Health and Safety in the Oil and Gas Sector: A UK Perspective

This report provides a comprehensive overview of health and safety practices within the UK oil and gas sector, with a specific focus on the Ageing and Life Extension (ALE) policy for assets in the North Sea. It examines the industry's current condition, risk management strategies, and asset integrity programs, highlighting both internal and external risks such as outdated equipment and environmental regulations. The report explores developments in knowledge and technology, including the use of AI and robotics in drilling, and discusses changes in organizational structures and skill requirements. It presents relevant statistics related to ALE and outlines the guiding legislations. The report details risk assessments, asset integrity management, and the impact of technological advancements, concluding with a discussion on the legal and ethical considerations. The report draws on various sources to provide a detailed analysis of the sector, including the financial statistics of the oil and gas cooperation, the consumption of oil and gas by the United Kingdom, the cost of production, and the safety and health measures adopted to ensure the safety of workers.

Running head: HEALTH AND SAFETY IN OIL AND GAS SECTOR
Health and Safety in Oil and Gas sector
Name of the Student:
Name of the University:
Author’s Note:

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Executive summary
This report intends to shed light on the process of “Ageing and Life Extension” policy used
by the various oil and gas companies, particularly the ones used by the United Kingdom
companies. This report will also take into consideration the various risk associated with the
process and the mitigation of those risks. The report will also provide insights into the asset
management techniques used by the industry. The report will also provide a few statistics
related to the ageing and life extension policy used by the industry and the various health and
safety issues which the industry is facing at the moment. Finally, the report will conclude
with an outline of the legislations which guide the process of ageing and life extension policy
used by the companies and the factors which they need to take into consideration.

2HEALTH AND SAFETY IN OIL AND GAS SECTOR
Table of Contents
Introduction................................................................................................................................3
Present condition of the UK oil and gas industry......................................................................4
Risk management and Asset integrity of North Sea installations..............................................5
Developments in knowledge and technology advancement......................................................8
Changes in the organization, skills and knowledge...................................................................9
Statistics relating to the “Ageing and Life Extension”............................................................10
Legislation relating to “Ageing and Life Extension” in the North Sea....................................12
Conclusion................................................................................................................................13
References................................................................................................................................14

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Introduction
The oil and gas industry is considered to be one of the largest industries in the world
presently in terms of the economic revenue which it generates on an annual basis. The
industry employs thousands of individuals from diverse parts of the globe in a bid to cater to
the energy and other related requirements of the world. It is to be noted that in nations like
Saudi Arabia and others it forms a major source of income to the nation and even contributes
a major amount to the GDP of the nation (Energy.gov 2018). The United Kingdom is one of
the key players in the global oil and gas industry. The “Oil and Gas Cooperation” of UK was
founded in the year 1909 and since then it has formed the backbone of the economy of United
Kingdom (Hse.gov.uk 2018). According to a report, in the year 2014 the industry produced
1.42 million boepd, of which oil and gas amounted to around 59% (Oilandgasuk.co.uk 2018).
Some of the financial statistics of this particular industry of the United Kingdom are listed
below-
Figure 1: Financial statistics of “Oil and Gas Cooperation”
Source: Factset, Bloomberg, S&P Cap IQ; Forbes.

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It is to be noted that although the nation produced such impressive amount of oil and
gas but the majority of them was consumed by the United Kingdom itself. For example, in
the year 2014, the consumption of oil and gas by the United Kingdom was “1.508 million bpd
of oil and 2.735tcf of gas” (Oilandgasuk.co.uk 2018). Therefore, the United Kingdom had to
depend on other sources of energy like hydrocarbons to cater to the energy needs of its
people. It is interesting to note that in the 1970s and 1980s the United Kingdom was a major
exporter of the various hydrocarbons however, in the present times the United Kingdom is
one of the major importers of the hydrocarbons (Energy.gov 2018).
Present condition of the UK oil and gas industry
It is interesting to note that 98% of UK’s oil and gas production comes from the its
various offshore fields (Hse.gov.uk 2018). The primary ones among these offshore fields are
located in Aberdeen, Morecambe Bay, the Southern North Sea and various others. Another
interesting fact to note is that till 2012, the United Kingdom had 15,729 kilometers length of
pipeline which connects around 113 oil installations as well as 189 gas installations
(Oilandgasuk.co.uk 2018). It is interesting to note that the high cost of export makes the oil
and gas produced by the United Kingdom, to a be high-cost commodity. As per a 2014 data,
the United Kingdom’s average cost related to the aspect of development was around
$20.40/boe with an additional operational cost of around $27.80/boe (Oilandgasuk.co.uk
2018). In addition to this, the nation also ended up spending around €1.1billion for
exploration purposes along with an operational cost of €9.6 billion and €14.8 billion worth of
capital investment for the year 2014 (Oilandgasuk.co.uk 2018). This had a direct impact on
the price of the oil and the gas sold by the United Kingdom. Therefore, the United Kingdom
has resorted to various measures to reduce the cost of the production of oil and gas products.
The primary one among this is the policy of “Ageing and Life Extension (ALE) of oil and gas

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assets in the North Sea”. According to this policy, the United Kingdom instead of procuring
various new instruments and equipment to increase the productivity of its oil and gas fields
off the North Sea focuses on various means in order to increase the life span of their existing
equipments (Energy.gov 2018). This policy of the United Kingdom is clearly outlined in the
dictum of Grey (2016), "As the UK offshore oil and gas industry seeks to maximize the
economic recovery of hydrocarbon reserves - and technology is developed to enable that
objective – so many installations will remain in service beyond their originally planned
operational life span….This inevitably presents challenges to the industry in managing the
effects of ageing on assets, plant and equipment, to ensure that integrity can be maintained
throughout the full asset life cycle……Ageing and Life Extension (ALE) is all about helping
operators maximize the value and the economic life of their assets without compromising on
safety…” (Hse.gov.uk 2018).
Risk management and Asset integrity of North Sea installations
Risk can be defined as the situation in which a company or a business organization
stands to gain or lose something in terms of its resources or its annual profit (Skogdalen and
Vinnem 2012). Therefore, risk management forms an important aspect of the business
process of any company or business organization. It is to be noted that the oil and gas
industry of the United Kingdom faces a considerable amount of risk not only in terms of the
various environmental factors but also in terms of the international business environment and
profitability (Skogdalen and Vinnem 2012). A risk assessment and management of the oil and
the gas industry of the United Kingdom is provided by the below given table-
Internal Risks
Risk Severity Actions to mitigate the risk
1 The equipments used in the fields off the Catastrophic The United Kingdom is

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North Sea are outdated and rarely new
equipments are added to enhance the
productivity of the fields.
currently focusing on increasing
the life span of these
equipments in a bid to increase
their life cycle. Therefore, the
United Kingdom has adopted
various measures to keep the
equipments in working
condition like periodical
servicing, checking the working
condition of the equipments and
various others.
2 The outdated equipments used by the
industry increases the safety as well as the
health risk faced by the workers (Adgate et
al. 2014).
Major The United Kingdom has
introduced various safety and
health measures in order to
ensure the safety of the workers.
The workers are even provided
with various safety equipments
to ensure their safety (Goldstein,
Kriesky and Pavliakova 2012).
External Risks
Risk Severity Actions to mitigate the risk
1 The various environmental regulations
which the United Kingdom oil and gas
industry needs to follow poses as a
threat to the industry as following all
the parameters of the environmental
Major The United Kingdom has decided to
take the help of “Bureau Veritas” and
others to control the amount of
emission produced by its fields
(Bureauveritas.jp 2018). The United

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regulations would decrease the
productivity of the industry.
Kingdom is also trying to modify the
equipments used by it currently as per
the various environmental regulations
in a bid to curtail the amount of damage
done by it to the environment.
2 The drying up of the oil fields off the
North Sea is another factor which
poses a serious threat to the United
Kingdom’s oil and gas industry.
Catastrophic The United Kingdom has device ways
in order to drill the crude oil from the
fields off the North Sea. The United
Kingdom is also undertaking several
exploratory projects in order to find out
fields where oil and gas can be drilled.
As already mentioned the exploratory
cost of the United Kingdom for the
year 2014 was around
€1.1billion (Energy.gov 2018).
Asset integrity can be defined as the ability of a product or equipment to perform the
activities or functions which were required of it in the most effective as well as efficient
manner while taking into consideration the environment and the safety regulations. It is to be
noted that the United Kingdom follows an asset integrity program for the maintenance of its
assets related to its North Sea fields for the drilling of oil and gas. This program was
developed as a result of the KP3 program along with several other events like Texas City,
“Piper Alpha North Sea disaster” and others (Oilandgasuk.co.uk 2018). It is to be noted that
this program is also directed “to extend the sustainable productive life of the North Sea, acted
as a catalyst for driving the asset integrity management agenda to a higher level and has
resulted in a better coordinated approach” (Hse.gov.uk 2018). This program was instrumental

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in the development as well as the improvement of the condition of the assets, their
management, performance and also awareness. It is also to be noted that the felt need to
improve the profile of the assets also led to a scrutiny of the existing maintenance system
which were used by these fields. The program confirmed the need to take into consideration
the maintenance of the assets in the oil fields off the North Sea. According to the HSE, “The
maintenance of asset integrity and control of the significant risk to asset integrity presented
by ageing processes is a key priority for HSE” (Hse.gov.uk 2018). It is a reflection of the
results of this particular that the United Kingdom has given a contract to the company Stork,
a Netherland based company to “deliver an inclusive range of services and capabilities to
extend the assets’ life cycle” (Bureauveritas.jp 2018). The regional Vice-President of Stork,
Erik-Jan Bijvank, outlines the primary purpose of this contract in the words ““This award is
substantial in terms of our combined service offering as well as the scale and volume of
deliverables that will support approximately 120 onshore and offshore jobs”
(Bureauveritas.jp 2018).
Developments in knowledge and technology advancement
The first major breakthrough in the oil and the gas industry came with Edwin L.
Drake, who “to the surprise and joy of everyone found he had tapped a vein of water and oil,
yielding 400 gallons of pure oil every 24 hours” (Hyne 2012). This event is often considered
to be the first major step for the oil and the gas. Initially, oil and gas was drilled at a level of
71 miles below the surface of the earth (Liu, Tang and Cong 2012). However, recent
innovations have made drilling possible hundreds of miles below the surface of the earth
(Hyne 2012). Another significant developed in the industry came with the introduction of 3D
printing and the use of computers for the process of drilling (Powerasia.com.uk 2018).
Recently, various companies are even trying to take the help of the various robots and other

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artificial intelligence (AI) system to facilitate the process of drilled. The use of robots has
made drilling possible at depths where human beings were unable to do the same. It is to be
noted that the present hydrocarbon resources are more diverse than the past ones and
therefore, the process of their drilling requires the use of modern innovations as well as
technologies. According to Martin Deffontaines (2018), “This makes innovation not an
option, but rather the very purpose of Research & Development in Total’s Upstream
segment”. Therefore, the modern innovations as well as technologies form an important
aspect of the present day process of drilling of not only gas and oil but also for hydrocarbons.
Presently, various researches are being conducted in order to increase the life cycle of the
existing resources and equipments used by the major oil and gas industries of the world. It is
interesting to note that there are various companies like Stork which seeks to provide services
to the companies related to the oil and gas industry in a bid to enhance the life cycle of their
assets and equipments.
Changes in the organization, skills and knowledge
It is to be noted that the present oil as well as the gas industry needs to make certain
changes in their organization, skills and knowledge in order to cope up with the changing
global scenario as well as the various health and safety regulations. The various companies
related to the oil and the gas industry should try to modify their approach and policies as per
the new climate of the global scenario (Bamberger and Oswald 2012). An example of this is
the focus of the United Kingdom’s insistence on the process of the “Ageing and Life
Extension (ALE) of oil and gas assets in the North Sea” (Powerasia.com.uk 2018). The
United Kingdom rather than focusing on the purchase of new equipments to increase the
productivity of its existing fields off the North Sea is trying to increase the life cycle of its
existing equipments by means of effective maintenance and servicing policies. The company

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even has given a contract to the Netherland based company, Stork for the maintenance of its
assets in the fields off the North Sea (Energy.gov 2018). Similarly, the organizations also
need to come up other plans in order to reduce their cost of production and also to increase
their annual profit margin. The use of the various robots and AIs can also help in the process
as they can help the oil and gas companies to drill hydrocarbons at a much deeper level than
the human beings. The companies can also develop the skills of the workers by providing
them effective trainings and teach them about the various health as well as safety measures
(Sneddon, Mearns and Flin 2013). It is to be noted that in the present times, the industry is
facing several threats related to the health and safety aspect. Therefore, the organizations
need to develop effective health and safety strategies and also equip the workers with
effective equipments like helmets, protective clothing and others to help them work in a safer
manner (Badri, Gbodossou and Nadeau 2012). The companies related to the oil and drilling
sector can also take the help of the various recent technologies to ensure that they provide a
safe and healthy working environment to the workers.
Statistics relating to the “Ageing and Life Extension”
It is to be noted that most of the equipments installed in the oil and the gas fields off
the North Sea by the United Kingdom are over the age of 20 years (Energy.gov 2018).
According to the HSE official website, “Ageing is not about how old your equipment is; it is
about its condition, and how that is changing over time. Ageing is the effect whereby a
component suffers some form of material deterioration and damage (usually, but not
necessarily, associated with time in service) with an increasing likelihood of failure over the
lifetime” (Hse.gov.uk 2018). Therefore, between the years 2011 and 2013 the HSE undertook
the inspection of “33 dutyholders and offshore assets across a range of installation types”. It
is to be noted that the HSE found that the rate of emission of hydrocarbons on the UKCS

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dropped down adter the introduction of the OGUK introduced its “Step Change in Safety
programme” in the year 2011. It is interesting to note that the Hydrocarbon release (HCR)
between the years 2012 and 2014 showed a marker increase of 20% in the leak
frequency (Energy.gov 2018). The below given figures shows the “Good practice
performance measures distilled from the EC & I inspections”-
Figure 2: Good practice performance measures distilled from the EC & I inspections
Source: (Hse.gov.uk 2018)
It is interesting to note that when the number of industrial accidents in the first decade
of 1900 shows a staggering figure of 3,200 people getting killed in the various oil as well as
gas drilling fields (Energy.gov 2018). As the United Kingdom’s official statistics, “Over 55%
of remaining red light plant-related issues have been identified through rigorous operator self
assessment processes that took place following the completion of KP3 inspection
programme” (Hse.gov.uk 2018). It is here that the role of the various KPE program become
important as they tried to reduce the number of these accidents. Another interesting statistic
to note is that every 15 seconds around 151 workers in the oil and gas industries are involved
in some kind of accident and around 160 million get work-related non-fatal diseases every

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year (Energy.gov 2018). According to the HSE official website, “ the above given statistics
represents 28% of all reported major accident loss of containment events in the MARS
database and equates to an overall loss of 11 lives, 183 injuries and over €170Million of
economic loss” (Hse.gov.uk 2018). According to a recent study this is a reflection of the
outdated model equipments used by the various oil and gas companies of the world
(Hse.gov.uk 2018).
Legislation relating to “Ageing and Life Extension” in the North Sea
There are certain legislations which the companies related to the oil and gas industry
need to follow for the process of “ageing and life extension”. The first one is the safety and
the health regulation which requires the companies to take into consideration the safety and
the health of the workers (Parkes 2012). For this, the companies need to effective strategies
and also to equip the workers with protective equipments to reduce the damage caused to
their body in case of accidents (Parkes 2012). The companies also need to ensure that the
equipments used by them are in fine working and does not cause any significant damage to
the workers (Friend and Kohn 2014). Then there are the several environmental regulations
which the oil and gas companies need to take into consideration to ensure that the damage
caused by them to the environment is minimal. This also requires the companies to check the
amount of emission caused by the equipments used by them and also the precipitates released
by them as byproducts. Then there are concerns about the process of “ethical use of the
natural resources” (Energy.gov 2018). The companies should drill the crude oil taking into
consideration the adverse effects which their drilling causes to the environment.
Conclusion
Therefore, from the above discussion it becomes clear that although the oil and gas
industry is one of the most booming industries of the world at the moment yet the industry

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faces a considerable amount of risk. The major risk which the industry faces is primarily in
the sphere of health and safety department. Moreover, the decision of the companies to use
the process of ageing and life extension is a debatable one. The companies also need to take
into consideration the various legislations related to the industry in order to provide effective
healthy and safe working environment to the workers.
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Badri, A., Gbodossou, A. and Nadeau, S., 2012. Occupational health and safety risks:
Towards the integration into project management. Safety science, 50(2), pp.190-198.
Bamberger, M. and Oswald, R.E., 2012. Impacts of gas drilling on human and animal
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production. PennWell Books.

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Liu, D., Tang, Y. and Cong, W.L., 2012. A review of mechanical drilling for composite
laminates. Composite Structures, 94(4), pp.1265-1279.
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