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Audit - HSE management in Norske Shell

The Norwegian Petroleum Directorate (NPD), from 1 January 2004 the Petroleum Safety Authority Norway (PSA), has conducted an audit of HSE management in Norske Shell E&P during the period from February 2003 - February 2004.

Background for the audit

Shell has a highly-developed and advanced management system, however, the NPD's/PSA's audit of the company did nevertheless reveal weaknesses in relation to HSE regulatory requirements.

In recent years, Shell has also experienced several serious incidents on Draugen and associated satellite fields that have indicated deficient management of the activities as regards HSE aspects.

The goal of Shell's change process, "Draugen - Shaping up for the future", is to reduce operating costs, primarily by transferring tasks and personnel to the land organization.

This process has gradually been coordinated with the reorganization of Shell in Europe, "Shell E&P Europe", wherein the goal is to create synergy effects from a joint resource base and uniform use of best practice.

It is our assessment that the change processes are of such magnitude that they could entail an impairment of the HSE level if not implemented properly.

In addition, follow-up of change processes and employee participation were key elements in the Norwegian Petroleum Directorate's general priorities for 2003.

The purpose of this was to follow up to ensure that change processes in the industry are planned, implemented and followed up according to regulatory requirements, and that the changes lead to safeguarding and further developing the HSE level.

Purpose of the audit

The purpose of the audit has been to provide a broad and comprehensive evaluation of Shell's HSE management, in part by considering whether the company's change processes are planned, executed and followed up, and by going back to previously implemented audits and evaluating whether there have been any improvements.

As part of this process, we have looked into how Shell's change processes are planned, executed and followed up in relation to the regulatory requirements for change processes.

Result of the audit

The PSA's main impression is that Shell has largely established and complies with an HSE management system that meets the regulatory requirements.

Through its integrity project, the company has done considerable work to map weaknesses in technical conditions, work processes, control systems, etc., and has identified, and in part implemented, a number of measures that can reduce risk on Draugen.

However, this process has taken a long time, and it has during certain periods been difficult to foresee the status of the activities and the HSE consequences associated with a prolonged and extremely comprehensive process.

In this context, we also refer to other audits which have evaluated various elements of the integrity project.

With regard to the reorganization processes implemented in Shell over the past year, the PSA has found certain non-conformities and potential for improvement as regards deficient management:

  • No firm measurement indicator for the change process
  • Weaknesses in the basis for making decisions and decision criteria for staff cuts on Draugen. Unclear whether the preconditions for the reduction in manning were met before the change was implemented
  • Impact assessments cover elements of the change processes, but not the totality
  • Insufficient employee participation in connection with implementation of impact assessments
  • Lack of clarity concerning roles and responsibilities, consequences of new cross-border functions not sufficiently explained

">The PSA's follow-up

Contact person in the PSA:
Mike Theiss