Influencing and Shaping HSE Policy and Practice in Joint Ventures

Abstract

Abstract Dedicated focus on Health, Safety and Environmental (HSE) issues is a pre-requisite to successful operations in the Upstream Oil & Gas industry. The welfare of people - employees, contractors and stakeholders - is paramount, while ensuring mechanical integrity and containment and safe operations are critical as well. These issues become more complex in the context of a Joint Venture (JV) or Joint Operating Company (JOC) structure, and may be further complicated when multiple nationalities and corporate cultures are introduced into the mix. This paper describes the historical safety performance and strategies and actions implemented by the Cuu Long Joint Operating Company (CLJOC) to create a positive HSE culture. CLJOC's exposure data will be broken down into the three major areas: Direct-hire Staff (DS), Operations, Maintenance & Drilling (OM&D) Contractors and Project Management (PM) Contractors. The data will be presented in the context of the growth of the Joint Operating Company and the impact of the Influence Model on the JOC safety performance will be shown. Changing Industry Trends Recent trends, driven by resource access challenges, have favored the formation of JV or JOC structures in which National companies have a controlling position. Partners may be other State companies, major public companies or small entrepreneurial organizations. Well established major operators may be involved as minority or non-controlling participants in the JOC's, with their staff acting as mentors in positions of influence without formal authority. The culture and structure of JV's and JOC's can differ greatly from the typical company as they may employ many nationalities from multiple cultures. Each culture may have a differing perception of risk, with some having a high tolerance and low awareness compared to those which have experienced a more sophisticated safety culture. JOC's and JV's have independent identities in which participants have influence but no direct organizational control. Participants may have differing (and at times conflicting) priorities and the work and living environments can be a challenge. There is a strong need to maintain corporate governance and adhere to stringent HSE standards as each partner is responsible for the health and welfare of their dependents. CLJOC Background The Cuu Long Joint Operating Company was established on October 28, 1998 for the purpose of operating Block 15-1, offshore Vietnam. Co-venturers in Block 15-1 include PetroVietnam Exploration & Production Corp., Ltd., 50.00%, ConocoPhillips (UK) Cuu Long Ltd., 23.25%, Korea National Oil Corp., 14.25%, SK Energy Co. Ltd., 9.00% and Geopetrol Vietnam SA, 3.50%. Block 15-1 is located at the north end of the Cuu Long basin, about 180km east-southeast of Ho Chi Minh City. Oil was discovered in October 2000 and production began in October 2003; there are now three fields producing on the block.