Annual Report 2021 – Production, Plans and Pandemic

Source: www.gulfoilandgas.com 5/2/2022, Location: Europe

The year 2021 was a time when gas prices reached new heights, the Norwegian continental shelf (NCS) produced at full pitch and government export revenues from petroleum set a new record.

Temporary tax arrangements ensured full speed ahead in the development of new fields, with several tens of development plans likely to be submitted to the authorities during 2022.

The signal from the government is that the industry will be developed, not wound up. At the same time, clear expectations exist in both political circles and society as a whole with regard to climate, sustainability and energy transition.

Many oil companies have adopted change strategies and are moving into new areas. They are committing to renewable energy, low-emission solutions and climate measures, such as increased use of electricity and carbon capture and storage.

The year was also one of pandemic. Still. Infection controls and testing have become commonplace on offshore facilities and at petroleum plants. It is our impression that infection control is being taken with the utmost seriousness, and that infections are being well handled while taking care of safety. Safety must be taken care of – in every phase and under all conditions. An important precondition for good safety is adequate manning with the right competence.

Another is good understanding of risk and the ability to apply measures in the right place at the right time. An important aid for assessing measures at industry level is the survey of trends in risk level in the petroleum activity (RNNP).

A unique tool
The 20th anniversary of the first RNNP report could be celebrated in 2021. Since 2001, the Safety Forum has been the key arena where the survey results are presented and discussed.

Based on the RNNP findings, a number of projects and activities have been pursued on behalf of the forum. This work has been important in giving the parties a unified picture of developments with a number of factors which affect risk in the industry.

The pilot report unveiled two decades ago was nothing less than a unique tool. Nothing similar probably exists either in Norway or internationally, regardless of industry. Safety Forum members could now drop time-consuming discussions on which way trends were moving, and concentrate on the facts revealed by the report.

Since 2001, the RNNP has been further developed and now includes data from many more areas than before. For us as a supervisory authority, this tool provides an important basis for setting priorities. The signals we have given the industry on areas requiring improvement have often had their basis in RNNP figures.

After a few initial years when the results fluctuated a good deal, the overall picture is that trends in risk level are moving by and large in a positive direction.

The total indicator for major accidents on the NCS also shows a generally positive trend. At the onshore plants, the number of near-miss incidents with major accident potential has fluctuated around a relatively stable average. In recent years, however, we have seen a worrying negative trend for unignited hydrocarbon leaks at these plants.

We will be devoting particular attention to this in the time to come. Where the questionnaire survey is concerned, we have seen a negative shift – particularly offshore – in several areas from 2019 to 2021.

Overall, the results show that we have a regime which functions and an industry which gets to grips with the challenges. At the same time, vigorous new efforts are needed in certain areas.

Side by side with the suppliers
“Side by side with the suppliers” was our main issue in 2021. Throughout the year, we called attention to the important role played by supplier expertise, technology and management systems for the level of safety in the industry.

We have urged the oil companies to help preserve strong and viable suppliers, and to meet their overall responsibility for safety in their collaboration with them.

The main issue generated both engagement and debate. Most operator companies are striving to achieve good interaction with their suppliers. Nevertheless, different operating parameters are created by contracts and their application in day-to-day operations. This is significant for supplier opportunities to execute assignments safely and with a good working environment for their employees.

“Capacity and competence – the key to safety” is our main issue for 2022. A clear thread connects this to last year’s issue. Viable suppliers are one of several preconditions for ensuring both appropriate and adequate capacity and competence in coming years.

Safety and the working environment
We have supervisory responsibility for both major accident and working environment risk. Overall, we work with a whole range of important subjects within each of these areas and across them.

We would call particular attention to the subject of ICT security, which has been a particular commitment for us over a number of years. That includes encouraging a number of studies and research activities directed at robustness in industrial ICT systems, and helping to increase industry knowledge in this area. The topicality of this subject has been highlighted not least by the current war in Ukraine and the position in Europe.

As in the year before, we devoted particular attention in 2021 to the consequences of the pandemic for safety and the working environment in the industry.

We highlighted two particularly challenging areas – the psychosocial working environment when social life is restricted during both work and leisure periods, and maintenance when activities have been reduced to a minimum at times. These are issues in our audits, and we are maintaining a close dialogue with the companies on both.

Our work has also been affected by the pandemic. Most of our staff have worked from home for parts of the year and, like everyone else in Norway, we have adapted to varying rules and routines. Much travel was postponed or cancelled.

Over the year, we nevertheless prioritised physical audits on facilities and at plants. At a time when the companies also had to adapt their supervisory activities to the infection controls, it is particularly important that the supervisory authorities are present.

Inter-party collaboration
The tripartite Safety Forum and Regulatory Forum arenas were in activity throughout 2021, with good and important discussions in both. The Safety Forum’s annual conference was held in Stavanger during September. We looked back there at the work done by the forum over 21 years.

Much is also functioning well at company level. Unfortunately, however, challenges remain. Over time, for example, we have seen that safety delegates become involved in issues too late, receive insufficient training and are given too little time for their work. Inter-party collaboration and employee participation are crucial to working well on safety, and we continue to give this priority in our supervision.

Strong and clear
Before 2019, the HSE regime and HSE conditions in the petroleum sector were subject to a number of major reviews – including a 2018 White Paper on health, safety and the working environment in the industry.

Several of these assessment have highlighted the need for a strong and clear supervisory authority, and for changes to supervisory practice on the use of instruments and enforcement powers. It has also been emphasised throughout that the regulatory regime is well functioning and a precondition for the level of HSE we have today.

We have been pursuing development effort since 2018 which has included looking at the use of instruments and enforcement powers. This has started from the current regulatory regime, and progress has been sought within the latitude provided by the regime and its preconditions.

We have improved our systematic monitoring of nonconformities, while making it clear that the companies themselves must put their own house in order. We have also lowered the bar for imposing orders, so that more than ever before were issued in 2021.

Feedback from both management and employees in the companies is that they regard us as both strong and clear. For tripartite collaboration to be firmly rooted, each party must fulfil their role. The petroleum industry needs strong and clear supervisory authority.

New areas such as offshore renewable energy production and carbon transport and storage also need a strong and clear authority – but adapted to the risk conditions found in the various sectors.

We have unique knowledge and experience of regulating safety in the petroleum sector. Our expertise is supervising industrial energy activities – offshore and on land. We are now taking this into new areas.

Safety for 50 years
The 50th anniversary of the Norwegian Petroleum Directorate (NPD) falls in 2022. Its safety division was the forerunner of the PSA, which was established in 2004.

We have played the role of guard/guide dog, supervisor and adviser, for half a century. We are proud of that role. We will also continue to work for safety and the working environment throughout our area of responsibility in coming years.

Capacity and competence are the key to safety
As this is being written, Norwegian society is in the process of opening up, even though the pandemic is still clearly present. And Europe is beset by unrest and war. We are in a time of great uncertainty.

At the same time, we face a period with a high level of activity in the petroleum sector. New projects and the transition to new energy forms must be handled while existing fields produce flat out. Ageing installations need to be maintained, while automation and new modes of operation are being introduced.

And safety must be maintained – in every phase, under all conditions.

Thanks to temporary tax provisions, 2022 will witness a record number of development plans. Our message is that all projects must be planned well, and that decisions must be taken on the basis of thoroughly prepared documentation. Many of our audits this year will deal with these projects.

Capacity and competence are the key to safety. That is our main issue for 2022. Safety in an ever more complex industry can only be protected through a competent workforce and good manning. That applies not least when the level of activity is high.

During the year, we will call for reflection and discussion on measures to secure adequate and competent manning in all parts of the industry.

Management’s responsibility
Management at all levels in the companies has a particular responsibility for safety. Building a good safety culture calls for managers who take the lead and show the way. What managers require gets attention. We will continue to ask how managers themselves follow up in-house – whether procedures are complied with, whether they are good enough, whether safety actually has top priority in the final analysis, and whether the measures planned are actually implemented.

Inter-party collaboration and employee participation are particularly important at a time of big change. When changes occur, companies restructure or new technology is developed, involving workers early in the processes is crucial. They must participate in both development and implementation of new solutions. That ensures the best result, and not least the best entrenchment.

We have systematically checked over a number of years whether our earlier orders have been complied with, and that nonconformities are corrected. We now expect the companies to have put their own house in order.

We are conducting an audit campaign in 2022 aimed specifically at the companies’ own follow-up of nonconformities identified by the authorities. And we are continuing to check earlier nonconformities in all relevant audits. Where deficiencies are found, good grounds exist to give notice of an order.

Learning from incidents
We are launching a wide-ranging project in 2022 on follow-up of serious incidents. The aim is that both we and the industry get better at preventing new incidents and contribute to a continuous improvement in the level of safety.

When investigating an incident, securing the essential information is important. Both we and the companies have good experience of conducting investigations, but we see that room for improvement exists. Investigation methodology is therefore one of the areas we are getting to grips with in this commitment.

Others include analysis and trending of incident data and methods for the best possible learning – learning which leads to change. We will work with the industry to achieve this.

Safety in new areas
The oil industry is changing. Technology and expertise from the petroleum sector are being adopted in new ways. Many companies in this industry are undergoing structural adaptations in order to become integrated energy businesses which embrace renewables as well. These changes also affect us.

Our expertise is supervising industrial energy activities offshore and at plants on land. We are now taking this expertise into new areas, such as offshore wind power and carbon capture and storage. At the same time, we are paying close attention to the industry’s restructuring work in order to assure ourselves that the priorities being set do not compromise on safety.

It is important that we take experience and relevant lessons from the oil and gas industry with us into the future. Safety work also occupies a key place here.

We are working in part through the Regulatory Forum to establish a common starting point for regulatory development to cover offshore renewable energy production. It is important that all the parties get involved in this work, so that we end up with a good regime and regulations in this area as well.

When uncertainty is the norm
Over the past two years, people in Norway have accustomed themselves to living with volatility, anxiety and constant changes. Uncertainty has become the norm.

That is also the position in the industry we supervise. Political conditions will vary, oil prices will vary and jobs will vary, and the demands for restructuring and development will only increase in the time to come.

In all this, we must take care of safety for those working in the industry and for the environment. In every phase, under all conditions. We are united on this.


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