An Efficient Risk Management Strategy
This is a report on the risk management and safety in the United Kingdom petroleum and gas sector. Due to the many concerns in safety and danger managing in the UK, new strategies for handling risk in the United Kingdom offshore gas and oil sector have been formulated and also issued by the Oil And Gas UK. These new strategic approaches that have been developed vertical integration whereby the collaboration helps to put resources together so as to be able to deal with accidents when they occur (Shuen, Feiler & Teece, 2014 p6). The other one is development of new revenue models in which financial risks are shared for future rewards. The other strategy that has been put in place is new equipment and service models which are designed to bring out the best value through sustained investment in new technologies which have reduced occurrence of unwanted events since equipment are new and serviced (Shuen, Feiler & Teece, 2014 p8). The various experts in safety and risk management have developed the risk management guidelines that aims at increasing awareness of the risks involved in the oil and gas sector and also provides the guidance needed on how to manage it (Lees, 2012 p34). The United Kingdom oil and gas sector functions within a goal-setting handling framework that sets out the operational ideologies that are directed towards the management of major accidental hazards such as giving installation and operations managers means that enable them to make more informed decisions (Grace, 2016 p55). However, there are small changes that may occur beyond the standards that are set for the day-to-day hazard supervision in the oil and gas industry which this new journal by Grace addresses. There are minor deviations that can occur which are associated with a small risk when evaluated on their own but when these risks are considered together they present a critical change in the overall risk for instance, lack of proper evacuation means together with inadequate rescue personnel can bring about a great risk (Grace, 2016 p55). Technical offshore specialists from various Oil and Gas UK’s affiliate corporations were involved in shaping the risk management documents that talk about assessing the collective hazard, proposals for methods and approaches, and evaluation on how to reduce risks (Lindøe, Baram & Renn, 2013). Therefore, there is also a great importance in understanding the environmental risk management processes for gas and oil operators (Fidler & Noble, 2012). There are various discussions going on that are highlighting on who should be held accountable in an event the worst happens.
There are various main factors that constitute an effective hazard managing plan for oil and gas in the UK. The first and the main factor is the presence of an all-inclusive risk management approach that extends all the stages of project expansion and development and also operations. The various factors that form risk happen at all the stages of the development of the project hence risk management do not entirely focus on the project execution. Therefore, all the stages in the offshore oil and gas industry should be managed properly through availing the necessary resources needed at each and every step so as to have an effective risk management (Shallcross, 2013 p11). The other factor is the existence of a balance between the human and the technical factors. Most of the technical processes such as the availability of new technology qualification standards are crucial but exploration of the available historical data in the UK shows that a high number of notable and significant incidents are due to the human factors such as lack of proper procedures since they are either not followed or they are out of date, inadequate interfaces between operations staff and project staff among others. For instance, in the Piper Alpha Explosion, there were no proper and adequate procedures to be followed hence leading to the occurrence of this incident that claimed many lives (Christou & Konstantinidou, 2012 p37). This accident could be contained and lives could be saved if only the management had put up safety procedures such as evacuation details.
Operators To Work With Third Parties To Implement An Operative Risk Administration Approach
Therefore, there is an interdependence in the menace administration process since the existence of risk managing systems that only focuses on the technical factors is likely to be ineffective (Shallcross, 2013 p11). The third factor is the need for a balance between lagging and leading indicators. In most cases, oil and gas companies in the UK rely on lagging indicators which constitute the measurements of incidents and events which have taken place in the past as a measure of their risk managing approaches. The events are accidents that are encountered in the offshore oil and gas operations which have led to the various adverse effects experienced (Shallcross, 2013 p11). However, the majority of the prominent occurrences such as Piper Alpha and Greymouth Pike River Mine explosions in the offshore environment had low possibilities but led to high consequences. The fact that a company or an organization has not had any major accidents or incidents does not mean that this is a strong predictor of the future risks. The most significant indicators are; measuring the adherence to risk management and the investigation mechanisms that are categorically critical (Christou & Konstantinidou, 2012 p50).
Third parties help in promoting developments as well as their implementation of an efficient model for those organizations that do not possess strong prevailing risk management competencies in the other areas of the organization. The major area that the participation of the third parties is required is in the provision of an independent evaluation of all the previous and past occurrences so as to make sure that the organization is identifying and acting on the real causes of these events. The mechanical and design related issues are first identified, however, on a close review of these incidents in the UK over a certain period of time and human factors frequently arise as the true systemic root cause (Reason, 2016 p32). There should be constant independence between the application of the systems and the examination of the effectiveness of these approaches. And having the same department or individual carry both of these activities leads to correctly understanding the risk (Reason, 2016 p32).
The Risk Assessment Model that has been adopted in the offshore gas and oil operation in the UK is the Quantitative Proactive Approach. This model advocate for assessment of the adverse environmental effects and following of the best available practices in their management. There should be improvements in the requirements for training and be updating the employees of the oil and gas companies on issues such as the use of Personal Protective Equipment (PPE), safe working environment, license to carry out offshore activities, and effective and reliable evacuation procedures to ensure the safety of the employees. The model also outlines the safety mechanisms that the UK should follow which constitutes of identification of safety hazards, assessment of the risks involved and the best practices to follow in managing them. The approach suggests a comprehensive emergency response mechanism and the importance of continued improvement and raising the standards through make the procedures efficient so that they can assure the implementation of environmental and safety management system. An example of an effective risk assessment model is the project HSE Management System that is a detailed work place assessment to determine the hazards associated with the operational activities of the company (Skogdalen & Vinnem, 2011 p470).
The Safety Practitioner should improve the learning culture as well as practices hence spreading the best practice to enhance safety and security in the offshore activities of gas and oil sector in the UK. This individual has the responsibility to ensure that there is integration among the safety regulatory authorities and the oil and gas companies that undertake offshore operations (Sutherland et al. 2010 p957).The Safety practitioner is mandated to have a clear command as well as control in case a spill event occurs. He or she should advocate for intensified risk management campaign to come up with capping, avoidance, containment, monitoring of offshore oil spill events and avoidance mechanisms (Sutherland et al. 2010 p960).
There are new legislations such as the EU regulations which expect all oil and gas companies to prove that they have the ability to cover and attend to all the possible liabilities that occur from their operations such as the Health and Safety at Work Act of 1974 and the Diseases and Dangerous Occurrences Regulations of 2013 (Adisesh et al. 2013 p1170). These new laws and regulations will ensure that the oil and gas companies in the UK adheres to the rules hence will have an optimistic impact on the energy sector peril management plan since they will result in improved consolidation in the industry since only big successful companies will afford the financial resources that are necessary to cover the liabilities of great impact. From a stakeholder’s point of view, these laws will have a positive development. Regulations in this industry in the UK are constantly changing and evolving hence offshore operations should be flexible to accommodate these changes in regulations in Health and Safety at Work and the Diseases and Dangerous Occurrences Regulations (Tombs & Whyte, 2013 p70). The oil and gas regulatory environment expects the oil and gas industry members to work closely with regulators so as they can together develop, implement and also monitor using new standards in health, safety and occupational disease control measures (Kloss, 2013 p21). After the Piper Alpha accident, the UK overhauled the offshore industry and formulated the Offshore Installations Safety Case Regulations 2015 (SCR 2015) that apply to gas and oil operations in all the external waters of Great Britain and all the designated waters in the UK continental shelf (Paterson, 2011 p369).
Since the offshore projects and operations have many stakeholders, the risk management strategies should be collaborative and integrated from the outset. This helps in improving standards as the tendency for supervisors and litigators try to go after the wealthy parties involved in the company to bear a huge portion of the cost of an accident or incident. Therefore, it is of utmost importance that all the parties have effective and efficient risk management systems and ensure that their business partners do the same. All the stakeholders are supposed to share responsibilities for risk management and ensure that the partners also adhere to the set rules and regulations since risk management strategies is a collaborative affair that involves every party in the offshore oil and gas sector in UK (Spence, 2011 p59)
In the UK, success in the risk management in this industry is measured by the Occupational Health and Safety Statistics through evaluation of the performances of the crucial methods used to manage risks and ensure that they are functioning as intended (Flin, Mearns, Gordon & Fleming, 2016 p137). Therefore, these statistics are used to form the basis in which assessment and formulation of regulation regimes occur. There are models used in the assessment of risks in this sector to measure success in the safety approach but are not based on whether an accident occurred and the number of times it happened, however, on the measurement models that are predetermined. Safety processes and mechanisms should adopt proactive measures instead of using reactive measures (Shuen, Feiler & Teece, 2014 p7).
The oil and gas companies operating in the UK should be able to estimate the probability the effectiveness of the system before the incident occurs so as to put up safety measures to reduce health risks as well as reduce the statistics of those affected (Vinodkumar & Bhasi, 2010). The UK has set up proactive measures since 1988 following the Piper Alpha Explosion in the United Kingdom waters in the North Sea that claimed the lives of more than one hundred and sixty-seven people (Mendes, Hall, Matos & Silvestre, 2014 p445). The Piper Alpha accident is termed as the worst offshore catastrophe that has ever happened in terms of the number of deaths and the negative impact that it had on the offshore oil industry (Lamare, Lamm, McDonnell & White, 2015 p80). After this accident is when the UK overhauled the offshore industry and formulated the Offshore Installations Safety Case Regulations 2015 (SCR 2015) which outlines requirements for effective hazard and risk management (Vinnem, 2013 p25).
Another incident is the Greymouth Pike River Mine in New Zealand which caused an underground explosion which resulted in close to thirty deaths (Lamare, Lamm, McDonnell & White, 2015). This incident comprised up to four explosions. Although the cause of these explosions is not yet determined, there is undisputed evidence of an abundance of the Methane gas (Lamare et al. 2015). The safety measures that were neglected in the Pike River Mine are lack of use of tube bundling gas measurement mechanism, lack of food and water, inadequate breathing devices and the absence of a second exit (Lamare et al. 2015). Although these are mandatory requirements in the United Kingdom mining, they were not taken into consideration prior to the occurrence of this incident and this has been termed as the key factor in the loss of these many lives in the Pike River Mine explosions (Lamare et al. 2015).
The stakeholders in the UK offshore oil and gas companies are expected to report all the cases, events and occurrences that are associated with explosions, spill, and other accidents through reporting of injuries and other consequences through Safety Of Work Act 1974 and the Disease and Dangerous Occurrences Regulations (King, 2016 p28). These events are also supposed to be recorded for future references so as to avert similar cases in the future. The activities of these companies should be monitored by the regulators and legislation that are formulated by the UK government to ensure management of health and safety among the involved individuals (Wright, Pearman &Yardley, 2010 p672). The oil and gas organizations should monitor the activities of their employees and offer them training and equipment for training and offer personal protective equipment as well as be offering effective fire and safety procedures and make the workplace a safe environment (Lèfstedt, 2011 p77).
Conclusion
In the risk management and safety in the United Kingdom gas and oil sector, the nonconformities in the danger managing when examined individually usually have a small risk that is associated with them but when they are pooled together, they have a significant risk associated with them (Baker, Ponniah & Smith, 2009 p100). Therefore, all the stakeholders in the UK oil and gas sector should be involved so as to reduce the safety risks that are involved through the occurrence of accidents such as the loss of lives and property in the Piper Alpha and Pike River Mine explosions among others. There are mechanisms put in place to reduce these risks which include; an efficient risk management strategy, implementation of an operative risk administration approach, risk assessment models, legislation, legal and ethical regulations, the position and responsibilities of the safety and safety practitioner and reporting, recording and monitoring mechanisms (Teal & Howarth, 2004 p30). There have been very many cases of oil and gas offshore accidents in the UK. These lead to great financial consequences for the parties involved and enormous environmental devastation. Although there has been a positive consequence of these accidents, since 2010, the offshore workers have been trying to develop mechanisms to reinforce and improve the risk management practices so as to carefully determine them to prevent the occurrence of similar catastrophes in the future. Research done in the UK oil and gas accidents show that these occurrences have great consequences such as financial problems to the companies involved, ruin the company’s reputation and lead to criminal charges against those excavating, loss of lives as well as environmental devastation. Companies are now acting by consolidation and strengthening of their risk management practices more so on how the potential of events with low possibility but extremely deadly outcomes are managed in project development.
References
Adisesh, A., Robinson, E., Nicholson, P.J., Sen, D., Wilkinson, M. and Standards of Care Working Group, 2013. UK standards of care for occupational contact dermatitis and occupational contact urticaria. British Journal of Dermatology, 168(6), pp.1167-1175.
Christou, M. and Konstantinidou, M., 2012. Safety of offshore oil and gas operations: Lessons from past accident analysis. Luxemburg: Publications Office of the European Union.
Fidler, C. and Noble, B., 2012. Advancing strategic environmental assessment in the offshore oil and gas sector: Lessons from Norway, Canada, and the United Kingdom. Environmental Impact Assessment Review, 34, pp.12-21.
Flin R, Mearns K, Gordon R, Fleming M., 2016. Risk perception by offshore workers on UK oil and gas platforms. Safety Science. 2016 Feb 1;22(1-3):131-45.
GRACE, D.J.,2016. What Change Management Strategies Can Be Undertaken By British Petroleum after Undertaking Strategic Analysis to Help Them Gain Competitive Advantage,.pp.54-61
King, R., 2016. Safety in the process industries. Elsevier. pp-23-45
Kloss, D., 2013. Occupational health law. John Wiley & Sons. Pp. 16-32
Lamare, J.R., Lamm, F., McDonnell, N. and White, H., 2015. Independent, dependent, and employee: contractors and New Zealand’s Pike River Coal Mine disaster. Journal of industrial relations, 57(1), pp.72-93.
Lees, F., 2012. Lees’ Loss prevention in the oil and gas process industries: Hazard identification, assessment and control. Butterworth-Heinemann.
Lèfstedt, R., 2011. Reclaiming health and safety for all: An independent review of health and safety legislation (Vol. 8219). The Stationery Office.p77
Lindøe, P.H., Baram, M. and Renn, O. eds., 2013. Risk governance of offshore oil and gas operations. Cambridge University Press.
Mendes, P.A., Hall, J., Matos, S. and Silvestre, B., 2014. Reforming Brazil? s offshore oil and gas safety regulatory framework: Lessons from Norway, the United Kingdom and the United States. Energy Policy, 74, pp.443-453.
Paterson, J., 2011. The significance of regulatory orientation in occupational health and safety offshore. BC Envtl. Aff. L. Rev., 38, p.369.
Reason, J., 2016. Managing the risks of organizational accidents. Hazard Management in oil and gas industry Routledge..,pp32
Shallcross, D.C., 2013. Using concept maps to assess learning of safety case studies–The Piper Alpha disaster. Education for Chemical Engineers, 8(1), pp.e1-e11.
Shuen, A., Feiler, P.F. and Teece, D.J., 2014. Dynamic capabilities in the upstream oil and gas sector: Managing next generation competition. Energy Strategy Reviews, 3, pp.5-13.
Skogdalen, J.E. and Vinnem, J.E., 2011. Quantitative risk analysis offshore—human and organizational factors. Reliability Engineering & System Safety, 96(4), pp.468-479.
Spence, D.B., 2011. Corporate social responsibility in the oil and gas industry: The importance of reputational risk. Chi.-Kent L. Rev., 86, p.59.
Sutherland, W.J., Albon, S.D., Allison, H., Armstrong?Brown, S., Bailey, M.J., Brereton, T., Boyd, I.L., Carey, P., Edwards, J., Gill, M. and Hill, D., 2010. The identification of priority policy options for UK nature conservation. Journal of Applied Ecology, 47(5), pp.955-965.
Tombs, S. and Whyte, D., 2013. Transcending the deregulation debate? Regulation, risk, and the enforcement of health and safety law in the UK. Regulation & Governance, 7(1), pp.61-79.
Vinnem, J.E., 2013. Offshore risk assessment: principles, modelling and applications of QRA studies. Springer Science & Business Media.45,.pp26-38.
Vinodkumar, M.N. and Bhasi, M., 2010. Safety management practices and safety behaviour: Assessing the mediating role of safety knowledge and motivation. Accident Analysis & Prevention, 42(6), pp.2082-2093.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
