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ONS safety lunch 2014: cost pressures cause concern

The oil industry has been warned by Anne Myhrvold, director-general of the Petroleum Safety Authority Norway (PSA), against making cost cuts and savings at the expense of safety. “I’m convinced it’s possible to look after safety in a good way while also cutting costs,” she told the safety lunch at ONS 2014. “But both the short- and long-term consequences of doing this must be understood.”

Photo of PSA director Anne Myhrvold speaking at The Safety Lunch

Hosted by the PSA on Wednesday 27 August, the lunch is a high-profile event at the Stavanger show which brings government representatives together with key company and union leaders. This year’s programme was entitled “The cost of change” and focused on petroleum industry safety in a national and international perspective.

Myhrvold’s speech addressed challenges posed for safety work in a time of economic instability and pressures to achieve cost efficiencies.

“The question now is how we are to deal with a position where the industry is very concerned to save money while the level of safety must be both maintained and improved,” she observed.

Addressing whether a high level of safety is to be maintained regardless of cost, Myhrvold asked: “Does anyone want to reduce safety standards? If so, is anyone willing to pay that price?”

For companies to understand the impact of cost-cutting on safety will demand a great deal from many people, she noted, and said the PSA will be keeping a close eye on developments.

“Our industry has historically experienced both ups and downs,” she reminded her audience. “Serious accidents have occurred and lives have been lost. Financial challenges have been faced before.”

Myhrvold pointed out that continuous improvement has been a key principle in Norwegian work on safety in the oil and gas business.

“The industry has got where it is today on the basis of explicit regulatory requirements, their follow-up by industry participants and their enforcement by the government. A focus on safety is also rooted in Norway's ambition of being a world leader for HSE in the petroleum sector.”

She noted that the level of safety in the industry is high, which also emerges from the PSA’s annual RNNP survey on trends in the level of risk in petroleum activities. “So the key task is to sustain the good work done so far. Preserving and maintaining the level of safety makes big demands on all those involved in this business.

“Safety is a perishable commodity. It is ‘here and now’. Being a world champion yesterday is no help if you have a major accident today.”

Far north
Safety in the far north of the Norwegian continental shelf (NCS) is the theme of the PSA’s stand at this year’s ONS. It is also one of the authority’s four priorities for 2014.

Myhrvold emphasised that the government has clear expectations of the companies as petroleum activities move ever further north and into new areas of the Barents Sea. This will call for knowledge and expertise, collaboration and teamwork between all the players to prevent accidents and undesirable incidents in the far north, she said.

“The time has come to join forces to develop solutions based on international experience and many years of expertise – but tailored to Norwegian conditions and the Barents Sea. We expect the companies and the industry to accept their responsibility, and to do so in a timely manner.”

Honourable mentions
Myhrvold also took advantage of the lunch to praise several specific projects which have made a positive contribution to the level of safety in recent years.

“Many people devote a great deal of good work to meeting safety requirements, and make a positive contribution to the everyday job of protecting life, health and the environment in the oil and gas industry.”

The projects she named as deserving an honourable mention are:

  • the lifeboat project – especially Statoil
  • the barrier project – the Norwegian Shipowners Association
  • the noise project – the Norwegian Oil and Gas Association, the Federation of Norwegian Industries and the unions
  • major accident risk in licences – Petoro