Applying an Enterprise Risk Management Framework to ......Saudi Aramco: Company General Use Responsible Care: Celebrating A Decade of Excellence Outline Why ERM is essential to Process

Saudi Aramco: Company General Use

Applying an Enterprise Risk Management Framework to Process Safety

3rd GPCA Responsible Care Conference, Jubail, KSA

10/14/2019

© Saudi Arabian Oil Company 2019


• 3rd GPCA Responsible Care Conference, Jubail, KSA

• 10/14/2019

Applying an Enterprise Risk Management Framework to Process Safety

© Saudi Arabian Oil Company 2019


Responsible Care: Celebrating A Decade of Excellence

Outline

Why ERM is essential to Process Safety

• Establish context

• Identify

• Analyze

• Evaluate

• Treat

• Monitor and review

ERM 6-Step Process

Summary



http://money.cnn.com/2012/09/05/news/companies/bp-oil-spill/index.html

Emerging Products

Cyber Attack Water Shortage Supply Chain

Fire & ExplosionCurrency & Interest Rates Climate Change

Geopolitical Instability

Key Risks for Corporations (examples)



http://money.cnn.com/2012/09/05/news/companies/bp-oil-spill/index.html

“The burning platform”

• $60+ billion

• Environmental disaster

• 210 MM gallons

• 87 days

• 17 injured

• 11 lives



6Monitor

&

Review

Methodology based on ISO:31000

Four important aspects:

Cyclic

Repetitive

Proactive

Embedded

6Monitor

&

Review

ERM Framework



• Board Level Committee

• HSE CommitteeOversight

• Executive LevelChampionship

• Process safety

• ERM

• Operations

• Environmental

• Process engineering design & controls

• Inspections

Taskforce

1. Establish context



Program scope

Lead to an incident resulting in

Damage to a major industrial facility

Loss of life

All facilities handling hazardous materials

• IT risk

• Incidents caused by security risks

Process safety risks

Exclusion

Inclusions

1. Establish context

https://www.google.com.sa/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwj7pez0_b3ZAhUHfFAKHRZdB98QjRx6BAgAEAY&url=https://www.istockphoto.com/photos/offshore-platform&psig=AOvVaw1rGFHs_jddrTmqT3iv8rbu&ust=1519542173376320

https://www.google.com.sa/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=2ahUKEwj7pez0_b3ZAhUHfFAKHRZdB98QjRx6BAgAEAY&url=https://www.istockphoto.com/photos/offshore-platform&psig=AOvVaw1rGFHs_jddrTmqT3iv8rbu&ust=1519542173376320



2. Identify

Process safety

risks database

Workshops with field

organizations

Interviews

Site specific Process

Hazard Analysis (PHAs)

Site risk profiles

Incident history

Fire & explosion

Environmental contamination

Toxic release

Lo

ss o

f p

rim

ary

co

nta

inm

en

t

Top process safety sub-risks (examples)

Major tank fire

Major hydrocarbon gas leak

Major hydrocarbon liquid leak

Major H2S release

Major CO release

Major offshore oil spill

1

2

3

4

5

6



3. Analyze

What can happen?

Where can it happen?

What sites/can be

affected?

Develop credible worst

case scenarios



5

4

3

2

1

1 2 3 4 5 6

Consequences

Lik

elih

ood

2

3

1 4

Process safety sub-risks

(as identified in Step 2)

Heat map

3. Analyze


case scenarios

Assess consequence

and likelihood



Lis

t of

pre

ven

tive c

ontr

ols

Lis

t of

reactive c

ontr

ols

Major

hydrocarbon

liquid leak


case scenarios

Assess consequence

and likelihood

Identify and assess

existing controls

L M H

L L M

F L L

Control designC

ontr

ol applic

ation

3. Analyze



Risk tolerability

Risk manageability

Cost-benefit analysis

5

4

3

2

1

1 2 3 4 5 6

Consequences

Lik

elih

oo

d

2

3

1 4

4. Evaluate



Accept the riskThird party/

contractors

Enhance controlsClose down a

high risk facility

Terminate Treat Gaps

TolerateTransfer

Strategy

5. Treat



Asset integrity

Technology

Inspection

Competency/training

Leadership & accountability

Safety culture

Management system

Corporate requirements

Compliance/audit

“The execution of the work practices across

an organization to a point where leaders and

employees consistently address the day-to-day

operational needs of the business in a timely,

safe and efficient manner.”

OPERATIONAL DISCIPLINE

5. Treat



OPERATIONAL DISCIPLINE

COMPETENCY

Know the right thing to do.

INTEGRITY

Willing to do the right thing.

FORMALITY

Consistently do the right thing.

ACCOUNTABILITY

Oversight on deviations

CULTURE

Ask the right thing to do.

5. Treat



6Monitor

&

Review

List of Key Risk

Indicators (KRIs)Selection criteria

Selected KRIs

Key aspects

• Approved & endorsed by top management

• Dynamic and evolving in nature

Industry practice

Ease of collection

Credibility of data

Frequency of collection

Scoring m

echanis

m

Existing KPIs

Industry recognized KRIs

Underlying causes

Lagging KRI

Leading KRI

6. Monitor & review



Demand on safety systems

Process safety competency assessment

Safe operating limit excursions

Overdue incident investigation items

Overdue inspection items

Overdue (process safety) audit action items

Process safety event rate (PSER) (Tier1/Tier2)

KRIs examples6

Monitor

&

Review

6. Monitor & review



Site specific support & help

Coordinated response

Periodic monitoring of risk

Holistic view of risk & risk functions

Link corporate & site management

Benefits



Operational Discipline

ERM can help to cultivate:

How to monitor risk?

What are the major risks?

What else needs to be done?

What controls are in place?

Conclusions


Thank youwww.gpca.org.ae

Applying an Enterprise Risk Management Framework to ......Saudi Aramco: Company General Use Responsible Care: Celebrating A Decade of Excellence Outline Why ERM is essential to Process

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