Memorandum submitted by the British Rig
Owners' Association
EXECUTIVE SUMMARY
In considering deep water drilling in the UK, the
British Rig Owners' Association, which represents mobile offshore
units, including drilling units, operating under the UK's jurisdiction,
remains confident about the safety of these operations in the
UK and perceives significant benefit from their commencement.
Differences between the UK safety regime and that of the USA are
noted, as well as ongoing technological developments stemming
from recent experience in the Gulf of Mexico, and the level of
risk is therefore considered to be within acceptable bounds despite
frequently severe environmental conditions west of Shetland.
1. Introduction
1.1 The British Rig Owners' Association (BROA) is
the association for persons or bodies corporate owning and/or
managing mobile offshore units operating on a regular basis within
the UK's jurisdiction. The membership includes companies operating
Mobile Offshore Drilling Units (MODUs). BROA was established in
1982 to provide rig owners and managers with a forum for the discussion
of common interests and to facilitate industry co-operation with
the UK Government, the International Maritime Organization (IMO)
and the European Community. As a primarily technical association,
BROA provides a forum for discussion by the members of what are
in the main part safety issues, and thereby both benefits from
and contributes to the collaborative approach of the British offshore
community in striving to achieve constant improvements in safety
for those working in the industry.
1.2 In responding to this call for evidence, we focus
(in sections 2, 3 and 4 of this document, respectively) upon the
first three questions asked, which align with our areas of expertise
as an association. BROA is ready and willing to enter into discussions
on the subject with a view to providing the best possible information
to the your Committee, and would be happy to be called to give
oral evidence.
2 Implications of the Gulf of Mexico oil spil
2.1 Environmental implications
2.1.1 Events following the blow-out experienced by
the Deepwater Horizon in the Gulf of Mexico have clearly
demonstrated the difficulties in intervention following a deepwater
incident and the potential for a significant oil spill to result
in the event that a blow-out does occur. Shetland and surrounding
landmasses are an environmentally sensitive area, as is the marine
ecosystem in the region. Dominant surface water currents flow
North East along the Rockall Trough and Faroe-Shetland Channel
into the Norwegian Sea through the region of the Faroe and Shetland
Islands, while demonstrating a high degree of local variability
caused by eddies and the slope of the continental shelf around
the West of Shetland field itself (Metoc PLC, 2002).
Within the Rockall Trough and Faroe-Shetland Channel, the NE flowing
surface waters comprise North Atlantic Water to a depth of ~500 metres
while Faroe-Shetland Channel bottom water flows in the other direction
below ~600 metres depth (Holliday et. al, 2000,
Turrell et. al, 1999). While the ecology
of the Rockall Trough is largely representative of the wider North
Atlantic, that of the Faroe Shetland Channel is substantially
less diverse due to limited recolonisation after glacial periods
(Bett, 2001). Nonetheless, the area as a whole is considered
ecologically rich in the global context of deep sea-floor habitats.
Current hydrocarbon contamination in the area appears to be largely
from sources other than the oil and gas industry (McDougall, 2000).
2.1.2 The dangers to the environment west of Shetland
and in the Shetland and Faroe islands of an oil spill such as
that seen in the Gulf of Mexico occurring are therefore significant
and it is consequently important to guard against the potential
for damage occuring. However, BROA believes this to be effectively
catered for by the UK's regulatory regime, as well as the industry's
proactive and responsible approach to safety, which has been a
primary focus during more than two decades since the Piper
Alpha disaster. We expand below on the various measures taken
to ensure a safe operating environment on the UK's continental
shelf and the specific considerations in the environment west
of Shetland.
2.2 Technical implications
2.2.1 Industry in the UK has taken a proactive approach
to developing technical mechanisms for the resolution of deep
water oil leaks of the form which took place following the Deepwater
Horizon incident. Another trade association, Oil and Gas UK,
has commissioned research through its "Oil Spill Prevention
and Response Advisory Group" into possible methods of applying
a 'cap' to achieve either full or partial pressure containment,
or to gather leaking hydrocarbons without restraining the well
pressure. The proposals thus far involve operation by remotely
operated vehicles (ROVs) and coupling via Cameron HC or Vetco H4
connectors. It is anticipated that a final concept and costing
will probably be available within one month and more detailed
engineering design will follow.
2.2.2 Within the BROA membership, work has been carried
out as a direct result of the Deepwater Horizon accident
to review equipment, maintenance systems and the feasibility of
ROV intervention, as well as the training of personnel and the
spectrum of staff attending well control courses.
2.3 Regulatory implications
2.3.1 The Health and Safety Executive's regulatory
regime for the UK's offshore oil and gas industry is recognised
globally as being of an extremely high quality. This is expanded
upon in section 4, below. Given the responsive nature of the regime,
it is expected that lessons to learn from events in the Gulf of
Mexico will be accurately identified by the HSE and swiftly accounted
for through their mechanisms for ensuring safe operation in the
industry.
2.3.2 Not only the HSE, but also the Department of
Energy and Climate Change, have already increased their inspections
of the industry, in the latter case doubling their number of inspections
(DECC, 2010). These additional inspections focus upon environmental
areas. Moreover, further developments in requirements placed upon
operators are expected to use the "safety case" methodology
practised by the HSE since 1993. This method of verifying operators'
standards requires operators to identify all hazards and to define
means of mitigation in a written document which has to be reviewed
and accepted by the HSE. Thereafter, verification is undertaken
annually by an external body (eg a classification society), which
ensures not only high safety standards, but proactive awareness
of risks by the operator.
2.3.3 It is hoped that careful assessment of the
tragic events in the Gulf of Mexico will enable the regulators
and the industry alike to further improve the already extremely
high UK operating standards and thereby enable continued exploitation
of our offshore hydrocarbon resources in a safe and efficient
manner.
2.4 Financial implications
2.4.1 Both regulatory and technological changes can
result in financial burdens to individual operators or within
the industry as a whole. The increased administrative burden of
a heightened level of auditing and certification as described
above in section 2.3 is significant, and more severe are the commercial
implications of the resultant delay to the deployment of mobile
assets or commencement of operations. Meanwhile, substantial changes
to equipment specifications (for instance an increase in the size
of permissible blow-out preventers through the incorporation of
additional sets of shear rams) could restrict the access to the
market of some existing rigs which were unable to handle such
altered equipment because of its size or weight. The consequent
reduction in competition would be expected to lead to higher supply
chain costs, in general.
3. Hazards and risks of deepwater drilling west
of Shetland
3.1 Environmental risks west of Shetland
3.1.1 The weather conditions in the west of Shetland
region can be both extreme and rapidly changeable. However, it
should be noted that UK operators are well used to North Sea conditions
which are themselves far from benign. Furthermore, maritime safety
equipment and practices on board mobile drilling units are of
a high standard as a result of their compliance with the regulations
of the International Maritime Organization, which is the source
of international safety legislation for the world's shipping.
With poor weather in the region a year-round phenomenon, there
is no clearly defined season and, because of limited warning of
deteriorating conditions, assets would stay on location during
bad weather but disconnect for safety reasons from the wells with
which they were engaged. The need to be able to do this in itself
ensures frequent verification of the function of blow out preventers.
3.1.2 Were a serious incident to occur in the west
of Shetland region during bad weather, the response would be likely
to be impeded by the weather. Access to the platform and its surroundings
would be difficult and rescue efforts hampered. Furthermore, oil
containment booms could be rendered ineffectual by the wave heights
associated with poor weather in the region, albeit that conditions
themselves would assist the break-up of any oil slick. However,
given that platforms would be disconnected from their wells during
periods of severe weather, it is extremely unlikely that a safety
or environmental incident involving their hydrocarbon related
work would coincide with these conditions.
3.2 Logistics and availability of assets 3.2.1 It
is acknowledged that there could be a limited supply of rigs in
the west of Shetland area which could drill relief wells if this
were to prove necessary. Furthermore, moving available rigs into
position during seasons characterised by inclement weather would
be logistically difficult because of the remoteness of the area
and consequent period of exposure during transit. However, as
shown by the Gulf of Mexico spill, relief wells represent a long
term solution, rather than a rapid solution to escaping oil.
3.2-2 By contrast to rigs, there is a high availability
of offshore support vessels (OSVs) in this area, including those
with oil recovery capability. Unfortunately, the UK's domestic
oil recovery capability through these vessels is weakened because
of unfavourable regulations in this country which disadvantage
UK flagged operators. BROA hopes that the numbers of available
vessels may be increased, if necessary through changes to the
regulations. However, other North Sea nations have a significant
number of ships equipped for oil recovery and a multinational
fleet operating in the North and Irish Seas forms the basis for
a significant pool of available OSVs. These ships would not be
restricted from bringing equipment or working on an incident in
the UK by protectionist measures and so could be readily deployed
to the task.
4. Fitness for purpose of the UK safety and environmental
regulatory regime
4.1 History and overview
4.1.1 The UK's regulatory regime for the offshore
oil and gas industry is widely regarded as the best in the world.
The HSE's Offshore Services Division (OSD) has been assembled
over time specifically to address the needs of industry while
enforcing safe practice across its range of activities. As such,
they have become an extremely skilled regulator which is staffed
by highly competent personnel who comprise a mixture of inspectors
and specialists working together to focus on particular problems.
This has enabled the HSE to remain responsive to new events and
needs, supported by continuous monitoring and regular analysis
of safety statistics for various aspects of the industry.
4.1.2 There has been a continuous focus on enhancing
safety standards in the UK since the Piper Alpha disaster
on the 6 July 1988. That major incident on our continental shelf,
which shocked the country as a whole and especially the offshore
community in Aberdeen, set the scene for safety practice in the
industry ever since, as well as providing a graphic, and horrific,
demonstration of the danger posed by offshore explosions. Following
the Piper Alpha incident, industry associations including
BROA, government and individual companies were involved in intense
debate as to mechanisms for preventing any similar event from
taking place in future. The inquiry carried out by Lord Cullen
spent two years examining the contributory factors to the incident
in detail and its 106 recommendations were accepted by the industry.
Among those changes was a transfer of responsibility for the safety
of the offshore industry from the Department of Energy to the
HSE, which resulted in the establishment of the OSD in April 1991.
4.1.3 Shortly after the creation by the HSE of its
Offshore Services Division, the new goal-setting regime of industry
regulation began, the Safety Case Regulations 1992 coming into
force on the 30 November, 1993. The safety case regime brought
to the offshore industry the philosophy of self-regulation by
those creating major hazards which had been practised onshore
for the previous twenty years under the Health and Safety at Work
Act. The regulations require a safety case to be made for each
new installation and this case to be accepted by the HSE. By November
1995, they were fully retrospectively applied to pre-existing
installations and in 2005, the regime was updated to be more fit
for purpose. In the case of mobile installations including MODUs,
the design of which is largely regulated through the International
Maritime Organization's MODU Code and the UK's Maritime and Coastguard
Agency, a safety case requirement applies before the commencement
of operations; as with all installations, the safety case must
cover the full range of operations being undertaken and their
associated risks. Ongoing scrutiny is provided via a dedicated
Inspector assigned to each Duty Holder, who is in turn are supported
by Topic Assessors with remits such as Structural and Mechanical
aspects.
4.1.4 Key Programmes on thematic areas are put in
place by HSE, the next one being "KP4 - The Ageing &
Life Extension Inspection Programme" which focuses on ageing
Installations. Inspections will concentrate on these issues over
and above the normal inspection process. KP4 will run until September
2013. It will include the development of technical information
for operators on ageing installations covering three areas: structural
integrity and the integrity of process plant, fire and explosion,
and electrical and control systems. The objectives of the KP4
are:
¾ to identify
duty holders' approaches to the management of the risks to asset
integrity associated with ageing and life extension;
¾ to raise
awareness of the need for specific consideration of ageing issues
as a distinct activity within the asset integrity management process;
¾ to enforce
an appropriate programme of remedial action where necessary; and
¾ to work
with the offshore industry to establish a common approach to the
management of ageing installations.
4.1.5 The HSE also engages directly with the industry
through collaborative safety fora such as their Evacuation, Escape
and Rescue Technical Advisory Group (EERTAG) and the Offshore
Industry Advisory Committee (OIAC), and with other national regulators,
for instance through the North Sea Offshore Authorities Forum
(NSOAF). The sharing of knowledge and experience which this enables
helps the HSE to remain responsive not only to the needs of industry,
but also to arising safety matters and newly identified risks.
4.1.6 As a safety critical component, blow-out preventers
are identified as falling under the HSE's verification scheme.
Their operation, redundancy and maintenance, including closing
rate and availability of tested backup, is closely monitored as
a result. Tests of blow-out preventers must be documented for
audit purposes. Furthermore, the design of wells themselves is
carefully regulated and assessed (HSE, 1995).
4.2 Differences between the UK and the USA regimes
4.2.1 All emergency systems within the UK are based
on major hazard risk analysis, ensuring the correct functioning
of safety critical elements. The safety case regime ensures the
proactivity of operators and goal-setting standards rather than
the mere fulfilment of requirements. Furthermore, the nature of
the way in which businesses are managed in UK is led by the HSE's
encouragement of people to speak up if there is a concern, and
operators have safety representatives and committees among their
staff as a result. This is a part of the workforce route put in
place by the HSE whereby part of an inspector's core role is to
speak to workforce safety representatives without the presence
of their management, creating an atmosphere in which any member
of staff can comfortably highlight safety concerns. Drilling contractors'
regimes in the UK therefore pride themselves on being inclusive
of staff.
4.2.2 With specific regard to blow-out preventers
and well design, the HSE's wells inspectors view safety cases
for proposals in critical detail, while the choice and function
of blow-out preventers are subject to careful ongoing verification.
The USA's requirements, meanwhile, are restricted to specifying
equipment and training. These are believed to be particularly
substantive advantages of the UK's regime which dramatically reduce
the risk of a blow-out occurring and therefore necessitating the
activation of response plans.
4.3 Effectiveness of the UK regime
4.3.1 The emphasis of the HSE's safety regime on
the design, installation and testing of blow-out preventers, and
their safety-case assessment of the design of proposed wells,
as well as the responsibility taken by operators for assessing
the safety of hazardous operations, are believed to be major contributory
factors to the widely held perception of the UK's continental
shelf as a safe environment in the context of the global offshore
industry. This would be as much the case West of Shetland as it
has been in areas of the UK's continental shelf which have previously
been exploited. The current regulatory regime has successfully
governed the safe progression to deeper waters and harsher environments
during the last decade and a half and, in doing so, has already
demonstrated its versatility.
4.3.2 In the event that an incident and/or oil spill
does occur within UK waters, the MCA has a well developed set
of procedures in the form of the National Contingency Plan for
Marine Pollution from Shipping and Offshore Installations (MCA, National
Contingency Plan). This document provides the basis for a pre-determined
decision making framework. Moreover, conventions and bilateral
agreements with other nations as laid out in Appendix C of that
document strengthen the capability for response. The consolidation
of relevant emergency powers in areas under the auspices of the
Department for Transport and the Department of Energy and Climate
Change for use by the Secretary of State's Representative for
for Maritime Salvage and Intervention (SOSREP) provides for decisive
and well managed responses to safety and pollution incidents.
5. CONCLUSIONS
5.1 Deepwater drilling, because of its technical
complexity and the difficulty of direct intervention at the well
head, poses risks over and above the same activity in shallower
locations and these are exacerbated by the environmental conditions
west of Shetland. For that reason, the industry is moving swiftly
to respond to the environmental effects of the oil spill in the
Gulf of Mexico by developing engineering solutions to the problem
of stemming the flow of oil in the very unlikely event that a
deep water blow out did occur in the UK. Primarily, however, BROA
believes that the robustness of the UK's safety regime, its focus
upon well design and testing and verification of blow out preventers,
and the steps taken by both industry and regulators to continually
enhance safety since the Piper Alpha disaster of 1988 mitigate
those risks of a blow-out occurring to acceptable levels. While
the precise causes of the Deepwater Horizon incident are
not yet known, it would be considered by BROA, given the differences
in the UK's and USA's regulatory and inspection regimes, to be
premature to take restrictive regulatory action in the UK based
upon a presumption of risk that a similar accident might take
place west of Shetland.
September 2010
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http://www.decc.gov.uk/en/content/cms/news/pn10—067/pn10—067.aspx
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HSE, 1995. The Offshore Installations and Pipeline
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