The State of Safety in Oil & Gas Industry – 2018

Abridged from DNV Report 05/07/2018

We work safer now than ever before, but: “You can’t take anything we do for granted… “

Recently, a horrible accident happened at a small welding shop behind our offices here in Houston. In this shop worked two or three welders, each one an experienced hand with 20-30 years of welding experience. While one of the welders was heating up a sealed pipe, something went terribly wrong: the pipe exploded.

When the pipe blew, we heard a loud bang and screaming. In the pipe’s sudden explosion, the welder tragically lost his arm just below the elbow. The EMTs arrived by emergency helicopter and took the injured man to the hospital to be treated. Fortunately, the man would live; unfortunately, he might not weld ever again.

Our safety lead at RTS, Tom Anderson, called an Emergency Safety Meeting. “You can’t take anything we do for granted—we work in a dangerous environment,” he said.

The oil and gas industry has become considerably safer over the past two decades according to data from several industry bodies, such as the International Association of Oil & Gas Producers (IOGP), as well as national associations, including those in the UK, Norway, US and Australia.

Despite this, any time you work in a high-risk environment, accidents like the one at the welding shop behind us can occur. So, is enough being done to further improve safety in the oil and gas industry? Have recent market dynamics negatively affected investments in enhancing safety performance? And how aware are industry leaders of safety risks and incidents?

You just can’t be too safe.

Key Issue – Increased Risk Due to Reduced Maintenance Investment

According to the results of DNV GL’s 2018 Industry Outlook research, close to half (46%) of the 813 senior oil and gas professionals surveyed believe that too little has been invested in maintenance and inspection of installations and equipment in recent years. Some 38% said that safety management in the oil and gas industry is effective and does not need to change – 26% disagree, while 31% are neutral. This clearly shows that the industry is divided on the need to change safety practices.

It is also interesting to note that safety performance and investment increased during the strong growth years to 2014, but only risk increased through the challenging years that followed. We have heard where some companies inadvertently increased safety risk because of incentive programs that rewarded maintenance managers for being under budget on maintenance.

Certainly, many in the industry don’t believe that their business has made any compromises on safety. “The risk that we’ve got now, in the recovering market, is that companies forget about the underinvestment 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 underinvestment made in the last few years. There is always a lag between periods of underinvestment and any associated safety impact.”

Downstream Sector Set to Invest More in Safety

In our survey, respondents from the downstream sector currently expect the highest increase in safety spending (41%) this year, compared with other parts of the industry. We also find the downstream sector to be more concerned about safety than other areas of the value chain. For instance, only 12% of respondents overall say that cost cutting over the past three years has increased health and safety risk, but this figure is nearly double (23%) in the downstream sector.

Digital Safety Measures Increasing

Many new investments in safety will be aimed at digitalizing safety monitoring, processes and responses this year. A clear finding from our survey is a significant increase in the proportion of respondents (54%) who intend to boost spending on digitalization in 2018 – up from 39% expected for 2017. Looking further ahead, over the next five years, 76% of respondents say they will invest in digitalization.

Already, even where cutbacks have been widespread, 40% say digitalization has improved safety over the past three years. “The industry has been a quick adopter of new technology and digitalization,” says Mr. Lu Nianming. “Technology has helped us improve safety monitoring systems, data analytics helps us determine which processes, areas and equipment are more accident-prone, while we have wearable equipment to monitor workers in case they faint or fall.”

A key advantage of digitalization in the safety context is that it can allow for the integration and transparent communication of hundreds of key indicators from across an organization. For example, DNV GL’s MyQRA service draws on data from quantitative risk assessment (QRA) reports to create a single source of safety data that can help all stakeholders generate deeper safety insights, better understand important safety signals, make decisions and predict future outcomes.

Senior Executives are More Positive About Safety Than the Field Engineers

Encouragingly, most survey participants (85%) say that safety risks and incidents are reported to senior management, and this figure rises to 91% among those working for companies with an annual revenue over USD500m. But how do perspectives on safety differ between those closer to the boardroom and those closer to the hazards?

Our survey found:

  • Senior management (45%) are more likely than engineers and technical specialists (32%) to say safety management is effective and does not need to change.
  • Nearly twice as many engineers/technical specialists (28%) as business leaders (15%) say that a focus on profitability has had a negative impact on safety performance.
  • Most business leaders (65%) say that senior management understands the impact of cost cutting on safety, while just 50% of engineers and technical specialists say the same.

This indicates that those in the boardroom are, to some degree, more optimistic about safety than those in the field. While further research is needed to understand why this is the case, it suggests that senior leaders in the oil and gas industry could benefit from spending time better understanding the risks faced by those on the front line.

The Right Mindset: Perpetual Improvement

Overall, long-term trends indicate a strong improvement in the safety of oil and gas industry workers over time. The industry appears to be largely continuing this path, increasing investment and modernizing safety procedures and equipment. However, there are reasons to caution the optimism – from lower investment in safety in recent years, to the relatively higher concerns identified in the downstream sector, and by more junior and technical employees.

“Operators cannot afford not to maintain safety – they are aware, of course, that they can’t compromise in this area – I don’t really believe they are allowing maintenance or safety standards to slip,” says Frank Ketelaars, regional manager, Americas at DNV GL – Oil & Gas. “In fact, in many places the pressure to raise standards has increased.”

In Closing

While zero risk is not achievable, much more can be done to stop preventable incidents. “We are in an industry that involves risks,” says Tom Anderson, Operations Director, RTS. “Safety incidents will happen no matter how much we do, but we can work to get the rate of incidents as low as possible. And to do that we must constantly focus on the need for improvements. Safety Matters Most.”

5 IMPERITIVES FOR TRAINING ON BIG RECIPS

Passing down the experience and skills from one generation to another.

The natural gas transmission industry is an excellent example where gathering new skills and leveraging the experience of an older generation is an essential business practice these days for big recip operators. And here is why, as an example, there are 1,782 Cooper Bessemer engines operating in the North American pipeline system, the average startup date for these engines is August 1961… 57 years ago.

Obviously, there is a lot of mature equipment in use today where the operating parameters for these machines have changed since they were first commissioned. These engines form the backbone of our natural gas transmission infrastructure making them. And, they occasionally need attention from engineers, mechanics and field personnel to keep them running at optimal performance levels.

The critical question to station and facility operators: How do operators train a 25-year-old mechanic to safely work on equipment that is over twice their age?

For every company in this space, employee training should be a continuous process; from the initial point of starting with a company, learning new skills is an essential part of personal development. As an employee gains more expertise, their role changes as they become the mentor to the next generation and the cycle continues. Today, the number of mentors available is diminishing rapidly, putting more pressure on operators to invest in training their employees.

Employee Investment

Investing in a comprehensive training program is very important for maintaining a high standard of personnel competence that will benefit customers as well individual members of the team. The cost for equipment down-time is potentially far greater than the cost of training the facility engineers or service technicians.

Big engines like the GE-Cooper Bessemer© pictured here have been driving gas compression for many, many years. The engineers and technicians for these machines need to be problem solvers, prepared and trained to demonstrate troubleshooting skills while safely operating and maintaining mechanical drive engines, controls, generators and ancillary equipment.

The course topics listed below are custom designed for each customer regarding their specific equipment. RTS’ trainers prepare for intermediate to advanced level students. Designed by our experienced training personnel and in-house subject matter experts, these courses provide an excellent means to quickly train your operators and mechanics in established maintenance best practices and operational strategies.

Turbine

Key Course Topics

  • Compressor Selection
  • Compression Process
  • Theory of Operation
  • Compressor Operation
  • Compressor Cylinder Assembly
  • Frame Assemblies and Compressor Configurations
  • Cooling and Lubrication
  • Capacity Control
  • Performance & Design Calculations
  • Case Studies and Compressor Applications

Improving Professional Standards

It is important that throughout their employment, employees are offered both internal and external training in specialized maintenance and operational topics that can help both the employee and the company improve the breadth of their expertise. RTS encourages ‘hands-on’ training applied to as many different specific disciplines as possible. Compression facilities have many specialist activities such as:

  • Plant Management
  • Maintenance
  • Purchasing
  • Engineering
  • Environmental
  • Health & Safety
  • Utilities

Each of these jobs functions are important, but other skills such as communication, ethics and quality management should also be addressed with every trainee.

Capturing Expertise

An employee’s value to the company increases as they gain more experience, not only for the expertise they can deliver, but the knowledge they possess can be shared with less experienced employees. Capturing knowledge and experience within an organization is essential to delivering a high quality and effective service, even when the most qualified personnel succumb to retirement.

Recording details of procedures and engineering analysis in a database ensures accurate customer records as well as retaining essential information that can be used to improve company procedures. In addition, procedures and manuals for performing various engineering tasks will also be used to train up-coming employees. However, the most valuable projects, in terms of new information, are those that pose a unique challenge or require an innovative solution. Gathering this data and creating a forum in which it can be passed on to others working in a similar field is very important in improving the efficiency of future projects.

Improving Technical Knowledge

Training can be tailored to suit the needs of individual customers and their equipment, allowing them to make cost-effective investments in their staff. As one of the leading service companies for reciprocating engines and compressors, RTS can provide training courses aimed at inhouse mechanics and field techs who are involved in the daily operation and maintenance of reciprocating equipment.

Reciptech Training

The aim of these courses is to enhance the competencies of the trainees, enabling them to improve productivity and reduce downtime. Depending on the roles of the trainees, courses can look at theoretical principles along with the design and operational characteristics of reciprocating equipment. This can lead to a better understanding of how to specify a machine correctly, which in turn will ensure the equipment is operating efficiently and reliably. Training on the most suitable predictive maintenance techniques can provide simple techniques for reducing downtime and maximizing productivity.

Potential Curricula

  • Maintenance Best Practices
  • Changes in maintenance cycles
  • Combustion
  • Operational considerations for operating low speed integrals on shale gas.
  • Engine balancing basics
  • Fugitive gas emissions reduction options
  • Life extension options for mature engines being pressed back into service
  • Bearing Maintenance
  • Block and crank repair techniques
  • Controls operation
  • Compressor Valve operation and maintenance (Hands on)
  • 4 and 2 Stroke Engine Operation and Maintenance overview
  • Compressor Rod Run Out

Sharing The Wealth

RTS has the reciprocating and is in position to train both engineers and internal staff. Ultimately, a company that believes in supporting its staff in improving their knowledge will benefit from a more skilled workforce and a more productive working environment.