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Reliable & Safe Downstream Asset Operation – The Key Challenges

When analysing the major trends that are shaping the global O&G industry, we can see that a number of these are happening in parallel:

  • The energy balance moving towards natural gas and associated surge of LNG-related projects (of different scales)
  • Stricter government and global environment standards and requirements – also evolving fuel specifications
  • The profitability of crude processing assets ‘slowing’ after the boost of 2016-2017, and, as a consequence, petrochemical industry progress

Without doubt, the startup of new projects is always good news for the industry – the geographical spread of these projects highlight the diversity of hydrocarbon sources, and of new emerging markets. Today, the production of LNG from the north of the Arctic circle to equatorial Asia is possible and in some cases economically viable.

We are also seeing a change from O&G companies in their project requirements – due to modern economic parameters and also increase competition for markets there is a notable move towards increased automation – contractors and suppliers are asked to provide automated process and safety systems in their packages. This can mean reduced manpower requirements.

In process design documentation and operating procedures the common practice is to have a minimum guaranteed asset lifetime of 20 years. However, if we look at LNG and certain petrochemical technologies, these been developed over the last 10 years – also some of the most innovative and competitive are often implemented for the first time on a production level.

Construction & commissioning of LNG terminals for developing markets such as Africa and Baltic region is also associated with HR deficit due to length of training required and the important development of the infrastructure.

Against this backdrop, there has been a ‘pause’ put on a number of ‘traditional’ refining projects.

Many experts have explained that this slowdown in activity is due to decreasing downstream margins, but not only. If we focus on IOCs – this factor is not a reason for them to stop production.

For instance, one large O&G Company in the CIS region has put on hold the construction of over 20 process units – these units have a current completion status ranging from 20-70% - this means that they are unlikely to be finished – at least in the nearest future.

On the flipside there are still many process units with a life period of more than 35 years still in operation in many parts of the world.

One important aspect when looking to implement these types of highly automated projects is the way in which HAZOP studies are performed. Successfully implemented projects of this kind require low impact of human factor and a relatively low number of personnel on site.

Nevertheless, if we look into the course of actions to be taken in the event of an emergency, it is clear that the only option for these workers would be to leave the danger zone.

In the case of a full shutdown of the power supply the APC system could be severely impacted and have a knock on effect for equipment, machinery, catalytic systems – and people. This is a key concern with regards to highly automated plants – in terms of maintenance and operation.

Another focus area when investing projects and in particular the construction phase is contractor management and ensuring safety within the site. For example, an approach to look up to is the one that BAPCO have implemented and have recently presented at the Gulf Safety Forum in Bahrain - BAPCO have used a 6-phase model for establishing a stable-working system: Phase 1 of this model is Contractor Pre-qualification (based on experience, HS policy, safety statistics, legal info, financial situation, etc.), then comes Contract Definition & Award (risk assessment to be done), Phase 3 is Pre-commencement (another risk control including PTW, skills verification, equipment), Contract Implementation (auditing, regular performance reviews, monitoring & inspection), then Handover & acceptance (receiving all relevant documents and confirming that no new hazards were created), and, finally, Closeout & review (evaluating contractor’s HS performance to determine its inclusion into Approved Contractors List).

With this procedure and model, BAPCO managed to successfully undertake several projects and update the corporate contractors database to simplify further the tender process for future projects.

Now turning our attention to LNG transportation projects. From the outset, the most advanced solutions on the market were implemented in such projects –in terms of operation in a low temperature environment and also with regards to process automation. As a result, these projects demonstrate an unprecedented level of hydrocarbons transported and/or stored per worker. These solutions – included during design stage – allow for safe and reliable operation of the asset against environmental hostility (weather effect, equipment unit failure, natural disasters, etc.).

They also take into account the important structural changes in the industry that have happened in the last 5 years; certain political and economic risks that influence the market e.g. trade and finance sanctions, conflicting interests of different producers and consumers, market segmentation, etc.

This often results in one party having some benefit from this or that decision, and gain competitive advantage (although the effect usually is short-lasting), while the other parties seek opportunities in other market sectors and areas – one of which is internal intensive development.

Based on the HSE-related events that Euro Petroleum Consultants have recently held in ME and CIS regions and the practical experience our experts have through working on different cases over the years, we can try to summarise the strategy that can be applied on both corporate and process facility levels (with certain amendments), using a Russian IOC safety roadmap for improving process safety level:

  1. Step 1 – changes in organisational structure (separate Process Safety dept., training employees onsite, introduction of special documentation for the purpose of establishing proper process control);
    A good example is IASK (Improve Awareness, Skills & Knowledge) learning program, developed and implemented at Saudi Aramco, with which the company achieved significant results: highest participation rate in Innovation System, participation in behavioral based safety program +6 times, 60% less audit findings in 1 year, time in port KPIs 100% maintained throughout the whole year.
  2. Step 2 – documentation control & support, use of experience (actualising documentation, analysis of current regulations and changes, review of best company practices with similar scope and function and – learning from cases from other industries – i.e. IT, aircraft, manufacturing, retail, etc., correcting the existing management system)
  3. Step 3 – efficiency improvement (checklist deviation control, ranging and development of an integrated database, sharing the ideas and information with other companies to help troubleshooting and inspire future development, maximum use of available IT resources for storing and analysing data, Increased top management involvement in the process of improvement)
  4. Step 4 – ensuring high level of PS – should be followed again by step 3 on an ongoing basis (risk prioritisation, elimination of high-profile risks, development of target programs, finance control and sustaining sufficient level of HSE funding, control of safety measures during maintenance and turnaround, monitoring and involvement of HQ specialists into solving the major issues)

In the past, a lack of focus with regards to HSE issued could have been understandable - it was not always considered top-priority for companies. Companies were more likely to direct their resources to new construction or market activities, thus leaving other elements of the system underfinanced.


The current trends in production, transportation and processing of hydrocarbons opens a whole new range of opportunities for growth and development of global business.

The market structure changes imply special analysis and evaluation of projects is required from an HSE standpoint.

To ensure zero level of accidents it is important to implement proven and advanced technology solutions – in addition to continuous review of lessons learnt.
Risk register does not limit itself to traditional points, it could – and definitely should – be extended & based on accumulated expertise & experience.

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November 2018