PSA Norway Urges Petroleum Sector to Uphold Safety Precautions
Every company involved in Norway's petroleum sector is under a special duty to manage the risk of major accidents. That represents absolutely the most important job in the industry.
The PSA conducted audits during 2008 at five companies with different roles on the NCS to learn how they themselves assess the involvement of their top executives in this area.
Controlling the risk of major accidents must be an integrated part of managing a business. But that can only be achieved if safety-critical data sought by top executives actually provide an accurate picture of the hazards.
Experience from serious oil industry incidents, both in Norway and internationally, show how management's own actions influence factors which directly or indirectly affect such risk.
"The possibility of major accidents relates to the protection of people, the environment and material assets," said Ingrid Arstad, PSA discipline leader for HSE management and legal affairs.
"But it also poses an operational, legal, reputational and reporting risk. And it's ultimately a financial risk for the company.
"Experience from accidents and important changes in the petroleum business are among the reasons we now want to learn more about the involvement of top executives and directors with major accident risk as an integrated part of their governance."
She explained that the PSA has focused through its supervisory activities on what such integration actually involves at the company level.
"We've turned the spotlight on how a number of decisionmaking processes affect the management of such risk. That includes long-term plans, budgets, production targets, organization, contracts, alliances, mergers, recruitment and/or reputation-building."
A good deal of knowledge and experience already exists about the way major accidents occur and how they can be prevented.
But inquiries nevertheless reveal that companies can emphasize the wrong information, overlook relevant data and/ or be in error about the mechanisms which contribute to such incidents.
"Our audits build on self-assessment and dialogue -- and should help to enhance awareness, knowledge and reflection about how top management handles major accident risks," Ms. Arstad said.
"This audit series has given us valuable insights into the way the companies themselves assess how management of such hazards is integrated with governance in practice.
"The companies have also identified a number of measures for improving the information reaching their top executives and processes for managing major accident risk."
This audit activity forms part of long-term efforts being made at the PSA to focus on industry priorities for its most important responsibility.
- Watchdog: Cost Cuts Appear To Harm Norway Oil Industry Safety (Feb 20)
- Norway To Investigate Oil Industry Safety After Accidents Rise (Nov 29)
- PSA Asks Statoil Whether Recent Incidents Related To Cost Cutting (Oct 26)