring the Role and Content of the Safety Case, Trans IChemE, Part B, July 2004

H.W. Heinrich Industrial Accident Prevention: A Scientific Approach, 1931 Jop Groeneweg, Leiden University, 2010 APPEA Safety Conference Andrew Hopkins, Energy Bulletin, 10 May 2010

Lord Cullen. 1990. The Public Inquiry into the Piper Alpha Disaster. Department of Energy, London: HMSO. ISBN 0 10 113102.