Cost Effective Outcomes from

FPSO Safety Case
By:
Brendan Fitzgerald, Managing Director, Vanguard Solutions
Joe Patrick, Managing Director, Hunter Oil
Paul Breen, Technical Director, Vanguard Solutions
FPSO Congress September 2010

Cost Effective Outcomes from FPSO Safety
Case







Brief History
What is a Safety Case?
The Management of Safety
Why do we need a Safety Case?
Benefits of doing a Safety Case
Safety Cases – Lessons Learned?
A suggested Blue Print for success
Conclusions

Cost Effective Outcomes from FPSO
Safety Case

2

FPSO Congress 2010 Singapore

A Brief History
Safety Cases are required in various
industries in Europe and Australasia.
• European Union Major Hazard Facilities –
Seveso 1 (1982) & Seveso 2 (1996)
• UK Railways 2000 & amended 2003
• European Union Railway Safety Directive
(2004/49/EC)
• Australia Major Hazard Facilities National
Standard 1996 & Updated 2002
Cost Effective Outcomes from FPSO
Safety Case

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FPSO Congress 2010 Singapore

A Brief History
OFFSHORE SAFETY CASE REQUIREMENTS
• UK Offshore Installations (Safety Case)
Regulations 1992 & Updated 2005
• Australia Offshore Facilities 1992, 1996, 2005
& 2009
• New Zealand Offshore Facilities 1993 & 1999
• Timor Leste Offshore Facilities - 2003
Cost Effective Outcomes from FPSO
Safety Case

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FPSO Congress 2010 Singapore

A Brief History
OTHER AREAS OF SAFETY CASE USE
• UK Defence Forces
• Australian Defence Forces
• Some oil companies apply Safety Case
worldwide, e.g. BHP, Shell and Woodside.

Cost Effective Outcomes from FPSO
Safety Case

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FPSO Congress 2010 Singapore

A Brief History “Safety Case still represents best means of managing major hazards offshore” • International Review panel – 2008 • Bills & Agostini – 2009 Cost Effective Outcomes from FPSO Safety Case 6 FPSO Congress 2010 Singapore .

What is a Safety Case? “A consistent and coherent set of arguments used to justify the safety of a system at all stages in its lifecycle” • H. Conlin et al. Trans IChemE. July 2004 Cost Effective Outcomes from FPSO Safety Case 7 FPSO Congress 2010 Singapore . Part B.

• Describes how the risks are controlled. http://www.nopsa.au/safety.asp under the heading "Safety Case Approach" Cost Effective Outcomes from FPSO Safety Case 8 FPSO Congress 2010 Singapore .What is a Safety Case? A safety case is a document produced by the operator of a facility which: • Identifies the hazards and risks.gov. and • Describes the safety management system in place to ensure the controls are effectively and consistently applied.

not just a document • It introduces a need for an audit trail with documented decisions • Brings a greater awareness of hazards and their management • It always involves a culture change Cost Effective Outcomes from FPSO Safety Case 9 FPSO Congress 2010 Singapore .What is a Safety Case? Safety case is a process.

W.The Management of Safety H. Heinrich Industrial Accident Prevention: A Scientific Approach. 1931 Cost Effective Outcomes from FPSO Safety Case 10 FPSO Congress 2010 Singapore .

The Management of Safety Commonly used modification from Heinrich Cost Effective Outcomes from FPSO Safety Case 11 FPSO Congress 2010 Singapore .

2010 APPEA Safety Conference Cost Effective Outcomes from FPSO Safety Case 12 FPSO Congress 2010 Singapore .The Management of Safety Fatal Fall Rig Explodes Fall from Stairs Serious Leak We We need need another another model! model! Not holding the handrail Jop Groeneweg. Leiden University.

The Management of Safety Rig Explodes Fatal Fall Serious Leak Fall from Stairs No Handrail Minor Leak Personal Safety Process Safety Jop Groeneweg. 2010 APPEA Safety Conference Cost Effective Outcomes from FPSO Safety Case 13 FPSO Congress 2010 Singapore . Leiden University.

Process Safety Personal Safety Cost Effective Outcomes from FPSO Safety Case 14 FPSO Congress 2010 Singapore ..The Management of Safety These are two different processes.. with different drivers. So management systems must recognise they are two different processes .

Cost Effective Outcomes from FPSO Safety Case 15 FPSO Congress 2010 Singapore .The Management of Safety Different elements of safety management systems address personal safety from those that address process safety So it is not enough to say that SMS addresses safety.

Rig Explodes No Handrail Serious Leak Minor Leak Personal Safety Cost Effective Outcomes from FPSO Safety Case Process Safety 16 FPSO Congress 2010 Singapore . trips and falls … Fatal Fall Fall from Stairs … with reducing attention paid to maintenance of technical integrity and major hazard controls.The Management of Safety Recent observations suggest that industry focus is on slips.

BP and other companies tend to measure safety and environmental compliance on a day-to-day.” Andrew Hopkins. to the point of basing executive bonuses on those metrics.The Management of Safety “But the more profound problem is a failure to put risks in perspective. Energy Bulletin. But even if worker accident rates fall to zero. checklist basis. 10 May 2010 Cost Effective Outcomes from FPSO Safety Case 17 FPSO Congress 2010 Singapore . that may reveal nothing about the risk of a major disaster.

Widely accepted failings of prescription include: • Quickly out of date as industry changes • Industry only performs to minimum – no incentive to exceed Cost Effective Outcomes from FPSO Safety Case 18 FPSO Congress 2010 Singapore .The Management of Safety Traditional means of the management of safety has been prescriptive in nature.

not on managing the hazard Cost Effective Outcomes from FPSO Safety Case 19 FPSO Congress 2010 Singapore .The Management of Safety Widely accepted failings of prescription include: • Industry lets regulator work out what is needed and comply verbatim – so operator fails to identify or understand the hazards and risks they are supposed to manage – controls may be inadequate or inappropriate • Prescriptive regulations become a hurdle to be cleared. with the focus on the hurdle.

Lord Cullen criticised attitude to management of risk from a high pressure gas fire: The witnesses’ reliance on merely a qualitative opinion showed. Cost Effective Outcomes from FPSO Safety Case 20 FPSO Congress 2010 Singapore . a dangerously superficial approach to a major hazard.The Management of Safety Piper Alpha Inquiry report. … … I consider that management were remiss in not enquiring further into the risks of a rupture of one of the gas risers and in such an event the risk of structural damage and injury to personnel. in my view.

Why do we need a Safety Case? Do we really understand our facilities? Here are some you may recognise! Cost Effective Outcomes from FPSO Safety Case 21 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? 27 July 2005. Mumbai High North – 22 fatalities Cost Effective Outcomes from FPSO Safety Case 22 FPSO Congress 2010 Singapore .

Montara – total loss of WHP and rig .Why do we need a Safety Case? August to November 2009.unknown environmental impact Cost Effective Outcomes from FPSO Safety Case 23 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? 20 April 2010 – Deepwater Horizon Macondo Blowout – 11 fatalities. massive & unknown environmental impact Cost Effective Outcomes from FPSO Safety Case 24 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? That’s all well and good – but what has that got to do with FPSOs? Cost Effective Outcomes from FPSO Safety Case 25 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? 8 August 2010. MT Gagasan Merak FSO – Cargo tank explosion – 4 injured Cost Effective Outcomes from FPSO Safety Case 26 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? 2009. Formosaproduct Brick Product Tanker – Ship Collision Cost Effective Outcomes from FPSO Safety Case 27 FPSO Congress 2010 Singapore .

Tanker Elli breaks back in ballasting error for tank entry Cost Effective Outcomes from FPSO Safety Case 28 FPSO Congress 2010 Singapore .Why do we need a Safety Case? 28 August 2009.

do they? Cost Effective Outcomes from FPSO Safety Case 29 FPSO Congress 2010 Singapore .Why do we need a Safety Case? Ship collisions don’t happen with offshore facilities.

Why do we need a Safety Case? 11 August 2010 – Kodeco Platform – unknown vessel collision Cost Effective Outcomes from FPSO Safety Case 30 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? 8 June 2009 – Big Orange XVIII collision with Ekofisk Complex Cost Effective Outcomes from FPSO Safety Case 31 FPSO Congress 2010 Singapore .

right? Cost Effective Outcomes from FPSO Safety Case 32 FPSO Congress 2010 Singapore .Why do we need a Safety Case? – You’ve carefully thought out all the angles – You’ve done it a thousand times – It comes naturally to you – You know what you’re doing. it’s what you’ve been trained to do your whole life. – Nothing could possibly go wrong.

Think Again Cost Effective Outcomes from FPSO Safety Case 33 FPSO Congress 2010 Singapore .

Why do we need a Safety Case? • How do you demonstrate adequacy of safety management to Company Board otherwise? • Demands of duty of care – how do you demonstrate adequacy without a Safety Case? • ISO 9000 process & ISO 31000 elements link directly to the Safety Case process • So good quality management requires a Safety Case!! Cost Effective Outcomes from FPSO Safety Case 34 FPSO Congress 2010 Singapore .

BP. Union Carbide) • How do you demonstrate safety in design without Safety Case? – Are standards / Class enough? • So if just apply codes and standards.Why do we need a Safety Case? • International companies – consistency of application across assets ( e. Shell.g. what other hazards/ risk mitigation measures would be missed? • How else could hazards and the SMS be linked? • HAZOP is an integrity assurance process – not hazard identification!! Cost Effective Outcomes from FPSO Safety Case 35 FPSO Congress 2010 Singapore .

Honeywell User Group Summit. MIT. June 2007 Cost Effective Outcomes from FPSO Safety Case 36 FPSO Congress 2010 Singapore .Safety Cases – lessons learned? The Enemies of Safety are : Complacency Arrogance Ignorance Professor Nancy Leveson. “Future Trends in Process Safety”.

Safety Cases – lessons learned? Factors in Complacency • Discounting risk • Over-relying on redundancy • Unrealistic risk assessment • Ignoring low-probability. high-consequence events • Assuming risk decreases over time • Ignoring warning signs Professor Nancy Leveson. Honeywell User Group Summit. “Future Trends in Process Safety”. MIT. June 2007 Reflecting on recent major accident events does any of the above sound familiar ? Cost Effective Outcomes from FPSO Safety Case 37 FPSO Congress 2010 Singapore .

impact and tradeoffs between: • • • • Schedule Cost Performance Safety Do we effectively put this into practice ? Professor Nancy Leveson.Safety Cases – lessons learned? Managing Tradeoffs Good risk management requires understanding the outcomes. implications. June 2007 Cost Effective Outcomes from FPSO Safety Case 38 FPSO Congress 2010 Singapore . “Future Trends in Process Safety”. Honeywell User Group Summit. MIT.

4 Overly aggressive schedule enforcement has little effect on completion time (<2%) & cost. June 2007 Cost Effective Outcomes from FPSO Safety Case 39 FPSO Congress 2010 Singapore .8 0.6 Priority of safety activities has a large positive impact. “Future Trends in Process Safety”.Example: Schedule Pressure and Safety Priority 1.2 Schedule Pressure 1 High 0. MIT. but has a large negative impact on safety 1.4 0.2 0 1. including a positive cost impact (less rework) 0.4 1.8 0.2 0 Low High Safety Priority Professor Nancy Leveson.4 0.6 0.2 1 Low 0.

Safety Cases – lessons learned? Cost Impact of Safety Case To influence Project Costs Cost of implementing Safety Case hardware changes Concept Detailed Design Cost Effective Outcomes from FPSO Safety Case Construction 40 Generic impact of late change on Project cost with time Operations FPSO Congress 2010 Singapore .

Safety Cases – lessons learned? • Blowdown philosophy set early. managing the detail and overlooking the big picture (example is OHS vs MAE risk) Cost Effective Outcomes from FPSO Safety Case 41 FPSO Congress 2010 Singapore . with late application of safety case – identified problem resulting in expensive change • People / competence / skills gaps – a major ongoing issue .with an ageing workforce how do we effectively manage current and future projects and operations? • Managing the wrong thing – i.e.

Safety Cases – lessons learned? • The Myth of major shutdown / In-Water Surveys with no time off riser – how many projects achieve it? • But we build this into the design basis and hence into the risk profile…. Cost Effective Outcomes from FPSO Safety Case 42 FPSO Congress 2010 Singapore .

they generally lose money if production stops – is there another way? • The Safety Case can and should give the FPSO Contractor a route to cost recovery! Cost Effective Outcomes from FPSO Safety Case 43 FPSO Congress 2010 Singapore .Safety Cases – lessons learned? Oil Company and FPSO Contractor Relationships • Typical contract arrangement gives minimal incentives for overall safe performance. but generally penalties for being unsafe! • The FPSO Contractor is contractually incentivized to keep producing .

Safety Cases – lessons learned? Oil Company and FPSO Contractor Relationships • Lump sum / low cost Safety Case v quality and understanding • The outcomes of the Safety Case are not known till well after the contract is signed – is lump sum a fair and realistic contract strategy? Cost Effective Outcomes from FPSO Safety Case 44 FPSO Congress 2010 Singapore .

Cost Effective Outcomes from FPSO Safety Case 45 FPSO Congress 2010 Singapore .Safety Cases – lessons learned? Some problems with Safety Case implementation Quote from Conlin et al: Often the Safety Case is produced by following a prescriptive set of instructions which stifle true thought about whether defined activities are as safe as they need to be because it is easier to write a Safety Case that way and then to audit the Safety Case against the internal procedure.

Safety Cases – lessons learned? Some problems with Safety Case implementation And further from Conlin et al: Because of the practice of describing the organisation that is in place rather than debating what options have been considered. the fact that safety science (engineering?) has had insufficient input into the design is not being revealed. Cost Effective Outcomes from FPSO Safety Case 46 FPSO Congress 2010 Singapore .

Just producing a book. the safety case process must be allowed to take its course. production line exercises in documentation. to examine critically and interact with the design and the organisation. ticking a box. To be effective.Safety Cases – lessons learned? Some problems with Safety Case implementation Safety Cases are not off-the-shelf. does not meet the intent! Cost Effective Outcomes from FPSO Safety Case 47 FPSO Congress 2010 Singapore .

but only specify something with wheels and an engine. don’t complain when a second hand Toyota needing maintenance work appears on the driveway! Cost Effective Outcomes from FPSO Safety Case 48 FPSO Congress 2010 Singapore .Safety Cases – lessons learned? Some problems with Safety Case implementation If you want a Ferrari.

A suggested Blue Print for Success • Management leadership – must have this to work • Apply realistic schedule and budget • Develop and apply safety design philosophy • Do it early! • Embed experienced Safety Engineer in engineering design team as interface to Formal Safety Assessment team • Apply risk based decision-making process • Create an audit trail Cost Effective Outcomes from FPSO Safety Case 49 FPSO Congress 2010 Singapore .

A suggested Blue Print for Success • Safety Engineering will provide linkage across the interfaces • Marine • Production • Mooring • Subsea • Sub-surface • Expect & support this! Cost Effective Outcomes from FPSO Safety Case 50 FPSO Congress 2010 Singapore .

A suggested Blue Print for Success For Operations: • Operating envelope / management of risk – i. • How do you know you are operating outside the envelope if you have not defined it or passed the knowledge on to operations! Cost Effective Outcomes from FPSO Safety Case 51 FPSO Congress 2010 Singapore . the Safety Case should define the operating envelope and hence allows you to understand the area in which your operational risk controls need to be applied and are designed to work.e.

Cost Effective Outcomes from FPSO Safety Case 52 FPSO Congress 2010 Singapore . • Basis for SMS – i.e. whether via hardware or the SMS • Clarify and manage separation of OHS risk (personal safety) and MAE risk (process safety) – the two triangles rather than one. the operations and the hazard and risk controls. the hazards identified. the Safety Case will provide a means of linking the facility.Benefits of Doing a Safety Case? • Manage carry forward of residual risk – the Safety Case provides a means of doing this in a way that allows the residual risk to be actively managed rather than forgotten.

risk & cost viewpoint) • Without Safety Case. safety. development and risk management deliverables • Do it early enough and you should get optimum design (from safety.Benefits of Doing a Safety Case? • Identifies low probability / high consequence events and assists to understand and manage them • Provides an Audit Trail for: quality. would you ever have a blast wall? Cost Effective Outcomes from FPSO Safety Case 53 FPSO Congress 2010 Singapore .

always positive Cost Effective Outcomes from FPSO Safety Case 54 FPSO Congress 2010 Singapore . to safety critical elements through performance standards • So the Safety Case should allow you to efficiently focus resources – i.e. manage the right thing! • Culture change – always occurs with safety case process.Benefits of Doing a Safety Case? • Enable targeted maintenance – i.e.

The Safety Case is not a silver bullet cure for all ills. This effort is well worthwhile as it can deliver: – – – Cost benefits in project performance Increased performance in operations. a corporate memory!) Cost Effective Outcomes from FPSO Safety Case 55 FPSO Congress 2010 Singapore . equipment and resources Improved communication of hazard management for the lifetime of the facility (i. due to greater reliability in plant. 2.Conclusions 1. Effective development and implementation of the Safety Case process requires significant effort by any organisation. the best means available for effective management of major hazard risks and process safety.e. however. It does offer.

Safety Case provides a competent and auditable process for senior management to demonstrate management of development. There is a trend that our industry may be focussing on occupational HSE with diminished attention to management of residual and process risk. project and operational risk to satisfy corporate requirements 4. Cost Effective Outcomes from FPSO Safety Case 56 FPSO Congress 2010 Singapore .Conclusions 3. Safety Case provides management focus to overcome this.

Quality and quantity of risk assessment combined with industry shortages of skilled personnel is a concerning issue going forward 6. With ongoing cost.Conclusions 5. schedule and implementation pressures there are better ways to contract and manage the preparation of Safety Cases. Cost Effective Outcomes from FPSO Safety Case 57 FPSO Congress 2010 Singapore .

made under the Health and Safety in Employment Act 1992. Health and Safety in Employment (Petroleum Exploration and Extraction) Regulations 1999. Department of Labour. European Community. Petroleum Inspectorate. Statutory Instrument 2005 No. 1982. Ministry of Commerce. Cost Effective Outcomes from FPSO Safety Case 58 FPSO Congress 2010 Singapore . Directive 82/501/EEC on the control of industrial major accident hazards involving dangerous goods. New Zealand. Dili. National Occupational Health and Safety Commission declared under s. Petroleum (Submerged Lands) Act 1967. Timor Sea Designated Authority for the Joint Petroleum Development Area. Control of Major Hazard Facilities – National Standard NOHSC:1014(2002). Statutory Rules 1996 No. New Zealand. Department of Labour. Commonwealth of Australia. 1982. Commonwealth of Australia.References/1 Seveso I. Commonwealth of Australia Interim Regulations issued under Article 37 of the Interim Petroleum Mining Code. 1996. The Offshore Installations (Safety Case) Regulations 2005. New Zealand. Seveso II. Draft Petroleum Regulations 1993. Specific Requirements as to Petroleum Exploration and Exploitation in the Joint Petroleum Development Area. Schedule of Specific Requirements as to Offshore Petroleum Exploration and Production 1992. 3117. Petroleum (Submerged Lands) (Management of Safety on Offshore Facilities) Regulations 1996. Council Directive 96/82/EC of 9 December 1996 on the control of major-accident hazards involving dangerous substances. Commonwealth of Australia. 298 as amended made under the Petroleum (Submerged Lands) Act 1967. ISBN 0 11 073610 9. Timor Leste. London: HMSO.38(1) of the National Occupational Health and Safety Commission Act 1985. Offshore Petroleum (Safety) Regulations 2009 made under Offshore Petroleum and Greenhouse Gas Storage Act 2006. European Economic Community. made under the Health and Safety in Employment Act 1992.

Offshore Petroleum Safety Regulation – Better practice and the effectiveness of the National Offshore Petroleum Safety Authority. Future Arrangements for the Regulation of Offshore Petroleum Safety – Australian Offshore Petroleum Safety Case Review. July 2004 H. Honeywell User Group Summit. Energy Bulletin. Trans IChemE. PG Brabazon & K Lee. Heinrich Industrial Accident Prevention: A Scientific Approach. The Public Inquiry into the Piper Alpha Disaster. Department of Industry Science & Resources. ISBN 0 10 113102. Australian Government.W. Part B. Department of Energy. Commonwealth of Australia.References/2 Railway Safety Directive. 2004. Commonwealth of Australia. 2010 APPEA Safety Conference Andrew Hopkins. K. H Conlin. 1990. Exploring the Role and Content of the Safety Case. 10 May 2010 Lord Cullen. D. Directive 2004/49/EC of the European Parliament and of the Council of 29 April 2004 on safety on the Community’s railways and amending Council Directive 95/18/EC on the licensing of railway undertakings and Directive 2001/14/EC on the allocation of railway infrastructure capacity and the levying of charges for the use of railway infrastructure and safety certification. and Agostini. Professor Nancy Leveson. 1931 Jop Groeneweg. June 2007 Cost Effective Outcomes from FPSO Safety Case 59 FPSO Congress 2010 Singapore . 2009. Leiden University. Bills. “Future Trends in Process Safety”. London: HMSO. 2001. MIT.