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Audit of Lundin's preparations for drilling operations

During the period 12-14 February 2007, the Petroleum Safety Authority Norway (PSA) conducted an audit of Lundin Norway AS (Lundin) linked to the company's preparations for drilling operations and hiring of a mobile drilling facility to carry out exploration drilling. During the audit we identified factors such as nonconformity in relation to governing documents and establishment of own organization through hiring of own personnel.

Background for the audit

The operating company Lundin is a new player on the Norwegian shelf, and is therefore being followed up as regards establishment of management systems as well as obligations linked to the company's development of its own organization with regard to expertise and capacity.

The audit activity included verifications of certain governing documents and meetings in which Lundin presented selected topics relating to management of health, safety and environment (HSE). Interviews were also conducted with selected personnel, and there was a tour of Drilling Production Technology AS' (DPT's)* emergency preparedness center.

*Lundin and several other operating companies have entered into agreements with DPT for assistance in connection with drilling and well activities.

Purpose of the audit

The purpose of the audit was to verify Lundin's compliance with obligations and requirements linked to HSE management in connection with execution of the above-mentioned activities.

The audit is an important contribution to our processing of Lundin's application for consent to carry out exploration drilling of a well in production license 338 using the mobile drilling facility Bredford Dolphin.

A key topic was to check that the operator has an adequate organization in Norway to enable it to carry out exploration drilling within the existing frameworks and HSE regulations for the activities.

How the company's own management evaluates its organization's competence and capacity to safeguard the role of operator was also a key topic. The focus on this area is also considered to fall under the commitment area of limiting the risk of major accidents.

Result of the audit

The company has a marginal organization, and has carried out planning of the first well with extensive use of consultants. However, the company has obtained more time for preparations than was originally planned.

The regulations require that the company have its own organization with the necessary professional expertise to evaluate whether the petroleum activities are prudent.

During the audit we identified nonconformities relating to the establishment of a dedicated organization through hiring its own personnel. Certain improvement items also emerged as regards the emergency preparedness organization, capacity for new operations and involvement of operations personnel.

We have also identified nonconformities and improvement items in connection with governing documentation.

Contact person in the Petroleum Safety Authority Norway:
Mike Theiss