Looking back to move forward – where next for HSE in Oil and Gas? The focus is on leadership

United Kingdom

The first virtual Oil and Gas UK HSE Conference held earlier this year involved a packed agenda. From the industry’s on-going Covid response, through to an analysis of hydro-carbon releases in recent years and on to the energy transition, maintenance backlogs and the ambitious decommissioning agenda ahead.  However, the key emerging theme of the conference was leadership.  The HSE took the opportunity to warn industry that the safety leadership arrangements of select dutyholders are being inspected, starting in quarter 2 of 2021 and continuing into 2022. 

HSE say they are developing internal guidance for this intervention and Inspectors will be seeking engagement at the most senior level: “this means not just with operations managers and technical authorities, but with board members too. We will want to assess the level of engagement and alignment between the boardroom and the control room, as well as other frontline staff.”

The conference was inevitably going to involve detailed reflection on Covid.  Inevitable but also incredible, to recall the speed the industry adapted and worked together to manage the pandemic when it all began.  We heard from more than one speaker during the conference about how perilous the situation was back in April 2020 - “we were very close to losing all helicopter operations if we had not got control measures in place.”  However, thanks to a collaborative response from industry and the mobilisation of the Pandemic Steering Group, a path forward was agreed and a sense of control maintained. 

In the months that followed, a very significant number of barriers to manage the risk of outbreak were implemented, many of those barriers urgently built from scratch, under considerable amounts of pressure. And they remain in place, constantly being reviewed, adapted and re-enforced. As one operator reported, it has come at a huge cost: “We estimate that we will probably have spent about £10 million by the end of 2021 on all of these risk mitigations.”

Looked beyond Covid, as OGUK’s Deirdre Michie said, this “was an opportunity to gather as an industry, to take stock of where we are and to keep learning lessons” and top of the agenda was leadership.

The principles of Process Safety Leadership were developed by an onshore working group following the Buncefield explosion in 2005. In November 2019 the UK oil and gas industry followed suit with an amended agreement and principles agreed by OGUK, STEP Change in Safety, IADC, HSE and OPRED. These eight principles require senior leadership team involvement and competence in safety management, putting process safety leadership at the core of the business to ensure that risks are properly managed and the workforce is engaged and involved. 

The signing of the agreement was described as “a significant milestone for our industry, providing a strong reference point for leaders as they drive continuous improvement in all areas of process safety.” However, HSE now report concerns around safety performance in the industry – “many operators are not sufficiently managing key controls”.  And they believe it is leadership that is going to drive a reduction in major accident risk.  Where do these risks lie? 

Hydro-carbon releases has been a hot topic for a number of years. In 2018, the HSE wrote to all offshore oil and gas production operators, demanding more action be taken to prevent the accidental release of oil and gas in the North Sea.  The HSE’s data now shows a falling trend in minor and significant releases however this has levelled off.  As for the major releases, although much less frequent, the HSE says that occurrences are unpredictable but it is reasonable to still expect that there will be a “handful” for each year.  To give a “major release” some context, each “major” is likely to be larger than the initial event that triggered Piper Alpha. 

Secondly, significant concerns are being raised around safety and environmentally critical equipment (SECE) maintenance backlogs. When the pandemic began, operators were forced to dramatically down-man, many reducing POB by more than half.  One operator reported that 27% fewer hours were worked in 2020 than in 2019 with a 40% reduction in vendors mobilising to site. The focus on the months ahead is to get this backlog under control.  The HSE say that although some operators are taking action, “there is an unclear understanding within some organisations as to the size of the challenge.  We also question whether some senior leaders have sufficient sight of the detail to be able to take appropriately informed decisions.” Meanwhile, OGUK say that workshops begin in May on maintenance backlogs, to address sharing data, good practices and what industry should be doing going forward.

As well as continuing to manage HCRs and the SECE backlog, there is the change in dutyholdership and the new entrants to the market, who HSE say they are focussed on actively engaging with to ensure they understand and implement the UK standards.  There is also the significant and rapid increase in decommissioning activity projected for the months and years ahead.  And of course there are the huge changes that lie ahead as part of the energy transition and the fundamental role the industry has to play in achieving the net zero goals.  As the HSE say “it is imperative that safety is a core part of the technological development – we need to get this right the first time.”

The regulator’s warning to leadership is loud and clear, “HSE will start to inspect select dutyholders process safety leadership arrangements. Interventions will start in quarter 2 of 2021 and run into 2022.  We are looking for engagement at the most senior level and checking that there is a positive culture in place.”  The HSE are expecting to see clear evidence that leadership in oil and gas organisations are familiar with the eight principles and supporting text of the Process Safety Leadership agreement, and “able to demonstrate that they have assessed themselves against them and have an ongoing improvement plan which they regularly review.” 

However, against this backdrop of risk and challenge in the industry, there is cautious optimism.  As Deirdre Michie put it, “there were glimpses of light that shone through the challenging year that was 2020. The events of the last twelve months highlighted that when faced with significant adversity, it is our ability to come together that does ultimately define us.” 

A version of this article was published in last months’ Energy Voice.