4/23/2018 Opinion: Process safety culture: Key trends in downstream industry

Opinion: Process safety culture: Key trends in downstream industry

Guest , March 26th, 2018

Monitoring the market and ongoing projects as well as the best industry
practices, the most successful projects, both in terms of implementation
(construction) and operation, are those with strong focus on achieving
and sustaining high level of process safety, comment Ekaterina Kalinenko
and Konstantin Stezhko.

Technical advances are moving forward at a very high pace in the downstream oil
and gas industry. Looking back at the last five years, many important changes have
occurred in the downstream sector, including: major refining and petrochemical feedstock price fluctuations; significant impact on
market by the shale revolution – traditional crude importing countries becoming export countries, nearly overnight; natural gas
revolution – a whole new market of LNG; higher utilisation rates of APG (associated petroleum gas); commissioning and start-up
of new large-scale processing facilities in oil producing regions; and geographical expansion of business, including the Arctic
areas.

Looking further back – 10, or more years – we can add the following: development and implementation of new quality standards
and specifications for oil and petrochemical products; emerging advanced technologies; replacement of retired and/or inefficient
assets and equipment; and tightening of environmental standards for process facilities and measures to reduce negative impact.

The best hazard and operability practices

The safety element is a key factor for stable and reliable facility operation. Every year, complexity of equipment and processes
increases, needing upgraded operational guidelines and procedures. Some of these requirements are set by state regulations.
Taking action to implement the best hazard and operability (HAZOP) practices allows not only the use of latest technologies, but
also the improvement of economic efficiency of a project via higher operational readiness level.

High safety standards embodied in a well-defined safety culture with a well-appointed operations team ensure that the best
practices and up-to-date solutions for safe operations are taken into account at the facility, and that needed competences are
gained in process safety management and emergency response areas. In order to better illustrate the economic benefits of
implementing HAZOP studies, it shall be compared to potential financial losses from the unit’s shut-down for maintenance,
environmental penalties, fines, social payments in case of incidents, product losses, etc. Cost advantages can be calculated based
on a number of scenarios – lack of measures taken following a HAZOP study is a premise to incident probability increase. Each
incident that occurs leads to substantial clean-up costs.

Hazardous events

Regretfully, there have been a number of accidents in the industry in recent years. These accidents have resulted in severe losses
and, in some cases, fatalities. Since refineries and petrochemical plants are qualified as high fire and explosion hazardous
facilities, all aspects relating to fail-free and safe plant operation should be prioritised. All companies, without exception, pay
special attention to HSE (health, safety and environment) issues and allocate extra funds to install safety barriers, and ensure
high-quality work performance and required staff training.

Lately, two of the instruments being frequently used globally are root cause analysis (RCA), analysis of incident causes and
consequences, and hazard identification (HAZID), failure and potentially hazardous event investigation and analysis. Both
techniques help to improve the development and sustainability of process safety level and change the corporate safety culture.

HAZOP analysis is the most widely spread method used in different business processes of downstream oil and gas industry. Many
potential challenges and issues can be identified and resolved through the research of brand-new, reintroduced, amended and
functional procedures, design solutions and processes with the use of the structural approach of the HAZOP study process.

For the HAZOP study to reach maximum efficiency, it requires the involvement of target-oriented, experienced and competent
team members with skills required for this activity. It is important to understand that process safety culture is not an independent
function – it usually is a result of integrated team work, and also personal consciousness, dedication and involvement.

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4/23/2018 Opinion: Process safety culture: Key trends in downstream industry

Leadership is the cornerstone of this approach. One should always keep in mind that a manager cannot convince his team
members of the necessity of safe work practices if he/she personally neglects the requirements put forward, i.e., wearing
protective over-garment, or helmet, or eye-shield.

Leadership with regards to safety within a company provides an opportunity to convey high standards of process safety to
shareholders, investors, state institutions and supervisors through roadmaps to sustainable development and regular financial
reports. As a result of these activities, mutual trust and confidence in safety of operations introduce additional benefits like more
attractive conditions of external financing and new perspective partners.

Transparency of data reporting

Another key point concerns the transparency of data reporting and statistics on hazardous events, incidents, accidents, and near
misses. Company personnel at every level of hierarchy should be motivated towards identification, analysis and elimination of
hazardous events. However, the most obvious instruments like financial incentives (bonuses or maluses) are not as efficient as,
for instance, team spirit and sense of belonging.

A good example and a proven method is the right to ‘say no’ to unsafe work performance and ask an occupational safety
engineer for clarification in case the worker has any concerns regarding his task or lack of essential information for safe
operation. It is unnecessary to remind that in this case a worker should not be sanctioned or limited in his/her right next time it
happens.

A remarkable and efficient approach within downstream companies is the distribution of unified and typical standards and
statistical records among its contractors. This is especially crucial for these facilities since works are performed on site with high
class of danger.

To summarise, it is not easy to assess a firm’s expenses in sustaining corporate safety culture, but only the involvement of each
and every employee can really contribute to the success of this concept. Despite changing macroeconomic situation and market
volatility, and project budgets and schedules being re-evaluated, the most reliable and commercially successful projects in a firm’s
portfolio are usually those that ensure high levels of process safety and compliance with HSE standards. These and other topics
relating to safety issues will be discussed at the Gulf Safety Forum that will take place in Bahrain, during 28-29 March 2018.

Ekaterina Kalinenko is project director at Euro Petroleum Consultants (EPC), which is an independent consulting company in the
oil, gas and petrochemical sectors, as well as a producer of specialised annual international conferences and training seminars,
focusing on market trends, technological advances and business strategies for the petroleum industry. EPC has offices in Dubai,
London, Moscow, Sofia and Kuala Lumpur. For more information, please visit www.europetro.com. Konstantin Stezhko is an
independent consultant.

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