Petroleum Safety Authority Research Articles

Making sense of a new risk concept in the Norwegian petroleum regulations

In the 2015 petroleum regulations update, the Norwegian Petroleum Safety Authority (PSA-N) modified the risk definition, by highlighting uncertainty instead of probability as one of the core components of risk. Although much work has been conducted on how to assess and manage risk using an uncertainty-based risk perspective, the specific implications of such a risk perspective for a regulatory context have not been given equally attention. The paper seeks to bring new insights to this issue, by examining the extent of change in the PSA-N regulatory practices and strategies as a result of the new risk perspective, as well as identifying factors influencing the implementation processes within the organization. A sensemaking framework provides the foundation for the discussion.

Learnings from recent offshore project proposal submissions

The offshore project proposal (OPP) process was introduced in 2014 as part of the streamlining of regulatory processes under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 and Environment Protection and Biodiversity Conservation Act 1999 to provide for offshore petroleum developments to be assessed early in the project lifecycle. The OPP process involves the assessment of environmental impacts and risks of petroleum activities conducted over the life of an offshore project by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). An OPP for an offshore project must be accepted by NOPSEMA before a titleholder can submit environment plans for activities that make up the offshore project. Although the OPP process is not new, it has proven complex to navigate, with four revisions to the OPP contents requirements guideline published by NOPSEMA since inception, and only three OPPs reaching the public consultation stage to date. An OPP is required to describe the offshore project; describe the environment that may be affected by the project; set out environmental performance outcomes for the project; describe feasible alternatives to the project or its activities; and evaluate environmental impacts and risks of the project. This paper provides insight to the OPP drafting, submission and assessment process, with shared key learnings based on actual examples of OPP submissions made. In particular, we will focus on the crucial elements that haven proven to make an OPP submission effective, including project aspect scoping, understanding relationships between aspects and receptors, building flexibility within set project boundaries and demonstrating acceptability.

Evaluation of ballast failures during operations of semi-submersible rigs

Risk analysis/assessment is one of the challenges encountered during operations of offshore units on the Norwegian Continental Shelf (NCS). In recent years, the Petroleum Safety Authority (PSA) has focused on hazards relating to floating installations and thus requested that more attention should be made by the industry on hazards relating to buoyancy loss and stability. Ballast systems play a very vital role to ensure vessel stability. Various failure modes of semi-submersible ballast systems are identified and possible barriers and consequences due to the ballast system failure during drilling operation are considered. The failure mode effect and criticality analysis (FMECA) of the main components of the semi-submersible’s ballast system is adopted to determine the failure causes and failure modes that could influence each components performance, and thus identifying the most critical component(s). The Structured What-If Technique (SWIFT) is used to compensate for hazard identification for the unidentified hazards (i.e., human errors), in the FMECA. By studying the most critical system components, a qualitative risk analysis is conducted to model accidental sequences by using the fault tree method to establish the chain of failure events. The result of the Structured What If Analysis (SWIFT) shows that maloperation of the ballast system is the main contributing failure cause. This involves, failure to properly describe ballast procedure, failure to follow ballast plan, wrong sequence of closing/opening valve, maloperation of valve, time pressure complacency, communication gap or general lack of knowledge of the system. The FMECA findings indicate that failure of valves to “close on demand” with a Risk Priority Number (RPN) of 60, is the most critical.

Development of a method for evaluation of measures used for winterization of offshore facilities and units

The environmental conditions in the Barents Sea include low temperatures, wind, snow and precipitation influencing safety, working environment, operations and equipment functionality. The conditions are not extreme compared to other Arctic areas, however they do necessitate protection and winterization of the facility. A study performed for the Petroleum Safety Authority (PSA) in 2016 identified known measures for winterization of facilities in the Barents Sea. The study found uncertainties related to the effect the measures have on winterization when considering environmental conditions. Further work was recommended to evaluate the effect of measures when considering performance influencing factors. A new study was initiated by PSA to develop a method to evaluate the efficiency of measures and a means to document the results. The method considers how well a measure achieves a specific safety and winterization goal, effect of the measure on energy consumption, effect of the measure on investment cost and operating cost, and vulnerability of the measure, including operational and organizational factors. In order to refine and test the method, it was applied to case studies considering a year-round production facility, a light well intervention vessel and a drilling facility used in the winter season in the Barents Sea. The paper is not intended to be a research paper but is a presentation of a method that has been developed to perform an initial evaluation of the effectiveness of winterization methods.

Preventing accidents in the offshore Oil and Gas industry: An interrupted time series analysis

Abstract Background Oil and Gas industry suffers from high accident rates because of the dangerous working conditions. Eastern Mediterranean countries have an immature Oil and Gas industry and therefore it is crucial for preventing accidents in this early stage to implement internationally proven successful policies. The aim of this study was to investigate whether the accident prevention policies implemented by Norwegian government in 2001 were effective in reducing accident rates in the offshore Oil and Gas industry. Methods Data on the number of accidents, dates and type of facility (fixed or movable) for the years 1999-2006 were obtained from the Norwegian Petroleum Safety Authority (PSA). The effectiveness of the policy to reduce accident rates was estimated in interrupted time series analysis with post-intervention period the 1st of January 2001. Poisson regression was used to model the number of accident per months. Results The dataset had 96 months with a median number of accidents per month 6.5 (IQR: 4-10) for fixed facilities and 5.0 (IQR: 3-9) for movable facilities. The analysis suggested that there was a reduction in accident rates for fixed and movable facilities. Following the policy, there was a reduction in accidents of 45% for fixed facilities (rate ratio (RR) 0.55; 95% confidence interval (CI) 0.47-0.64), while for movable facilities there was a decrease of 67% (RR 0.33; 95% CI 0.28-0.39). Conclusions The policies implemented by Norwegian government in 2001 were effective in reducing the accident rates for fixed and movable facilities. The immature Oil and Gas industry of the Eastern Mediterranean countries will be benefited from studying and adopting some of the policies implemented by Norwegian government. Key messages Norwegian policies for accident prevention in the offshore Oil and Gas industry were successful. Oil and Gas industry of Eastern Mediterranean countries should adopt proven successful policies to prevent accidents.

Survival in cold waters - learnings from participation in cold water exercises - a regulatory perspective related to the Norwegian offshore industry

Participation in exercises lead by the University of Stavanger, the SARex 1 in 2016 and SARex 2 in 2017, provided valuable lessons related to survival in a cold maritime environment. The scenario of the exercises was a mass evacuation from a stranded cruise ship in Arctic waters but provided experiences relevant beyond the cruise industry. This article focuses on the relevance for the oil and gas industry in the Norwegian sector. SARex 1 and 2 were rescue exercises carried out north of Spitzbergen by industry, regulators and academia during the spring of 2016 and 2017. The Norwegian Coast Guard, the University of Stavanger and GMC, Stavanger, organized the exercises. The Petroleum Safety Authority found it important to participate in SARex 1 and 2, to better understand the factors enabling success in a cold climate survival situation. The survival tests in lifeboats and life rafts during SARex 1 and 2 showed the necessity of having trained and competent leadership on board. This issue has perhaps been neglected, compared to the development of equipment to ensure successful evacuation and avoid hypothermia. Some key factors for survival success were (1) Functioning of emergency equipment (2) Organising and teaching the function of various items of safety equipment (3) Operating evacuation means at sea, e.g. watch routines, operating hatches/venting routines and (4) Activities and maintaining mental awareness and motivation. The overall learning from SARex 1 and 2 is that survival is dependent on active participation from the survivors. There is a need for sufficient competence amongst personnel to micro-manage all the details required for survival. The mental factors following fatigue and seasickness, in addition to hypothermia, make leadership and competence in a cold maritime climate essential for survival.

Implementing an uncertainty-based risk conceptualisation in the context of environmental risk assessment, with emphasis on the bias of uncertain assumptions

ABSTRACT Environmental risk assessments are routinely carried out in the Norwegian petroleum industry. As this industry is moving north, towards the Arctic and into areas with differing vulnerabilities and new risk sources compared to the now well-developed areas, previous operational experience and analytical practice may become less relevant. Reflecting the lack of knowledge (i.e. the uncertainty) that exists, and the strength of the available knowledge, then becomes critical. In the present paper, we review and discuss the industry guideline that for a long time has formed the methodological basis for these assessments, focusing on its foundation concerning risk and uncertainty. We conclude that there is a potential for improvement, and to contribute to improving the guideline, we describe how to implement – in the context of environmental risk assessment – a framework for conceptualising risk and its description that is consistent with the new uncertainty-based risk perspective recently adopted by the Petroleum Safety Authority Norway and in the Society for Risk Analysis glossary. The implementation includes a description and exemplification of a method for assessing the bias of uncertain risk assessment assumptions.

Reducing the complexity of environmental approvals: learnings from an industry-wide collaborative effort

This extended abstract uses the reference case project, initiated by National Offshore Petroleum Safety and Environmental Management Authority, now led by National Energy Resources Australia, to delve into the underlying issues in the environmental approvals process and propose the root causes that have influenced this flagship collaborative effort. Collaboration for competitors is inherently difficult. The basis for meaningful collaboration is to find intractable problems that are better solved by a collection of participants with a common purpose. The environmental approvals process has evolved into an intractable problem that is adversely affecting the oil and gas industry’s ability to explore by becoming a barrier to investment and a source of uncertainty in project execution. Successive Australian Petroleum Production & Exploration Association conferences, and oil and gas industry leaders, have frequently promoted the collaboration imperative to the industry. Indeed, there is broad agreement, and many international examples on matters of health, safety and environmental management, that there is no value in competition. Why then is meaningful collaboration so difficult to deliver in an environmental management setting in Australia? This paper explores the successes and failures of the reference case project to illuminate the realities of collaboration in the Australian offshore petroleum industry. The paper shares insights from project leads, participants, decision makers and stakeholders and covers how collaboration can unlock barriers to investment and deliver greater certainty to the oil and gas industry and the Australian community.

Current trends in industry safety performance: applying scrutiny to safety issues associated with ageing facilities

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) has had a direct role in highlighting safety concerns that relate to petroleum companies transferring their interests in late-life production to smaller companies. Existing projects in offshore Australia have generally been operated by medium to large companies. However, there is an emerging trend for companies to transfer their interests in late-life production titles to smaller companies with limited resources. On the basis of NOPSEMA’s experience, such smaller companies have limited means to deal with unexpected maintenance, decommissioning requirements and associated safety measures. This paper will explore the impacts of this trend on maintaining safe operations.

When Is a Risk Assessment Deficient According to an Uncertainty-Based Risk Perspective?

The Petroleum Safety Authority Norway (PSA-N) has recently adopted a new definition of risk: "the consequences of an activity with the associated uncertainty." The PSA-N has also been using "deficient risk assessment" for some time as a basis for assigning nonconformities in audit reports. This creates an opportunity to study the link between risk perspective and risk assessment quality in a regulatory context, and, in the present article, we take a hard look at the term "deficient risk assessment" both normatively and empirically. First, we perform a conceptual analysis of how a risk assessment can be deficient in light of a particular risk perspective consistent with the new PSA-N risk definition. Then, we examine the usages of the term "deficient" in relation to risk assessments in PSA-N audit reports and classify these into a set of categories obtained from the conceptual analysis. At an overall level, we were able to identify on what aspects of the risk assessment the PSA-N is focusing and where deficiencies are being identified in regulatory practice. A key observation is that there is a diversity in how the agency officials approach the risk assessments in audits. Hence, we argue that improving the conceptual clarity of what the authorities characterize as "deficient" in relation to the uncertainty-based risk perspective may contribute to the development of supervisory practices and, eventually, potentially strengthen the learning outcome of the audit reports.

Permitted to be powerful? A comparison of the possibilities to regulate safety in the Norwegian petroleum and maritime industries

This paper examines the link between formal authority and executive power by comparing two supervising authorities in two related industries. It includes an analysis of regulations and statements of the Norwegian Petroleum Safety Authority and the Norwegian Maritime Authority regarding the power to influence industry safety. Safety in both industries relies primarily on functional regulations, whereby the companies develop their own safety measures, which the authorities advise upon and control. A closer look at the two agencies reveals inequalities in power, despite their equal formal safety authority and similar regulatory regimes. The Maritime Authority´s power is impeded by its objective to facilitate maritime safety and to be a preferred administrative body among a large number of globally mobile, low-income companies. This enables the companies to implement only the minimum safety standards. In contrast, the petroleum industry context supports the Petroleum Safety Authority's ability to exercise multiple power dimensions while ensuring that the resourceful companies develop high safety standards. In sum, each industry's regulatory potential seems to be hinged on its characteristics, objectives, and resources that the relevant authority is given. Further, this study shows that successfully enforced self-regulation requires both the regulated and the regulators to have sufficient resources. Successful regulation demands political safety support, especially in global industries with viability problems. In practice, these findings can be viewed as a warning to governments not to take safety measures lightly, even in times of cost cutting.

Review and proposed extension of the APPEA Method for estimating levels of financial assurance

In 2014, the Australian Petroleum Production and Exploration Association (APPEA) published the ‘Method to assist titleholders in estimating appropriate levels of financial assurance for pollution incidents arising from petroleum activities’, referred to as the APPEA Method. The APPEA Method provides a standard approach to quantifying the appropriate level of financial assurance required under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act). The National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA) endorsed the APPEA Method for an initial period of 2 years (until December 2016) with the requirement that APPEA review the method against a broader range of case studies to confirm its validity. In 2017, APPEA applied the APPEA Method to 18 case studies, comparing independently calculated cost estimates with the APPEA Method cost band for each case study. For 17 of the 18 case studies, the independent cost estimate was less than the APPEA Method cost band, confirming the validity of the APPEA Method for those case studies. For one of the case studies involving marine fuel oil, the APPEA Method cost band potentially underestimated the response and clean-up costs. The robustness of the APPEA Method can be improved by amending the hydrocarbon type impact score for fuel oils. Based on the review, NOPSEMA has since endorsed the APPEA Method until September 2018. The APPEA Method is currently endorsed for incidents in which the total volume of hydrocarbon released is <1 000 000 m3 and the total volume of oil ashore is <25 000 m3. Based on an assessment of the response and clean-up costs from three additional case studies that exceeded these limits, amendments to the APPEA Method are proposed that would extend the range of incidents to which it could be applied.

2018 offshore petroleum exploration acreage release

The Australian Government’s 2018 offshore petroleum exploration acreage release was announced by the Commonwealth Minister for Resources and Northern Australia, Senator the Hon Matthew Canavan at the 2018 APPEA conference. This paper provides insights into the processes that the Australian Government has undertaken to select the final release areas and goes into detail on the ongoing petroleum related activities of the Department of Industry, Innovation and Science (the Department). The annual acreage release is a central component of ensuring ongoing, sustainable and responsible investment in Australia’s offshore petroleum sector. The annual acreage release remains the primary mechanism for securing investment in offshore oil and gas exploration in areas of known petroleum potential and new geological frontiers. Continued exploration for oil and gas in Commonwealth waters is a central component of ensuring Australia’s future energy security. Australia’s well established and independent environmental regulator, NOPSEMA (the National Offshore Petroleum Safety and Environmental Management Authority), ensures all petroleum activities in Commonwealth waters are performed safely and in an environmentally responsible manner. Combined with NOPTA’s (National Offshore Petroleum Titles Administrator) leading practice titles administration, Australia remains an attractive investment destination while offering industry leading environmental protections and ensuring safe working conditions industry-wide. Australia offers investors access to data, secure tenure, a stable economic environment and a well-established transparent regulatory system for offshore petroleum activities. A key driver for sustainable activity in Australia is the acceptance of multiple use access to Australia’s marine resources. Recognising this, the department consults with a range of stakeholders on the areas it proposes to release for petroleum exploration. This consultation process provides an opportunity for all interested parties to provide comments and feedback on the areas proposed and in particular highlight how interested parties or the areas might be impacted by exploration activities. The 21 areas in the 2018 offshore petroleum exploration acreage release are located in the offshore areas of Western Australia, South Australia, Victoria and the Ashmore-Cartier Islands. These areas will enable the next wave of investment in the Australian resources sector, and the prospect of new oil, gas and condensate production.

Building a world-class Australian decommissioning industry

Collaboration in decommissioning offshore infrastructure could save both industry and taxpayers billions of dollars and facilitate new industries and exports for Australia, especially in the Asia-Pacific region. At the end of the liquefied natural gas (LNG) plant construction boom, Australia must not miss out on this major new opportunity. The 2017 bid for Commonwealth funding to establish a Decommissioning Offshore Infrastructure Cooperative Research Centre (DOI-CRC) involved more than 30 participants and many other collaborators. High-level commitments were made by Chevron, Woodside, Shell, BHP, ExxonMobil, Quadrant, The University of Western Australia, Curtin University, the University of New South Wales, Deakin University, Australian Maritime College, CSIRO and Australian Institute of Marine Science. A Perth-based DOI-CRC was supported by National Energy Resources Australia, National Offshore Petroleum Safety and Environmental Management Authority and other Australian Government bodies and by the Western Australian Government and its Chief Scientist and agencies but did not receive sufficient support from the CRC Advisory Committee. Meeting decommissioning challenges in the North West Shelf, Bass Strait and the Northern Territory in a timely, robust, scientific, efficient and cost-effective manner that contributes to a sustainable marine environment should draw upon and augment international best practice with local capability and expertise. Good science and innovative engineering are needed to support regulatory approval of options such as ‘rigs to reefs’ and commercial opportunities such as in waste management and expanded fishing and tourism. APPEA and operators wish to maintain DOI-CRC’s momentum and learn from UK research arrangements through funding marine science projects. But we must be much broader if we are to build a sustainable world-class Australian decommissioning industry. In particular, we need to work more closely with state and federal regulators and policymakers and undertake more engineering science research and innovation.

Regulation under uncertainty: The coevolution of industry and regulation

AbstractAs production and design disintegrate and become more collaborative, involving dynamic relations between customers and firms supplying complex subsystems and service, products and production methods become more innovative but also more hazardous. The inadvertent co‐production of latent hazards by independent firms is forcing firms and regulators to address the problem of uncertainty – the inability to anticipate, much less assign a probability to future states of the world – more directly than before. Under uncertainty, neither the regulator nor the regulated firms know what needs to be done. The regulator must induce firms to systematically canvas their practices and identify potential hazards. But recognizing the fallibility of all such efforts, the regulator must further foster the institutionalization of incident or event reporting procedures: systems to register failures in products or production processes that could be precursors to catastrophe; to trace out and correct their root causes; to alert others in similar situations to the potential hazard; and to make certain that countermeasures to ensure the safety of current operations are taken and the design requirements for the next generation of the implicated components or installations are updated accordingly. In this essay we develop these arguments and look closely at changes in the Norwegian offshore oil and gas industry and its regulator, the Petroleum Safety Authority to better understand the coevolution of vertically disintegrated industry and new forms of regulation.

Power, trust and robustness – the politicization of HSE in the Norwegian petroleum regime

AbstractRecent studies of offshore oil and gas industry problematize the role of supervisory bodies with respect to the audit functions, the legal basis of the supervisory bodies, and the role conflicts that arise when handling a function-based regulatory regime. This paper addresses how trust and the execution of power among the Petroleum Safety Authority, Norway, (PSA) and the petroleum industrial actors will affect the robustness of the Norwegian safety regime on the Norwegian continental shelf. This requires a twofold discussion wherein we will use empirical evidence to answer two questions: (1) how a function-based regulatory regime presupposes a balance of power and trust between the actors in play, resulting in a possible politicization of the HSE field; and (2) how politicization of HSE may affect the robustness of the Norwegian petroleum regime. The analysis is based focus group interviews from 2013 and 2014.

Corrosion Processes Relevant to the Integrity of Oil and Gas Facilities1

The Petroleum Safety Authority (PSA) Norway will set the terms for and follow up that players in the Norwegian petroleum industry maintain a high level of health, safety and the environment and emergency preparedness, and thereby contribute to creating the highest possible value for society. Ensuring good material selection process and structural integrity is an important effort where different corrosion forms are of concern and corrosion protection measures of interest, especially in respect to major accidents.PSA addresses corrosion in rules and regulations, requiring “robust material selection”, with reference to international standards and guidelines. The operators addressing and monitoring of the corrosion effects on the process and structural integrity by incident reporting, reviews and site audits are the key tools for PSA in assessing the corrosion challenges and control in the industry.It is of paramount importance to avoid major accidents. The subject of this paper is to address the challenges with material degradation in ageing structures, and the challenges associated with life extension considerations. Corrosion plays a major role in this respect; especially PSA is concerned with corrosion under insulation (CUI). This paper presents some of our work in these areas.

Stakeholder response to abandonment challenges in Australia

Australia’s early efforts in field abandonment have been limited in comparison to more mature basins, but have proven both complex and high cost, with delayed approvals caused by regulatory uncertainty and social concerns. Three underlying challenges impact operators and government and require action on both sides to resolve: (1) increasing size and scale of decommissioning liability, (2) limited understanding of challenges and cost drivers, and (3) uncertainty of regulations and taxes. Abandonment expenditure is expected to accelerate, with most industry companies already active and more companies expected to abandon in the future (e.g. Gippsland, North Carnarvon). Between 2017 and 2030, the overall impact of decommissioning is estimated to be ~US$5.5 billion, with the government taking up to 60% of this cost through taxes and liabilities. Many companies are looking to upgrade abandonment capabilities and take advantage of new technologies and approaches to reduce costs (although they seem to be struggling to bring programs forward in this period of lower prices). Some companies look to sell assets to late-life operators who tend to be smaller with less abandonment experience and capabilities. In an environment where regulations remain unclear and there is a lack of technology, skills and knowledge around abandonment, the industry is facing unprecedented challenges. Through strategic cost reduction, new technology and operating models, we believe costs could be optimised by a further 10–35%. The industry, National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) and government have started engaging to clarify uncertainty in abandonment regulations. This will require an unbiased process that balances value and risk to all stakeholders and avoids the taxpayer bearing increased costs/rebates from inefficiencies.

Allision risk analysis of offshore petroleum installations on the Norwegian Continental Shelf\u2014an empirical study of vessel traffic patterns

The Norwegian Petroleum Safety Authority (PSA) requires offshore petroleum operators on the Norwegian Continental Shelf (NCS) to perform risk assessments of impacts (allisions) between passing ships and offshore installations. These risk assessments provide a basis for defining the allision accidental load that the installation shall be designed for. Even though the risk of allision is small, the potential consequences can be catastrophic. In a worst-case scenario, an allision may result in the total loss of an installation. The ageing industry standard allision risk model, COLLIDE, calculates the risk of impacts between passing (non-field-related) ships and installations based on Automatic Identification System (AIS) data. Both the COLLIDE risk model and a new Bayesian allision risk model currently under development are highly sensitive to variations in vessels’ passing distances, especially close proximity passings. Allision risk assessments are typically performed during the design and development phase of an installation, which means that historical AIS data are used “as is”, disregarding future changes to the traffic pattern when the new installation is placed on a location. This article presents an empirical study of one of the most important variables used to calculate the risk of allision from passing vessels, namely passing distance. The study shows that merchant vessels alter course to achieve a safe passing distance to new surface offshore petroleum installations. This indicates that the results of current allision risk assessments are overly conservative.

Safety regulations: Implications of the new risk perspectives

The current safety regulations for industrial activities are to a large extent functionally oriented and risk-based (informed), expressing what to achieve rather than the means and solutions needed. They are founded on a probability-based perspective on risk, with the use of risk assessment, risk acceptance criteria and tolerability limits. In recent years several risk researchers have argued for the adoption of some new types of risk perspectives which highlight uncertainties rather than probabilities in the way risk is defined, the point being to better reflect the knowledge, and lack of knowledge, dimension of risk. The Norwegian Petroleum Safety Authority has recently implemented such a perspective. The new ISO standard 31000 is based on a similar thinking. In this paper we discuss the implications of these perspectives on safety regulation, using the oil & gas and nuclear industries as illustrations. Several suggestions for how to develop the current safety regulations in line with the ideas of the new risk perspectives are outlined, including some related to the use of risk acceptance criteria (tolerability limits). We also point to potential obstacles and incentives that the larger societal and institutional setting may impose on industry as regards the adoption of the new risk perspectives.