Building the bridge safely

Speech by State Secretary Jan-Erik Støstad at the ONS 2006 Conference, Stavanger, Norway 24 August 2006

Ladies and gentlemen,

My name is Jan Erik Støstad, I am state secretary in the Ministry of Labour an Social Inclusion. Let me start by extending greetings from the minister, Bjarne Håkon Hanssen, who was very unhappy that he was not able to be here.

Then I would like to thank the ONS (Offshore Northern Seas) conference committee for this opportunity to outline the Norwegian government’s ambitions for health, safety and environmental standards in Norway’s petroleum activity. This is an extremely important subject. As the state secretary with responsibility for working life, it is particularly gratifying to be able to address such a gathering of key policy shapers in the Norwegian and international oil and gas industry.

High oil prices combined with safe and efficient methods to explore for, and produce, the resources, have helped to turn petroleum into Norway’s largest industry. This year’s ONS theme of bridging the energy gap reflects a growing global need for energy and also underlines the significance of Norway’s role as an energy supplier now and in the future. At the same time, today’s theme of building the bridge safely emphasises that HSE (Health, safety and environment) must be a central consideration if success is to be achieved.

The petroleum industry has become a pioneer in HSE (Health, safety and environment) work, and all the players involved deserve praise for this development. However, areas remain where the government expects to see an intensified commitment to improving safety even further. We want a safe petroleum activity which takes the lead on reaching such goals as an inclusive working life, which allows people to follow an occupation without risking exclusion and damage to their health. We also want a petroleum industry which demonstrates that it is capable of meeting all the environmental challenges. The Soria Moria declaration, made by the present government when taking office, expressed a clear ambition to ensure that the Norwegian petroleum activity obtains a world-leading standard concerning HSE (Health, safety and environment). To reach this target, requirements must be set for systematic work and quality by all players and at every stage from planning to final shut-down.

The government presented a new White Paper on HSE (Health, safety and environment) in the petroleum activity this spring. In this document, we identified important development trends as well as the future challenges which these present. These challenges are faced not only by the industry but also by the authorities, and must be overcome if the Norwegian petroleum activity is to maintain and improve its HSE (Health, safety and environment) standards in the future.

It is appropriate to ask whether the commercial aspects of the industry are in any way incompatible with the governments expressed ambition of being a world leader in HSE (Health, safety and environment). Do we have to let our HSE goals slip because of increased competition in the industry?

The short and correct answer is no. On the contrary, the government’s clear assessment is that business development, technological advances, productivity and concern for HSE (Health, safety and environment) are mutually dependent elements which collectively build a robust and profitable industry.

Safeguarding HSE (Health, safety and environment) for everyone concerned in a long-term perspective secures value creation and profitability. I would also maintain that the competitiveness of the Norwegian continental shelf is improved by high HSE (Health, safety and environment) standards. Players find it easier to win the trust of the authorities, their employees and of the society in general. That trust is important in building up a reputation for Norway as a reliable energy supplier.

In the government’s view, it is much easier to meet growing global demand for energy when the industry takes care of these aspects in a satisfactory manner. This will not least help to facilitate the recovery of oil and gas in environmentally-vulnerable areas. I will also defend high and sound government requirements in HSE as positive for the long term profitability of the industry.

The petroleum activity is currently enjoying a boom, and is characterised by rapid development and growth against a backdrop of high prices. At the same time, this is a complex business with operators, contractors and sub-contractors. A high level of activity and many interfaces present substantial challenges in achieving the best possible management in order to reduce the risk potential which exists.

A predictable framework, unified management across players, and the expertise and capacity of the industry will be key factors in this context.

The combination of lower operating costs and a higher recovery factor on each field, is regarded as essential for the Norwegian petroleum activity in a long-term perspective. Integrated or e-operation represents an important element in this scenario, and is also an expressed requirement for further development of Norway’s petroleum sector and for meeting future energy demand.

Advances along these lines, which call for close operational collaboration between a number of players, could lead to significant changes in the way work is done offshore and in operational support teams on land. It could also provide greater opportunities to transfer jobs from the Norwegian continental shelf to land. So the development and organisation of integrated operations has clear implications for HSE (Health, safety and environment).

We accordingly consider it important to establish new knowledge about, and good methods for, risk assessment relating to such integrated operations. A research commitment will also be needed, and a separate priority area for such integrated operations has been established in the national research programme. I believe that being one step ahead of developments must be a goal for the industry, so that the potential for a real improvement in HSE (Health, safety and environment) and risk management can be realised.

The petroleum activity is as you know, truly international. Constructed through collaboration between government and industry, Norway’s policy framework is intended to provide the most appropriate possible solution for this business and for official regulation and supervision. We are witnessing a development in which new technology allows the industry to be managed across continental shelves, and already face a desire by major international players to do just that. This means that we must look more closely at how we can extend the collaborative regime on which Norway’s regulations and regulatory system is based. We must also see how such cornerstones as collaboration between government, employers and employees and workforce participation can be preserved in a new reality. Let me here and now emphasise that the government’s clear expectation for the industry is that HSE (Health, safety and environment) standards will be maintained and further developed also within a more international industry, and that the requirement for participation and codetermination by the workforce continues to be met at all levels.

National and international work on standardisation and adjustments of the regulatory regimes of different countries are positive and necessary measures for meeting global developments. Such collaboration can be pursued without coming into conflict with the goal of continuing to develop HSE (Health, safety and environment) standards in the Norwegian petroleum industry. The government accordingly envisages a continuation of the established international collaboration at government level, not least by concluding formal treaties and agreements with other nations in order to lay the basis for a unified follow-up of the petroleum activity.

The Norwegian and British authorities have long experience of such cooperation, and the government wants Norway to be an active participant in developing petroleum operations in the far north through collaboration with Russia. This cooperation will be pursued in various fora and in different ways. The petroleum authorities, safety and working environment authorities, and the environmental and coastal authorities will be active players in this work. Nor is there any reason to deny that the government would be very pleased if enterprises with experience from the Norwegian continental shelf have opportunities to win contracts from the Russian side, not least because they can provide experience, expertise and technology. This could make a significant contribution to ensuring that the same standards for petroleum development, operation and transport apply in both sectors of the Barents Sea.

Norway’s petroleum sector is currently under great pressure, and we read stories in the media about personnel shortages in the industry. At the same time, government, employers and employees are jointly committed to achieving a more inclusive workplace. This will ensure that as many people as possible can remain in work, and will prevent exclusion while promoting inclusion. Given that the petroleum activity is a pioneering industry characterised by a broad-based collaboration between employers and employees, and between these two sides and the government, these aspects ought to attract extra attention.

Serious personal injuries on the Norwegian continental shelf currently show no clear trend. After a positive decline up to 2004, developments reversed in 2005 and accident figures are now at an average level for the past 10 years. Personal safety clearly continues to present major challenges in this business. The government expects the industry to remain conscious of its responsibility in boom times like these being experienced today, and keep a particular focus on preventive action.

Attention has recently been focused on possible health hazards presented by exposure to chemicals. Historically, certain groups of workers are likely to have been exposed to high concentrations of chemical substances which could have had long-term effects. Of course, it is important that recognised methods are applied in identifying and assessing historical risk, so that those affected can get the best possible information.

We see from the results of the project on trends in risk levels on the Norwegian continental shelf that many companies fail to satisfy the regulations on conducting risk assessments when using chemicals. This is not good enough! I believe it is crucial that the chemical working environment is integrated in a unified risk management system, and that players show greater ability to balance the various HSE (Health, safety and environment) aspects relating to the use of chemicals. I also expect that earlier exposure is taken into account when calculating the total load for today’s workers.

The chemical working environment will be a priority for the authorities in the time to come. We are pursuing a project which will lay the basis for a historical risk assessment and for prioritising future research efforts. The industry will also face a strong demand to develop new knowledge, risk indicators, and monitoring and control of the chemical working environment.

Working schedules in the industry will be another focus of attention in the time to come. Research in other sectors suggests that shift and night work, combined with 14-day tours of duty and 12-hour working days, represent a risk factor. Working schedules which may increase the risk of human error and damage to health will be a natural issue for follow-up. A good deal of research has already been conducted in this area, and the ministry has taken the initiative on launching a preliminary study during 2006 into practice on working hours in the petroleum activity and its consequences. At the same time, I expect that we will intensify our monitoring of the obligation which rests on the companies to organise their operations in order to minimise night work, and to ensure that the risks of any working at night are kept as low as possible.

In conclusion, I have gained a clear impression that this industry is in many respects a pioneer in the HSE (Health, safety and environment) area. However, I would emphasise that it also has scope for improvement in areas. Results from the risk-level project, for instance, do not reveal a persistently positive trend even though we ought to have clear expectations that this would be the case.

Good information is essential for pursuing improvement measures. I am aware of allegations about under-reporting of incidents in the petroleum activity, and expect that such claims are followed up so that any necessary action can be taken. All participants share a responsibility here, but I would draw particular attention to the overall duty of the operators to follow up.

The government believes that high HSE (Health, safety and environment) standards are a clear requirement if Norway is also to help meet world energy requirements in the future. The petroleum industry has the expertise, experience and resources needed to make clear strides towards even higher HSE (Health, safety and environment) standards. However, achieving these improvements depends on innovative action by individuals, companies, other government authorities, institutions and organisations.

The object of the HSE (Health, safety and environment) prize that we will present here today for the first time is precisely to recognise a contribution which is of such importance to society. This award is a fine initiative, and I hope it will help to concentrate further attention on the significance of a systematic and long-term commitment to HSE (Health, safety and environment) as a condition for all value creation.

Thank you for your attention!