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Offshore Resilience

pic of JPT editorTwenty-five years ago next month, the oil and gas industry’s worst offshore disaster took place. The explosion and fire on the Piper Alpha North Sea oil production platform killed 167 men and left only 61 survivors. The anniversary will be commemorated with a 3-day safety conference in Aberdeen and the refurbishment of a memorial sculpture honoring the victims.

The accident ushered in a new safety culture in the oil and gas industry as well as a new regulatory mandate. That sector of the industry recovered and has made steady improvements in safety since. Three years ago, the Macondo Gulf of Mexico accident rocked the industry, and its implications are still being felt. From all appearances at last month’s Offshore Technology Conference in Houston, the offshore sector is booming and even more mindful of the necessity of safe operations amid an exploration renaissance.

Operators expect a tougher regulatory regime in the Gulf of Mexico going forward, one that could lead to some industry consolidation, according to a survey report released at OTC by GL Noble Denton. The survey of 100 senior oil and gas industry executives found that 85% of respondents expect the US regulatory regime to become much tougher over the next 2 years and 61% believe that regime will negatively affect their businesses.

Speakers at OTC sessions echoed those sentiments. The industry should expect new rules about well control equipment, blowout preventers, and production systems, according to Randall Luthi, president of the National Ocean Industries Association.  But he expects overall production from the Gulf of Mexico to continue to increase, and communication between regulators and the industry to continue to improve. E&P activity has rebounded in the Gulf since Macondo. New rigs are being delivered and wildcat wells are being drilled. The most recent deepwater activity report issued by the US government shows a total of 36 floating rigs operating in the Gulf compared with 30 at the time of the Macondo accident, and a total of 51 projects are under way in more than 1,000 ft of water.

In a keynote speech at the recent SPE European HSE Conference and Exhibition in London, Phil Hemmens, managing director of Eni UK, said he believes high-profile accidents such as Macondo and Piper Alpha put a burden on the industry to prove that it can manage its operations safely. The industry has made great strides over the past 30 or so years in raising safety standards and measuring occupational safety performance in a way understandable to regulators and the public. But it does not have key performance indicators (KPIs) that might indicate the potential for a major accident such as Macondo, he said.

Although the industry has some indicators—information gleaned from near-misses or types of hydrocarbon releases—the complexity of deepwater and other projects has made standardizing KPIs difficult. Developing those indicators, and then applying them industrywide, would help both the industry and regulators identify and manage risk at the operational level more efficiently.