“Heading our list of aims and objectives is our commitment to strive for the highest possible technical and safety standards. Nothing can, or should, over-ride this key mission statement and associated action,” he says.

Safety ranks so high up the list of IMCA activities that its two core committees safety, environment and legislation (SEL) and training, certification and personnel competence (TCPC) work right across all the special interest divisions within IMCA – marine, diving, remote systems and ROV and offshore survey; and the four sections – Americas Deepwater, Asia-Pacific, Europe and Africa; and Middle East and India, he says.

There are a number of ongoing safety initiatives which include the IMCA safety flash system; publication of safety statistics and of annual incident reports; the continued development of safety aids such as pocket safety cards, safety posters and videos; and also the work of the security task force that addresses such issues as piracy and security. These initiatives rely on sharing where IMCA is the conduit used to share individual experiences with the wider industry for the common good.

CURRENT CONCERNS
“With a strong oil price and exceptional levels of activity throughout the offshore oil and gas industry we are living in exciting and challenging times,” he says.

The $20 billion-a-year offshore marine contracting industry, key to the offshore oil and gas industry, is responsible for construction work on major oil and gas field developments globally as well as undertaking specific contract work for field improvements and extensions. Sophisticated vessels and platforms are vital for the safe and efficient support of underwater and surface construction, so many would expect the industry to be overjoyed by the knowledge that over $17 billion-worth of new vessels are in yards or in planning and engineering phases. However, there are very strong concerns, he points out.

In a relatively short time some 50 new marine construction vessels and 600 offshore support vessels will be in service around the world; to say nothing of 40 floating drilling rigs, 100 new work class ROVs; 10 new portable or modular saturation diving systems; and a whole new generation of dredgers and seismic vessels.

The top-of-the-range installation vessels will be fitted with cranes of 3000 tonne-5000 tonne capacity, whilst the top-of-the-range pipelay vessels will have up to 60 inch diameter pipe handling capacity. Except for vessels such as Allseas’ Solitaire and Lorelay, nothing like these top-end vessels has been built for two or three decades. A new breed of ‘single lift’ vessel with capacities from 20,000 – 48,000 tonnes is also being built with decommissioning in mind. At the same time, more heavy lift transport ships are being added to the fleet, and these, plus some of the offshore support vessels may be used for offshore construction projects.

The offshore fleet is certainly about to become physically larger (in terms both of the number of vessels and their actual size), and more sophisticated with the majority featuring dynamic positioning (DP) and state-of-the-art control systems. Many vessels will have the scope to fit and operate additional capacity such as cranes, ROVs, diving systems and reels for pipelines, umbilicals and cables.

“We’re moving into a new era; but there is a major concern about whether skills and safety levels will match the sophistication of this ‘new-look’ fleet; and, of course, there is a pressing need for current and new supply bases to accommodate these large vessels, and all the high tech equipment which goes with them. Progressively we should be considering new bases incorporating supply chain elements; for example, major contractors are establishing shore-based pipeline fabrication and spooling facilities in remote areas as close to offshore fields as possible,” he says.

“An item topping the IMCA agenda is the global concern about skills shortages. To operate just these new construction vessels, we need some 2,000 additional watch-keepers across the bridge, deck and engine room; 800 personnel in saturation diving and related positions; 1000 additional survey and inspection personnel; 1200 ROV personnel and many other diving, support, project and engineering personnel. It is a huge task.

“With zero incidents in mind, all these people, newly recruited to the industry, must be capable of absorbing the available knowledge and taking on board industry safety objectives. Training must continue across the board to keep them safe – training establishments and trainers will be in high demand. Yes, even more people will be needed to man them,” he says.
It may be that many of the people new to the industry have transferred from other sectors of the civil or defence marine industries, but whatever their background and wherever they are from, training to the high levels required by the offshore oil and gas industry, and “adopting the ethos of our industry is vital”.

SOPHISTICATED TECHNOLOGY
“Within the offshore contracting industry we are used to multi-redundant, fail-safe systems. The lack of new vessels over the past decade or so has meant working with vessels with long histories, systems have been added and evolved; teething problems ironed out; and performance improved.

“Now, fresh from the yards we are going to see very sophisticated vessels (with similarly sophisticated equipment fitted on them) often going straight out to remote oil and gas provinces. Almost without exception, this will see them operating in ever deeper and more hostile waters far from shore – yes, it really is ‘new frontier’ country. What can we expect?”

DEBATING THE ISSUES
There is no simple answer to the three inter-linked issues of skills availability; skills and safety; and the impact of new technology. “We need to debate the issues, get feedback and views from across the industry and ensure we work together to identify challenges, and set the wheels in motion to share solutions. IMCA’s real-time safety flash system will be used to share specific operational knowledge as it becomes available.”

COLLECTIVE WISDOM
The new fleet and its new personnel will want to learn from the collective wisdom of the past. This is contained in new design codes which have improved since much of the current fleet was built. But a considerable contribution comes from the equipment specifications, procedures and personnel competence described within IMCA’s good practice guidelines. These also address trials and commissioning; ‘failure modes and effects’ analyses; audit and maintenance programmes developed on past successes and occasionally from past incidents; and the development and recognition of competence in the workforce.

IMCA can certainly help to build strong foundations for the new fleet and new people who will be joining the industry. IMCA has published well over 200 guidelines relevant throughout the world. The most pertinent to the new fleet may be DP for supply vessels (and many other DP documents including incident analyses); the Common Marine Inspection Document; training and competence framework; crane specifications and lifting operations; maintenance of wire ropes; communications (bridge and dive control); incident investigation; vessel and personnel security (including ISPS); as well as the suite of diving documents which support IMCA’s International code of practice for offshore diving. There are specific guidelines relating to various aspects of safety, and also IMCA’s much used safety promotional material aimed at individuals within the industry, but safety and efficiency are the goals of the content of almost all IMCA guidelines.

CMID A LIVING EXAMPLE
IMCA’s Common Marine Inspection Document (CMID) was developed originally to reduce the number of audits carried out on individual vessels, together with the adoption of a common auditing standard for the offshore marine industry. It is gratifying that the CMID is seeing ever-greater adoption around the world and members are actively promoting its use to clients, sub-contractors and other vessel operators. Indeed, a significant part of the international offshore industry has accepted the CMID as the standard for vessel inspections and therefore, when requesting copies of recent inspections they will expect them to be in the format laid out in the CMID.

The CMID is treated as a living document. Some parts can be completed by the crew prior to an independent auditor’s arrival and, thereafter, the vessel’s crew can keep it updated wherever possible, so that the minimum amount of work is required at each audit, and auditors can spend their time on board as effectively as possible. “IMCA views it as so important that it was the subject of one of the workshops at our annual seminar when we explored how the CMID is used in practice and how the use of the document can be enhanced.”

“You cannot compromise on health and safety,” says Doyle Galloway, HSE manager, at Shell International E&P. “You have to stay true to your core values and what is important to you, both in a business sense and morally.”

Galloway is unashamedly fanatical about health, safety and the environment (HSE), and believes that the only way to keep improving the performance of the oil and gas industry is to keep raising standards.

“I’m a health and safety purist, so I have intentionally set the bar very high, and every time we get near it I raise the bar again,” he explains. “I don’t apologise for that. I think the industry has done well, although we have a very long way to go. There are still unacceptable incidents, injuries and deaths. To me, the loss of one life is too much. No profit justifies that, so we want to truly have a workplace without harm to mind, body or environment. I don’t mind if people call me dramatic. Life and death is a dramatic issue.”

“There is no justification for cutting corners when the lives of staff and the community are at stake.”

One of the major challenges Galloway faces is to keep raising standards on HSE in a business climate that constantly rises and falls in tandem with fluctuating energy prices and, now, the pressures of the global macro-economic environment.

“Some people say the oil industry is either full speed ahead or slamming on the brakes,” he says. “Nevertheless, HSE cannot be compromised. That is one of our highest values. Yes, we must be profitable, just like any other industry, but you should be able to marry both profit and safety. You can never separate the two things.”

THRESHOLDS OF RISK
Ensuring profitability and high standards of health and safety is easy in principle, but in practice it requires a great deal of hard work to achieve a sustainable balance.

For Shell, the solution is to lay down firm values about HSE, and clear procedures to determine the actions that should be taken to promote health and safety while maximising profitability.

The first step, according to Galloway, is to stay true to the core values of HSE and ensure that these are well defined and understood throughout the company.

“People will always say that safety is one of their core values, but their commitment only shows when times get tough,” he says.

Secondly, Shell determines strict risk tolerability criteria. Risk can never be entirely eliminated in upstream activities, simply because of the nature of the business and, in some cases, the environments in which E&P operations must take place. The key, therefore, is to decide what level of risk is acceptable to the business and the people it employs.

“You can’t cry wolf on health and safety issues, otherwise management will not hear the message.”

“We all accept some level of risk in our lives – when we cross the street or get in a car, for example – but the lines must be very well defined,” says Galloway. “Once they are, then no matter what happens we will not go below that line.”

The third vital element in determining HSE policy is the ‘as low as reasonably practical’, or ALARP, principle. This determines the company’s activities regarding maximising profitability and managing risk, without ever going below the threshold of acceptable risk. Putting these three principles in place is one thing, but unless they are fully understood by everyone whose activities could affect them, then they are irrelevant.

“We strive for those principles, but we must communicate those messages within the company, educate people around the principles that must be learnt and which are not necessarily inherent in the way humans behave,” says Galloway. “We have the tools and techniques to analyse risk, but the right skills must still be learnt and then reinforced over time. An important part of our work as HSE professionals is to teach those skills, and to put mirrors up in front of people so that they can examine their behaviour.”

ONGOING BATTLE FOR HSE
No matter how successful Galloway and his colleagues are, he will never ease up on his efforts to champion HSE, not only within Shell, but also in the industry as a whole. Galloway feels that no one can allow themselves to believe that the battle is won.

Fighting that battle means helping operational managers to recognise risks as they emerge and take action, which often requires courage on their part. After all, it means sometimes telling senior management what they would rather not hear in terms of operational efficiency.

“We must work harder to ensure the balance between profit, operational efficiencies and HSE as the industry moves into harsher and more remote locations – even in established locations,” he says. “There is a risk that the industry might try to do too much, too fast. Management must have the courage to speak up and say ‘slow down’.”

To give these managers the confidence to make the right calls on HSE risks, a company must have a clear formula for assessing risk and the right processes to raise concerns. A lack of clarity will either mean too many false issues being raised, or important risks being overlooked. There is a need for consistency and willingness in the culture of a company to prioritise HSE and, therefore, heed the warnings raised by operational managers.

“I’ve found in Shell that upper management is open to that message and wants to hear about HSE risks when they are real,” says Galloway. “You can’t cry wolf on health and safety issues, otherwise management will not hear the message. The challenge is trying to get people to speak up in an industry that is known for having a ‘can do’ attitude. People want to deliver, that is the culture in this industry. You need clear criteria to make that call, so we have to focus on education, communication and reinforcement of our core values and risk criteria.”

RIGHT ATTITUDE TO HSE
“HSE is not just about processes or programmes. It must be about leadership.”

It is evident that Shell’s approach reflects a culture in which people are prioritised. This filters down to the company’s proactive approach to inspection, repair and maintenance. In the past, the industry’s emphasis may have been on developing well-defined processes for ensuring the efficient and cost-effective operation of equipment, but increasingly there is an understanding that people’s behaviour should also be subject to scrutiny.

“There is an old saying that I have come to understand more as I get older: ‘people do what you inspect, not what you expect’,” says Galloway. “If you inspect what people do, then they will be more diligent in the meeting the standards you set.”

With all these measures in place, there is one further element that Galloway insists is top priority – without it, everything else will fail.

“The most important thing in getting HSE right is to have the right leadership,” he says. “Everything hinges on that, no matter how many people you have on HSE or how many dollars you spend. You need leaders in the business who are committed to health and safety, then you can win before you even start. HSE is not just about processes or programmes. It must be about leadership. I work for a company where HSE matters to the leadership, and that allows me to champion health and safety within the industry.”

“My principal responsibility as chief executive is to develop a strong, competitive and efficient group,” he says. “To succeed in that endeavour, health, safety and environmental considerations must underpin everything we do. We thereby make our group more robust, reliable and competitive. It is also important to remain an attractive place to work, which offers our employees good development opportunities,” he says.

“The group is the result of the biggest-ever merger in the Nordic region. As operator for a total production exceeding three million barrels per day, StatoilHydo is the world’s largest operator in deep water. The merger was driven primarily by the need to strengthen our international competitiveness,” he says.

At the same time, the company is realising major benefits and gains on the Norwegian Continental shelf, which will benefit its owners, its partners and society as a whole. In parallel with the integration process, StatoilHydo established new platforms for long-term international growth over the past year. “We have further strengthened our position in North America through a major acquisition in Canadian oil sands and by acquiring exploration licences in the Gulf of Mexico and off Alaska,” says Lund of the company’s expansion. “In addition, we secured a position with Russia’s Shtokman field. These will be important areas for us in the years to come.”

ENVIRONMENTAL CONCERNS
As an industry, oil and gas lives on top of the global stress zone where the need for secure and adequate energy supplies rubs up against the climate challenge. The climate issue represents both a challenge and an opportunity for everyone involved in this sector; something that Lund appreciates and understands. “The challenge is to reduce greenhouse gas emissions. Its opportunity is the commercialisation of more environment-friendly solutions and products. We are constantly challenged over the footprint we leave as an energy company. In coming years, our competitiveness will be influenced by our industrial response to the climate challenge,” he says.

“Our response involves both making our core business cleaner and more energy efficient, and strengthening our involvement with new energy. This is why we are committed to enhancing energy efficiency and develop environmental technology. This is why we are developing new technology for carbon capture and storage at Mongstad. And this is why we are stepping up our involvement in renewable energy, with the focus on wind power and biofuels.”

StatoilHydro’s move last year into Canadian oil sands was first and foremost about realising major resources that can help to meet the world’s growing energy demand. At the same time, the company is working on technology and industrial measures which address the associated environmental and climate challenges.

Technological development is at an early stage in this area, which is why the company has established a new technology centre for heavy oil in Calgary. “Our starting point is solid experience from areas such as managing carbon emissions, enhancing energy efficiency and improving oil recovery. No easy fixes are available, but I am convinced that we have a lot to contribute.” StatoilHydro’s ambition is also to develop more efficient and environment-friendly solutions for heavy oil.

OPPORTUNITY COST
Opportunities in the oil and gas industry are defined more by geology than by geography. The world’s oil and gas resources are often found in areas that pose major development challenges; poverty, corruption and human rights violations all present demanding conditions.

For all companies operating in areas like the Middle East, this calls for extra vigilance to ensure that business is conducted with a high degree of openness and within an uncompromising performance framework defined by values, HSE principles and an ethical platform. Lund says that StatoilHydro’s best contribution to social development is to conduct an efficient and profitable business within this framework. The company also works systematically on measures to operationalise its corporate social responsibility.

StatoilHydro’s work on sustainability is about continuous improvement. Last year showed the group it needed to improve in a several areas, as it was involved in three fatal accidents during 2007; tragic incidents that caused irreplaceable loss for the bereaved. “The oil spill from the Statfjord A platform in the North Sea was unacceptable,” says Lund. “The investigation exposed weaknesses and deficiencies which we cannot accept, given our high ambitions in the environmental area. We have initiated a number of improvement measures to ensure that such events are not repeated.

“An oil and gas company which aims to compete successfully over tomorrow’s resources must take sustainability seriously. Our ambition is to be part of the solution to important sustainability challenges. We then need an active and open dialogue with the society around us. Our interaction with owners, government authorities and civil society will help to make us even better. Only in that way can we strengthen and renew our contribution to meeting future challenges and expectations.”

This sentiment is echoed by Børge Brende, newly-appointed managing director of the World Economic Forum (WEF). The strict environmental standards set on the Norwegian Continental shelf will give the group a major advantage in extending our international commitment.

“When the authorities in various corners of the world come to award licences to oil and gas companies, StatoilHydro’s list of achievements related to sustainability will be given increased weight,” he says.

Brende’s new base is at the head office of the non-profit WEF in Geneva. A former Conservative member of the Storting, he was a high-profile minister of the environment and then of trade and industry between 2001 to 2005. He now plays a central role when the WEF brings together heads of government, industry leaders and key academics at its annual conference in Davos to seek solutions for the world’s really major challenges.

“Climate change, corruption, poverty, human rights violations, lack of education and clean water are individually such big and complex issues that they mean more than simply an unworthy life for those who suffer under them,” Brende states.

“My job is to highlight that such challenges also have a direct effect on company bottom lines because they destabilise the basis for future economic growth and progress. That in turn weakens both the ability and desire to invest by the whole private sector.

“In other words, hindering dramatic climate change and conflicts rooted in excessive social differentials is in the business community’s own interest. Although its primary responsibility is to be commercial, the authorities alone cannot make the world more sustainable. After all, the private sector represents by far the largest slice of the global economy.”

To help solve the complex problems facing the world, the WEF must go right to the top – where the power lies. Its list of members is long and heavyweight, and includes top executives from the 1000 largest companies in the world – including StatoilHydro – and representatives from smaller companies which nevertheless play a key role in their region or segment.

Brende is convinced that the world can only be shifted in a more sustainable direction if people get better at persuading governments, industry, research bodies and civil society to pull together and reach agreement on a number of key global rules of the game.

“We must be more intelligent at using the best aspects of the market economy, and that’s what the business community is best at,” he tells me. “That must be combined with experience from public administration and with the thoroughness and methodology of the academic community to ensure that as many considerations as possible are taken into account.

“However, the sustainability discipline still contains too much of a planned economy mindset, and that in itself isn’t sustainable because it means that some parties don’t feel a proprietary attitude towards it.”

OVERCOMING ADVERSITY
He admits that it will not be easy to overcome both poverty and climate problems simultaneously as long as economic growth means increased use of fossil fuels.

“But we must collectively identify solutions which can uncouple growth in energy consumption from rising emissions. Much low-hanging fruit can be plucked in a transitional phase before the world is able to make greater use of renewable energy sources. Combating deforestation will be a very useful contribution at relatively low cost. We can also improve energy efficiency at both industry and end-user levels through relatively minor measures. In addition comes carbon capture and storage, where StatoilHydro is a world leader.”

Operations on the Norwegian Continental shelf have yielded a number of positive developments, as Brende states. That applies perhaps particularly to legislation on produced water from offshore oil production as well as the carbon tax adopted in 1991. “A direct result of the latter levy, after all, was that StatoilHydro began to capture carbon dioxide from the Sleipner West wellstream in the North Sea and store it in the Utsira formation,” he says. “This engineering achievement was a direct consequence of tougher demands from the government, demands to which the industry responded very positively.