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Director-general Magne Ognedal: Principal signals 2010

Director-general Magne Ognedal reflects on the issues – both for the PSA as a regulator and for the petroleum industry – which cause him the greatest concern in 2010.

Magne Ognedal, director-general in the PSA Norway

Magne Ognedal, director-
general in the Petroleum
Safety Authority Norway


The Petroleum Safety Authority Norway (PSA) held an information meeting with the industry and the press on 10 February. The agenda for the meeting was to sum up 2009 for the petroleum industry in health, safety and environmental (HSE) terms and to present the PSA’s main priorities for 2010. Director-general Magne Ognedal also signalled changes and expectations, and issued some forthright challenges.

In addition, the PSA’s “annual report” in magazine format – Safety – status and signals – was unveiled. See the link in the right-hand column.

A time of change
“The petroleum sector in Norway has changed character in recent years. Today’s picture is primarily of an industry composed of many new and small companies with one large and dominant player.

At the same time, offshore operations are characterised by aging installations, major change processes and very complex licensee groups. A broad strategy process has been launched at the PSA to analyse what action we as the regulator must consider taking in the light of this position.

Issues being looked at include the ‘obligated party’ hierarchy – in other words, what responsibilities rest on the various players and companies in the industry.

Questions include whether small companies can be expected to have the same expertise as big ones, the realistic minimum standards which can be set for them, and possible changes to the demands made of such licensees. Should operators bear a greater responsibility than today?

Our formal systems, such as the regulations, the acknowledgement of compliance (AoC) scheme and consents, also form part of this strategy work. Must anything be amended to fit today’s activity picture?

Another issue is coordination between official regulators in the safety arena. Does this function optimally, and in line with the intentions expressed when we were founded? Should we be looking for other models based on our six years of experience?

The time is ripe to make some choices. Our aim is to find answers to more of these questions during 2010.“

“We are assessing whether the AoC scheme has worked as intended, or whether we need to tighten it up and clarify which units it will cover.

The AoC was initially intended for vessels in a ship register which transfer between several operators on the NCS. One aim was to make it easier to move and take over rigs. It is meant to be given only to units which comply fully with the Norwegian regulations.

The scheme was also tailored to an acceptance system for drilling rigs in north-west Europe, and later expanded to other types of vessels used off Norway. However, the AoC was not intended for use with installations which are going to be permanently moored on a field throughout the latter’s producing life.

In our view, a distinction needs to be drawn in principle between units which should have an AoC and those excluded from the scheme. The regulations may need to clarified.

We nevertheless believe that the AoC scheme has helped to raise awareness of Norway’s regulatory requirements and to enhance compliance with these by vessel owners.

The technical and operational quality of the rigs is now well documented, which means the attention paid to safety has improved. Feedback from the industry is very good across the board, although the process can be demanding for everyone concerned.“

Rowan Gorilla VI
“We have pursued a very extensive AoC process over the past couple of years with the Rowan Gorilla VI rig, and the owner’s efforts during the same period have been at least as demanding.

An AoC was finally awarded in late 2009, but this work showed a need for better harmonisation between our requirements and those set by other verifiers of rig equipment. For the AoC to be a stamp of quality, everyone involved must apply equally stringent standards.

The process leading up to an AoC for Rowan Gorilla VI was particularly lengthy and demanding, and the scheme in general involves a heavy workload for us. So it is important that this commitment yields the desired benefit for everybody.“

“The model for coordinating our work with the Norwegian Climate and Pollution Agency (previously the SFT), the Board of Health and other relevant safety authorities was created when we were established in 2004.

One goal was to make contact with the authorities simpler for the companies – consents should be approved by all the agencies before they were issued, for instance. Unfortunately, it has proved difficult to get these arrangements to function adequately. We have accordingly included the coordination model in our current strategy process.

On the basis of the experience gained so far, we need to assess what represents a realistic approach to inter-agency collaboration and whether today’s approach should be adjusted.“

Major international accidents
“We have seldom experienced major accidents in Norway, with substantial loss of life or large-scale environmental pollution. However, we witnessed a very serious incident last year on the Montara field off Australia.

A blowout occurred in late August and continued for several months. This resulted on 1 November in a fire which completely destroyed the West Atlas rig among other consequences. The blowout was halted on 3 November, but caused a major spill in the Timor Sea and extensive financial losses. Fortunately, no people were injured or killed.

We monitored the Montara incident on a continuous basis and had a dialogue with our Australian counterpart, the National Offshore Petroleum Safety Authority (Nopsa).

Disasters such as the Texas City refinery explosion in 2005 and the petroleum-related helicopter crashes in the UK and Canada during 2009 have also attracted our attention. The aim is also to learn from these international events and apply the knowledge gained to our work on the home front.

Managing major accident risk must be a priority for the leadership in oil companies and the rest of the petroleum industry. They should actively learn from incidents in other countries and implement these lessons in their own business. That will enhance general knowledge of major accidents and the level of safety in Norway.

Helicopter transport represents the big accident risk for workers on the NCS. The British and Canadian incidents in 2009 underlined the importance of regulators and helicopter companies in Norway working continually to improve safety. I hope these tragic accidents will be followed up carefully, and that the lessons benefit Norwegian offshore flights.“

Remote risks
“Remote control means that people disappear from parts of the offshore activity. Some claim that everything thereby becomes simpler and safer and that risk vanishes. That is not the case. We must exploit the improvement potential offered by new technology, not least with a view to enhancing safety. But remote control is not synonymous with eliminating risk. Even though people are less directly exposed, work in association with hydrocarbons will always pose the threat of undesirable incidents.

Remote control could even add to risk for people in some cases, and may often involve the potential for environmental pollution and loss of material assets. So safety considerations are just as important in integrated operation as in traditional activities.“

Freeloaders and individualists
“The Norwegian petroleum industry has a long tradition that the oil companies contribute to developing best practice, and that the whole industry has confidence in and uses these solutions. Unfortunately, we have recently seen signs of a different culture emerging, with certain oil companies refusing to accept best practice and opting for their own solutions.

That might be acceptable if this choice only concerned them, but becomes a problem when others are affected. This individualistic trend is accordingly a matter of concern. Companies throughout the player chain should be using best practice so that the whole industry can rely on established and accepted methods and systems.

We do not want freeloaders in Norway who undermine the integrated approach and sharing of experience for which the industry is known – to the advantage of safety.“

“Is the PSA too strict? Do the authorities make excessive demands? Are the regulations enforced too ambitiously? Such questions get asked from time to time, perhaps not unnaturally. Our role has been enshrined in instructions from central government, and the rule in Norway is that official regulations are neither dormant nor pro forma.

In that respect, our regulatory authority is clearly defined and we are measured and evaluated by the way we fulfil our duties. We must see to it that requirements are met, and take the necessary steps to ensure such compliance by the companies.

The government’s most important goal is to help make the petroleum industry as safe as possible, and this sector is continually improving. At the same time, it must be stressed that our supervision is rooted in the nature of the business. The approach to risk varies between offshore and land-based operations, and is tailored to the prevailing risk picture.

If we are given a role in supervising new forms of energy offshore, our work in that area would follow the same logic. Risk differs greatly with the presence or absence of hydrocarbons.“

Six more years
“On 1 January, I began a new six-year term as director-general of the PSA. This is a responsibility I take seriously, and look forward to with pleasure, excitement and optimism. We find ourselves in a time of great activity and many changes, and with challenges which it will be interesting to devote energy to overcoming.

For my part, I will continue to give priority to the tripartite collaboration between government, companies and unions, in part as chair of the Safety Forum. This body provides a venue for important, and often vocal, discussions which frequently contribute to good solutions. A similar role is played by the Regulatory Forum.

Although both these arenas function well today, a good tripartite partnership cannot be taken for granted and is challenged at regular intervals. To retain its position, it must be nurtured. Each participant bears a personal responsibility here. If cooperation is to function, you must respect and listen to the views of others without attributing ulterior motives to them.“

By Inger Anda