Risk management upgrades needed to improve safety offshore

The following is a general discussion and not based on any specific information from theDeepwater Horizon accident. The experiences referred to are from a range of companies, including operators and suppliers to the offshore industry.

In brief terms, the purpose of risk management is to take the right actions to handle the right risks. Is the industry aware of all the safety risks involved in offshore fields? In broad terms, yes of course. All operator organizations have in-depth, detailed knowledge about risks, and make great efforts to ensure the risk picture is kept up-to-date.

However, there is still room for improvement, particularly in two areas. The first is where the extrapolation of the design and/or operational practices causes new risks. These typically occur when engineers alter the dimensions of their designs to a level where physical behavior changes drastically. For example, heavier BOPs have caused unforeseen wellhead fatigue problems due to a different dynamic behavior of the floating rig/riser/BOP/wellhead combination. The second problem area is due to the challenges of risk management during changes. Examples include during complex operations such as the drilling and completion of a well where safety barriers change during the operations, human interaction with systems, or changing risks due to wear and tear. A major contributor to several large accidents has been ongoing repairs or unrepaired system failures, such as systems that were temporarily outside their intended design conditions.

Does the industry manage to prioritize the right risks? Many operators have focused heavily on this area in the past few years. We observe many good practices, but also a great deal of variation between organizations – even within companies. In the worst cases, we see that it has taken years to implement improvements to designs or operational practices, which for very good safety reasons are listed as having top priority. The inability to deal with important issues is partly blamed on a lack of resources. Each operating organization is sized to handle exactly a "normal day." Anything out of the ordinary requires special work processes and additional resources, which can be difficult to mobilize. In addition, there are typically long lists of proposals for various kinds of improvements, and they need to be handled in a coordinated manner. The top safety issues do not always survive prioritization processes.

A well-known challenge in risk management is structuring risk governance to ensure the escalation of information and actions related to the most important risks in the organizational hierarchy and between organizational units. It is often a challenge to give priority to managing the risks of rare accidents with major consequences. These risks tend to be undervalued because they are complex to both understand and deal with. It seems easier to prioritize handling the risk of more frequent accidents with smaller consequences, but this may not be optimal in regards to safety risk management.

Looking beyond the immediate causes of accidents, what can we learn? The development of new technology and new organizational practices has provided useful tools for optimizing designs, work processes, and organizations. The effects are highly valuable improvements in technology and operations, but also have changed the conditions for successfully practicing safety risk management. In design and fabrication, there is much less room for failures and deviations from technical tolerances. A small deviation that was once harmless can now cause a serious failure. A similar development applies to operational procedures and decision-making in operations. Disregarding the total effect of small and what seem to be individually insignificant deviations from safe practices may have grave consequences. The requirements of accuracy in decision-making and work execution are higher than before.

We believe there is a need to upgrade safety risk management to better deal with these challenges. Some of the most important improvement areas are (in order of priority):

• Improve risk management leadership. Include better processes to ensure that large organizations prioritize actions to improve safety performance and escalate risk awareness more effectively in the organizational hierarchy and between organizations. Other improvement areas are actions to improve the understanding of risks due to rare and large-consequence accidents, improve tools and more direct support for dealing with accidents and issues.
• Deal with the dynamics of handling the risk of changing conditions during operations. This is in part a question of improved attention to the details of risk assessment during such situations on site. In part, it is also a question of directing desktop risk analyses to assess such situations, and of using the results when preparing operational decision makers.
• Improve the accuracy of risk assessments. In particular this means becoming more specific on both technology and work processes for important systems and functions.

DNV is working to contribute to these improvements through joint industry projects and internally funded developments.

Magne Tørhaug
Director of Market and Business Development
DNV

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