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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

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
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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
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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.

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Safety Case

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A Brief History
Safety Case still represents best means
of managing major hazards offshore
International Review panel 2008
Bills & Agostini 2009

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Safety Case

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, Part B, July 2004

Cost Effective Outcomes from FPSO


Safety Case

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;

Describes how the risks are controlled;


and

Describes the safety management system


in place to ensure the controls are
effectively and consistently applied.

http://www.nopsa.gov.au/safety.asp under the heading "Safety Case Approach"


Cost Effective Outcomes from FPSO
Safety Case

FPSO Congress 2010 Singapore

What is a Safety Case?


Safety case is a process, 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

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Safety Case

FPSO Congress 2010 Singapore

The Management of Safety

H.W. Heinrich Industrial Accident Prevention: A Scientific Approach, 1931


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The Management of Safety

Commonly used modification from Heinrich


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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, 2010 APPEA Safety Conference
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The Management of Safety


Rig Explodes

Fatal Fall

Serious Leak

Fall from Stairs


No Handrail

Minor Leak
Personal
Safety

Process
Safety

Jop Groeneweg, Leiden University, 2010 APPEA Safety Conference


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The Management of Safety


These are two different
processes.
So management systems
must recognise they are
two different processes ...
with different drivers.
Process
Safety

Personal
Safety
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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.
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The Management of Safety


Recent observations suggest that industry focus is on
slips, trips and falls
Fatal Fall

Fall from Stairs

with reducing attention


paid to maintenance of
technical integrity and major
hazard controls.
Rig Explodes

No Handrail

Serious Leak
Minor Leak

Personal
Safety
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Safety Case

Process
Safety
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The Management of Safety


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


Traditional means of the management of safety
has been prescriptive in nature.
Widely accepted failings of prescription include:
Quickly out of date as industry changes
Industry only performs to minimum no incentive to
exceed

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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, not on
managing the hazard

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The Management of Safety


Piper Alpha Inquiry report, Lord Cullen criticised attitude
to management of risk from a high pressure gas fire:

The witnesses reliance on merely a qualitative


opinion showed, in my view, a dangerously
superficial approach to a major hazard.
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.

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Why do we need a Safety Case?

Do we really understand our facilities?

Here are some you may recognise!

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Why do we need a Safety Case?

27 July 2005, Mumbai High North 22 fatalities


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Why do we need a Safety Case?

August to November 2009, Montara total loss of


WHP and rig - unknown environmental impact
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Why do we need a Safety Case?

20 April 2010 Deepwater Horizon Macondo Blowout


11 fatalities, massive & unknown environmental impact
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Why do we need a Safety Case?

Thats all well and good but what has


that got to do with FPSOs?

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Why do we need a Safety Case?

8 August 2010, MT Gagasan Merak FSO


Cargo tank explosion 4 injured
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Why do we need a Safety Case?

2009, Formosaproduct Brick Product Tanker


Ship Collision
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Why do we need a Safety Case?

28 August 2009, Tanker Elli breaks back in ballasting


error for tank entry
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Why do we need a Safety Case?

Ship collisions dont happen with


offshore facilities, do they?

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Why do we need a Safety Case?

11 August 2010 Kodeco Platform unknown vessel collision


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Why do we need a Safety Case?

8 June 2009 Big Orange XVIII collision with Ekofisk Complex


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Why do we need a Safety Case?


Youve carefully thought out all the angles
Youve done it a thousand times
It comes naturally to you
You know what youre doing, its what
youve been trained to do your whole life.
Nothing could possibly go wrong,
right?
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Think Again

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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!!

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Why do we need a Safety Case?


International companies consistency of application
across assets ( e.g. Shell, BP, Union Carbide)
How do you demonstrate safety in design without
Safety Case? Are standards / Class enough?
So if just apply codes and standards, 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!!
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Safety Cases lessons learned?


The Enemies of Safety are :
Complacency
Arrogance
Ignorance

Professor Nancy Leveson, MIT, Future Trends in Process


Safety, Honeywell User Group Summit, June 2007

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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, MIT, Future Trends in Process Safety,
Honeywell User Group Summit, June 2007

Reflecting on recent major accident events does any of the above sound familiar ?
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Safety Cases lessons learned?


Managing Tradeoffs
Good risk management requires
understanding the outcomes, implications,
impact and tradeoffs between:

Schedule
Cost
Performance
Safety

Do we effectively put this into practice ?


Professor Nancy Leveson, MIT, Future Trends in Process Safety, Honeywell User
Group Summit, June 2007
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Example: Schedule Pressure and Safety Priority


1.4

Overly aggressive
schedule enforcement has
little effect on completion
time (<2%) & cost, but has
a large negative impact on
safety

1.2

Schedule Pressure

High

0.8
0.6
0.4
0.2
0

1.4
1.2
1

Low

0.8
0.6

Priority of safety activities


has a large positive impact,
including a positive cost
impact (less rework)

0.4
0.2
0

Low

High

Safety Priority
Professor Nancy Leveson, MIT, Future Trends in Process Safety, June 2007

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Safety Cases lessons learned?


Cost

Impact of Safety Case


To influence Project Costs
Cost of implementing
Safety Case
hardware changes

Concept

Detailed
Design

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Safety Case

Construction
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Generic impact of
late change on
Project cost with time

Operations
FPSO Congress 2010 Singapore

Safety Cases lessons learned?


Blowdown philosophy set early, 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. managing the detail
and overlooking the big picture (example is OHS vs
MAE risk)

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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.

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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 - 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!

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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?

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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.

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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.

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Safety Cases lessons learned?


Some problems with Safety Case implementation
Safety Cases are not off-the-shelf, production line
exercises in documentation.
To be effective, the safety case process must be
allowed to take its course, to examine critically and
interact with the design and the organisation.
Just producing a book, ticking a box, does not meet
the intent!

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Safety Cases lessons learned?


Some problems with Safety Case implementation
If you want a Ferrari, but only specify something with
wheels and an engine, dont complain when a second
hand Toyota needing maintenance work appears on
the driveway!

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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
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A suggested Blue Print for Success


Safety Engineering will provide linkage across the
interfaces
Marine
Production
Mooring
Subsea
Sub-surface

Expect & support this!


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A suggested Blue Print for Success


For Operations:
Operating envelope / management of risk i.e. 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.
How do you know you are operating outside the
envelope if you have not defined it or passed the
knowledge on to operations!

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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.
Basis for SMS i.e. the Safety Case will provide a
means of linking the facility, the hazards identified,
the operations and the hazard and risk controls,
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.
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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, safety,
development and risk management deliverables
Do it early enough and you should get optimum
design (from safety, risk & cost viewpoint)
Without Safety Case, would you ever have a blast
wall?

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Benefits of Doing a Safety Case?


Enable targeted maintenance i.e. 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, always positive

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Conclusions
1. The Safety Case is not a silver bullet cure for all ills. It
does offer, however, the best means available for
effective management of major hazard risks and
process safety.
2. Effective development and implementation of the
Safety Case process requires significant effort by any
organisation. This effort is well worthwhile as it can
deliver:

Cost benefits in project performance


Increased performance in operations, due to greater reliability in
plant, equipment and resources
Improved communication of hazard management for the lifetime
of the facility (i.e. a corporate memory!)

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Conclusions
3. Safety Case provides a competent and auditable
process for senior management to demonstrate
management of development, project and
operational risk to satisfy corporate requirements

4. There is a trend that our industry may be focussing


on occupational HSE with diminished attention to
management of residual and process risk. Safety
Case provides management focus to overcome this.

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Conclusions
5.

Quality and quantity of risk assessment combined


with industry shortages of skilled personnel is a
concerning issue going forward

6.

With ongoing cost, schedule and implementation


pressures there are better ways to contract and
manage the preparation of Safety Cases.

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

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References/2
Railway Safety Directive. 2004. Directive 2004/49/EC of the European Parliament and of the Council of 29 April
2004 on safety on the Communitys 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.
Future Arrangements for the Regulation of Offshore Petroleum Safety Australian Offshore Petroleum Safety Case
Review, 2001. Department of Industry Science & Resources. Commonwealth of Australia.
Bills, K. and Agostini, D. 2009. Offshore Petroleum Safety Regulation Better practice and the effectiveness of the
National Offshore Petroleum Safety Authority, Australian Government, Commonwealth of Australia.
H Conlin, PG Brabazon & K Lee, Exploring the Role and Content of the Safety Case, Trans IChemE, Part B, July
2004
H.W. Heinrich Industrial Accident Prevention: A Scientific Approach, 1931
Jop Groeneweg, Leiden University, 2010 APPEA Safety Conference
Andrew Hopkins, Energy Bulletin, 10 May 2010
Lord Cullen. 1990. The Public Inquiry into the Piper Alpha Disaster. Department of Energy, London: HMSO. ISBN
0 10 113102.
Professor Nancy Leveson, MIT, Future Trends in Process Safety, Honeywell User Group Summit, June 2007

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