Special Report: UK oil industry reflects on Piper Alpha lessons

What safety lessons has the UK North Sea oil industry learned as it reflects on the 20th anniversary of the Piper Alpha disaster?

On July 6, 1988, 167 people died in an explosion and fireball on the Piper Alpha oil platform due to a gas-condensate leak from pipework connected to a condensate pump (OGJ, July 11, 1988, p. 20). The safety valve had been removed for maintenance, the leak was ignited, and an explosion and fire followed; only 61 people survived.

As the industry strives to attract young entrants, it is crucial to pass on the safety lessons of this tragedy, stressed Chris Allen, health, safety, social, and environment director at UK trade association Oil & Gas UK (OGUK).

“Safety is not just a company or industry matter, but it is something for every individual working offshore or onshore,” Allen said.

Cullen report

The disaster prompted the Cullen review of safety culture in the UK North Sea, which was published in 1990, with all stakeholders examining regulation, training, processes, and ways of improvement.

Responsibility for offshore safety was transferred from what was then known as the government’s Department of Energy to the Health and Safety Executive (HSE). In addition, major design changes were made to offshore platforms; existing prescriptive legislation was replaced with goal-setting requirements, and a safety case regime was established.

Recently unprecedented high oil prices prolonged the use of aging platforms, and the ongoing trend of selling assets to newcomers–some small and without operating experience on the UK Continental Shelf–requires different approaches to managing safety risks.

Technological advances often mean that little or no operational experience is needed for managing fields.

Steve Jenkins, president of trade body Oil & Gas Independents Association, told OGJ that safety had not dropped as a priority.

“We have to be fully compliant with regulations, and regular audits are carried out,” Jenkins said. Small operators use bridging contracts with drilling companies whereas the majors work with them directly.

KP3 challenge

The number of fatalities fell to two during April 2006-April 2007, and the number of major injuries in the fiscal year ended April 2008 was the lowest since 1995.

However, although safety has improved over the years, much progress is needed on UK platforms, according to the “Key Program 3” (KP3) report HSE published last November. The body investigated the safety and integrity of nearly 100 offshore installations and their equipment over a 3-year period and concluded that more than half of the oil and gas industry’s basic assets were in poor condition.

“This report looked at management issues, and these are harder to deal with,” said Ian Whewell, head of HSE’s offshore division, in an interview with OGJ. “Senior management had a culture of ‘Give us solutions.’ People wanted to know that everything was all right. We have said that if you hear that everything is all right then you should be worried.”

Earlier this year, HSE shut down three installations until operators could rectify the problems.

But OGUK has contested some of the findings in the report, arguing that when it was published some data were out of date. The industry is preparing its feedback, and HSE will send a new document to the secretary of state in April 2009.

“We are hoping to see a detailed analysis of the progress made since KP3 was published,” Allen said.

The report concluded that greater leadership, more good practice sharing, and improved worker involvement are needed to reduce offshore risks. But Jake Molloy, regional organizer of OILC, the offshore trade union, warned that employers are still intimidating workers about voicing safety issues.

“Constructive dissent serves as an important monitoring force within organizations, a warning signal of danger ahead or of organizational decline. Industry leaders on the UKCS need to realize that internal dissent is not itself a crisis: it is priceless insurance against disaster,” Molloy said.

Asset integrity

A key safety challenge now is asset integrity as platforms continue to work beyond their design life.

According to a recent viewpoint on asset integrity published by Celerant Consulting, an operational advisory firm, although capital spending budgets in the UK North Sea rose by 25%, the number of improvement and prohibition notices in 2006 was 53% higher than in 2005.

The North Sea is a challenging environment with high waves and harsh weather. Low oil prices in the late 1990s meant that installation integrity fell on the priority list for operators. With an estimated recoverable 27 billion boe still to be discovered, asset integrity is crucial to ensure that future discoveries can be tied-in and decommissioning postponed. Production from the mature UKCS made strong economic sense when oil prices peaked at almost $147/bbl in July.

Now, with oil prices rapidly falling, have companies stopped investing in asset integrity? OGUK told OGJ that $1.5 billion will be spent on it this year.

“There is no sign of this effort slacking off,” OGUK said. “This will never be a job that is fixed; we will always be working on it and addressing the legacy issues, as no one thought that the platforms would be there for as long as they [have].”

Having strong leadership at industry and company level is critical in setting the tone for any company on safety matters. The global skills shortage means it is more difficult getting the right person in place to deliver operations successfully.

Celerant Consulting said there was “fundamental misalignment between the asset integrity aspirations of senior management and the reality on the ground. Indeed, asset integrity may very well not be at the level of excellence that many senior executives would like to believe.”

HSE has set a goal of making the UKCS the safest offshore area by 2010.

Operators are committing huge sums on asset integrity and safety programs, but safety culture is fundamentally about attitudes and training. Therefore, it is imperative that succeeding generations share the lessons from Piper Alpha to avoid mistakes that could so easily escalate out of control.