Report No. 12 to the Storting

Transcription

1 THE ROYAL MINISTRY OF LABOUR AND SOCIAL INCLUSION Report No. 12 to the Storting ( ) Health, safety and environment in the petroleum activities Translation from the Norwegian. For information only.

2 2 Report No. 12 to the Storting

3 Table of Contents 1 Background, contents and main conclusions Content of the report Central preconditions for HSE in the petroleum activities Integrated management of health, safety and environment Major accident risk Working environment and health Research needs and other measures Research needs Other measures related to major accidents, working environment and health Development trends Introduction General description of developments The player scenario on the Shelf The player scenario at the land facilities Operative conditions on the Shelf Operative conditions at the land facilities About information technology Working hours arrangements Details regarding development of HSE results Development in risk level as regards major accidents Development in risk level as regards working environment, health and personal safety Comparisons of health, safety and environment results Regulating HSE in the petroleum activities Introduction HSE regulations in the petroleum activities HSE regulations on the Shelf Safety and working environment regulations on land The integrated HSE concept Key factors that determine how HSE is regulated Political objectives International and national regulatory frameworks Ethical assessments Principles for risk reduction Development of knowledge Social assessments linked to the risk of major accidents Safeguarding working environment Involvement of the parties Risk management under the HSE regulations in environmentally vulnerable areas Social and business factors Socioeconomic assessment of HSE measures Socioeconomic consequences of major accidents Socioeconomic consequences of work-related accidents and work-related illness Business incentives for HSE focus Costs associated with HSE regulation Costs associated with remotecontrolled pipe handling Formulation of general HSE regulations for offshore and land facilities Systematic collection of experience with current land and Shelf regulations (user survey) New general regulations for Shelf and land General safeguarding of HSE Introduction Competence development in the Petroleum Safety Authority Coordination and cooperation between the supervisory authorities Coordination system for supervision of HSE in the petroleum activities Cooperation with authorities in foreign countries Integrated follow-up of the petroleum activities and associated activities

4 2 Report No. 30 to the Storting Opportunities and Challenges in the North Helicopter transport and maritime operations Cooperation on audits of mobile facilities, establishment of the AoC system Interface between operator, contractor and subcontractor New forms of operations and integrated work processes Introduction Integrated work processes Digital infrastructure Cooperation between the parties Introduction Regulatory Forum Safety Forum Working group on employee participation Project cooperation directed by the parties Major accident risk Introduction Management of major accident risk Specific risk areas challenges and measures Hydrocarbon leaks Drilling and well-related factors Load-bearing structures and marine systems Maintenance Emergency preparedness in the petroleum activities Operational preparedness Terrorism preparedness Investigation Man, technology and organisation (MTO) as regards major accident risk Follow-up of working environment and personal safety Introduction Integrated follow-up of working environment Management of working environment risk Risk indicators for working environment Resting conditions and working hours arrangements Work-related health problems and exclusion Extent of health-related problems, illness and disability pensioning Psycho-social working environment Physical working environment Personal injuries Extent of personal injuries Causes of personal injury Diving Diving in the petroleum activities Regulations for organization of diving in the petroleum activities Risk of delayed injuries and health follow-up Training of diving personnel Multi-party working group and proposed measures Diving in sheltered waters Review of regulatory and supervisory regime Economic and administrative consequences

5 THE ROYAL MINISTRY OF LABOUR AND SOCIAL INCLUSION Report No. 12 to the Storting ( ) Health, safety and environment in the petroleum activities Recommendation by the Ministry of Labour and Social Inclusion, dated 7 April 2006, approved by the Cabinet as of the same date (Stoltenberg II Government) 1 Background, contents and main conclusions Content of the report In its consideration of Report to the Storting No. 7 ( ) on health, safety and environment in the petroleum activities, the Storting (the Norwegian Parliament) requested in Recommendation to the Storting No. 169 ( ) that a report on the status of HSE factors in the petroleum sector be presented every fourth year. The collective term «health, safety and environment» used in the petroleum sector (the HSE concept) is broadly defined in that it has a basis in eight statutes and covers the overall consideration for human beings, the environment and financial assets. This report largely deals with the safety and working environment aspects. A good working environment and a high level of safety also contribute towards preventing unfortunate consequences for the external environment. This Report covers this dimension of protection of the external environment, while other issues relating to the external environment, including pollution issues, will only be discussed to a very limited degree. Concrete evaluations of environmental factors are also discussed in Report to the Storting No. 21 ( ) on the Government s environmental protection policy and the environmental state of the nation, Report to the Storting No. 1 ( ) for the Ministry of the Environment and in the work on overall management of Norwegian sea areas, including the process surrounding the integrated management plan concerning the marine environment in the Barents Sea and the waters off Lofoten. In Chapter 2 of this Report, the Government will present the central development features in the petroleum activities on the Shelf and at the land facilities which fall under the supervisory and regulatory jurisdiction of the Petroleum Safety Authority (PSA), cf. the Crown Prince Regent s Decree of 19 December 2003 and the provisional regulations of 19 December 2003 relating to safety and working environment for certain petroleum facilities on land and associated pipeline systems. Important aspects of integrated management of the petroleum activities, as well as challenges facing the industry and the authorities as regards the overall safeguarding of HSE for this sector are reviewed in Chapters 3 and 4. Specific information regarding the risk of major accidents, personal injuries and 1 A New Norwegian (nynorsk) version of Chapter 1 is included as a printed appendix

6 6 Report No. 12 to the Storting work-related illness, including chemical exposure, is presented in Chapters 5 and 6. Important aspects of professional diving activities as they are practiced today are reviewed in Chapter Central preconditions for HSE in the petroleum activities The petroleum activities constitute Norway s largest industry. The industry is expected to remain one of the country s most important contributors to value creation, growth and welfare for many decades to come. The petroleum industry maintains high standards for health, safety and the environment. Professional players that exercise due care, as well as a good set of regulations, are preconditions for a low number of injuries, few serious personal injuries and little likelihood of major accidents. A long-term commitment to the development of new knowledge on risk, and translating this into preventive actions, is another important contributing factor. The activities are also characterized by broadbased cooperation between the involved parties. Some of the positive changes achieved in the sector s HSE results since the presentation of Report No. 7 to the Storting ( ) show that factors such as good dialogue and cooperation between the parties, as well as between the parties and the authorities, are important prerequisites for improving HSE status and thereby also ensuring continued value creation from these activities. Nevertheless, the Government feels there is reason to point out that the petroleum activities carry the potential of significant negative consequences and costs, of both human, social, environmental and financial character. Undesirable incidents in recent years have confirmed this yet again. The Soria Moria Declaration expresses the ambition that the petroleum sector in Norway should lead the world when it comes to health, safety and the environment. On this basis, the Government s goal is for the petroleum sector to continue being a pioneering industry that creates values for society through a conscious commitment to quality and knowledge, while also being based on an objective of continuous improvement. Some of the key reasons for the Government s objectives are the fact that the petroleum activities entail a risk of major accidents, as well as the danger of personal injuries, work-related illness and pollution of the environment. Moreover, the sector has a huge impact on the Norwegian economy and society at large. Good HSE management contributes to the security of individual employees, and it is also an important precondition for carrying out petroleum activities in new areas. This is also a contribution towards gaining access for Norwegian industry to foreign continental shelves, and also helps ensure high regularity and thus good delivery security from the Norwegian Shelf. Reputation, branding and competition for competent labour are also important reasons why the companies must continuously develop strategies to remain in the forefront of the HSE area. The socioeconomic consequences of a major accident are immense. For those who are directly affected by a major accident or other serious incident, the consequences are both serious and tragic, and encompass far more than what can be seen from a socioeconomic evaluation. The value of a life cannot be expressed solely in terms of money. The fact that major accidents and other undesirable incidents can occur in the petroleum activities, and can entail human and socioeconomic consequences, constitutes one of the major considerations underlying the authorities regulation of HSE. The Government is convinced that the Norwegian management model will continue to be a good tool for the authorities contribution to value creation in a social perspective. This is characterized by the fact that the commercial and regulatory interests are separated, that all players are accountable and are aware of their responsibility, that the regulations set goals for the industry, and that the supervision carried out by the authorities is based on openness and confidence. Over the last decade, the authorities have devoted significant resources to following up assertions that the Norwegian regulations are cost-driving. Particular attention has been drawn to the cost implications of the petroleum authorities enforcement practices and the industry s own use of the functional regulations. In the Ministry s opinion, various comparative studies and reports have shown that the Norwegian HSE regulations are not particularly cost-driving per se, nor are they out of step with the regulatory regimes in other countries. However, the Ministry takes the signals regarding enforcement and application of the regulations seriously, and assumes that the supervisory authorities and the industry will review their procedures to ensure that the industry does not incur unnecessary costs.

7 Report No. 12 to the Storting 7 Report No. 7 to the Storting ( ) pointed out a number of challenges in the petroleum sector. Development of new knowledge and new methods as regards risk management were emphasized as important means of achieving these goals. Therefore, a major new commitment to HSE research was established in the Research Council of Norway, first in association with the Oil and Gas Program, and from 2005 within the framework of the Petromaks 2 program. The HSE Petroleum subprogram focuses on four main topics established in consultation with the parties involved. The objective of the program has included knowledge development, development of new methods and building arenas. The program has led to a significant lift as regards development of knowledge, expertise and methodology in important areas. Experience has shown that the commitment to research and development (R&D), in addition to obtaining new knowledge, has played an important role as an arena where the parties can meet by contributing to a more unified perception of the factual basis. An independent evaluation of HSE in petroleum yields a consistently positive picture of these efforts as regards direction and results, and illustrates that all of the parties see a definite need to continue this commitment. 1.3 Integrated management of health, safety and environment 2 The Petromaks program gathers most of the activities within petroleum-related research in the Research Council of Norway. Multi-level changes represent a challenge as regards the goal of implementing the petroleum activities in an integrated, managed and prudent manner. The scope of the petroleum activities is being expanded through the opening of new areas, which also entail more stringent requirements regarding discharges and emissions from the activities. Several fields in mature areas on the Norwegian Shelf are entering a phase which entails either removal of facilities or continued operation through the use of new technology. Another factor is the higher oil prices, which could make investment an interesting option to extend field lifetime. We also see a trend towards development and operation of small fields. The exploitation of mature or small fields leads to a change in the player scenario on the Norwegian Shelf. Smaller, more specialized operators and suppliers gain access to the Shelf while at the same time we see a number of mergers both on the oil company and contractor sides. This has led to a doubling of the number of players on the Norwegian Shelf since As a consequence of this, more and different players are participating in the petroleum activities, and will thus also make their contributions to developments in the HSE area. Technological developments provide opportunities for greater integration between operations carried out on the Shelf and the land-based activities. Integrated operations entail the use of new information technology. Work processes are altered in order to achieve better solutions, to remote-control and/or monitor equipment and processes, and to move functions and personnel to land. All of these factors have obvious HSE implications, and they will entail a need for further development of the supervisory authorities work methods and tools in their follow-up of the industry. Increased international integration of the petroleum sector has also led to changes in corporate strategies and how activities are organized in order to extract synergy effects across Shelf boundaries. Tougher competition from other offshore provinces has also contributed to the focus on the different framework conditions for the various Shelf regimes. This development is demanding for the players, but it also challenges the framework conditions that apply to the Norwegian petroleum activities. Norway s stated goal is that the authorities regulation of health, safety and environment (HSE) shall be predictable and progressive. Therefore, the regulatory system must constantly be adapted to the development trends facing the sector. It is still the Government s opinion that a consistent set of regulations for the activities on land and offshore will contribute to more integrated management of the activities. This is increasingly important when there are more and smaller players, and the tasks and decision authority is divided among more players. Therefore, it is important that the authorities, through coordinated supervision and regulatory development, follow these developments and the effects they may have on HSE work in the industry. The Ministry is also concerned with ensuring that international cooperation among the authorities is prioritized, as this is important in following up an increasingly international industry.

8 8 Report No. 12 to the Storting Major accident risk The experience gained from the petroleum activities so far has clearly demonstrated the risk associated with these activities. The catastrophes when the Alexander L. Kielland overturned in 1980 and the explosion and fire on Piper Alpha on the British Shelf in 1988 illustrate the dramatic consequences that can result from major accidents in the petroleum sector. In recent years, there have been incidents both on the Norwegian Shelf and at the land facilities that have carried the potential of becoming a major accident. To describe developments in risk, the authorities use a number of factors. Experience from audits, reporting of accidents and near-misses, investigation of major incidents and R&D activities are all important sources. With regard to the development in the risk of major accidents, the results of the project entitled Risk Level on the Norwegian Shelf (RNNS) are an essential source of information. If we assess the development in major accident risk in areas covered under the RNNS project, we see an underlying negative trend from 1996 to During the period after 2000, there have been relatively large annual fluctuations, although no underlying trend can be observed. Therefore, we have not been able to ascertain the desired lasting positive trend in line with the objective of being a pioneering industry. It is important to observe that improvement of the risk level in certain areas seems to have a definite connection with how much focus the authorities and the industry place on these areas. Hydrocarbon leaks are an example in this respect. The number of hydrocarbon leaks has exhibited a definite decline since This coincides well with the initiative made by the authorities in cooperation with the industry to set up specific reduction targets in The industry has achieved these targets through systematic work. The media carefully monitors the petroleum sector, giving significant attention to incidents and accidents. The Ministry is aware of recent assertions of under-reporting of incidents in the petroleum sector. These factors are being followed up by the Petroleum Safety Authority, together with the industry, to determine whether these assertions are correct and, if so, to implement measures to rectify this. The petroleum activities potential for major accidents also entails the likelihood of significant socioeconomic consequences. Because of this, the authorities must apply a broad perspective when formulating how health, safety and environment shall be regulated, including balancing considerations for socioeconomic, business and other factors. The Government is initially of the opinion that high profitability and a high level of HSE are factors that both complement and reinforce each other. At the same time it is important, also from an HSE perspective, to recognize that a clash of interests can occur between the different objectives when specific decisions must be made. In such cases, the decisions will often have to be based on discretionary judgement, and it is authorities expectation that important requirements related to health, safety and environment will not be impaired. 1.5 Working environment and health The Government wants a working life where there is room for everyone. Maintaining focus on the connection between work, health and social inclusion in employment is important if we are to achieve social objectives for growth and welfare in a long-term perspective. The Norwegian petroleum activities are a very important arena in this context. In recent years, the authorities have implemented efforts aimed at overall prevention of workrelated injuries and illnesses in the petroleum sector through highlighting and following up regulatory requirements for management of working environment, facilitating work and rest/restitution factors, management of change processes and follow-up of work-related illness. Based on today s knowledge, no clear conclusions can be made regarding the scope or development trends as regards disability or death resulting from work offshore. There was a positive declining trend in the number of serious personal injuries in the period However, this declining trend was reversed in There has been an increase in the number of serious personal injuries in 2005, and present figures are at the average level for the past ten years. A report was prepared during the period to estimate the total costs incurred by the Norwegian society resulting from work injuries, work-related sick leave and disability pension in the petroleum activities. The costs have been estimated at NOK million per year (2004 price level). There is a substantial range of uncertainty linked to these estimates, both as regards the scope of the various outcomes such as sick leave, disability, death, etc, as well as the costs of each individual case. Nevertheless, the human and socioeconomic conse-

9 Report No. 12 to the Storting 9 quences of work-related injuries and illness require continued systematic work to achieve the goal of reduction. The objective is to ensure that as many as possible of the people who are actively employed in the industry remain so, and that those who are in danger of dropping out of these jobs are brought in again, and that those who do not have work are given the opportunity to participate and make a contribution. Even though today we know much more about potential damage to health resulting from exposure to various chemicals than was the case from , the industry faces significant challenges in this area. This relates particularly to risk assessments and awareness in relation to the use of chemicals and personal protective gear. During the period following presentation of Report No. 7 to the Storting ( ), the Ministry has reviewed how diving operations are organized in the petroleum industry. This review shows that diving operations, as they are carried out today, are prudent. However, it also shows that the long-term follow-up of divers health is a challenge that is being reinforced by factors such as different types of affiliation forms for employees in diving enterprises, as well as activity that takes place on the shelves of many different countries using the same divers. 1.6 Research needs and other measures A determined commitment on the part of the industry and the authorities to maintain and improve the level of HSE is still important. The solutions to some of the challenges pointed out in this Report require strategies for long-term action. Financing of the measures that the authorities are responsible for will be handled through the normal budget processes Research needs With the increasing complexity in an industry with high risk potential, substantial know-how challenges are linked to ensuring the best possible factual basis on which to base requirements and decisions. Active and goal-oriented R&D activities in relation to the needs of the industry and the authorities thus make up an important element in the overall work to reduce the risk level. R&D efforts have proven particularly useful in those cases where the parties needs for more and better knowledge coincide. Here additional gains can be achieved by establishing closer interactions between research and development in HSE, and in the technological and organizational areas that take place in other parts of the Petromaks program and under the direction of the industry. This is particularly relevant with regard to R&D linked to increased activity in the northern areas, the need for better well control and introduction of e-operations. The Ministry emphasizes that there is a need for continued learning about risk management in the petroleum activities. This will provide important contributions to ensure that Norway has sufficient risk-related expertise to handle significant challenges as regards general civil protection. The Ministry also points to the need for additional research surrounding the causes of exclusion and work-related illness associated with work in the petroleum activities. There is clearly a need to establish better knowledge concerning the risk of various types of consequences associated with current working hours arrangements on the Shelf. More knowledge is also needed regarding the connection between exposure to chemicals and workrelated illness. Furthermore, there is a need for more reliable documentation of trends and developments regarding the impact of working environment on health. This need exists not only in the petroleum sector, but in Norwegian working life in general. In this connection, the Ministry has started a monitoring project aimed at obtaining an overview of data and documentation regarding working environment and work-related health injuries in Norway. The paramount goal of the project is to create a foundation for a joint description of the actual situation as regards status and central development trends, both nationally and by sector, with a view towards discussing measures and intervention Other measures related to major accidents, working environment and health An important part of the work on maintaining and improving HSE results is conducting adequate measurements of HSE developments, for the purpose of identifying important commitment areas. The RNNS project, an important tool in mapping risk level, will therefore be maintained and further developed. In 2007, the RNNS project will be expanded to cover the Petroleum Safety Authority s sphere of responsibility for the land facilities. Work continues on indicators for measuring exposure to noise, chemical health hazards and muscu-

10 10 Report No. 12 to the Storting lar-skeletal ailments. In this context, the Ministry would emphasize the industry s independent and primary responsibility for identifying and implementing improvement measures. The Government is pleased that a united industry has decided to continue the work to reduce the risk contribution from hydrocarbon leaks, but also expects that the industry will work systematically to reduce the contribution from other parts of the activities. This applies e.g. to well incidents, ships on collision course and damage to load-bearing structures. The PSA will maintain particular focus on these areas in its audit efforts. In order to facilitate overall management of the activities, the authorities plan to present a proposal for new, integrated regulations for the land facilities and Shelf activities during the course of At the same time as research into the causes and scope of work-related injuries and illness is reinforced, the industry must also maintain continuous focus to prevent healthy young workers from being exposed to working conditions and particular load factors that could lead to their early exclusion from the job. It is also important to prevent the combination of down-sizing, aging and long-term wear and tear from leading to a situation wherein the majority of the workforce aged is excluded from employment in the industry before reaching retirement age. In this context, the authorities will intensify their focus on the use of working hours arrangements in the sector. Use of overtime in excess of a 12-hour workday and use of extended offshore stays will be evaluated in relation to the scope and potential consequences associated with the increased risk of mistakes and injuries. The companies work to reduce the overall risk associated with night work will also be followed up. To address today s challenges as regards chemical exposure in the petroleum activities, the industry is encouraged to intensify its efforts to implement risk assessments of the chemical working environment, as well as attention to overall risk management of chemical working environment in relation to other HSE aspects. The Ministry will also initiate studies in priority areas to clarify actual knowledge regarding exposure and health risks, and propose R&D activities where needed. Reference is made in this context to a report from a multi-party group that has investigated various aspects of chemical exposure in the petroleum sector. The Ministry will take the initiative to follow up the recommendations made by a multi-party working group as regards organization, supervision and regulations relating to diving in the petroleum activities. The Ministry has also decided to implement a review of the regulations for professional diving in protected waters. Emphasis will be placed here on ensuring a rapid and greater degree of harmonization vis-à-vis the Petroleum Safety Authority s regulations, providing a better overview of diving operations that take place in sheltered waters, as well as ensure better follow-up of the divers health. At the same time, the Ministry is considering implementation of specific amendments to the regulations before the major regulatory review is complete.

11 Report No. 12 to the Storting 11 2 Development trends 2.1 Introduction The petroleum industry is characterized by development of knowledge and technology. The industry s focus on profitability, even during periods when oil prices are high, as well as the technological and operational challenges the individual fields pose for the players, ensures continuous development of new solutions. It is the Government s goal that the Norwegian petroleum activities be global leaders as regards HSE. To achieve this, our foundation must be learning and continuous improvement where health, safety and environment consequences for all of the involved players must be an important and integrated part of all decisions made by the industry. This applies to the evaluations used as a basis when selecting new solutions, decisions regarding changes and use of new technology, as well as the new organization forms and operational concepts that ensue from these. At the same time, it is important that the development in HSE result in the activities is monitored and followed up by all of the players, so that corrective measures can be implemented. Increased international integration of the petroleum activities brings with it changes in corporate strategies and structures in order to extract synergy effects across Shelf boundaries. Heightened competition from other offshore provinces has also contributed to additional focus on harmonization of framework conditions. This increased internationalization can also mean that activities are no longer linked just to the country where the activity takes place, but that decisions, contracts and activities are managed from other countries. The authorities must cooperate across national borders to a greater degree if they are to meet the challenges that accompany increased internationalization. This also applies to development and enforcement of the regulations, as well as sharing experience gained in the supervision of the petroleum activities. It is also important to obtain the most correct picture possible of the HSE result in Norwegian petroleum activities. Measurement of HSE results and development depends on good measuring tools and a good data base, as well as a fundamental understanding of the underlying factors that affect HSE performance. The project entitled «Risk Level on the Norwegian Shelf» (RNNS) has gradually assumed an important position in the industry as it contributes to a unified understanding of the development in risk levels among the parties. Other sources of knowledge concerning central development trends include the Petroleum Safety Authority s (PSA s) direct experience with the industry gained through audits, investigations and dialogue, as well as the research and development conducted by research institutions and financed by the industry and the authorities. 2.2 General description of developments The development in the petroleum activities is characterized by an increasing degree of integration between activities offshore and on land. This is the result of land facilities gradually assuming greater importance in an overall production perspective. The development of e-operations and integrated processes also contributes to the ability of land organizations to provide operations support to facilities on the Shelf, or that production can take place directly from the seabed. However, there are a number of special features of both the player scenario and the operating conditions on the Shelf as compared with activities on land. These will be reviewed in the following sections The player scenario on the Shelf Previously, the Norwegian Shelf was characterized by a small number of large oil companies. Now the trend is towards a more complex player scenario as regards operators. Smaller and more specialized companies are gaining access to the Norwegian Shelf. At the same time, we see mergers both in the oil company and contractor sectors, so that the authorities must deal with more or larger players. Experience from other shelves around the world indicates that some players want to organize their

12 12 Report No. 12 to the Storting activities in new, different ways, which can in turn place demands on how the authorities will regulate the sector in the future. More than half of today s licensees have entered the Shelf after 1 January This largely relates to small players who are initially looking for stakes as license partners in established and mature production areas. Other companies are looking for operatorships, also in relatively mature areas where they can take over existing production. In Report No. 7 to the Storting ( ), the Ministry gave an account of the opportunities and challenges entailed by a changed player scenario. The current HSE regulations emphasise the duties of licensees, and in 2001, the PSA established a separate licensee audit project to follow up how the licensees interact with other licensees and safeguard their responsibilities and duties as licensees, including their special responsibility for following up to ensure that the operators carry out their duties. The vast majority of licensees have been subjected to such an audit, in which development of management systems and HSE culture have been key topics The player scenario at the land facilities To a greater extent than on the Shelf, the land facilities face challenges linked to the fact that there are many players with personnel of many different nationalities, all involved in construction or major modification work. This poses particular challenges with regard to language and communication in general. Furthermore, a number of other cultural differences can affect how the activities are organized, and how the organized safety delegate service functions. Another factor is that there are many players involved with many links in the contract chain, which can lead to unclear responsibilities and difficulty in achieving a consistent follow-up Operative conditions on the Shelf Parts of the Norwegian Shelf are characterized as mature. Some fields are entering a period of declining production, while some fields are moving into the cessation phase. Development and operation of small fields poses great challenges, also in relation to HSE. There is still a strong focus on profitability and measures to reduce costs. In this context, it is important to emphasize that the HSE requirements remain the same. A substantial portion of the production from the Norwegian Shelf now comes from wells situated in templates on the seabed. The percentage of subsea wells is expected to increase in the years to come. New solutions involving subsea wells that can be controlled directly from land, rather than from nearby platforms, are being developed. Mapping maintenance management on the part of certain key operators has highlighted the need for long-term strategies for handling the challenges linked to the fact that many fields are now entering the final stages of production. Areas of particular importance here have been costs associated with necessary and long-term maintenance to ensure continued prudent operations, as well as the relationship between maintenance strategies and manning needs. Another development feature is the advancing age of the facilities on the Norwegian Shelf. The access to mobile facilities has been reduced. Moreover, fewer long-term contracts are being signed between operators and rig owners. At the end of 2005, 23 mobile facilities had a valid Acknowledgement of Compliance (AoC), and were thus verifiably in compliance with the provisions of the PSA s regulations; which is a precondition for operating on the Norwegian Shelf. In the Ministry s opinion, the number of facilities with AoCs is basically sufficient to serve the needs for drilling on the Norwegian Continental Shelf. However, some of these facilities will seek assignments in other offshore provinces. Such a development represents a challenge for the industry in relation to maintaining continuity and predictability in their operations. The production from an increasing number of fields is approaching the end of its commercial viability, which means that we expect an increase in the disposal of facilities after production ceases in the years to come. In most cases, this type of activity entails full or partial removal of facilities and equipment. Work operations associated with such removal entail new challenges, also as regards HSE. The activities are also changing through the opening of environmentally sensitive areas. The precondition for this is that the environment and other commercial interests do not suffer. Activities in such areas can only take place following comprehensive overall impact assessments and must, in any event, comply with stringent HSE requirements. There are special requirements in northerly sea areas, such as no discharges to sea during normal operations. 3 3 Study of the consequences of year-round petroleum activities in the Lofoten-Barents Sea area (ULB) - Ministry of Petroleum and Energy, 2003

13 Report No. 12 to the Storting Operative conditions at the land facilities The activities at the land facilities are, in some respects, considerably different from the activities on the Shelf. This applies particularly to development phases for new facilities which encompass technical disciplines in traditional construction work, such as blasting, earth moving, quay facilities, construction cranes and other construction machines and equipment. In addition comes the fact that the land facilities, due to their geographic location, may have a closer relationship to the local community. Like development projects on the Shelf, new developments or major modifications to the land facilities are characterized by short time horizons and tight budgets, which means that a number of parallel activities are underway at the construction sites, with many different players involved. This necessitates overall management of the activities. For most land facilities, integration between Shelf and land means that they are directly tied to the activity that takes place out on the fields they are connected to in that they process gas and/or condensate from these fields in the same way as gas and condensate are processed on the offshore installations. There is thus a mutual dependency between the activities that take place at the respective land facilities and the associated fields. In terms of management, there is a clear dependency relationship which may entail, in part, that if there is a serious incident at a land facility, this will also have major consequences for the activity on the field and the installation that is connected to the land facility, and vice versa. A shutdown of the land facility can thus lead to shutdown of production on a connected offshore installation. Parts of the activities on the offshore installations can also be guided from control rooms at the land facilities. Based on a need for overall risk management and satisfactory handling of HSE factors, it is thus a precondition that the activities on the Shelf and at the land facilities are viewed together and managed on the basis of the same principles. Following the expansion of the EU, use of foreign labour in Norway has become increasingly relevant. As regards the petroleum sector, this particularly applies to the land facilities. The General Application Act (the (Norwegian) Act of 4 June 1993, No. 58 relating to general application of wage agreements, etc.) entered into force at the same time as the EEA Agreement in The purpose of the Act is to ensure that foreign workers receive wages and working conditions that are equal to what Norwegian workers have, ref. Section 1 1 of the General Application Act. According to the legislative history of the Act (Recommendation to the Odelsting No. 98 ( )), the purpose is also to prevent distortion of competition to the disadvantage of Norwegian enterprises and employees. Based on demands from the largest employee and employer organizations in Norway, the Tariff Board, which in addition to three neutral members also includes one member each from LO (the Norwegian Confederation of Trade Unions) and NHO (the Confederation of Norwegian Enterprise), can decide that wages and working conditions that follow from a nationwide collective wage agreement shall apply to everyone working within activities that fall within the scope of the relevant collective wage agreement. On 11 October 2004, the Tariff Board passed a resolution to partially apply three collective wage agreements to the land facilities, cf. the Regulations relating to general application of wage agreements for certain petroleum facilities on land (10 November 2004, No. 1396). The Regulations cover seven of the petroleum facilities on land that lie under the PSA s jurisdiction, and entail that all workers at the facilities, both Norwegian and foreign, who perform work covered under these Regulations, are entitled to the wages and working conditions that follow from these Regulations, as a minimum. Under the General Application Act, the PSA is authorized to carry out audits to ensure that general application decisions are observed in the activities. The PSA is also the supervisory authority under the Immigration Act, and shall thus carry out supervision to ensure compliance with terms for granting work and residence permits About information technology There is a clear trend toward the development of more integrated work processes in the main activity areas such as drilling, operations and maintenance. This integration takes place between activities offshore and on land, between operators and suppliers, as well as between activities in Norway and internationally. Development and use of information technology and digital infrastructure is a precondition and a driving force for a development that will increasingly entail opportunities for remote monitoring and remote control of activities on the Shelf. Such a development, which presumes close operative interaction between a number of players, could lead to significant changes in the work pat-

14 14 Report No. 12 to the Storting terns on the Shelf and in the operative support environments on land. This also yields increased possibilities for transferring tasks from offshore to land. Through this development, the working environment in parts of the activities on land will thus take on greater significance for the operational safety on the Shelf. For a number of years, the authorities and the industry have focused on the development of new methods of evaluating the interaction between man, technology and organization (MTO) in the planning and design of operations and the design and use of equipment, as well as in investigations of incidents. The Ministry emphasizes the need for the ongoing change processes to focus on HSE challenges and opportunities linked to e-operations, including a central position for the MTO perspective. How the employees perceive safety on the job is another key consideration in this context. The digital infrastructure on the Shelf, particularly the fiber optic cable network that links the operating units, is rapidly being expanded and further developed to meet the needs arising from new ways of using data. However, this development is fragmented and many different players are involved. Ownership and operations structures are also undergoing change. New forms of operations with increased use of information technology mean that the accessibility of infrastructure, both in normal operations and when handling deviations, is increasingly important to the safety of the activities Working hours arrangements The working hours arrangements on the Shelf differ considerably from the general working hours arrangements on land. In several areas, they also challenge the established health and safety standards for how working hours are organized. With regard to major building and construction projects at the land facilities, new working hours arrangements are being set up. Using their right of nomination, the employee organizations have, for example, allowed schemes that entail 12-hour shifts for up to 14 days. However, this is tied to a condition that the scheme shall not be combined with night work or overtime. The industry is also establishing more and more operations centres on land, where 24 hour continuous operations are planned. This could lead to a trend towards coordinating shift schemes between land and the Shelf. 2.3 Details regarding development of HSE results All accidents that result in loss of life or serious personal injuries are tragic and will entail significant consequences. In order to establish a picture of the risk potential associated with major incidents, one nevertheless normally differentiates between incidents that have a so-called major accident potential due to their special scope and the consequences associated thereto. There are several definitions of what constitutes a major accident. One definition is an accident where several individuals and/or the surrounding environment, suffer direct exposure to harm, or exposure as a consequence of industrial activity. This separates major accidents from work accidents that affect individual workers Development in risk level as regards major accidents The results of the project entitled «Risk Level on the Norwegian Shelf» (RNNS) provide key input for the authorities when describing trends in HSE results for the Norwegian petroleum activities on the Shelf. So far, there is no corresponding measurement of risk at the land facilities which are subject to the Petroleum Safety Authority s jurisdiction. However, it has been decided that the RNNS project will also be expanded to cover these facilities. An aggregate indicator for major accident risk has been developed as part of the risk level project. The indicator is based on a risk calculation model which takes into account the frequency and severity of incidents. Each incident is weighted on the basis of its potential for causing fatal accidents. The indicator is relative and the level in 2000 is set at 100. This is a supplement to the individual indicators for the respective incident categories. Worked hours are used as a normalization parameter to offset differences in activity level. Since this is a calculated indicator, it does not show the risk level explicitly. Here it is important to focus on trend developments, rather than on annual variations. As can be seen from the figure, the risk of major accidents overall has exhibited a negative trend in the period from and including 1996 through The reasons for this trend are complex, but incidents related to hydrocarbon leaks and well incidents make a strong contribution as regards production facilities, while construction-related inci-

15 Report No. 12 to the Storting 15 Figure 2.1 dents show the strongest contribution for mobile facilities. The development in risk level linked to the risk of major accidents shows a negative trend from 1996 up to the presentation of Report No. 7 to the Storting ( ). There have been relatively large annual variations in the period after 2000, which in total indicate a flat level. Although the total number of incidents has been reduced in recent years, the potential consequences associated with a few of these incidents are nevertheless so significant that the overall risk does not exhibit a corresponding reduction. Therefore, the desired lasting positive trend cannot be observed here Development in risk level as regards working environment, health and personal safety There are many factors which, independently and working together, have an impact on working environment risk. In some areas, there are also different opinions regarding the connection between influence and health injuries. The petroleum activities are characterized by a number of risk factors in the working environment. Changes in organizations and technology mean that the exposure and strain in relation to the various working environment factors may change in both a positive and negative direction. Certain factors, such as shift schemes and manual labour, can entail the risk of injuries that can develop over a long time period. Strategies for handling risks must therefore combine prevention of known risks, handling of uncertainty surrounding risk and corrective measures Fatal accidents, personal injuries and work-related illness There have been three fatal accidents in the petroleum sector during the period after the presentation of Report No. 7 to the Storting ( ). In 2002, a fatal accident occurred on the Byford Dolphin during work on the Sigyn field, as well as a fatal accident on the Gyda field. Yet another fatal accident occurred in 2005 during construction work at Nyhamna. The latter is the first fatal accident within the PSA s jurisdiction at the land facilities. There was a definite increase in the frequency of serious personal injuries per million hours worked on the Shelf in the latter part of the 1990s. A reduction has been observed from the peak in During the period , the scope of serious injuries reported to the PSA has shown a marked decline and in 2004 the rate was at a level that was significantly lower than the average for the ten preceding years. Then, for the first time, we observed that the injury frequency (serious personal injuries) for contractor employees was lower than for operator employees on the production facilities. In 2005, however, the positive sinking trend was reversed, and the frequency of serious personal injuries on the Shelf increased in 2005 compared with 2004, bringing it back on a par with the average of the ten preceding years. An overview of serious personal injuries in the petroleum activities at the land facilities will not be established until Cases of work-related illness reported to the Petroleum Safety Authority are relatively stabile, both as regards scope and distribution of illness categories. Muscular-skeletal ailments and chronic hearing loss account for about 80 % of the cases. A review of the distribution of diagnoses in RTV/ SSB s registry of doctor-approved sick leave, and the distribution of self-reported ailments in the RNNS survey, support the extent of muscular-skeletal ailments, but indicate a substantial underreporting of work-related mental ailments to the PSA. The number of reported work-related illnesses as a consequence of the effects of chemicals has stayed at about the same level in recent years. As regards noise-related injuries, the number has increased somewhat. This may be due to changes in the criteria for reporting hearing damage, such as the inclusion of new occupational groups exposed to high levels of noise. A significant number of hearing loss injuries continue to be reported to the PSA.

16 16 Report No. 12 to the Storting Reports from relevant working groups and projects A study carried out by the National Institute of Occupational Health (STAMI) of the scope of work-related illnesses and injuries on the Shelf points out that work-related illness very likely leads to absence, disability and work-related death at a rate that is higher than corresponding consequences of work accidents. It thus follows that illness is a source of higher costs than injuries, although this is not unique to the petroleum activities. Therefore, the authorities will follow up to ensure that the industry places more emphasis on the reduction of health injuries that are due to exposure to various working environment factors, in addition to their work on systematic reduction of personal injuries. Based on national surveys, STAMI estimates that % of sick leave may be work-related. According to the RNNS questionnaires, there is a greater percentage of workers who, during the course of the past year, have been away from work due to their own illness. The percentage of people who have sick leave lasting more than 14 days has also increased. Nevertheless, the overall scope of sick leave on the Shelf is low. The number of people receiving disability pension from the petroleum activities on the Shelf has increased significantly in recent years, and was about 700 in There is great uncertainty associated with how many of these are work-related disability. Other development trends, such as higher average age, also affect the scope. If we apply the same percentage as for sick leave (25 40 %), the estimated scope of work-related disability from the Shelf is in the range of new cases per year. The average age in these cases is similar to those who receive disability pension on land. Based on a comparison of available research and public registries, STAMI concludes that there are certain indications that work-related mortality among current and former Shelf employees is somewhat higher than for the general workforce in Norway. However, here both STAMI and the PSA note that there is great uncertainty concerning the estimates and there is a need for more in-depth study. Work-related mortality, disability and other health-related exclusion are often the result of long-term influences involved in the work situation. In 2001, the Ministry appointed a multi-party working group to study the causes of exclusion. The working group points to a number of factors related to physical and psycho-social aspects and how the work is organized that have proven to have an impact on workers health. The report specifically points out challenges related to psycho-social factors and shift schemes in the offshore activities that can make a particular contribution to health problems and exclusion How offshore employees perceive HSE conditions Among other things, two RNNS questionnaire surveys have been conducted (2001 and 2003) which illuminate central aspects of offshore employees perception of HSE conditions at their own workplace. The questionnaire survey is extensive and provides information about several factors. The surveys show that the employees have experienced an improvement in working conditions from 2001 to 2003 as regards workload, work tempo and the number of heavy physical lifts. The number of employees who report that they do not feel sufficiently rested at work is still relatively high. The responses also indicate that factors in the immediate work situation, such as communication with colleagues, the employee s own role in emergency response, and the relationship to their immediate supervisor are described as posing the fewest problems. Factors associated with more general aspects at the organization level, such as deficient cooperation between operator and contractor, as well as weighting of financial factors as compared with safety factors, are experienced as being more troublesome. The Ministry notes that the development in offshore employees perception of HSE conditions at the workplace is moving in a positive direction. 2.4 Comparisons of health, safety and environment results A condensed description of health, safety and environment results in an enterprise or business sector must be based on extensive background material. Relevant information includes the installations and equipment s technical and operational robustness in relation to continuous loads resulting from planned operations, emergency incidents and sabotage/deliberate destructive acts. Results of audits carried out, risk analyses, investigations and statistics covering actual accidents, injuries and other undesirable events provide similarly important

17 Report No. 12 to the Storting 17 information about HSE levels, and how they are developing. At the same time, statistical accounts have built-in weaknesses as regards the reliability of the data used. It may take time before an unfortunate development in the way the activities are organized and run results in incidents that emerge in statistical material. Similarly, it can take time before a positive development in an area becomes visible in the form of improved statistical results. In addition, statistical information looks back on the past, and does not provide any direct information about the underlying risk. This particularly applies to accidents and incidents that occur rarely, such as major accidents. Another weakness is linked to the reporting procedures themselves, where different reporting routines or changes in reporting routines along the way could yield incorrect descriptions of situations. Therefore, it is at least as important to obtain an unbiased overview of how the employees experience risk factors and evaluate the management systems ability to safeguard health, safety and environment, and possible changes over a shorter time horizon. As the authorities see it, there are no statistics or other information available today that allow for a good and overall comparison of health, safety and environment results between different industrial sectors or between the petroleum activities on different continental shelves. However, based on various studies and feedback, the authorities assessment is that the petroleum industry on the Norwegian Shelf has generally maintained high standards in these areas, in both a Norwegian and an international perspective. With a point of departure in specific feedback regarding better safety levels on other continental shelves, the PSA, through dialogue with the petroleum authorities in other countries, and in a dialogue with the industry and research communities, follows up to investigate the areas in which this might apply, so that measures can be implemented to further improve health, safety and environment in the activities on the Norwegian Shelf. In the same manner, the authorities also expect the industry to actively seek out opportunities for sharing experience. Through the established International Regulators Offshore Safety Forum (IRF) an initiative has also been made to develop a common format for reporting incidents and personal injuries in the petroleum activities, so that in the future joint safety statistics can be used for comparisons.

18 18 Report No. 12 to the Storting Regulating HSE in the petroleum activities 3.1 Introduction The framework for HSE in the petroleum activities assumes prudent health, safety and environment results. This must always emerge as the most expedient for the industry and for the supervision carried out by the authorities. A framework for the activities is developed on different levels, by different players and in different ways, including through the use of regulations, guidelines, international agreements, agreements between the parties, standardization, common industry norms and internal company specifications. At the same time, the petroleum industry encompasses complex industrial activities, both offshore and on land, with many interfaces between different players and the authorities. The activities are characterized by continuous technological and organizational development. The petroleum industry is international. Basic international law and special conventions may entail restrictions in how Norway exercises its authority. The EEA Agreement also entails guidelines for harmonizing parts of the HSE regulations towards a common set of European regulations. When formulating the HSE regulations for the offshore petroleum activities, emphasis has been placed on developing an integrated set of regulations stipulated and enforced by the Petroleum Safety Authority (PSA), the Norwegian Pollution Control Authority (SFT), the Directorate for Health and Social Affairs (Shd) and the Norwegian Board of Health (Htil) jointly. Emphasis has been placed on utilizing existing regulations insofar as practicable. Great importance has also been placed on describing interfaces to adjacent regulatory regimes. This has facilitated the simplest possible interface between the authorities and the industry. The intention behind this form of regulation is that all issues relating to health, safety and environment are to be viewed in an overall context. In this connection, the authorities place great emphasis on ensuring that the responsibility for HSE in the activities lies with the decision-makers. In addition, operators/licensees have a particular responsibility for following up the overall activity in the form of the supervisor responsibility. The regulations largely contain functional requirements in which standards and norms indicate what is to be considered a responsible level pursuant to these regulations. In this way the regulations can meet the challenges associated with continuous change processes in a complex industry. At the same time, the safety authority benefits from the standardization work carried out by the industry itself on the basis of its own needs, and facilitates and encourages good transfer of experience in the industry. In those cases where functional requirements require dialogue regarding specific alternative solutions, the regulations require that the parties be involved. The Ministry has noted that national and international regulatory regimes are gradually applying similar principles as a basis for regulation. Box 3.1 Important policy instruments for the authorities overall management of HSE in the petroleum activities are: Award of exploration and production licenses on the Shelf Consent system Development of an expedient framework, including: Cooperation with the parties in regulatory development, HSE research, etc. Participation in national and international standardization work International cooperation between petroleum authorities Supervision of the players management and follow-up of health, safety and environment in the activities Use of means of enforcement in connection with violations of regulations, inadequate follow-up of decisions, etc. Advice and guidance to the industry so that it can comply with all of its duties under the regulations

19 Report No. 12 to the Storting 19 The development in the petroleum sector entails greater integration of the activities on land and offshore. In light of this and as it emerges in Report No. 17 to the Storting ( ) on government supervision, and on the basis of the Storting s Standing Committee on Local Government s recommendation to Report No. 7 to the Storting ( ), a decision has been made to draw up integrated regulations for the petroleum activities on land and offshore, based on the HSE regulations for the Shelf. Reference is made to Section HSE regulations in the petroleum activities HSE regulations on the Shelf An integrated and coordinated set of regulations has been prepared for the petroleum activities on the Shelf, stipulated in September 2001 and in force as from 1 January The Directorate for Health and Social Affairs, the Norwegian Pollution Control Authority and the Petroleum Safety Authority govern together through overarching regulations relating to health, safety and environment in the petroleum activities, as well as four supplementary regulations governing the areas of management, operations, technology and submission of information to the authorities. The regulations are mainly stipulated in accordance with the Act of 29 November 1996 No. 72, relating to petroleum activities (the Petroleum Act), the Act of 17 June 2005, No. 62, relating to working environment, working hours and job protection, etc. (the Working Environment Act), the Act of 13 March 1981 No. 6 relating to protection against pollution and regarding waste (the Pollution Control Act), as well as the health statutes. The HSE regulations are risk-based. Having a joint set of regulations makes it possible to consider risk in context, and measures can be implemented to contribute to overall risk management. The regulations must be interpreted as a function of the specific risks that apply in each individual activity. Most often, the sector s and the authorities measures to improve management of risk in one area have a positive impact on risk level and conditions in other parts of the activities. A number of different considerations form the basis for the professional and discretionary evaluations that are made when frameworks and regulatory decisions are to be studied in terms of impact assessment and/or resolutions. There may be cases where various considerations may conflict with each other. One illustrative example is a case where the use of alternative chemicals to reduce risk to the external environment may pose a greater health risk for the employees that handle these chemicals. In such cases, these considerations must be balanced. A continuation of today s coordination among the authorities is important in order to ensure this. The requirements in the HSE regulations are largely formulated as functional requirements, whether they relate to technology, operations, management systems, consideration for human life and health or the external environment. Compliance with functional requirements means that responsible players determine specifically how the requirement will be met, on the basis of the specific risk factors linked to the respective activities. Therefore, the challenge in complying with the HSE regulations depends on the distinctive characteristics of each individual activity. When the existing regulations for petroleum activity on the Shelf were developed, the purpose was, in part, to facilitate better exploitation of recognized industry standards, ensure more uniform and inter-disciplinary approaches to specific areas and improve predictability as regards application of the regulations. Reference is made to industry standards as recommended norms in guidelines to the regulations, where responsible players can choose to use such recommended industry standards as a basis in the area of health, safety and working environment, or in some other manner document that the selected solutions fulfil the regulatory requirements Safety and working environment regulations on land When the Petroleum Safety Authority was separated from the Norwegian Petroleum Directorate in line with Report No. 17 to the Storting ( ) relating to government supervision and the Crown Prince Regent s decree of 19 December 2003, specifically defined petroleum facilities on land fell under this body s jurisdiction. In order to give the Petroleum Safety Authority the necessary basis for carrying out supervision of these land facilities pending an integrated set of regulations for both the Shelf and land, provisional regulations were drawn up relating to safety and working environment for certain petroleum facilities on land and associated pipeline systems. Under these regulations, the Petroleum Safety Authority enforces the working environment and safety regulations that were stipulated by the Directorate of Labour Inspection and the Directorate for Civil Protection

20 20 Report No. 12 to the Storting and Emergency Planning (DSB). The statutory basis for the regulations is thus the Act of 14 June 2002 No. 20 relating to protection against fire, explosion and accidents involving hazardous substances and the fire service s rescue tasks (the Fire and Explosion Prevention Act), the Act of 24 May 1929 No. 4 relating to the supervision of electrical installations and electrical equipment (the Electrical Supervision Act) and the Act of 11 June 1976 No. 79 relating to inspection of products and consumer services (the Product Control Act), in addition to the Working Environment Act and the Petroleum Act. 3.3 The integrated HSE concept The health, safety and environment term (HSE) is used to describe the overall scope of current regulations for the petroleum activities. The HSE term, as it is used in the petroleum activities, has broad application and must be understood in light of the areas governed by the respective statutes that apply to the activities. Among other things, HSE includes safety and environment in the sense of the Petroleum Act s provisions, including measures designed to prevent injuries to personnel, harm to the environment and damage to material assets, including measures to maintain production and transport regularity. HSE also includes the working environment which, under the Working Environment Act, is a generic term for all factors in the work situation that can have an effect on the employee s physical and mental health, the ability to work safely, welfare and rights and obligations as regards participation. The HSE term also includes health which, according to health legislation, is intended to cover a more narrowly defined part of the activities, specifically health services, health preparedness, transport of sick and injured personnel, hygienic conditions, drinking water supplies, production and serving of food and beverages, as well as other factors of significance for health and hygiene. Health services mean both curative and preventive services. Hygiene encompasses occupational hygiene and other measures that are implemented with the objective of preventing illness or promoting good health, also beyond that which is normally linked to the development of a proper working environment. Therefore, hygiene includes all factors that cover health protection work aimed at individuals or the working environment. With regard to preventive health services and hygiene, the authorities responsibility will be divided between the Ministry of Health and the Ministry of Labour and Social Inclusion, cf. regulations relating to environmental health protection, including water supply, and working environment, respectively. The purpose of the Act of 13 March 1981 No. 6 relating to protection against pollution and relating to waste (the Pollution Control Act) is to protect the external environment from pollution. The Act shall ensure prudent environmental quality so that pollution does not lead to damage to health or harm to the natural environment, ref. Sections 1 and 6. As regards the land facilities under the Petroleum Safety Authority s jurisdiction, the safety term must be interpreted in light of the Fire and Explosion Prevention Act and the Electrical Supervision Act as legal basis. The provisional regulations for the land facilities do not govern healthrelated factors that fall under the jurisdiction of the health authorities or the external environment, which falls under the Pollution Control Act. Nevertheless, for practical reasons, this Report will use the HSE term when referring to the entire scope of authority of the Petroleum Safety Authority, unless the context indicates otherwise. 3.4 Key factors that determine how HSE is regulated Regulation of HSE in the petroleum activities is a complex issue. Behind each individual element lie various grounds and considerations that must be balanced. Political objectives, national and international commitments, ethical guidelines, knowledge development and principles regarding participation, etc. are all elements that help determine how the regulations are designed and complied with Political objectives Paramount political objectives form the foundation for the Ministry s instructions to subordinate bodies as regards the management philosophy to be applied for governing the activities and implementing the regulations. Key objectives in the HSE area, also as expressed in previous reports to the Storting, are for the petroleum activities to be a pioneering industry based on learning and continuous improvement, as well as the goal of zero injuries/

21 Report No. 12 to the Storting 21 damage and accidents in the petroleum activities (zero philosophy). The authorities base themselves on an interpretation that entails a deliberate commitment to quality, knowledge and the search for safer, more effective and smarter solutions. This applies to management, technology and work processes. When regulating the activity, these objectives can affect both which development features and trends the authorities want to influence, and what types of changes should be implemented in the regulations to achieve the objectives. The objectives can also have an impact on the intent of and requirements in the regulations, and in the selection between use of alternative policy instruments International and national regulatory frameworks General international law and signed international treaties, agreements and conventions guide the formulation of HSE regulations. A central example in this context is the obligations under the EEA Agreement. Directives in the EEA Agreement are guidelines for Norwegian HSE regulations, in keeping with the demand for total harmonization within the EEA Area (all EU countries and Norway, Iceland and Liechtenstein). In contrast to minimum harmonization, total harmonization means that member countries are not allowed to go further than the directives when stipulating the national protection level. These directives place demands on the quality of products before they enter the market, and also when they are used in the workplace. In addition, more than 20 working environment directives 4 have been made part of the EEA Agreement for the purpose of ensuring a single European market in the EEA countries through harmonization with common minimum provisions. Although the EEA countries can go farther in the implementation of the individual directives, the national regulations cannot depart from the general EEA law principles of ensuring a single market with free exchange of goods and free movement of services, persons and capital. Adaptations of the HSE regulations may also be necessary as a consequence of other national regulations or management reforms that have a bearing on the regulations. One aspect of the governing process is the interaction between regulations laid down by the authorities and standards or norms developed by standardization organizations or the industry. Standards prepared under the direction of national and international standardization organizations are of particular importance in the petroleum sector. In addition, a number of national petroleum standards have been developed under the direction of the Norwegian petroleum industry (NORSOK standards). Development of standards in these areas has facilitated regulatory development that is based more on functional requirements and where the standards provide more details regarding prudent levels of operation Ethical assessments Regulating HSE includes a clear ethical dimension linked to what constitutes acceptable or unacceptable risk levels in an activity. Ethical principles do not provide absolute guidelines for what constitutes an acceptable or tolerable risk level, or what values should be considered when weighing risk against other factors. However, they do point towards more general factors for how such decisions should be made. A key aspect here is the right to expose others to risk. It is a recognized principle that enterprises that carry out activities involving risk cannot determine what constitutes an acceptable risk level on their own, but must provide the authorities and the society at large with the best possible information about the nature of the activity so as to achieve an overall evaluation of acceptable risk, and how society s interests and framework conditions are safeguarded. From an ethical perspective, another key element is the right to participate in decision processes for those who will be exposed to risk. Therefore, enterprises that carry out activities involving risk are required to involve those that will be exposed to this risk. Furthermore, the duty to apply generally accepted methods or standards for risk reduction is another key element. The same assumptions regarding participation must be made when the authorities prepare riskbased regulations. Therefore, the petroleum authorities have planned for broad-based participation by employers and employees in connection with work on the regulations. In addition, all regulations are sent out for ordinary consultation processes so that other affected parties also have an opportunity to comment. 4 Change directives are not included.

22 22 Report No. 12 to the Storting Principles for risk reduction The HSE regulations assume that if there is insufficient knowledge concerning the effect that use of technical, operational or organizational solutions may have on health, safety or environment, solutions must be selected that will reduce this uncertainty. Areas which may entail substantial uncertainty regarding consequences are linked to long-term health effects and impact on the external environment. A high degree of uncertainty in general is justification for a cautious approach, e.g. through conservative evaluations and estimates, such as barrier requirements and robust solutions or application of principles such as ALARP (as low as reasonably practicable). If there is insufficient knowledge concerning the possible effects of a preventive measure, according to the HSE regulations additional measures must be implemented to avoid potential harmful effects Development of knowledge Different experiences gained must be emphasized when formulating specific provisions in the regulations. Important knowledge in this respect will be related to handling and follow-up of accidents and incidents, both in Norway and abroad. This applies to accidents and incidents in the petroleum activities, as well as in other industrial activities. Formulation of specific regulatory requirements is also affected by experience gained in carrying out the regulations, in part in connection with exercising supervision or other processing and feedback from those affected by the regulations. In addition comes new professional knowledge acquired through research and development, both national and international. Overall, the sum of such experiences forms the main basis for how the authorities formulate the regulations. both the authorities regulations and supervision, as well as how the industry runs the activities Safeguarding working environment Safeguarding the working environment is a key part of regulating HSE, and is also an important precondition for ensuring prudent operation of the activities. The Working Environment Act requires a satisfactory working environment, which includes follow-up of how the enterprises manage the activity to reduce the risk of individual employees being exposed to the danger of physical or mental strains that can lead to injuries or illness. Regulating the working environment is also aimed at managing the risk of mistakes that can lead to hazard and accident situations. Other requirements in the Working Environment Act are linked to employees development opportunities, rights of participation and duties, welfare and job protection. Frequent change processes and more complex operational solutions entail an increased need to view the Petroleum Act s requirements for safety, and the Working Environment Act s requirements, in a single context when developing regulatory requirements and in standardization work. The regulations must contribute towards unifying the considerations of a good working environment, organizing work and safe operations Involvement of the parties Norway has a long-standing tradition of employer and employee involvement. This tripartite cooperation has developed into one of the pillars of employment relations in the petroleum activities. Active involvement of the parties throughout the decision process and equivalence between the parties are prerequisites. Reference is also made to Chapter of this Report regarding ethical assessments, which addresses an important aspect of the broad involvement of affected parties Social assessments linked to the risk of major accidents Risk factors linked to the activities are evaluated by many different players based on their diverse interests, as well as players that are not directly involved in the activities, such as the media and public opinion. Society s perception of the risk associated with incidents and near-misses may differ from the authorities perception of the risk. Nevertheless, society s perception can give definite guidelines for 3.5 Risk management under the HSE regulations in environmentally vulnerable areas It follows from the regulations that stricter measures are required to operate prudently in environmentally vulnerable areas than would be necessary in a less vulnerable area. Pursuant to the HSE regulations, the players must conduct detailed analyses of their own activi-

23 Report No. 12 to the Storting 23 ties to map how dangerous situations may arise and develop, and the potential consequences associated with the various scenarios. The purpose of risk assessments is to identify mechanisms that can lead to acute oil spills, their duration and the volume of oil discharged. Environmental risk analyses identify dispersion patterns, potential impact area, scope of damage and duration of the environmental damage. Risk management requirements in the HSE regulations make the players, i.e. the potential polluters, accountable with regard to implementing the most relevant measures where they can be most effective in preventing acute oil spills, or limiting the consequences of such spills. The safety and emergency preparedness measures must be proportionate to the risk in each individual activity. The higher the risk, the more, and more comprehensive, risk reducing measures must be implemented. Risk identified through analyses affects both the type of measures, the scope of the measures and how the measures are designed/dimensioned. The understanding of risk obtained through risk analyses will form the basis for choosing measures to reduce the likelihood of acute oil spills, and combat such incidents at the source in order to reduce the scope and duration of the spill. The understanding of risk obtained through environmental risk analyses will form the basis for choosing emergency preparedness measures, e.g. in order to discover, map and combat acute pollution at sea and in coastal and beach zones. Safety and emergency preparedness measures in vulnerable areas will have to take place on the basis of comprehensive overall assessments, and therein be adapted to the actual conditions and the risk analyses and environmental risk analyses that the players are obliged to conduct. This means that requirements for e.g. helicopter preparedness and rescue equipment, and preparedness for personal injuries and illness must take account of distances, climate conditions, etc. Extensive national frameworks are in place for the activities through established regulatory requirements, management principles, trend monitoring projects, follow-up and control mechanisms and a broad range of possible sanctions. These frameworks reflect comprehensive knowledge and experience concerning risk management, and they are being continuously developed on the basis of new knowledge, experience, trend monitoring and feedback from the parties. Cooperation among the various authorities has already been established in the petroleum activities, with the shipping and coastal authorities, both for the purpose of preventing oil spills and establishing effective emergency preparedness under the direction of the industry and the national authorities. New areas are opened for petroleum activities following comprehensive overall evaluations. The existing framework is regarded as being satisfactory in order to safeguard risk management also in environmentally vulnerable areas. In the petroleum activities, actual experience from the Norwegian Shelf indicates that the current regulatory and supervisory regime constitutes an important contribution towards preventing and combating acute oil spills. 3.6 Social and business factors Socioeconomic assessment of HSE measures A good working environment, safeguarding life and health and protecting the external environment are strong and independent arguments for ensuring high HSE standards in the petroleum activities. Although it is a fundamental precondition that safety for people and the environment take precedence over financial considerations, a number of social and business factors will still have to be included in professional and discretionary assessments made when decisions are made regarding HSE measures. There may be significant differences between business and social effects when it comes to health, safety and environment. An important cause of the different assessments of these effects is that substantial costs associated with accidents, injuries and work-related illness are not just taken from the enterprise/activity that caused the costs to arise, but are also charged to the public purse. In addition comes the fact that the individual enterprise s incentive to invest in HSE-related measures can be impaired through the spreading of the financial risk associated with potential accidents. In an authority perspective, the overall socioeconomic effects in connection with regulation of the sector must be emphasized, and they constitute an important part of the reasons for choosing the form and level of regulation. From a socioeconomic perspective, it is also important to take into account the potential damage in both the short and longer terms. The health consequences of certain working environment factors often appear through exposure over a longer period of time, or a long time after the exposure occurs.

24 24 Report No. 12 to the Storting Socioeconomic consequences of major accidents An important characteristic of the petroleum activities is that they entail a significant potential for major accidents. In addition to the human aspects, a major accident would also have considerable socioeconomic consequences. Therefore, reduction of major accident risk is a central reason behind the formulation of existing health, safety and environment regulations. A number of elements are involved when the authorities evaluate how to regulate major accident risk. These are discussed in more detail in the SEROS report (2005) 5. Key elements here are probability, causal relations, consequences for health, safety and environment, as well as weighting of the consequences. In connection with the project work in Risk Levels on the Norwegian Shelf (RNNS) there is focus on the likelihood of major accidents. There is also considerable focus on causal relations, both by the authorities and the industry. With regard to consequences, however, little systematic work has been done to provide overall descriptions of this, in both national and international terms. There is not an absolute definition of a major accident, and the research thus covers a wide range of accidents with great variation in financial consequences. The SEROS report presents a framework for evaluating business and socioeconomic consequences of major accidents. Based on the examples, rough estimates are presented for the various cost components. The socioeconomic consequences of a major accident can range over a large interval. Therefore, estimates of the various cost components may vary, as indicated in Table 3.1 below, based on a number of factors. The table indicates a range per cost category. The elements are not totalled, as no major accident will involve maximum values in all of the categories at the same time. Similarly, it cannot be ruled out that a particularly extensive major accident could entail higher costs than the maximum values indicated here. We would emphasize that the cost figures are estimates of the socioeconomic consequences of major accidents. For those who are affected by the accident, the losses range far beyond the socioeconomic evaluation contained herein. The value of a life cannot be measured in kroner or dollars. 5 Centre of Risk Management and Societal Safety (SEROS): "Important factors linked to the authorities' regulation of health, safety and environment in activities with major accident potential, with particular emphasis on the petroleum activities." Table 3.1 Illustration of potential socioeconomic costs associated with a major accident in the Norwegian petroleum activities Cost category Cost in BNOK (billion Norwegian kroner) Costs associated with handling the accident Financial loss linked 0 20 to shutdown Loss linked to reconstruction/ 1 12 removal Costs linked to health effects/ 0 2 loss of life Financial loss linked to longterm loss limitation 0 50 Effect on reputation 1 6 Framework conditions 1 20 The estimate of the business consequences for the directly involved enterprises deviates substantially from the socioeconomic cost scenario. This is due in part to the fact that there are some costs where the enterprises are not fully exposed, such as State costs associated with long-term loss limitation and changes in the industry s framework conditions that affect other activities. In addition, insurance schemes and a marginal tax rate of approx. 78 % entail significant differences. Initially, the Norwegian State will have to cover a very large portion of the socioeconomic costs associated with an accident Socioeconomic consequences of work-related accidents and work-related illness It is desirable, both for the society at large, the individual enterprises and the individual employees, that the activities and working environment be organized in such a way that the likelihood of workrelated injuries and work-related illness is as low as possible. However, the activity on the Norwegian Continental Shelf leads to work-related injuries and work-related illness that entail costs for the society as a whole. Measures to prevent work-related injuries and work-related illness also have a cost aspect. In order to weigh the costs of measures against the gains the measures bring, the Ministry believes it is correct to attempt to quantify the amounts associated with work-related injuries and

25 Report No. 12 to the Storting 25 work-related illnesses. This issue is discussed in a report prepared by ECON 6 for the Petroleum Safety Authority. The report presents estimates for these costs, based on data concerning the scope of workrelated injuries and illnesses on the Shelf obtained by the National Institute of Occupational Health (STAMI), as discussed in more detail in Chapter In addition, estimates are used as a basis for valuation of various work-related injuries and workrelated illness. The total costs associated with work-related injuries, work-related illness and disability pensions are estimated at NOK million per year (2004 prices). The large cost interval is mainly due to uncertainty regarding how much of the sick leave, deaths and new cases of disability on the Shelf are work-related. Table 3.2 shows that the costs associated with absence due to work-related injuries and illnesses amount to % of the total costs. The costs associated with death as a consequence of workrelated illness and injuries amount to about % of the total costs, while the costs associated with disability amount to %. In comparison, the costs of treating work-related injuries and illnesses, transport and rehabilitation are very small sums. Table 3.2 Socioeconomic costs associated with work-related injuries and work-related illness on the Norwegian Continental Shelf. Millions of 2004-NOK per year. Cost component Death Injury Illness Source: ECON (2005) Our estimate Transport Treatment costs 2.5 Injury Illness Disability Injury Illness Rehabilitation Total A central point of departure for the total cost estimate is what kind of estimates have been used for the statistical value of a human life. The value of a statistical life does not indicate the value of a human life, but rather the socioeconomic willingness to pay to implement measures that could presumably lead to avoidance of a death. It is also important to emphasize that the value of a statistical life is an uncertain amount. The calculations above are based on an estimate of NOK 21.9 million. 7 When we include the costs associated with reduced quality of life as a result of various illnesses and injuries, which with considerably uncertainty can be estimated at NOK million per year, it emerges that the costs associated with work-related injuries and illnesses on the Shelf can represent very significant amounts. Here too, there are considerable differences between the socioeconomic costs and the business costs. There is substantial uncertainty as regards the estimates, nevertheless, the figures indicate huge costs for society at large that must be taken into consideration when evaluating the need for measures. Costs and socioeconomic effects of workrelated accidents are also the object of work in the EU. This is expressed inter alia in the EU s working environment strategy for Even though these figures are also very uncertain, they help support the evaluations of the socioeconomic importance of HSE made above Business incentives for HSE focus The business effects of a measure will be a natural part of the evaluation when individual enterprises consider HSE measures. Central elements in a business context are the costs associated with measures that affect accident or injury prevention, and thus lead to reduced risk, as well as costs associated with an accident or an injury, if such should occur. At the same time, the industry states that it is very important to take care of the workforce, which represents high and specialized expertise. In addition to the «useful effects» of a measure in the form of reduced risk to individuals, the external environment and material assets, HSE measures can also have other business effects. Among other things, an HSE measure can lead to savings in design and modification costs and/or savings in operations and maintenance costs. 6 ECON is an independent investigation, research and consultancy firm. 7 Based on the estimates from Elvik (1993) which are in turn adjusted upwards to the 2004 level.

26 26 Report No. 12 to the Storting Box 3.2 HSE measures All of an enterprise s measures or adaptations that can have a positive effect on HSE results. The measures may be dedicated, but could also be decisions with a different primary purpose than improved HSE. A good example is technological development initiated for other reasons, but which could have significant positive effect on HSE results. Regulatory requirements related to management to ensure that HSE is incorporated as part of the enterprise s management system can also have positive effects for management of the enterprise in general. Through its audit activity, the Petroleum Safety Authority sees that there is a close connection between management of quality, regularity and HSE. In connection with assessments related to HSE measures, it is the authorities opinion that positive effects from HSE measures often do not receive much attention, which can lead to a somewhat one-side focus on costs. As regards the business incentive to invest in preventive HSE measures, it may often be important to the individual enterprise to determine the extent to which it can share these costs, or transfer them to other enterprises or to the State. A significant portion of the business costs associated with accidents and injuries is thus spread among several parties, in part through the license organization with several licensees, through insurance schemes, through the tax system and through the State s ownership in licenses. In addition comes the spread of financial risk vertically through the value chain. The costs associated with damage to an enterprise s reputation, which can represent a significant percentage of the total costs associated with the accident, cannot be reduced in the same way by spreading financial risk. The negative effect reduced reputation may have on the individual enterprise may therefore be an incentive for investing in HSE measures. High HSE standards are generally a precondition for carrying out the activities, including in new areas that have been opened to petroleum activities following comprehensive overall evaluations. Special requirements are stipulated for discharges to sea and emergency preparedness for spills in connection with petroleum activity in northern sea areas, and the opportunities provided under the regulations for stipulating strict safety requirements are exercised to the fullest extent. Therefore, based on such assessments, high levels of HSE and profitability complement each other. 3.7 Costs associated with HSE regulation National objectives in the area of HSE are expressed inter alia in previous white papers which confirm that the petroleum activities are to be a pioneering industry based on learning and continuous improvement. The Soria Moria declaration further emphasizes that the petroleum sector shall lead the world when it comes to HSE. The Petroleum Safety Authority has the technical responsibility for preparing regulations to govern safety and working environment in the petroleum activities on the Norwegian Continental Shelf and associated facilities on land, as well as a coordinating responsibility for developing general HSE regulations for the petroleum activities. The Petroleum Safety Authority (PSA) has placed great emphasis on dialogue and cooperation with the affected parties in connection with development of the Shelf regulations, and has received good feedback on this multi-party cooperation. As a result of this cooperation, there has also been a high degree of consensus concerning the formulation and content of the regulations that now apply to the activities. In spite of the established regulatory cooperation and the fact that the regulations in the safety and working environment areas refer to the industry s own normative documents, the authorities have still invested considerable resources over the past decade on following up general assertions from parts of the industry that the HSE regulations contain many requirements that are unique to Norway and cost-driving. It is also asserted that the Norwegian authorities enforce regulatory provisions in an unreasonable manner in relation to other Shelf countries with which Norway can naturally be compared. This criticism has mainly been in relation to the regulations for mobile facilities which move from shelf to shelf, and they have particularly been concentrated around working environment issues. As regards regulation of the working environment, the Ministry would refer to the Storting s decision in 1992 that the Working Environment Act, with a few exceptions, would also apply to mobile facilities so that all employees on Shelf facil-

27 Report No. 12 to the Storting 27 ities would be subject to the same safety and working environment rules. In the Ministry s opinion, the Norwegian HSE regulations per se are not particularly cost-driving or otherwise out of line with the regulations in other countries. This emerges both from comparative studies of the Shelf regulations in other countries and a number of reports from various committees and working groups, as well as the sum of the answers that have emerged from specific inquiries. 8 Among other things, a study conducted by the drilling contractor company Smedvig in cooperation with Norwegian and British shelf state authorities, «Regulatory Requirement Project (NPD vs. HSE)«, shows that the HSE regulations in the United Kingdom and Norway are largely concurrent, but that enforcement practices differ in some areas. Different enforcement practices between offshore provinces can mean that upgrades may be required in relation to working environment for older installations that want to work on the Norwegian Shelf for the first time. Such requirements, which can entail substantial investments, may be founded both in the authorities regulatory requirements and in the requirements stipulated by the operators for assignments on the Norwegian Shelf. There are also a number of added costs associated with upgrades that are not related to Norwegian HSE regulations, but which are attributed to upgrades of equipment due to normal aging, inadequate maintenance, correction of nonconformities in relation to international rules and/or ambitions of being attractive to multiple customers. If it is the case that the authorities enforcement practices and the industry s practical compliance with the regulations have expensive implications, these are factors that all of the parties in question must address, in order to avoid investments that no party feels will improve HSE results. On this basis, the Petroleum Safety Authority has commenced an internal review of its enforcement practices. The objective is to achieve improved and more consistent enforcement on the part of the authorities, by establishing stronger focus on knowledge and application of the regulations, as well as further development of procedures for processing these matters. The Ministry will follow up the PSA, in particular to ensure that the parties are involved when major changes are made in 8 Ref. e.g. the Lenning and Ognedal committees, the Rig Market Report (2000), Norsok's HSE committee, the Smedvig study ( ), Konkraft (2004). guidelines or how the rules are interpreted. In such cases, the Ministry of Labour and Social Inclusion must be informed in line with ordinary processing routines. With regard to the industry s compliance with the regulations, the Ministry would point out the importance of ensuring that the enterprises familiarize themselves with and take the regulations into consideration even as early as the planning stage. It is the Ministry s perception that the costs of a measure will depend on how risky an activity is, but also on what types of solutions are selected and whether the company decides to implement measures of the necessary type and scope at the right time. The Ministry is aware that the Norwegian Oil Industry Association (OLF) is in the process of implementing a new internal cost analysis of the regulations and assumes that any conclusions from this review will be shared with the affected parties so as to facilitate a discussion of the results, and so that the PSA can see these in context with the ongoing regulatory work, see Section 3.8 of the Report Costs associated with remotecontrolled pipe handling The regulations of various offshore provinces have grown closer in recent years. However, one of the major differences between the Norwegian and British shelves today is the requirement for mechanical drilling equipment. The requirement for remote control of operations on the drill floor on the Norwegian Shelf goes all the way back to 1981, and was expanded in 1992 to also cover drill collars and casing. A requirement was also introduced to use remote-controlled equipment to transport pipes from storage to the drill floor. Estimates made by the industry place upgrade costs to comply with this requirement at an average of approx. NOK 20 million per facility. Rogaland Research (now IRIS 9 ) prepared a report in 1999, «Remote-operated pipe handling, changes in personnel safety, working environment and health» with the objective of mapping the effects of the transition from manual to remote-controlled pipe handling on safety, health and working environment offshore. The main conclusion from the analysis of injury rates is that the introduction of remote-controlled pipe handling equipment had contributed to a significant reduction in drilling injuries. A basis was also found for the claim that 9 International Research Institute of Stavanger

28 28 Report No. 12 to the Storting remote-controlled pipe handling equipment has had a positive effect on health and working environment in drilling. 3.8 Formulation of general HSE regulations for offshore and land facilities As previously stated in the Report, technological development entails increasingly close integration between the petroleum facilities on land and offshore. The land facilities are taking on increasing importance in an overall production perspective. More and more operations on the Shelf are monitored or remote-controlled from land, and jobs are being moved from or divided between the Shelf and land. In order to safeguard health, safety and environment in the best possible way, more integrated HSE regulations are being drawn up for the overall activities that also take into consideration the special factors that apply to the land facilities. The reason for having joint regulations between the HSE authorities is to have an overarching perspective of risk management, thus making it possible to adapt measures to eliminate and reduce various types of risk. There are different considerations that form the basis for the professional and discretionary evaluations that are made when frameworks and regulatory decisions are to be studied in terms of impact assessment and/or resolutions. There may be situations where different considerations conflict with each other and must be considered in a balanced manner. A continuation of the current coordination on the authority level is important in order to ensure this. Often, however, the enterprise s and the authorities measures to improve risk management in one area can have a positive impact on risk levels and conditions in other parts of the HSE area. Therefore, the Ministry believes that joint regulation also of the land facilities can contribute to streamlining benefits, in that the requirements will be more basic and the users will find all the requirements presented in a single document/set of regulations. In its consideration of Report No. 7 to the Storting ( ), ref. Recommendation to the Storting No. 169 ( ), the Storting pointed out the importance of ensuring that the supervision is based on the same legislation for the entire area, so that the industry has the same legislation to deal with on land and offshore. When the Petroleum Safety Authority was established in December 2003, it was decided inter alia that the PSA would coordinate the preparation of such general HSE regulations for the petroleum activities on land and offshore Systematic collection of experience with current land and Shelf regulations (user survey) In order to create a good foundation for the regulatory work to be commenced, and as part of the work to conduct a systematic review of the strengths and weaknesses of the current regulations, a user survey concerning the regulations was implemented in the fall of 2004 January Implementation of the user survey was planned as a sub-project in connection with the regulatory project to develop general and coordinated regulations for health, safety and environment in the petroleum activities on the Shelf and at certain facilities on land. In order to ensure independence in relation to the authorities responsible for drawing up the regulations, the PSA decided that the survey would be conducted using external consultants. The survey consisted of a combination of a questionnaire and follow-up meetings. All of the most central user groups in the industry, employers and employees participated in the survey. Generally speaking, the regulations received good feedback and few comments were received regarding specific provisions in the regulations. However, there were individual comments by users, both on the part of the authorities and the industry, regarding the use of the regulations. In addition, there were comments concerning the need for clearer interfaces between the offshore regulations and other regulations, e.g. in relation to maritime regulations. The results from the user survey are documented in the «Report User Survey 2004» New general regulations for Shelf and land The work to develop joint basic regulations for the petroleum activities as a whole has been divided into two phases in which the PSA was to look into factors such as: visions, opportunities and limitations in the work to prepare a set of regulations to govern the activity on the Shelf and on land as a whole, and that safeguards the interfaces with other authorities in an orderly and coordinated manner, and development of systematic, consistent and easy to understand arrangements.

29 Report No. 12 to the Storting 29 In order to give the PSA the necessary basis on which to supervise the land facilities during the period up to when new regulations are in place, provisional regulations were prepared for safety and working environment in certain petroleum facilities on land and associated pipeline systems. The regulations apply to the following land facilities: Kårstø, Sture, Kollsnes, Mongstad, Tjeldbergodden, Melkøya and the refinery at Slagentangen. The provisional regulations give the Ministry of Labour and Social Inclusion the authority to decide that future integrated offshore or land facilities, or other facilities of such type, with associated pipeline systems, are to be wholly are partially subject to these regulations. According to the guidelines to the provisional regulations, other facilities of such type could include gas power plants. It has been resolved that the regulations will cover the facility at Nyhamna in Aukra municipality in connection with development of the Ormen Lange field. A decision has also been made that the regulations will apply to three planned gas power plants in Skogn, Hammerfest and Grenland, and that the PSA will thus have supervisory responsibility for these facilities. The preparation of the provisional regulations also ensured that changes on the authorities side in the preliminary phase would not lead to unintentional changes in the regulations or enforcement practices for the industry on land. New basic regulations for the petroleum activities on the Shelf and on land are being prepared, and the plan is to complete these regulations by the end of In the development of these new regulations, it is important that we utilize the existing Shelf regulations and the experience gained in connection with developing and enforcing these regulations. At the same time, consideration must be given to any special factors that might apply to the regulation of the land-based part of the activities. The objective is: one framework regulation be developed for land and the Shelf one common management and documentation regulation be developed for land and the Shelf current facility and activity regulations will be continued for activities on the Shelf, a new technical/operational regulation will be prepared that will apply to the land-based activity. This will largely continue current land regulations. In order to ensure the best possible involvement of the users of the regulations, the regulatory work is channelled through the Forum for health, safety and environment regulation, the Regulatory Forum (RVF), which is discussed in more detail in Section of this Report. This more comprehensive dialogue between the authorities and the industry also safeguards the need for participation, as discussed in Section of this report. In addition to meetings in the Regulatory Forum, the parties are invited to participate in connection with various topics addressed in the regulatory work. These contributions may include descriptions of problems or illuminations of various sides of a topic, or participation in special topic meetings where persons with special expertise are invited to attend in addition to the users.

30 30 Report No. 12 to the Storting General safeguarding of HSE 4.1 Introduction All of the participants have a joint responsibility for the further development of good HSE results in the activities. An important fundamental principle in this respect is that the individual player is responsible for following up its own activities, including the selection and follow-up of contractors and subcontractors. Operators/licensees have a special responsibility for following up the overall activities. The objective of the Norwegian petroleum activities leading the world as regards HSE also places great demands on the supervisory authority. Therefore, the Ministry believes it is important for the Petroleum Safety Authority to devote resources to following up and ensuring an overall understanding of the developments in the industry. Experience gained from serious incidents show that complex interfaces between different organizational units and different parts of, or participants in, the operations pose substantial challenges as regards identifying and following up risk. Overall risk management in the activities is a growing challenge and places great demands on coordination on all levels, also as regards safeguarding HSE considerations. Internationalization of the sector, as well as activities in areas adjacent to or straddling international borders, naturally create a need for greater equivalence in regulations and how they are enforced. The Government assumes that the activities are to be followed up in an integrated manner and in line with international commitments. To ensure this, a coordination system has been established and cooperation and assistance agreements have been signed between the authorities for following up HSE in the petroleum activities, ref. Report No. 17 to the Storting ( ) relating to State supervision. Treaties and agreements have also been signed with petroleum authorities in other countries in order to facilitate consistent follow-up across shelf boundaries. In addition, various cooperation forums have been established among the petroleum authorities in various countries in order to meet the increasing degree of internationalization and the challenges this entails. 4.2 Competence development in the Petroleum Safety Authority The petroleum sector is made up of activities that are characterized by innovation and technological and organizational change processes. In Report No. 7 to the Storting ( ), the Ministry underlined the importance of developing competence in the Petroleum Safety Authority (PSA), and noted that provisions would be made for enhancing this competence. The following areas were emphasized in particular: ICT, risk management, safety economics, decision tools and audit methods designed to follow up decision processes under uncertainty, adapted to the early engineering phase. Provisions were made for increased competence in these areas in that the PSA was allocated resources in the form of new positions and more resources for developing the competence of the agency s own personnel. As a consequence of this and other factors, the PSA has identified several main challenges that will determine how the agency prioritizes activities and develops core competence. The main challenges are linked to the following areas: Aging facilities Seabed solutions Land facilities and land-shelf integration Environmental vulnerability E-operations Value creation Internationalization In order to meet the need for increased knowledge and cutting edge expertise in these areas, the Petroleum Safety Authority has carried out a total of 178 different projects during the period , all linked to developing expertise and competence in the form of post-qualifying education, sharing experience and building networks. This includes both internal and external courses and seminars, lectures, continuing education, analyses and studies with the assistance of or in cooperation with research institutions, series of meetings with players, authorities and technical experts. Master degree studies and specially adapted vocational education in the field of audit methodology is also

31 Report No. 12 to the Storting 31 an important part of this effort. A total of 26 audit team leaders have completed post-qualifying education that leads to certification. Overall, this new competence development has become a necessary and important part of the PSA s way of complying with the demands for continuous improvement and development of knowledge, and thus contributes to ensuring satisfactory follow-up of the activities by the authorities. 4.3 Coordination and cooperation between the supervisory authorities Coordination system for supervision of HSE in the petroleum activities The Crown Prince Regent s Decree of 19 December 2003 confirmed that the Petroleum Safety Authority (PSA) was to be one of three strong coordination forces for industrial and social HSE supervision. This entailed a continuation, further development and expansion of the central principles of the supervision arrangement that was established in In addition, the coordination arrangement was expanded to apply also to the PSA s sphere of authority on land. The main reason for introducing such an arrangement for the land facilities is consideration for the users and their needs. Other important considerations underlying the coordination arrangement are the objective of avoiding build-up of redundant competence in the overall management, as well as facilitate the most equivalent practices possible as regards the joint requirements for the industry. It emerges from the Crown Prince Regent s decree of 19 December 2003 that the coordination arrangement shall apply to regulatory development and follow-up to ensure compliance with the regulations. It emerges from the resolution that the coordination arrangement shall cover the following areas: Processing of permits, consents, approvals and other decisions such as orders and exceptions. Coordination and follow-up that can occur in special situations, including hazard and accident situations. Coordination of, obtaining and submitting documentation. Coordinating follow-up vis-à-vis the enterprises, including planning, implementation, following up and reporting, in addition to information and meeting activities. Coordination of regulatory development, including implementation of EU/EEA rules. In practical terms, the coordination takes place through extensive dialogue between the Petroleum Safety Authority and 13 other authority agencies that either have independent supervisory authority, or that are to assist the Petroleum Safety Authority by virtue of their special expertise. This cooperation is based on assistance and cooperation agreements between the Petroleum Safety Authority and the respective authority. In the event of disagreement between authorities, the issues shall be submitted to the relevant supervising ministries for clarification. In order to ensure a coordination system that functions well, the Crown Prince Regent s decree of 19 December 2003 presumes that the Petroleum Safety Authority (PSA) will exercise strong authority and take responsibility for clear and unambiguous coordination. It is also emphasized that the affected ministries and underlying agencies are obliged to support the PSA s coordinating role. The PSA is in the process of discussing the necessary agreements with the affected authorities. In particular, it is the coordination system for the land facilities that has not yet been fully implemented Cooperation with authorities in foreign countries Formal treaties and agreements have been signed with other nations in order to facilitate consistent follow-up of the petroleum activities, such as for pipelines and reservoirs that cross national borders. Such treaties and agreements have been signed with European countries that receive Norwegian petroleum, and countries whose continental shelves are crossed by the petroleum transport systems. There is also extensive cooperation between the authorities with responsibility for safety and working environment in the international petroleum activities Bilateral cooperation with the United Kingdom The framework agreement for petroleum cooperation across the border signed by the British and Norwegian authorities in April 2005 has been further supplemented by separate agreements between the British Health and Safety Executive (HSE) and the Petroleum Safety Authority as

32 32 Report No. 12 to the Storting regards safety and working environment. For the border fields Blane and Enoch, as well as the Langeled Sør transport system where construction commenced in 2005, agreements have now been signed that govern the cooperation in following up operating companies, fields and facilities, as well as exchange of safety-related information. Similar agreements have been signed for the treaties that apply to the other fields and transport systems that cross the shelf boundaries. The PSA and the British supervisory authorities regularly conduct joint audits and follow-up of the industry players, in line with the intentions of these agreements. Together with the PSA, the Ministry also cooperates with the HSE under the heading «Special Working Group» SWG. The group meets twice a year to exchange information on developments in legislation and supervision strategies in the two countries, experience gained from the activities, and on developments in the EU Area of significance for the regulations and exercise of authority. Within the framework of the agreement and the SWG, provisions have been made for operative cooperation in the field of supervision. The intention of this cooperation is to exchange experience from the supervisory activities and to facilitate joint activities limited to specific areas. This is particularly relevant in relation to companies that operate on both the Norwegian and British Shelves, and for companies that have regional operations in Northwest Europe. Within the drilling and well technology disciplines, cooperation has also been established between the Norwegian and British authorities to, in part, exchange experience in the follow-up of well control equipment. Specifically, experience from the British Shelf with high pressure and high temperature wells has provided useful background information for future audits of relevant developments on the Norwegian Shelf. Norwegian experience from audits of well design have also provided a basis for the most equivalent approach possible in the follow-up of operating companies that apply common design procedures on the continental shelves of several countries. Based on joint experience, a common need has been identified for continuing and reinforcing attention to well design and well control training on the respective shelves. Similarly, good professional cooperation has also been established in the fields of crane and lifting operations, load-bearing structures and pipelines, emergency preparedness and implementation of diving operations. In the process area, there has been particular focus on follow-up and transfer of experience in order to reduce gas leaks Bilateral cooperation with Russia in the northern areas The Government has a goal of ensuring that the petroleum activities in the Barents Sea and the Norwegian Sea are the best in the world with regard to oil spill preparedness and monitoring the environment. On the Norwegian side, this is accomplished through the existing health, safety and environment regulations which ensure the overarching framework for carrying out prudent activities in these areas as well. Russia now faces substantial challenges in connection with development of oil and gas activities in the northern areas. Safe development, operation and, not least, transport of oil and gas products from this area and to the Continent will entail many simultaneous activities on the Russian side that could have an impact on Norway and our coastline. Therefore, the Government wants Norway to participate actively in the development of petroleum activities in the north, in cooperation with Russia. This cooperation will take place in various forums and in different ways. The petroleum authorities, the safety and working environment authorities, the environment and coastal management aspects will all play important roles in this work, in which the already established dialogue on energy will also play a prominent role. If they secure assignments on the Russian side, Norwegian enterprises will also be able to contribute experience, expertise and technology that can provide important assistance in ensuring the same high standards for development, operation and transport in the petroleum activities on the Russian side as we have in the North Sea and in the Norwegian part of the Barents Sea. The cooperation with the Russian authorities will, as mentioned above, be discussed on several different levels. In the joint declaration on energy cooperation, signed in Moscow in June 2005, the parties have stated their joint interest in creating favourable conditions to ensure an integrated and sustainable development and stewardship of the resources in the northern areas, including the Barents Sea. This shall take place through reinforcing and developing the bilateral relationship regarding petroleum on a mutually beneficial basis, including through exchange of experience linked to petroleum policy and legislation, organization of the petroleum sector and energy markets. At the same time, provisions will be made for implementing joint measures to establish a high level of safety and strict environmental requirements for the petroleum activities. Health, safety and environ-

33 Report No. 12 to the Storting 33 ment will be an important part of the ongoing energy dialogue and an important policy instrument in the Government s strategy for the northern areas in order to achieve the environmental targets that will form the basis for the Integrated Management Plan for the Barents Sea. The Norwegian-Russian prime ministers declaration on energy cooperation from June 2005 mentions cooperation on HSE. This is the basis for the PSA now strengthening its cooperation with comparable regulators on the Russian side. The PSA has previously cooperated with the Russian authorities through the so-called Boris Project, which was discussed in the previous white paper. This has helped to create good relations and contributed to exchange of experience with Russia as regards safety. The PSA s previous partner in Russia, Gosgortekhnadzor, has now been incorporated into the federal supervisory authority for environmental, safety and nuclear issues, Rostekhnadzor. The Ministry of Labour and Social Inclusion will take a greater role in the PSA s cooperation with Rostekhnadzor to ensure the political basis. Norway holds the chairmanship of the Nordic Council in In this connection, the northern areas have been singled out as an important issue for the Norwegian chair. The Ministry of Labour and Social Inclusion plans to hold a conference in the fall of 2006 on the health, safety and environment challenges in conducting petroleum activities in the northern areas. Norwegian and Russian authorities at both the central and local levels, as well as the Russian and Norwegian industries, will be invited to attend this conference Multi-lateral cooperation In addition to the cooperation with the United Kingdom and Russia as mentioned above, cooperation also takes place with a number of other petroleum authorities, both bilaterally and multi-laterally. The Ministry would particularly mention the cooperation that takes place under the direction of the North Sea Offshore Authorities Forum (NSOAF), which includes participation by all of the authorities in Northwest Europe that have regulatory responsibility for offshore petroleum activities. The NSOAF cooperation represents an important forum for exchanging experiences and viewpoints which help to streamline national exercise of authority as regards health, safety and environment. Among other things, this cooperation has resulted in the development of joint standards for safety training. Joint audits in the area of cranes and lifting operations are also planned. Incidents in connection with testing of free-fall lifeboats have led to cooperation on development of joint measures to improve safety in the use of such lifeboats. This cooperation has also been expanded to include the member countries in the International Regulators Offshore Safety Forum (IRF), which consists of the United Kingdom, the Netherlands, the USA, Canada, Brazil, Australia, New Zealand and Norway. In addition, the cooperation between NSOAF and the International Association of Drilling Contractors (IADC) has resulted in the development of guidelines for a joint northwest-european application for use of mobile drilling rigs, ref. Chapter Integrated follow-up of the petroleum activities and associated activities Helicopter transport and maritime operations During the consideration of Report No. 7 to the Storting ( ), ref. Recommendation to the Storting No. 169 ( ), attention was given to the need for putting greater overall focus on the petroleum activities and associated activities. Areas that were mentioned in particular included activities in connection with maritime operations, as well as helicopter transport to and from the facilities. For the purpose of following up the recommendations in the Norwegian Public Reports NOU 2001:21 and NOU 2002:17 on helicopter safety on the Norwegian Continental Shelf, the Norwegian Civil Aviation Authority has appointed a Cooperation Forum for Helicopter Safety on the Norwegian Continental Shelf (the Cooperation Forum), composed of the central affected parties. The Forum s task is to work towards a significant improvement in helicopter safety on the Norwegian Shelf, where the primary objective is to cut the overall probability of death associated with helicopter flights at least by half for the next ten-year period, compared with the period The Cooperation Forum is to be a driving force vis-à-vis the responsible authorities and players, so as to ensure implementation of the recommendations in the NOUs in areas such as clarification of responsibility and authority cooperation, technical and operative requirements for helicopters,

34 34 Report No. 12 to the Storting requirements for helicopter decks and installations, as well as flight control services. The Petroleum Safety Authority is a member of the Cooperation Forum, and will contribute to ensuring that improvement measures are implemented in those areas where the PSA has authority. In order to follow up guidelines concerning a more integrated approach, the PSA, assisted by the Civil Aviation Authority, has also carried out investigations of three helicopter incidents that also affected safety of facilities on the Shelf. The investigations reveal that there is room for improvement in several aspects associated with helicopters at the facilities. Initiatives have been taken vis-à-vis relevant authorities and the industry in order to follow up on this. For quite some time, the petroleum sector has been concerned with establishing controlled airspace for flights on the continental shelf. Establishing controlled airspace is also one of the measures that the Cooperation Forum for helicopter safety on the Norwegian Continental Shelf is particularly interested in. Such a service has already been established for flights between Bergen/Florø and the fields in the Snorre, Gullfaks, Statfjord, Oseberg and Troll areas. The service has been established based on the fact that there is also radar service on Gullfaks C. Avinor supplies flight control services and they have now decided to set up controlled airspace between Sola and Ekofisk and for Haltenbanken. Two new radars are planned at sea, one on Ekofisk and one on Heidrun. Land-based radar is also planned on Urdalsnipa in Rogaland County. It has proven difficult to establish the radar on Urdalsnipa because coexistence with a planned windmill park entails great uncertainty as regards implementation and scheduling. Therefore, parallel work is proceeding on alternative locations. For areas without radar coverage, there is a requirement for M-ADS (Modified dependant surveillance) for civil helicopters used in the petroleum activities. The system provides total monitoring of helicopter traffic so that the flight control services can follow the traffic in areas not covered by radar. NOU 2002:17 Helicopter safety on the Norwegian Continental Shelf proposes that the system also be applied for the Armed Forces and the Norwegian Pollution Control Authority s maritime helicopters and aircraft that operate in the same area and at the same altitudes. According to Avinor s work plan, the planned radars will be in place during the course of 2008 and from that time, large parts of the helicopter flights on the Norwegian Shelf will take place in controlled airspace. With regard to improvement of safety in maritime operations, this is an area that is covered under the various parties cooperative effort Working Together for Safety (SfS), in which a dedicated working group on maritime operations has been put together, including participation by the authorities. The purpose of the working group is to contribute to sharing experience, spreading information about new guidelines, following up projects and initiating new projects in this area. The working group has drawn up guidelines for safety in interaction between facility, base and offshore service vessel, as well as guidelines for safe anchor handling and towing. A joint procedure/checklist has also been prepared as regards entering safety zones. This is to help ensure that both the vessel and the facility fully understand the relevant terms. Work is also underway on joint international guidelines «Guideline for safe management of offshore supply and anchor handling operations (NW European Area)«. The objective is for this to replace the national guidelines to ensure harmonization of practices and routines across national borders. The Petroleum Safety Authority participates as an observer in the working group Cooperation on audits of mobile facilities, establishment of the AoC system The Acknowledgement of Compliance (AoC) is a statement confirming that the technical condition of a mobile drilling facility, and the applicant s organization and management system, have been found to be in compliance with relevant requirements in the Norwegian shelf regulations. AoC evaluations are made in cooperation with the Norwegian Maritime Directorate. The system facilitates the use of maritime regulations and documentation from audits of the maritime areas, and is thus a good example of how the authorities cooperate across established governmental management boundaries. In its consideration of Report No. 7 to the Storting ( ), the Storting asked the Government to submit a proposal for making the AoC system mandatory. As a follow-up to this, the system was made mandatory from 1 January So far, 24 mobile drilling facilities have received an AoC. The AoC system has led to increased understanding of the regulations on the part of the players, particularly the shipping companies. The

35 Report No. 12 to the Storting 35 understanding of roles and responsibilities has improved. Generally speaking, the system has led to improved dialogue between the players and the authorities and simplified case processing, and thus more cost-effective solutions. Following a unified recommendation from the industry, a decision has been made to expand the system to also apply to other mobile facilities bearing a flag, such as mobile living quarters (flotels), mobile facilities for drilling, production, storage and shipping, as well as well intervention facilities. The AoC statement must be viewed in context with similar systems for documenting compliance that are prepared under the regulatory regimes of other countries, such as the British Safety Case. In order to facilitate simpler movement of facilities between continental shelves in Northwest Europe, the IADC (International Association of Drilling Contractors), in close cooperation with the respective shelf country authorities, has joined forces to prepare the North West European HSE Case Guidelines. 4.5 Interface between operator, contractor and subcontractor As can be seen from Figure 4.1, the percentage of contractors involved in the petroleum activities is high. Mobile facilities are operated exclusively by contractors, while about 60 % of the man-hours are worked by contractors. This results in an overall contractor percentage of about 68 % of the total workforce in The responsibilities of the various players are underlined in the HSE regulations for the petroleum activities. Terms such as the supervisory responsibility, security responsibility, participation responsibility, coordination responsibility and the duty to follow up are all key terms in this context. The supervisory responsibility is assigned to the party ultimately responsible for the activity, i.e. the licensee or the operator, ref. Section 10 6, second subsection of the Petroleum Act and Section 5, second subsection of the Framework Regulations. The supervisory responsibility shall ensure a systematic follow-up of the players that deliver products and/or services in the activities. Parties who own or operate petroleum facilities on land under the PSA s jurisdiction have a similar supervisory responsibility, ref. provisional regulations relating to safety and working environment for certain petroleum facilities on land, etc. (temporary regulations), Section 4, second subsection. Figure 4.1 Contractor percentage offshore (number of hours) for permanent and mobile facilities, 2004 A coordination responsibility also rests with the primary company, including the operator or others, for ensuring coordination of activities that coincide in time or affect each other in some other way, ref. Section 2 2, second subsection of the Working Environment Act and Section 44 of the Framework Regulations. In addition, the operator is responsible for ensuring that its own activities are carried out in a prudent manner, ref. Section 10 6, first subsection of the Petroleum Act and Section 5, first subsection of the Framework Regulations. The same applies to parties that own or operate petroleum facilities on land, ref. Section 4, first subsection of the provisions regulations. Contractors are also responsible for ensuring that their own work is carried out prudently. On the shelf, contractors are also responsible for following up their subcontractors, ref. Section 14 of the Framework Regulations. As a point of departure, contractors do not have a coordination responsibility for players they are not contractually bound to, unless they are defined as being the primary company. As described above, the operator and the licensee, alternatively parties who own or operate petroleum facilities on land, have the paramount responsibility and set the framework for the activities. The large percentage of contractors in the activities places great demands on coordination and management of the overall activities. Development trends indicate that the industry is developing new operations concepts and cooperation models that could entail a change in the roles between operator and contractor and could have an effect on how the operating companies enter into and formulate contracts. It is important that the

36 36 Report No. 12 to the Storting regulations definitions of roles and responsibilities are safeguarded in the event of such changes. In this context, the Ministry would point out the necessity of following up and ensuring that the organized safety and environment work, as well as employee participation, are safeguarded. In connection with the PSA s investigation of incidents and accidents, a recurring observation is that contractors and subcontractors are often involved and that failure in interaction between these players, and between operator and contractor, are central underlying causes. The observations can be linked to unclear responsibilities between the various organizations, deficient management of parallel activities and consequences of deficient harmonization of procedures and routines. One question from the RNNS questionnaire survey in 2003 clearly illustrates one aspect of this problem: 73 % of the contractor employees agree that different procedures and routines on the different facilities are perceived as being a threat to safety. Through their audits, the authorities have also seen a need to expand their focus to include the contractor companies and thus ensure adequate and integrated follow-up of all players in the sector. Therefore, a decision has been made to further develop and implement audits and advice targeting the contractors in the petroleum sector and work is underway to accomplish this. The main focus of the audits will continue to be on those with primary responsibility, but this may be supplemented by focus on the contractors in order to better handle the interaction between the players. 4.6 New forms of operations and integrated work processes Introduction Report No. 38 to the Storting ( ) on the Petroleum Activities assumes that the long-term development scenario for the petroleum activities on the Norwegian Continental Shelf requires a combination of lower operations costs and higher recovery rates for the individual fields. E-operations, or integrated operations, are considered to be an important element in this scenario. E-operations or integrated operations are based on computer technology that makes it possible to transmit data over large distances and/or process and share large volumes of information simultaneously, regardless of location. The development of e-operations is driven by the industry s need for more efficient exploration processes, improved reservoir exploitation and cost-effect operations. During recent years, the industry has conducted a number of studies and development projects, primarily under the direction of OLF, to establish a common platform for the companies work to develop integrated work processes, digital infrastructure and information security. The Norwegian Petroleum Directorate has established an e-operations forum (e-driftsforum), which has become an arena for the involved parties to promote e-operations. The Petroleum Safety Authority participates in this forum and is represented in the management group. From being primarily focused on development and application of technology, the development of e-operations is now moving in new directions with greater focus on ICT vulnerability, challenges related to new work processes and integration of information throughout the value chain. E-Operations means that established functions and work tasks can be changed and moved between the parties who carry out the various work tasks, and the locations where they are performed. These changes must take place in a prudent manner which includes employee participation. In such a context, there is a need to consider factors such as offshore employees right to participate in the development and operation of functions on land. The Ministry emphasizes that the HSE regulations also require that the consequences of change processes be evaluated before the changes are implemented, so that a qualified basis can be achieved for making decisions. Employees and their representatives shall participate in the work to develop impact assessments, and those who perform such analyses must have the necessary competence Integrated work processes The development of integrated operations in the direction of land and offshore becoming one operations entity where the various functions are taken care of within a single context continues. The Petroleum Safety Authority (PSA) has the ultimate and coordinating responsibility for following up HSE in the petroleum activities on the Shelf and at the land facilities, cf. the Crown Prince Regent s decree of 19 December The PSA s responsibility for following up functions that are moved to land and placed outside of the land facilities depends on the significance of these functions for ensuring prudent operations on the Shelf. In these cases, the significance of these functions for safety on the Shelf is the determining factor.

37 Report No. 12 to the Storting 37 Development of new and changed work processes also entails change processes, which in turn mean changes in organisations, manning, management systems, technology and the interplay among all of these factors. It is a prerequisite for such changes that HSE targets are established that are followed up in an equivalent manner as for other targets. Early integration of multi-party cooperation and HSE considerations are prerequisites for achieving the goals set by the companies. Through the authorities supervision, various challenges have been identified linked to safeguarding the requirements for employee participation in connection with the implementation of such change processes. These may relate to deficient and divergent understanding of the responsibilities of the safety organisation, roles and responsibilities, as well as a flawed description of the employee participation system or organisation of safety delegates and working environment committees. The employees have stated that the terms for changes are decided before the employees are involved and the employee organisations also state that, in practice, the safety delegates are not allocated sufficient time and resources to carry out their duties in such processes. The Ministry believes there is a need for the industry to conduct a more systematic review of potential HSE consequences linked to the planned changes. Important aspects to consider in this context are the consequences for the remaining positions on the Shelf, life cycle analyses for control centers on land, with regard to the need for future expansion of the functional area, consequences of increased complexity and automation in expertdriven decisions processes, training and learning strategies for expert teams, changes in responsibilities and roles, transfer of decision authority across national/cultural borders and between time zones and how HSE is safeguarded in new contracts. Employee participation is an important part of this work. The Ministry wishes to point out that this development could also have a number of HSE benefits. One example could be expert guidance that can be given from land simultaneously as complex work operations are carried out on the Shelf. The authorities believe it is important to establish new knowledge and methods with regard to evaluating the risk involved in these factors. The supervisory authority has implemented a project to enhance competence and influence the development of risk analysis methods. R&D efforts will also be necessary, which will be in line with the current establishment of a separate commitment area for integrated operations in national research efforts Digital infrastructure Achieving the goals linked to e-operations is also based on systematic development and exploitation of digital infrastructure, which includes data transport systems between different locations on the Shelf and on land, network systems of various levels and information systems to collect, process and transmit data. Today s digital infrastructure for transport of data between various facilities and land/offshore has been developed on the basis of company-specific needs, and does not have equal terms for access and use. Therefore, there is a need to take a closer look at how to ensure that all relevant users have sufficient capacity and reliability as regards the need for data transport. The industry, represented by OLF, has taken an initiative in this context to work on this matter, including an analysis of how the current digital infrastructure is organised and a review of alternative operations models, with the aim of presenting a specific proposal for a business model that the players can agree on. The Ministry emphasizes that such analyses must also include critical safety aspects that are covered under HSE regulatory requirements. Key factors here will be linked to the networks capacity and quality, reliability, regularity, accessibility and integrity. The systems integrity must also be viewed in an overall context where organisational and human risk factors are evaluated. The industry s objective is increased use of the new technology in the decision processes. The Ministry assumes that the industry will take the necessary initiatives to develop methods for risk assessments and guidelines for solutions in this area. Particular attention should be given to the challenges related to securing the independence of various control systems, software security, reliable interaction between various parts of the ICT network/systems, etc. The new solutions also introduce greater challenges as regards how information security could impact HSE in the activities on the Shelf. In this context, the authorities point out the importance of ensuring that the development of new solutions is combined with experience gained from traditional management/control systems with new challenges linked to information security. In particular, the authorities point out the need for new knowledge as regards HSE risk associated with system development and operation, as well as increased

38 38 Report No. 12 to the Storting knowledge about how to handle incidents involving ICT system failure. The Ministry assumes that the established national strategy for information security is followed up by all players to ensure overall risk assessment in relation to interfaces between digital infrastructures that are critical to the industry s operations and infrastructures that are critical for the Norwegian society. 4.7 Cooperation between the parties Introduction Cooperation between the parties and employee participation are important pillars in the work to establish and further develop a high level of HSE in the petroleum activities, and a precondition for achieving overall safeguarding of HSE. As emphasized in Chapter 3, it is crucial from an ethical perspective that those who are exposed to risk are given an opportunity to participate in decision processes that have an impact on this risk. Furthermore, the Working Environment Act contains a number of requirements relating both to the employees duty and right to participate to ensure a satisfactory working environment in the activities. Therefore, the same assumptions regarding participation must be used as a basis when the authorities draw up risk-based regulations, and regulations that are largely based on functional requirements. Application of functional requirements means that the players themselves can largely make decisions on how to fulfil regulatory requirements. The industry thus has greater freedom to choose between alternative solutions than would be the case under detailed regulations. This freedom of action places great demands on the quality of the decisions and decision processes, including the ability to ensure that employees have the necessary degree of participation before solutions are chosen. Because the current HSE regulations largely allow such solutions to be determined by the responsible player, the players bear a particular responsibility for involving all of the affected parties before making such decisions. As regards the petroleum authorities, they have paved the way for broad-based participation by employers and employees in connection with further development of the regulations. Aspects of this were thoroughly discussed in Report No. 7 to the Storting ( ). The Ministry referred then to feedback indicating that cooperation between the parties and employee participation had not been sufficient in the preceding years. Therefore, a need was pointed out for a renewed and reinforced focus on participation, and several commitment areas and measures were outlined. The Ministry also underlined the need for improved sharing of experience between the players in the activities in a number of areas, and suggested that this could be addressed by establishing a forum for best practice, see the discussion on cooperation between the parties in Working Together for Safety in Section A need was also noted for the parties to take a joint look at issues relating to exclusion from employment, sick leave and aging. As a follow-up to this, a multi-party working group was established with the assignment of performing a systematic survey of factors that can affect exclusion from employment, with focus on overarching and general factors. Based on this work, the group was to propose measures. The result of the working group s work is discussed in more detail in Chapter Regulatory Forum In order to ensure the best possible involvement of the users of the regulations, an «External Reference Group for Regulatory Issues» (ERR) was established in 1986 in connection with a major regulatory reform. Subsequent to the decision to expand the PSA s scope to also include land facilities, this forum has been expanded to a «Forum for health, environment and safety regulations», (the Regulatory Forum). The Regulatory Forum (RF) is composed of the parties within the safety and working environment areas on both the authority and industry sides. Its tasks include facilitating openness and information regarding activities that set the framework for the industry, such as regulatory strategy and regulatory work, adaptation to EU/EEA rules, industrial standardization, principle interpretations, and experience in the use of the regulations or the regulatory framework in general. The environmental authorities, represented by the Norwegian Pollution Control Authority (SFT) participate as needed. The Regulatory Forum does not replace formal consultation in relation to new or amended regulations, but comes in addition to the formal system according to the regulatory instructions. RF continues the tripartite cooperation that took place in ERR and it is one of the central arenas for cooperation between the parties in the petroleum sector.

39 Report No. 12 to the Storting Safety Forum The Safety Forum was established in The Forum s objective included building new trust between the parties, and deriving benefit from mutual exchange of experience following a period when cooperation between the parties had stagnated. The Safety Forum was expanded in the fall of 2004 with member organisations associated with the land facilities under the PSA s jurisdiction. The Safety Forum is the central tripartite arena for HSE in the petroleum industry. Its ambition is to contribute to increased knowledge and understanding of why the petroleum activities are to be a pioneering industry in the field of health, safety and environment. The Safety Forum has also been a reference group for the authorities work on a new HSE report for the petroleum activities. The Safety Forum has made a significant contribution to constructive development in the tripartite cooperation in recent years. The Risk Level on the Norwegian Shelf project (RNNS), led by the Petroleum Safety Authority with a foundation in the Safety Forum, has been crucial in ensuring that the parties have largely agreed on a joint description of the current HSE situation in the industry. Such a common understanding is essential for the cooperation on solutions to HSE challenges. The Forum has also established its own annual conference to ensure broad-based involvement by the industry, employee representatives and safety delegates, as well as by other authorities and research communities. The conference also contributes to course correction and identifying new approaches to HSE processes and projects. After a relatively short time, the Safety Forum s annual conferences have become one of the industry s important meeting places to address and discuss relevant and important HSE challenges Working group on employee participation Based on the need for examining the entire field relating to employee participation identified in Report No. 7 to the Storting ( ), the Ministry, in a dialogue with the parties in the Safety Forum, appointed a multi-party working group. The working group was to examine the entire field related to employee participation based on the statutory rights and experience gained in the offshore activities. The working group was also to evaluate participation in the license committees on the basis of demands made by the employee organisations. The working group presented its report in the spring of 2004, including a number of recommendations for improved ways of handling employee participation. Several topics are addressed in the recommendations, including participation in matters related to integration of land and Shelf activities, sufficient time for safety delegate work, participation in change processes, etc. The recommendations have been well received by employers and employees, which will help contribute to the respective members focusing on following up the various recommendations. The recommendations in the working group s report have also been included in research organised under the HSE research program in the Research Council of Norway. The Ministry has noted that the recommendations by the working group touch on aspects that the parties themselves can address and thus, with one exception, do not entail a need for changes in the regulations. The exception is linked to the «recommendation for safeguarding participation in joint AMUs (Working Environment Committees) for workers who are not permanently affiliated with a field or a facility.» A proposed regulatory amendment in connection with this recommendation has been handled in connection with the annual revision of the HSE regulations in One of the working group s recommendations relates to participation by the parties in the licences. A special working group has studied this question in more detail, and based on this, a voluntary trial scheme has been introduced for employee participation in three large operating licences for a period of two years from 1 January The purpose of such a participation scheme is to reinforce and improve the overall HSE work. The trial scheme entails establishment of an HSE forum where the partners and the employees meet to exchange information and discuss important HSE issues in the individual licence. The experience gained in this cooperation will be evaluated at the end of the trial period Project cooperation directed by the parties Aging and health For purposes including following up the letter of intent on inclusive working life and the work to reduce sick leave and disability rates, as well as to ensure that new personnel recruited to the petroleum activities maintain their health and capacity for work, the parties have implemented a project on «Aging and health on the Shelf» during this period.

40 40 Report No. 12 to the Storting The objective of this work has been to contribute to ensuring that employees on the Shelf want to work, and have the capacity and health to work, until they reach regular retirement age. Several member companies have provided positive feedback on the focus on aging and health offshore. Projects and campaigns have been implemented with a view towards bringing about change in the companies. One of the project s main recommendations is that the works councils (AMU/BU) in the companies should prepare annual strategies and goals, plans and measures aimed at human resource policies based on a life-phase approach, with priority on motivation, competence and health, and thereby to ensure lasting changes. A delegated research project has also been implemented in which IRIS (formerly Rogaland Research) will follow projects in individual companies during the period , and provide advice as regards development of strategies and goals and implementation of measures. Health data in the respective companies forms the point of departure for evaluation of the results achieved. Network meetings with mutual exchange of experience among all participants in the research project has also been part of this work Working Together for Safety The Working Together for Safety (SfS) project was commenced in late 2000/early The participants from employee and employer organizations have the goal of improving safety in human actions on board vessels and facilities, and putting the spotlight on all aspects that have an impact on this. SfS works on issues related to man, technology and organisation (MTO) on facilities and on board vessels that take part in the petroleum activities on the Shelf. SfS shall thereby focus on all aspects that affect the character and framework conditions for the work. This entails, in part, focus on corporate culture, structure, organisation and management. The aim of the work is to provide recommendations to the industry. SfS communicates through gatherings and seminars, with a view towards being able to document and exchange best practice in the industry. Through the organisations that take part in the work, SfS has a contact network that includes all the central players in the petroleum activities on the Shelf. Up to the end of 2005/beginning of 2006, SfS has prepared 27 different recommendations in areas such as crane and lifting operations, falling objects, safety delegate service, platform management, and harmonisation of safety procedures and routines. SfS has also commenced work to look into issues related to the land facilities and has therefore established a working group to develop best practices for being a primary company at the major facilities. Furthermore, development of best practice as regards building a common safety culture and establishing joint terms to harmonise safety training for all the companies is a prioritised task. Work has also been started to examine prevention of substance abuse and follow-up of OLF s established guidelines in this area. The Ministry views the preparation of recommendations under SfS as a valuable contribution towards improving HSE results in the activities, and assumes that the parties will follow up the intentions that form the basis for this cooperation, while at the same time ensuring that they are adapted to the international activity to the greatest possible extent. By their signatures, the participants in this work have pledged to contribute to implementing the recommendations in their activities. The Petroleum Safety Authority will follow this up by means of audits and active use of the regulatory norms. At the same time, the Ministry encourages the industry to continue to work to identify new areas where procedures can be harmonised on both the national and international level and to actively work to develop and apply these procedures Regulatory competence project Knowledge about the regulations not only affects HSE results in the activities, but it can also have substantial financial consequences for the industry. Lack of knowledge can result in misinterpretation of regulatory requirements and violations of the regulations. Therefore, knowledge and competence were key topics in Report No. 7 to the Storting ( ), in which it was ascertained that there was a lack of emphasis on measures aimed at promoting competence in the HSE regulations. In this connection, a brief description of the Regulatory Competence Project for the petroleum industry (RVK) was provided. The project was initiated by OLF and the Norwegian Shipowners Association, and the central employee organisations have also joined the project. The goal of the RVK project is to provide the participants with in-depth knowledge of the structure and content of the regulations, as well as examples of how this is put into practice. This is

41 Report No. 12 to the Storting 41 achieved by giving the relevant target groups detailed information on active use of the regulations, while also promoting continuous HSE improvement. In addition, this provides an arena for exchange of viewpoints and experience regarding the HSE regulations by providing the opportunity to have broad-based groups of course participants. Of a total target group of about 70,000 employees in oil-related industry, it is estimated that about 10,000 of these would derive great benefit from an introduction to the regulations. At the end of 2005, more than 6000 people had completed courses under the direction of RVK. In connection with the Risk Level on the Norwegian Shelf project (RNNS), extensive questionnaire surveys on the regulations were conducted among offshore employees in 2001 and 2003, before and after the new HSE regulations entered into force on 1 January From the responses received in 2003 as compared with 2001, it emerges that there was a considerably more positive attitude towards the current HSE regulations for the Shelf than was the case for the regulations that applied previously. There is a clear connection in that those who believe they have received adequate HSE training also say they are satisfied with the new HSE regulations. This also applies conversely. The Ministry emphasizes that this shows that training in the regulations is important, and finds it interesting that the users can express themselves directly in this way regarding the regulations.

42 42 Report No. 12 to the Storting Major accident risk 5.1 Introduction Box 5.1 Barriers: The term «barrier» means technical, operational and organisational measures which, either individually or together, shall prevent or interrupt the course of specific undesirable incidents. Barriers can reduce both likelihood and consequences. Box 5.2 Risk is characterised using two parameters; likelihood that undesirable incidents will occur (often expressed as frequency), and consequence of such incidents. Preventing the occurrence of a major accident is a very central objective. Both the design of installations and facilities, selection of technical solutions with good inherent safety properties and selection of effective barriers are measures to help prevent undesirable incidents. Barriers are used both to reduce the likelihood of undesirable incidents and to eliminate or limit the consequences of such incidents. Nevertheless, experience gained from the petroleum activities up to the present has clearly demonstrated the risk associated with the industry. The catastrophes when Alexander L. Kielland capsized in 1980 and the explosion and fire on the Piper Alpha on the British Shelf in 1988 illustrate the dramatic consequences that can result from major accidents in the petroleum sector. There have also been incidents in recent years, both on the offshore facilities and at the land facilities, that have had the potential of turning into major accidents. There are several important sources of information when describing the risk level for major accidents on the Norwegian Shelf. The results of the RNNS project are the most central source of knowledge in this area. This project measures the development in risk level on the Norwegian Shelf, based on a broadly composed set of indicators including Number of incidents and near-misses that have occurred on the facilities. Examples may include: hydrocarbon leaks, well incidents/loss of well control, ships on collision course, damage to platform structure and helicopter incidents. Social science indicators, such as questionnaire surveys, interviews, field work and workshops. The objective of the project is to establish a picture of the development in risk level, where the indicators are studied both individually and together to achieve this. An indicator has also been developed which seeks to establish a picture of the general development in major accident risk. This is based on the number of incidents having major accident potential. When evaluating contributions to risk, consideration must be given to both incident frequency and the incidents potential for loss of human life. As noted in Chapter 2, the risk level in areas covered under the RNNS project shows a negative development from 1996 up to the presentation of Report No. 7 to the Storting ( ). During the period after 2000, there have been relatively large annual variations which, in total, do not show any clear development trend. Although the total number of incidents has been reduced in recent years, the potential consequences associated with a few of these incidents is nevertheless so large that the overall risk does not exhibit a similar reduction. Therefore, the desired lasting positive trend cannot be observed here. The risk of major accidents is present both on the offshore facilities and the land facilities. With regard to the land facilities, we do not have the same systematic experience data concerning the development of major accident risk over time. However, it has been decided that the RNNS project will also include the land-based part of the activities. Many of the problems associated with managing major accident risk are the same for the activi-

43 Report No. 12 to the Storting 43 Box 5.3 One example is hydrocarbon leaks in connection with the production and process facilities on the Shelf. Through the RNNS project, more than 271 leaks greater than 0.1 kg/s were registered in the period In all of these cases, one or more barriers intended to prevent the escape of hydrocarbons has been broken. However, the barriers intended to prevent consequences of leaks in the form of ignition have functioned for all of these leaks, so that fire and explosion have been avoided. ties on land and offshore. In the following sections, land and offshore are referred to together, unless otherwise specified. 5.2 Management of major accident risk The enterprises involved in the petroleum industry in Norway consistently have modern risk management strategies and systems. One important element of these is the establishment of several layers of safety systems and safety measures (barriers) to reduce both the likelihood of incidents and to limit their consequences. Since the previous white paper, the industry and the authorities have worked actively to establish new knowledge about risk management models and tools. This is also a key element in the HSE petroleum research program. This research has provided useful knowledge about managing the risk of major accidents. At the same time, the authorities follow-up in this period shows that the industry still faces challenges in this area. The current systems for risk management and risk analysis models can be said to be fragmented in the sense that the various risks are not evaluated together. On this basis, there is a need for more integrated management models, in part to identify potential conflicts and synergies between different measures. The methods that have been developed to describe, measure and communicate risk have provided important support for decisions, particularly in the design phase. In light of the frequent change processes, it is important that the risk analyses are also further developed for the operations phase. Errors can, to some extent, be prevented, but they cannot be eliminated. A natural consequence of this is that critical safety systems must be capable of intercepting such errors. In the HSE petroleum research program, focus in recent years has been on barriers and robust work practices. Through this, a better understanding has arisen of the human contribution to risk and risk reduction. The authorities view this as an important contribution towards reducing the risk of major accidents. HSE culture and culture building has also received considerable attention in recent years. In the work to develop good HSE culture, the industry s attention has mainly been focused on individual actions and personal safety in the execution phase on the facilities. This is an important, but insufficient part of the HSE culture concept. Good HSE culture must also address technical and operational factors. HSE culture must be developed in a way that places more emphasis on technology, quality planning, competence, management involvement and other framework conditions for prudent operations. In this context, the following areas should be further developed: models and tools for overall risk management development and implementation of risk analysis methods to provide a better basis for handling changes in risk models and tools for evaluating the human contribution to risk risk communication This further development should take place in a cooperative effort between the industry, the authorities and research institutions. 5.3 Specific risk areas challenges and measures As mentioned in the introduction to this chapter, the authorities and the industry have worked together in the RNNS project to obtain a description of the risk level in the petroleum activities on the Shelf. Specific areas with the greatest probability of major accidents have been identified in this project. Within these areas there are many diverse factors of a technical, operational and organisational nature, which individually or together can lead to accidents occurring or have an impact on a potential course of events. In total, hydrocarbon leaks, serious well incidents, damage to load-bearing structures and maritime systems and ships on collision course have accounted for more than 80 % of

44 44 Report No. 12 to the Storting the total major accident risk for the period In addition comes the contribution from helicopter-related incidents with major accident potential. Therefore, these are factors that must be addressed in order to avoid undesirable incidents or to limit the consequences of such incidents. In this context, the Ministry is concerned with applying measures where they will have the greatest effect, including prioritisation of measures that contribute to quality in all parts and phases of the activities. The greatest risk contributors to major accidents at the land facilities will be hydrocarbon leaks with subsequent fire or explosion. The land facilities often have production processes that carry large streams of hydrocarbons, and there are also often huge storage capacities. Therefore, it can be expected that a large hydrocarbon leak at a land facility will be larger than a large leak on an offshore facility. In addition, the processes are often more complex and entail high temperatures and high pressures. Because of this, the consequences of a fire or explosion may be very grave. However, there is lower risk of personal injury in the event of a fire or explosion at a land facility than for a comparable incident on an offshore facility. This is because the possibilities of escape are better at the land facilities, and the number of people near the process areas will not be as high during normal operations. This picture could change during modification processes and simultaneous operations, and more people could be exposed. Experience from foreign facilities indicates that major maintenance work represents a definite increase in risk. The following sections contain a review of the most important commitment areas for preventing major accidents Hydrocarbon leaks Hydrocarbon leaks have a major accident potential that can be illustrated by the total loss of the Piper Alpha on the British Shelf in 1988, in which 167 people died. A medium-sized gas leak formed a gas cloud which was ignited. The explosion caused the rupture of oil-carrying pipelines and a fire that was not controlled because no water supply was available for the fire water systems. This gradually led to the rupture of the large oil and gas pipelines (risers), which in turn led to the total loss of the platform. The large number of fatalities is due in part to the failure of all evacuation and rescue means. On the Norwegian Shelf there are four-five leaks each year that are equivalent in size to the Figure 5.1 leak that started the Piper Alpha accident. Figure 5.1 shows the development in number of leaks greater than 0.1 kg/s during the period Surveys show that about 40 % of the hydrocarbon leaks occur in connection with normal operations, while the remainder occur in connection with other manual work on the facilities. Leaks that occur in connection with normal operations can be further prevented through better equipment choices, better routines for inspection and maintenance and improvement of procedures for transfer of experience. However, there is probably an even greater potential for preventing leaks through better planning, preparation and implementation of other manual work on the facilities. There has been increased focus in recent years on the risk contribution from hydrocarbon leaks on the Norwegian Shelf. In the summer of 2003, the authorities took an initiative vis-à-vis the industry with a view towards reducing the number of leaks. As a follow-up measure, OLF started a project with the objective of reducing the number of leaks greater than 0.1 kg/s by 50 % by the end of 2005, measured against the average during the period This project has highlighted management involvement, behaviour and measures to improve the competence of personnel involved in the activities. A review of technical aspects on the facilities and greater attention to potential leak sources have also contributed to reaching this goal. The results of the project show that the objective of a 50 % reduction was achieved, and the industry has established a new and ambitious reduction objective. This new ambition entails that the number of hydrocarbon leaks greater than 0.1 kg/s shall be reduced by an additional 50 % by the end of 2008 (based on the 2005 objective). The

45 Report No. 12 to the Storting 45 Figure 5.2 Ministry regards these overall efforts as being a valuable contribution towards improving the risk level on the Norwegian Shelf, and emphasizes the important of all parties maintaining continuous focus on key issues. With regard to larger hydrocarbon leaks greater than 1 kg/s, the authorities have compared the Norwegian and British Shelves, limited to the northern part of the North Sea (north of 59 degrees N), and the Norwegian Sea. 10 Figure 5.2 shows a comparison where the number of leaks are normalised in relation to the number of platform years as a three-year revolving average, The figure shows that the frequency on the Norwegian Shelf (northern part) is considerably higher than on the corresponding part of the British Shelf figures for the British sector are not available (the year ends in April 2006). In the past five years, there have been six leaks greater than 1 kg/s in the northern part of the British Shelf. This is substantially lower than in the first part of the period shown in Figure 5.2. For the Norwegian Shelf north of 59 degrees N, there have been 26 leaks greater than 1 kg/s in the last five years. Since there have been so few leaks greater 10 The limitations are due to the fact that the facilities in these areas are comparable in size and complexity, while there are larger differences further south. The number of facilities is also approximately as high in the northern parts of the Norwegian and British Shelves. than 1 kg/s on the northern part of the British Shelf in recent years, a five-year average must be applied to achieve relatively stable values. By comparing data for the last five years, we see that the values are 3.7 leaks for the British Shelf and 14.0 leaks for the Norwegian Shelf north of 59 o N per platform year. On the British Shelf, a campaign was implemented as early as in 2000 to reduce the number of hydrocarbon leaks. This may be a contributing factor to the British achieving better results as regards larger hydrocarbon leaks. In the Ministry s opinion, the significant differences between the Norwegian and British Shelves show that the Norwegian Shelf still has considerable potential for improvement. Therefore, the Ministry assumes that all players will continue to set definite goals and implement measures to further reduce hydrocarbon leaks. The Ministry notes that the industry has established a new objective for reducing hydrocarbon leaks that entails a 50 % reduction in the number of hydrocarbon leaks greater than 0.1 kg/s by the end of 2008 (based on the 2005 objective). Several incidents related to hydrocarbon leaks from wells, subsea facilities and pipelines in recent years highlight the need for better insight into how hydrocarbon discharges under water react, and the risks associated with such discharges. The incident on Snorre A in 2004 underlines this need. Therefore, the industry and the authorities have

46 46 Report No. 12 to the Storting initiated a project to evaluate issues relating to gas discharges under water. The purpose of the project is to document the challenges and describe proposed measures to ensure good understanding of these phenomena Drilling and well-related factors A substantial contribution to the overall risk of major accidents comes from drilling and wellrelated factors. Many of the fields on the Norwegian Shelf are approaching their final stages. New and demanding well solutions must be used to recover the remaining resources. Examples of this include extended reach wells and multilateral wells. Depletion of the reservoirs has also led to changes in the pressure conditions in the subsurface, thus reducing the ability to use conventional drilling technology. Drilling and well technology is under continuous development and therefore can possibly compensate for technical problems, while also providing better resource exploitation. Another challenge is linked to the fact that old wells on older fields are often re-used for other purposes than they were originally designed for. In recent years we have seen several cases of technical well failure, in which insufficient understanding of barriers, well history and knowledge of the condition of the wells has led to significant major accident risk connected with re-use of wells. Serious incidents in connection with these wells have now led the industry to exercise more overall planning, in which the selection of decision levels and involvement of the right expertise are included in safety-critical operations. Several players have set up their own well integrity groups which include condition overview and control as important elements. The Petroleum Safety Authority (PSA) has well integrity as one of its main commitment areas for In addition to following up through audits, an initiative has been taken for a pilot project to achieve better assurance of well integrity in the petroleum activities. The project will be carried out in close dialogue with experts in the industry. Plans are underway for a dedicated industry seminar as part of this project. Rising demand for drilling facilities both in Norway and abroad has resulted in reduced opportunity to use facilities and equipment for simple measurements and repair of existing subsea wells, so-called well intervention. The backlog in necessary well intervention activity has led to an increased effort to develop lighter, specialised facilities for this type of work. These units differ from conventional drilling facilities. The industry will face a unique challenge in ensuring compliance with the applicable regulations with regard to the design of safety systems, both on the facility and on the seabed. In order to provide for the use of such facilities, a decision has been made to expand the AoC system to include these facilities. Competence requirements and training of drilling and well personnel are defined through the industry s own standards and guidelines. Parts of these are currently being revised, and new revised editions are expected during the course of A particular need has been identified for a review of standards and industry requirements as regards well control knowledge and training. This need has been discussed by the Norwegian, British, Danish and Dutch authorities over the past three years. The objective has been to develop a common understanding and joint follow-up of the industry in this area Load-bearing structures and marine systems Damage to load-bearing structures and incidents related to marine systems on the Shelf is one of the risk indicators used in the RNNS project. The number of incidents and damage has remained stable in recent years. The generic term load-bearing structures and marine systems covers several areas with significant contribution to risk: Aging facilities An increasing number of facilities are being used longer than their projected lifetime, and there are plans for further increases. This trend represents a challenge as regards HSE. The Norwegian authorities, in cooperation with the British authorities (HSE), have sent out identical letters to the industry in the two countries, asking that owners of semi-submersible mobile facilities review the technical integrity of the facility, measured against today s regulatory requirements. This has led the owners of the facilities to identify nonconformities and they have instituted measures. Based on this good experience, the Norwegian authorities have sent out similar identical letters regarding jack-up facilities in order to achieve improvements for this category as well. Today, there are very few internationally recognised industry norms by which to judge lifetime extensions, and there is little uniform practice

47 Report No. 12 to the Storting 47 nationally and internationally in this area. To confirm that the facilities satisfy current HSE rules, the industry and the authorities therefore devote considerable resources to evaluating the issue of extended lifetime. As a consequence of this, the authorities, in cooperation with the industry and international authorities, have taken the initiative of developing better methods for planning inspection, as well as establishing criteria for scrapping of facilities Seabed subsidence Seabed subsidence has been observed on two of the fields on the Norwegian Shelf. One of the consequences of this is insufficient distance between the crest of the waves and the facilities decks. This means that some of the facilities no longer meet the normal requirements for strength in the event of a hurricane. Compensatory measures have therefore been implemented, which entail that production is shut down and the facility is evacuated in the event of a hurricane warning. It is the opinion of the authorities, based in part on the results of the RNNS project, that the overall risk to personnel is maintained at a stable level through such evacuation measures. However, the likelihood of pollution and/or loss of financial assets is increasing Positioning of floating facilities Traditional anchoring, dynamic positioning systems or a combination of these are normally used to keep floating facilities in the correct position. There have been an increasing number of incidents involving anchoring in recent years. The problems are linked to three areas: the anchor winch and its braking systems, the anchor line and the anchor itself. Brake failure was one of the main causes of the Ocean Vanguard incident in A common factor for all of the facilities experiencing problems is that they were more than 20 years old. Within its sphere of authority, the Petroleum Safety Authority (PSA) will increase its focus on the industry s competence and conduct audits to ensure that necessary maintenance is performed. There have also been incidents where the anchors holding power has failed. This is particularly a challenge for the floating living quarters (flotels) which are located close to other facilities. Breakage has also been observed in several older anchor lines. On this basis, the authorities will intensify their attention on ensuring that anchor holding power can be documented. The PSA is working with the maritime authorities on solutions that may entail stricter requirements for inspection, and that the oldest chains are taken out of service Ships on collision course, other collisions There has been a definite decline in the number of collisions between facilities and supply vessels since Report No. 7 to the Storting ( ) was presented in The background for this is largely considered to be linked to the improvement measures that have been implemented. These measures are largely described in the Norwegian Oil Industry Association s (OLF s) and the Norwegian Shipowners Association s (NR s) joint guidelines for safety in interaction between facility, base and offshore service vessel. A multi-party working group under Working Together for Safety (SfS) has also drawn up a proposed joint checklist for offshore service vessels entering the 500-meter safety zone. The Ministry is satisfied with this development and assumes that these guidelines will be applied by the industry, and thus lead to further improvements in the years to come. In order to maintain a current overview of ship traffic that could threaten facilities on the Norwegian Shelf, the industry has established systems for monitoring the sea areas. For the southern part of the North Sea, ConocoPhillips has established a maritime monitoring center on Ekofisk that compares radar/data and information from the facilities in the area, thus providing an overview of ship traffic in and around the facilities. Similarly, Statoil has established a maritime monitoring center at Sandsli which gathers and compares the same type of data for the middle and northern parts of the North Sea and Haltenbanken. These systems also provide an overview of available ship resources, so that their capacity can rapidly be employed in an emergency response situation. The Ministry is very pleased that the industry itself identifies needs and develops systems that lead to improved HSE on the Norwegian Shelf Environmental data The licensees have an obligation to implement collection of environmental data, including meteorological data, so that the necessary data is available for planning and executing activities. This means that meteorological data such as temperature, wind speed, wave height and current speeds must be gathered and sent to the Norwegian Meteoro-

48 48 Report No. 12 to the Storting Maintenance Figure 5.3 Observation grid for meteorological data on a normal day in the Barents Sea logical Institute. Weather stations on facilities, dedicated weather ships, floating buoys that measure wind, temperature and wave height are the most important means of gathering this data. Overall, these data provide an important basis for designing facilities and establishing the necessary emergency preparedness. The northern part of the Norwegian Sea and the Barents Sea do not have the same degree of petroleum activity and therefore do not have the same coverage of weather observations. Another factor is that weather coming from the north will often come without warning from the weather forecast system. Therefore, polar low pressure systems are a unique phenomenon in the northern areas. It is important that both the industry and the authorities take this into account when planning and implementing operations in these areas. Figure 5.4 Geographical distribution of where polar low pressure systems are first observed, covering the period Deficient maintenance can increase the risk of major accidents, damage and mishaps. The Petroleum Safety Authority (PSA) has reviewed 188 audit reports on the Shelf from the period 1 January 2004 to May About 50 of these were related to maintenance management and maintenance. The review shows a relatively large percentage of regulatory nonconformity. Examples include deficiencies relating to prioritisation of maintenance, assessment of critical factors, follow-up of temporary equipment, unsatisfactory documentation and outstanding maintenance of safety-critical equipment. In some cases, maintenance competence was insufficient. The PSA has also conducted a general review of the operators management of maintenance on the Shelf to obtain a more detailed overview of the status and possible development trends as regards challenges in the field of maintenance. The status assessment is also based on the authorities audits, investigations of accidents and reviews of reports from the RNNS project. Some factors that were noted as being unsatisfactory in Report No. 7 to the Storting ( ) have been handled better by the industry in the years after Some examples of improvements are: Description of maintenance strategy, targets and some management indicators. Increased use of computer-based maintenance systems for planning. Focus on work processes and establishment of process networks. Description of management loops that safeguard the requirement for continuous improvement. Access to and communication with land-based support functions (operations). The regulatory requirements for effective maintenance emphasise the need for continuous improvement of maintenance and maintenance programs. Nevertheless, experience gained from the authorities follow-up shows there are still areas that need improvement. Maintenance competence, maintenance planning in the design and operations phase and incentive schemes in maintenance contracts should receive more attention. The industry bears the primary responsibility for following up these factors, but the PSA will implement an initiative vis-à-vis the industry to contribute to increasing focus on this area.