Line of Sight to Operations Major Accident Event Prevention

Montara Action Plan Implementation Manager & Philip Askew, Principal, Schlumberger Business Consulting

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Agenda

Background for development of Line of Sight (LoS)

Development of LoS to prevent Major Accident Events

Operation of LoS system and benefits for safety

A Part of the PTTEP Group

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Background

Australian-owned Coogee Resources was developing the Montara Field in the Timor Sea Thai-owned PTTEP acquired Coogee February 2009 renamed PTTEP Australasia (PTTEP AA) PTTEP AA maintained status quo broad oversight of new asset

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The Incident

21st August 2009 (Darwin time) 05:30 well kick

07:30 uncontrolled well flow

69 POB evacuated by lifeboats to construction barge

No injuries / no ignition

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The Commission findings and PTTEP AA Actions

COMMISSION OF INQUIRY FINDINGS

Failure to maintain two well barriers e.g., cement shoe was compromised, one PCCC was not installed Inappropriate well verification where well was allowed to be filled with seawater that caused underbalanced Deficient Management of Change process with poor governance structure

PTTEP AA ACTION PLAN

1. 2. 3. 4. 5. 6. Clarify Well Barriers Integrity PTTEP Australasia Drilling Management System SSHE Improvements Regulatory / Industry Liaison Organization and Personnel Training and Competence

7. Personnel and contractors did not have the appropriate level of competency, and no system in place to uncover it
8. 9.

Environmental
Governance / Oversight / Lessons Learned Implementation of the Montara Action Plan

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BP had similar findings

Source: BP Deepwater Horizon Accident investigation, Drillsafe Melbourne Presentation

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Government Response - Commission of Inquiry

Terms of Reference announced Powers of a Royal Commission Commission of Inquiry Hearings conducted in Canberra

5 November 2009

15 March 16 April 2010

24 November 2010

Final Commission of Inquiry Report published: 100 findings and 105 recommendations Minister to review PTTEP AAs licence to operate Determine if show cause notice should be issued Department of Resources, Energy and Tourism (DRET) commissioned independent review of PTTEP AAs Montara Action Plan (NOETIC)

During discussions with NOETIC, it was agreed that a Major Accident Event Prevention Program was required. In practice this is the Line of Sight tool.
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Agenda

Background for development of Line of Sight (LoS)

Development of LoS to prevent Major Accident Events

Operation of LoS system and benefits for safety

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Globally, regulators are looking at Major Accident Event Prevention

REGULATORS / ASSOCIATIONS Comprehensive barrier management let to improved safety performance Enforces Barrier and Operational Risk Management

1 JUL 2010-Risk Assessment Guidance Note: Offshore operators to conduct detailed risk assessment of MAEs and Barrier Management

Used to document safety for facilities crossing borders

Source: Company Research, SBC Analysis

Proposal to use bow- ties in EU Safety Case Regime1

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Note: 1. Driven by EU Seveso (Chemical Accident) Safety Case Directive

What is Major Accident Event?

A Major Accident Event is an event connected with a facility, including a natural event, having the potential to cause multiple fatalities of persons at or near the facility [OPGGS(S) regulation 1.5]

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Line of Sight is the latest tool to enhance process safety in O&G activities
Torrey Canyon Tanker Spill,1967 Amocco Cadiz Spill, 1978 Ixtoc 1 Well Blowout, 1979 Union Oil Refinery Explosion, 1984 Kills 19 Bhopal Disaster, 1984 Kills 20,000 / Injures 500,000 Exxon Valdez Spill 1989 Shell Refinery Explosion, Norco, Louisiana, 1988

Kills 7

BP Refinery Explosion in Texas City 2005 Kills 15

Macondo Apr 2010 Kills 11

1980
Piper Alpha Jul1988 Kills 176

1990

2000
Montara

2010

Aug 2009

Line of Sight
Concept of Behavior-Based Safety Defined
Safety Cases Introduced

HAZIDs and Risk Registers Used in Design

Shell Incorporates Bow Ties Into Risk Analysis

Direct view on Barriers Health Allows preventive intervention from Management

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The LoS principles of leading methods and top-down, bottomup engagement combine to support MAE prevention
LINE OF SIGHT GUIDING PRINCIPLES Operational activities comply with set policies, procedures Systematic audit / check of barrier implementation & maintenance

Use of Leading Methods to mitigate Risk

Line of Sight (LoS) Management System Clear accountability in barrier control

Focus superintendent, supervisors on risk prevention activity Focus Drilling Management on barrier health Visibility and assurance to Management of process safety control Transparency of Governance from asset to corporate parent

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The LoS system monitors and reports on the health of critical barriers that prevent Major Accident Events
BOW-TIE ANALYSIS
AREAS COVERED BY LOS
Threat / Root Cause
Prevention Barrier Prevention Barrier Recovery Measure Recovery Measure

Traditional ER Systems
Consequence

Threat / Root Cause

Prevention Barrier Prevention Barrier

Consequence MAE
Recovery Measure Recovery Measure

Threat / Root Cause

Consequence
Prevention Barrier Prevention Barrier Recovery Measure Recovery Measure

Principles and Features: Identify all Major Accident Events, threats and consequences Link to Root Cause Analysis List all preventive barriers to MAEs Define management & monitoring of prioritized barriers including communication protocols
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The Swiss Cheese model demonstrates how no one single barrier is sufficient in preventing hazards from causing losses
Well hydrostatic pressure underbalanced

HAZARDS

BOP function issues Competency

Cement job isolation of well from reservoir

LOSSES

All barriers may inevitably have deficiencies

When deficiencies occur simultaneously in barriers, it can lead to losses Multiple barriers and the quality checks on these barriers are required to reduce simultaneous occurrence of deficiencies and hence systemic failure
13 Source: James Reason, University of Manchester, 2000
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Line of Sight gives Line Management visibility and ability to intervene quickly

!
THREAT 1: Engine Room Fire Barrier A: Fire Fighting Systems Functional

Monitor status When red, understand problem and: - Support to resolve (e.g. expediting procurement) - Check Management of Change is in place

Line Management Checks: X Bi-weekly servicing of fire fighting equipment Annual certification performed Checks: Smoking shacks provided on rig Personnel briefed on smoking policy
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Barrier B: Smoke Detectors Effective

Checks: Monthly test of smoke detectors

MAE: Large Scale Fire

Rectification work on detectors done

THREAT 2: Personnel Smoking

Barrier C: Smoking Restricted to Smoking Shacks

etc

Agenda

Background for development of Line of Sight (LoS)

Development of LoS to prevent Major Accident Events

Operation of LoS system and benefits for safety

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The line of Sight is operational: Drilling Example

BEFORE OPERATION DURING OPERATION

BEFORE MORNING MEETING Enter Status for Checks in Input Sheet DSUP

DURING MORNING MEETING

1
DSUP

Update LoS Report

DSV

Discuss report as part of morning meeting

DSV

DSUP

Information
CON DSV

Update barrier status

LoS Report

DSUP

LoS Report
1. Enter status for prejob checks such as DP3 Assurance checklist signed-off

DRL

Information

DSV

DSUP

AFTER MORNING MEETING Update LoS Report and 3 Submit for Approval
Submit for Approval Within 1 Hour of Morning Meeting
DSV DSV

2. Hold discussion with Contractor to discuss on the information that they need to provide for LoS

DSV

DSUP

AFTER APPROVAL RECEIVED Disseminate 4 and CorporateLine, Affiliate Management

Company Intranet

DSUP

DM

Receive Report
DSUP

Finalize and Sign Off on LoS Report

Sign Off

Submit for Approval Within 3 Hours of Morning Meeting

DOM

S&E Team (Senior Management) 16

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The LoS Report uses a traffic light reporting system

DEFINITION OF TRAFFIC LIGHT SYSTEM FOR LOS Not applicable based on the condition of the well, rig type and/or phase

Operation has stopped, restore barrier or instigate a Management of Change before resuming operation There is/are minor issues(s) , however, it is not required to stop Rig operation. A Management of Change process may have been initiated.

There is no issue

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A tool has been built to provide daily reporting on LoS It is now live and is reported through the PTTEP intranet
LOS REPORT STRUCTURE
Tab on Barriers for Large Scale Fire Tab on Barriers for Loss of Stability Summary Tab Tab on Barriers for Toxic Gas Release

Tab on Barriers for Unsafe Helicopter Environment

Tab on Barriers for Unignited Blowout

Breakdown barriers for MAE #1: Unignited Blowout Breakdown of checks per barrier

Checks Tab

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Running the Line of Sight checks on the Montara H1 ST1 would have detected critical barriers were not in place
07-Mar-09 Daily Drilling Report

LoS DSV Input Sheet

After bumping the plug, All well control equipment casing is tested and the seal in fulfill the design and assemblies are set and operational requirement tested in line with the defined by AA approved drilling program

Unignited Phase 4 blowout

Green - Statement is met Red - Statement is not met Yellow - Management of Change is pending for approval

Red

Unignited Phase 4 blowout

All well control equipment in fulfill the design and Casing is set and cemented operational requirement in line with program defined by AA

Green - Statement is met Red - Statement is not met Yellow - Management of Change is pending for approval

Red

LoS Summary Report

TYPE OF MAE STATUS CHECK

MAE#1:

Unignited Blowout Details of Barriers

Other checks such as competency, may also have raised red flags
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Major Accident Event prevention can be brought to life by having LoS systems across all operational areas
LOS ACROSS O&G VALUE CHAIN
BD Exploration Appraisal & Development Production Production Operations (To be developed) Examples - Uncontrolled Pressure - Maintenance Operations - Toxic Gas Release, - Unsafe Helicopter Operating Environment, - Large Scale Fire

LoS monitors Major Accident Events through 4 pillars 1. Design 2. Procedures 3. Equipment & materials 4. People

Installation Operations - Personnel Transfers Accidents - Dropped Objects - Helicopter Crash on Construction Vessel - Construction Vessel Collision - Vessel Loss of Stability - Fires on Construction Vessel - Hydrotest Failures - Commissioning

Drilling Unignited Blowout, Toxic Gas Release, Unsafe Helicopter Operating Environment, Large Scale Fire, Loss of Stability (Implemented) Wells MAEs for long term well integrity, well services operations (To be developed) Other Safety Critical Areas (non-worksite) e.g. Fixed Wing Aircraft, Supply Boats
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LoS is a key part of the Clients new SSHE Philosophy

In the wake of Montara LoS is a key part of the Clients new SSHE Philosophy The client aims for a Perfect Day The client aspires to be a Mindful Organisation Safety is paramount

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