Safety as an Economic Factor
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- Melvin Douglas
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1 Safety as an Economic Factor Safety Day 2014, FH Campus Wien OMV Group Content OMV at a glance Performance challenge Managing safety Continual improvement Effective risk control 2 OMV Group, Corporate HSSE, March 17,
2 OMV at a glance OMV Business segments* Exploration & Production Oil and gas production of 303, 000 boe/d in 2012 Proven oil and gas reserves of 1.12 bn boe as at the end of 2012 Operational activities in two core countries, Romania and Austria, as well as in a balanced international portfolio Gas & Power km natural gas pipeline network in Austria Gas storage facilities with a capacity of 2.6 bcm Gas-fired power plant projects in Romania and Turkey Gas pipeline network with a marketed capacity of around 103 bcm/a Refining & Marketing (incl. petrochemicals) Total refining capacity of 22 mn t per annum Network of approximately 4, 400 filling stations in 2012 Market share of around 20% in the Danube Region * 2012 data 3 OMV Group, Corporate HSSE, March 17, 2014 OMV at a glance Safe workplaces Safe processes For stakeholders and the environment For you 4 OMV Group, Corporate HSSE, March 17,
3 Performance challenge Safety Performance Oil & Gas Industries 31 fat in gas plant explosion, Reynosa Pemex, Mexico Source: Concawe: European downstream oil industry safety performance 2012 data OGP: Safety performance indicators 2012 data 5 OMV Group, Corporate HSSE, March 17, 2014 Performance challenge Macondo Deepwater Horizon April OMV Group, Corporate HSSE, March 17,
4 >> daily weekly monthly annually every 3 years high consequnee Performance challenge Performance Killers leaking process system has to be fixed unplanned release of oil / gas > 500kg high frequency Message from David C. Davies Deputy Chairman of the Executive Board Responsible for Finance oil release > 100t process accident in one of the 472 refineries worldwide > 100 Mio loss total loss one of the 3445 rigs worldwide 7 OMV Group, Corporate HSSE, March 17, 2014 Managing safety Process Safety Management Plan 2011 to 2016 Measuring and understanding PS performance Right-sizing the scope of PS Demonstrate that all PS risks are managed Establish basic governance Understanding the context of PS Comprehensive verification of PS performance 8 OMV Group, Corporate HSSE, March 17,
5 Act on outcomes Managing safety Barrier Management an Infinite Story Historical Experience Correct Techniques Knowledgeable People Risk Acceptance Criteria Risk Assessment What can cause harm? How sever will it be? How likely is it? Depending on outcome: Strengthen barriers Revise performance standards. Add further barriers. Review the risk assessments. Barriers Performance Standards Verify Performance What risk controls do we have? Are they plant barriers, procedural barriers or people barriers? How do the barriers need to perform? Is it sufficiently described? Do the barriers perform as expected? Are they operational? Risk Management Concepts compliant with ISO (Risk Management) 9 OMV Group, Corporate HSSE, March 17, 2014 Continual improvement Improvement Programs + Evaluation of the AS IS situation Systematic hazard analysis Technical audits & inspections Findings from accidents Gap analysis, etc. Improvement recommendations deeper insight + availability of budget allocation of resources finite resources + Action plan - 10 OMV Group, Corporate HSSE, March 17,
6 Continual improvement Business Case for Process Safety Example Project Improved Standard for Functional Safety (SIL) Description Assumed loss Likelihood reduction Savings reduce likelihood of major accident scenario reduce number of spurious trip savings for engineering & procurement 20 Mio damage and production loss 100 k loss per spurious trip; 60 process plants 50k per 15 Mio investment reduce from every 10 years to every 20 years safe one trip per 10 years and unit 1 Mio per year 0.6 Mio per year 8 invest projects a year 0.4 Mio per year Effort establishing the standard additional efforts for upgrading and maintaining the systems Costs 100 k (once) 100 k per year revenue 2 Mio per year 11 OMV Group, Corporate HSSE, March 17, 2014 Continual improvement Reality Checks... functions which will lead to immediate hazard in case of failure (e.g. flame supervision) [...] shall comply with SIL 3... proven-in-use versus proof-on-paper inherent safety implies also reduction of complexity carefully balance the effort for risk reduction with the benefit gained 12 OMV Group, Corporate HSSE, March 17,
7 Effective risk control Winning the Formula 1 Design Integrity Technical Integrity Operating Integrity initial risk Technical failures reduce or eliminate failures and malfunctions Human failures improve ability to respond to failures improve machine / human interface Organizational failures improve ability to succeed under varying conditions residual risk >> > ALARP ALARP simple, linear complex, non-linear 13 OMV Group, Corporate HSSE, March 17, 2014 Safety Performance is a proxy for overall performance Continuous and rigorous Risk Management at all levels of organization are paramount We 14 OMV know Group, Corporate it. We HSSE, March do 17, it
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