Risk Management and Assessment in the Oil and Gas …tc56.iec.ch/action/presentation/Topic(iii).pdf · · 2011-07-01Copenhagen Denmark 2008 2008 -10 -15 IEC/TC56 Dependability Seminar

CopenhagenDenmark2008

20082008--1010--1515 IEC/TC56 Dependability Seminar IEC/TC56 Dependability Seminar

Copenhagen, DenmarkCopenhagen, Denmark11

Risk Management and Risk Management and

Assessment in the Oil and Assessment in the Oil and

Gas IndustryGas Industry

Tom Van HardeveldTom Van Hardeveld

Strategic Maintenance Solutions Inc.Strategic Maintenance Solutions Inc.

CanadaCanada




SummarySummary

�� Risk application in oil and gas Risk application in oil and gas

industry: safety, design, O&Mindustry: safety, design, O&M

�� Facility risk assessmentFacility risk assessment

�� Pipeline integrity managementPipeline integrity management

�� Dependability and risk Dependability and risk

managementmanagement

�� ConclusionsConclusions




Oil and Gas = RISKOil and Gas = RISK

Steam turbine and hydrogen compressor Natural gas pipeline Construction at a refinery

Oilfield operators receiving training in gas compression Gas turbine overhaul shop




Risk in Oil and GasRisk in Oil and Gas

�� FinancialFinancial

�� Regulatory and politicalRegulatory and political

�� ProjectProject�� Exploration and drillingExploration and drilling

�� Major facilitiesMajor facilities

�� Construction practices, contracts and costConstruction practices, contracts and cost

�� HSE HSE –– Health, Safety and EnvironmentHealth, Safety and Environment

�� DesignDesign

�� Operation and maintenanceOperation and maintenance




Facility Risk AssessmentFacility Risk Assessment

�� PSM PSM -- Process Safety ManagementProcess Safety Management

�� Hazard identificationHazard identification•• Hazardous materialsHazardous materials

•• ElectricalElectrical

•• Process conditions (high pressure, Process conditions (high pressure, temperature, etc.)temperature, etc.)

•• RadiationRadiation

•• Mechanical equipmentMechanical equipment

•• FailuresFailures

•• Work activitiesWork activities




Hazard AnalysisHazard Analysis

�� Hazard analysis methodsHazard analysis methods•• HAZOP HAZOP –– Hazard and Operability StudiesHazard and Operability Studies

•• What if / ChecklistsWhat if / Checklists

•• LOPA LOPA –– Layer of Protection AnalysisLayer of Protection Analysis

•• SIL SIL –– Safety Integrity LevelsSafety Integrity Levels

•• HACCP HACCP –– Hazard Analysis and Critical Hazard Analysis and Critical Control PointsControl Points

•• JSA JSA –– Job Safety AnalysisJob Safety Analysis




Integrated Risk MatrixIntegrated Risk Matrix

Loss of life (1)

Major injury

Minor injury

Widespread pollution

Small spill or releaseMinor outage less

than 1 day

Financial impact lessthan $10k

Sev

erit

y p

oin

t sc

ale

10

1

0.1

0.01

0.001

0.0001

Loss of life (10)

First aid

Minor spill with cleanup

Major spill with cleanup

Major outage up to1 week

Major outage morethan 1 week


Financial impact lessthan $1 million

Financial impact lessthan $10 million


Health and safety Environment Production Financial

Consequence categories




Risk ControlRisk Control

�� Safety of personnelSafety of personnel•• Formal safety policies Formal safety policies

and proceduresand procedures

•• Personal Protective Personal Protective EquipmentEquipment

•• Job planning and Job planning and hazard analysishazard analysis

•• Work permitsWork permits

•• Tag and lockout Tag and lockout proceduresprocedures

•• Training and Training and certificationcertification





�� Emergency response planning and Emergency response planning and exercisesexercises•• Documented and approved proceduresDocumented and approved procedures

•• Response planning and exercisesResponse planning and exercises

�� DesignDesign•• Standard proven designStandard proven design

•• Protective equipment (e.g. relief valves, Protective equipment (e.g. relief valves, overspeed)overspeed)

•• Alarm and shutdown instrumentation and Alarm and shutdown instrumentation and controlscontrols





�� OperationOperation•• Standard operating proceduresStandard operating procedures

•• Training and certificationTraining and certification

�� MaintenanceMaintenance•• Standard maintenance proceduresStandard maintenance procedures

•• Training and certificationTraining and certification

•• Maintenance task development (RCM)Maintenance task development (RCM)

•• Maintenance planning and schedulingMaintenance planning and scheduling




Risk ManagementRisk Management

�� RiskRisk--based inspection based inspection -- static equipment static equipment such as pressure vesselssuch as pressure vessels

�� Integrity management Integrity management -- pipelinespipelines




Integrity ManagementIntegrity Management




Integrity ManagementIntegrity Management




Probability AnalysisProbability Analysis




Analysis ResultsAnalysis Results

Risk ranking of segments by total cost Risk profile before and after a maintenance action

Cost optimization with safety constraint Benefit-cost ratio




Risk and DependabilityRisk and Dependability

�� Dependability is a key performance Dependability is a key performance characteristic in riskcharacteristic in risk--based systems based systems

�� Dependability approach to risk Dependability approach to risk assessment assures that the risk assessment assures that the risk exposure to a product or system under exposure to a product or system under control remains at an acceptable level control remains at an acceptable level within the confines of a tolerable regionwithin the confines of a tolerable region

�� Dependability focuses on risk Dependability focuses on risk assessment methodsassessment methods




Risk StandardsRisk Standards

Risk management process being defined by new standard ISO 31000

Risk assessment methods to focus on new joint standard ISO/IEC 31010




Risk DefinitionsRisk Definitions

� ISO Guide 73 (latest draft): effect of uncertainty on objectives

NOTE 1 An effect is a deviation from the expected positive and/or negative

NOTE 2 Objectives can have different aspects such as financial, health and safety, and environmental goals and can apply at different levels such as strategic, organization-wide, project, product and process

NOTE 3 Risk is often characterized by reference to potential events, a consequence, or a combination of these and how they can affect the achievement of objectives

NOTE 4 Risk is often expressed in terms of a combination of the consequences of an event or a change in circumstances, and the associated likelihood of occurrence

� ISO Guide 51: combination of the probability of occurrence of harm and the severity of that harm




Risk ConceptsRisk Concepts

�� Risk is uncertaintyRisk is uncertainty

�� Risk is always present under all Risk is always present under all circumstancescircumstances

�� Elimination of all risks is not always Elimination of all risks is not always possible or economicalpossible or economical

�� Risk should be reduced to a level as low Risk should be reduced to a level as low as reasonably practicable to achieve a as reasonably practicable to achieve a desirable benefitdesirable benefit




Risk ReductionRisk Reduction

Residual risk Tolerable risk Risk exposure to a product or system requiring control

Necessary risk reduction

Actual risk reduction

Partial risk reduced by dedicated risk control mechanisms

Partial risk reduced by technology applications

Partial risk reduced by external risk avoidance means

+ +

Actual risk achieved by all risk reduction approaches




Selection of MethodsSelection of Methods




Assessment MethodsAssessment Methods

SA-strongly applicable A-applicable NA-not applicable




ConclusionsConclusions

�� Risk management and assessment is Risk management and assessment is

critical to the oil and gas industrycritical to the oil and gas industry

�� Risk is closely tied to dependability and Risk is closely tied to dependability and

has to be considered over the entire life has to be considered over the entire life

cyclecycle

�� Dependability risk assessment methods Dependability risk assessment methods

are widely applicable to all industriesare widely applicable to all industries

�� Integrated ISO/IEC standards are under Integrated ISO/IEC standards are under

development to meet industry needs development to meet industry needs

Risk Management and Assessment in the Oil and Gas …tc56.iec.ch/action/presentation/Topic(iii).pdf · · 2011-07-01Copenhagen Denmark 2008 2008 -10 -15 IEC/TC56 Dependability Seminar

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