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Does cost cutting increase risk in Norway's offshore industry?

20 September 2016

Following warnings from Norwegian offshore regulator PSA, risk management research agency Preventor also claims that safety trends are now going in the wrong direction. In this piece, Preventor director Professor Jan Erik Vinnem of the University of Stavanger highlights the negative effects of cost cutting on the sector’s HSE outcomes.

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The offshore industry consistently maintains that cost cutting can be carried out without increasing major accident risk. But there are ever more signs that this is not the case.

The last few months has seen two fatal accidents in the Norwegian sector, one occupational accident on COSL Innovator in December and one major helicopter accident with 13 fatalities in April. 2015 also saw more hydrocarbon leaks, especially those above 1 kg/s, than in previous years. More than half of the leaks are associated with manual work on pressurised systems.

Other indicators from Petroleum Safety Authority Norway’s Petroleum Activity Risk Trends (RNNP) 2015 report have also turned negative (see link below).

There have also been claims recently that subcontractors and suppliers are forced to accept contracts that do not even cover operating costs. Who thinks that subcontractor personnel will then focus on major accident prevention, rather than on cost minimisation and corner cutting?

This is parallel with the arguments put forward by Haugen and colleagues about maintaining helicopter safety when there are no absolute criteria and the framework conditions are changed. The importance of framework conditions can be most explicitly demonstrated when offshore and onshore helicopter transport are compared, but similar mechanisms are assumed to apply in many other circumstances, not the least in association with hydrocarbon leaks with operational causation.

Also, construction projects in the Far East have seen several fatal occupational accidents over the last few years, for both ENI and Statoil, to an extent not seen for several decades. This is yet another indication of a trend in the wrong direction.

When you couple this with authorities who appear increasingly impotent, this does not give good expectations for major accident prevention in the future.

And if this were not enough, there has been a steep decline in funding for health, environment and safety from the Norwegian Research Council over the last couple of years at a time when industry has shown an ever more short term approach to research, as argued by a number of research organisations, including both the Norwegian University of Science and Technology (NTNU) and the International Research Institute of Stavanger (IRIS).

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