DNV GL Voices Concern Over Oil and Gas Safety Lag

safety helmets

By MarEx 2018-05-02 20:59:59

Close to half (46 percent) of senior oil and gas professionals believe that there has been under-investment in inspection and maintenance of infrastructure and equipment in recent years, according to a new report published by DNV GL. However, only a quarter of the 813 people surveyed said that they expect to increase spending on safety in 2018.

Data from the U.S. Bureau of Labor Statistics show that the rate of fatalities in the U.S. oil and gas extraction industry decreased significantly between 2003 and 2013, even though the number of extraction workers doubled. So, although the number of fatalities increased with the growth in activity, the frequency of incidents per 100,000 workers fell.

Similarly, in the U.K., industry statistics published by Oil & Gas UK show that, while maintenance backlog in the U.K. offshore sector rose by 15 percent in 2016, there is no clear link between the oil price and asset integrity issues. In fact, the data shows that backlog was rising even when the oil price was high.

At the same time, there have been indications in other regions that cost cutting has led to an increase in risk. In late 2016 in Norway, for example, the Petroleum Safety Authority Norway pointed to “several serious incidents” and launched a full review into safety in the industry, citing the fact that parties involved “disagree on whether cost reductions are putting pressure on safety.”

Among DNV GL survey respondents 49 percent do not think that the focus on profitability in recent years has negatively impacted on safety performance, while 20 percent feel that it has. It is arguably too early to tell, says DNV GL. The effects of cost cutting on safety can take time to have an impact.

“The risk that we've got now, in the recovering market, is that companies can forget about the under-investment that they made,” says Graham Bennett, vice president, DNV GL – Oil & Gas. “Ramping up operations to take new opportunities can result in a worrying picture if companies don't recognize the under-investment made in the last few years. There is always a lag between periods of under-investment and any associated safety impact.”

The report affirms expectations for digital technologies to bridge the gap between long-term cost efficiency and enhanced safety in projects and operations. Already, even where cutbacks have been widespread, 40 percent say digitalization has improved safety over the past three years. 

The appeal of digitalization is often how it compensates for human error, identified as the main cause of 60 percent to 80 percent of industrial accidents, and how well digital systems can manage and spread information. For example, in 2016 a report from BP suggested that there was no “standard and global approach to managing engineering information and data throughout the life of an asset” at the organization, and that this leads to “a consistent lack of clear accountability and responsibility for managing critical engineering information.”

As the industry adopts a growing portfolio of new technologies with an increasing digital dimension, it also faces the significant task of demonstrating that these are as safe as their mechanical and hydraulic counterparts. “Where the oil and gas industry has traditionally relied on mechanical and hydraulic safety barriers, it may increasingly rely on more efficient and cost-effective electric solutions and digital barriers in the future,” says Frank Børre Pedersen, program director, DNV GL Group Technology and Research.

“We see all-electric solutions attracting substantial interest and opportunities relating to using digitalization to simplify process control and process subsea safety. However, existing standards and guidelines, derived from best practices for traditional technologies and operational concepts, may not be relevant for demonstrating the safety of such new concepts.”