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5 Jul 2016

New DNV GL Hazard Awareness Training Center Spearheads Joint Industry Project

Testing at the DNV GL Spadeadam Testing and Research center. Photo courtesy of DNV GL.

More than GBP 3 million has been invested in the Spadeadam Testing and Research center to enhance its offering to perform rarely available trials in a controlled and secure real-life environment. The site features some of the world’s most advanced destructive and nondestructive test facilities. The new training and conference facility will enhance experiential learning for the oil and gas, chemical, utilities, and security industries.

Tørstad

Elisabeth Tørstad, chief executive officer for DNV GL Oil and Gas, said, “While the industry is understandably preoccupied with generating shorter-term value, we must be vigilant in ensuring safety remains as a top priority. Our challenge is to continue giving the message to clients that cutting costs without understanding the bigger risk picture can end up being ineffective and ultimately very costly to the business.

“The primary role of the Spadeadam Testing and Research center,” Tørstad said, “is to provide our clients with the knowledge and understanding to ensure risks are reduced and operations are safer. It is the availability of this infrastructure that allows Spadeadam to respond so effectively across a number of sectors.”

The Rt Hon The Lord Cullen of Whitekirk KT, who opened the center on 29 July, said, “I welcome the creation of this conference center for the support of training. Hazard awareness is essential for the successful management of safety in the interface between people, plant, and equipment with which they have to work.”

Vamadevan

Spadeadam will run full-scale experiments, using available test rigs, for a new DNV GL-led joint industry project, CostFX, to investigate cost-efficient explosion load descriptions for process areas. The project, which is still open to new participants, is driven by a need to improve and align knowledge between the health, safety, and environment and structural disciplines on explosion load criteria. The aim is to reduce complexity and overdesign in current models and methodologies for explosion protection while balancing demand for valid, accountable safety margins. The results will be used to generate standards and guidelines to allow structural engineers to predefine design explosion loads for standard installations, mitigating the need for costly, specialist analyses. For nonstandard installations, a direct link from complex explosion load assessments to structure response and design analyses will be provided. Overall saving in project execution, duration, and steel thickness is foreseen, while areas where increased safety is needed will be identified, providing both increased safety and reduced cost.

Work carried out at the site, which is the largest facility of its kind in the UK, consists of confidential, large-scale, major hazard tests, including flammable gas dispersion, fires, explosions, pipeline fracture tests, and blast and product testing in a safe and secure environment.

Hari Vamadevan, DNV GL Oil and Gas regional manager for UK and West Africa, said, “The demonstrations today, showcasing an explosion simulation and a pipeline failure, have been a real testament to the capability of the center at Spadeadam. The ability to show first-hand the reality of these types of scenarios shows just what can happen when things go wrong. Our highly specialized hazards awareness courses demonstrate how this can be prevented and that the experience and variety of work being carried out is unrivalled.

“Although the oil and gas and other industries are facing challenging times,” Vamadevan said, “safety is one area which cannot be compromised, and it is important that we provide an environment where research and training can be conducted safely, securely and confidentially.”

22 Jun 2016

World Energy Council Report Points to Innovation as Key To Drive Sustainability

The energy sector is at a transition point and faces a number of growing challenges. Innovative policies and technologies are the key to addressing these challenges, according to a new report by the World Energy Council.

The report was presented to ministers and government representatives as they met at the seventh Clean Energy Ministerial (CEM7) in San Francisco on 1 June.

The World Energy Trilemma 2016, “Defining Measures To Accelerate the Energy Transition,” published by the World Energy Council in partnership with global consultancy Oliver Wyman, has identified five focus areas to drive progress on the energy trilemma of sustainability, security, and energy access and meet the goals of 2020 and beyond. The report will provide the foundation for many discussions at the 2016 World Energy Congress in Istanbul in October 2016.

Joan McNaughton, chairperson of the World Energy Trilemma study group, said, “The Paris agreement has raised the bar on what countries must do to have a sustainable energy policy—one which delivers not just on energy security, access, and affordability but is also capable of delivering the Paris commitments. Having a high GDP (gross domestic product) or great natural resources can help, but good policy with a clear sense of strategic direction, implemented well, is what really drives good trilemma performance.

“More substantive dialogue with business leaders and the investment community will help policymakers to produce policies which are robust in a world of fast-changing dynamics of energy supply and demand and an accelerating pace of technological and business change. The sooner countries start on the transition, the cheaper it will be.”

The report highlights five key findings emerging from innovative policies, interviews with policymakers and private sector energy leaders, and an analysis of 5 years of the energy trilemma index:

  • Transforming Energy Supply. Policymakers and decision makers must set clear energy targets and provide clarity to the market.
  • Advancing Energy Access. Countries are reforming regulatory frameworks to decrease the cost of doing business and increase private investments in modern infrastructure expansion.
  • Addressing Affordability. While subsidies can be vital for low-income consumers in the short-term, long-term subsidies can erode the profitability of utilities.
  • Energy Efficiency. Cost savings alone are insufficient to stimulate the adoption of energy efficiency standards. Performance ratings, incentives, and labeling programs also encourage consumer energy efficiency.
  • Decarbonization. Dynamic and flexible renewable energy investment policies are the key to responding to evolving market dynamics and technological developments.

Speaking ahead of the CEM7 meeting, Christoph Frei, secretary general of the World Energy Council, said, “Solely expanding infrastructure is not enough. Countries must look to a range of innovative mechanisms that enable access for people to utilize the benefits of modern energy for income-generating activities. Pay-as-you-go business models and mobile banking solutions to promote the take-up of renewable powered energy services are examples of such mechanisms.

“Investment and policies intended to change demand and supply at national level will either take time to deliver visible progress or likely will be disruptive. Countries must act now to progress on the trilemma with secure, equitable, and environmentally sustainable energy to support a thriving energy sector, a competitive economy, and a healthy society. In San Francisco, a great focus will be on innovation to achieve these objectives. We will take into account any outcomes and lessons learned at our World Energy Congress later in the year.”

Many of the sessions at the 2016 World Energy Congress in October will revolve around how business and government can innovate in order to balance the trilemma. For example, two sessions—Innovative Business Models: The New Frontier and Enabling the Energy Transition: Benchmarking 150 countries—will look at how innovations in energy technology such as e-storage or changes in business priorities can help balance the trilemma and deliver a shift to a low-carbon economy. The focus of Day 3 will be on policy, with approximately 100 ministers and up to 10,000 delegates discussing policy action to drive the energy transition.

Francois Austin, global head of energy practice at Oliver Wyman, said, “Many emerging and developing economies continue to struggle to expand their energy infrastructure to support advanced energy security, reliability, and access. To increase private sector investments in infrastructure expansion and modernization, countries should, and are, beginning to reform regulatory frameworks to decrease the cost of doing business and increase competitiveness in the electricity market.

“To ensure policy and regulation keeps up to date with changing business models and evolving consumer, industry, and government expectations, policymakers should stimulate broader industry engagement, including the energy sector, new entrants to the energy industry, and with businesses that are transforming their energy consumption profile.”

Read the full report here.

9 Jun 2016

HSE Now Reader Survey

HSE Now needs your help. In order to better serve our readers, we are conducting a readership survey. The online survey should only take about 10 minutes to complete and can be accessed with the button below.

In 2012, the Society of Petroleum Engineers (SPE) recognized the need to better serve its members within the health, safety, security, environment, and social responsibility (HSSE-SR) discipline. SPE created HSE Now as a way to meet that need and disseminate technical information within the HSSE-SR discipline. In 2013, HSE Now launched with both original content and content curated from sites throughout the Internet.

Since that time, HSE Now has continued to grow. It is our goal to continue that growth and to continue to provide quality, relevant content for HSE professionals. This survey is your chance to help us guide this resource to best serve you.

Thank you for taking the time to answer the questions, and thank you for reading HSE Now.

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24 May 2016

Call for Papers Opens for SPE’s North America HSE Conference

17HSSE

The 2017 SPE Health, Safety, Security, Environment, and Social Responsibility Conference—North America will be 18–20 April in New Orleans.

Since 1993, this conference has brought together HSE professionals for knowledge sharing, learning, and networking. Experts from industry, government, and academia attend to share insights and best practices. The event will include presentations and discussions to help attendees address the health, safety, security, and environmental challenges facing the exploration and production industry.

Paper proposals are being accepted until 31 May. Papers are being accepted in more than 75 categories.

Read more about the conference here.

Submit an abstract for consideration here.

5 May 2016

Lloyd’s Register Sees Improvements in Offshore HSE

Six years after the Deepwater Horizon drilling rig incident, has safety and environmental protection of offshore oil and gas drilling in US waters improved? Lloyd’s Register believes improvements have been made. Expertise in health, safety, and environment (HSE) best practice and regulations is adding value to American drillers and operators in their efforts to mitigate and manage their HSE risks.

“I know I sound like a broken record,” said Brady Austin, Lloyd’s Register’s quality, health, safety, and environment (QHSE) group service owner based in Houston. “But operators and/or lessees are required to assess their operations and put into effect a management system to maintain and keep those offshore operations safe. Every operator in US waters has to have a detailed plan to assess those offshore operations, and the SEMS (Safety and Environmental Management Systems) plan goes into great detail.”

Last month marked the sixth anniversary of the Deepwater Horizon drilling rig accident and the onset of the 2010 Gulf of Mexico oil spill. Postspill reforms continue 6 years later, with the Bureau of Safety and Environmental Enforcement (BSEE) issuing well-control rules and new regulations on blowout preventers (BOPs). Meanwhile, a lot of work is moving forward with American Petroleum Institute (API) and the Center for Offshore Safety (COS) on SEMS. The word on the ground highlights that both industry and regulators are proceeding much more harmoniously.

“The SEMS is very much collaborative,” Austin said. Work on SEMS was one of the earliest initiatives to move forward postspill after the former Minerals Management Service was reorganized into three independent agencies: BSEE, the Bureau of Ocean Energy Management, and the Office of Natural Resources Revenue.

Largely based on recommendations by the API, SEMS aims to steer the industry toward tight and highly regimented workplace safety management practices while trying to keep the initiative with the industry itself, rather than see industry forced to simply respond to the government’s commands.

As an example, offshore operators must submit to third-party audits of their SEMS program. Where auditors find opportunities for improvement, companies must inform BSEE what their corrective action plan is to reduce systemic issues within the effectiveness of their SEMS plan. SEMS audits and the COS aim to identify industry opportunities for improvement and elevate these possible recommended practices through API committees, formalizing what API and others deem as suitable safety standards, with BSEE playing an advisory role.

Lloyd’s Register, which has recently expanded its offshore equipment training capacity in Houston, has been conducting SEMS training and has been working closely with BSEE and the COS to conduct SEMS audits. Austin agreed that the oil and gas industry and BSEE are on the same page with the direction of SEMS. The company’s HSE and operational experts’ specific understanding of best practice and regulations enable teams across the world to add value to support operators in their efforts to mitigate and manage their risks. Considering the current market, audits are a proactive way to reduce risk when properly implemented.

“When you’re dealing with technical issues, you can get technical,” he explained. “But, when you’re dealing with a management system, you are assessing how a company deals with technical implementation, because every company does things differently, and, even though they all work toward the same guidelines and understand what must be done, they’re not told how to do it.”

“SEMS rule and the implementation of the SEMS audits and industry participation in it is definitely improving things,” Austin said.

While documentation is important to the audit, it should focus on other evidence such as records, interviews, and observations. “Opportunities for improvement will be identified during an audit, the real management commitment comes in at the corrective/preventive action implementation,” Austin said.

“The regulator has stated many times at various conferences that they are focusing on what a company does to improve, not so much the identified opportunities for improvement,” he said. “Those are good things.”

The information gained from COS member-company SEMS audits is anonymously shared within the oil and gas industry to improve safety and environmental practices continually and reduce potential incidents in US waters. Non-COS member companies can elect to have this information shared as well.

Read more about Lloyd’s Register here.

Read more about Lloyd’s Register courses and training here.

28 Apr 2016

Virtual Tours Show Environmental, Safety Aspects of Sites

The Environmentally Friendly Drilling (EFD) program conducts a number of research projects on air, water quality, land, and efficiencies. In addition, the field tests performed have enabled the program to document “unintended benefits,” including improvements in public perception.

EFDThe retention of training for the newest generation of oil and gas workers is greatly enhanced by using a computer-based virtual platform. In 2012, the EFD program team launched the EFD Virtual Drilling Rig website, a free online interactive educational tool to help foster environmental awareness in the mindset of oil and gas employees and to assist in workforce development. The program uses gaming software to allow the user to tour a rig and identify, through hot spots, attributes that improve environment or safety performance.

The Virtual Hydraulic Fracturing site was released in 2014. This EFD virtual site allows visitors to walk around a hydraulic fracturing site without leaving their desks. Numerous hot spots are located on the site that provide information on process technologies and practices. When a user clicks on a hot spot, a manual pops up that provides general information; introduces environmentally friendlier alternatives; and provides literature, case studies, and videos on the equipment and practices.

When programs like this are made available on the web, they also becomes a publicly available tool that can have a positive or negative effect on the industry.

One virtual site currently under development is a production pad. This project is similar to the others in the way visitors navigate and learn. It includes a focus for regulator training and is also being developed to inform the public on what is going on “behind the fence.”

The EFD team is now developing a Virtual Offshore Safety Awareness (VOSA) site. This approach enables workers to improve their understanding of innovative improvements to safety and environmental technologies and culture associated with offshore development. The VOSA site will be free to use for individuals, trainers, and other organizations and programs for their own educational efforts. Subject-matter experts, safety and environmental specialists, educators, associations, and workers from the industry will be consulted so that current concerns and best practices can be included in the hot-spot material. The completed VOSA site will be designed around the Gulf of Mexico; however, information about other regions could be included in the pop-up manuals. This effort is funded in part by the National Academy of Sciences Gulf Research Program and EFD members.

These virtual sites have been used in a variety of settings, such as introductory classes for new employees, for oil and gas administrative employees who support the company but have never been to a site, and for college students focused on oil and gas careers. With these projects came the added benefit of communicating to those outside of industry, including the public; educational and training institutes; high school science, technology, engineering, and math students deciding on college and career paths; regulators; congressional staff; local officials; nongovernmental organizations; and health professionals. This information is about not only the processes of energy production but also the various improvements to safety technologies and environmental protection systems being used to address various issues associated with development.

None of these projects would be possible without the help of subject-matter experts. The EFD team is always looking for experts and companies to help keep these up-to-date and increase the distribution. An added objective is to work with companies and organizations that provide health, safety, and environment training so they can use these tools as part of their programs to keep the students motivated and improve retention.

The Virtual Site is free to use, and feedback is always welcome.

Visit the virtual site here.

Read more about EFD here.

26 Apr 2016

Expansion in Mexico Puts Spotlight on HSE Expectations

With the recent changes to Mexico’s constitution, many global exploration and production (E&P) operators and service companies are currently entering Mexico for the first time. To tap Mexico’s vast offshore resources, operators will call on state-of-the-art E&P technology. A key enabler to this anticipated growth is aligning Mexico’s new regulatory requirements and existing health, safety, environment, and sustainability culture. Strong performance in this arena offers a wide range of benefits, assists with meeting local requirements, and minimizes operational risk for all participants.

MexicoFocusing on the theme Collaboration for Future Growth, SPE held its first health, safety, and environment (HSE) symposium in Mexico 30–31 March 2016 to share process improvements, technological advancements, and innovative applications that will enhance HSE performance in Mexico’s emerging market. As with other SPE events of this type, its success lies in an open exchange of ideas, which was certainly the case given the very active participation of the attendees during the various technical sessions and panels.

One such panel, titled Growing Importance of HSSE-SR, focused on addressing the importance and impact that health, safety, security, environment, and social responsibility (HSSE-SR) have on all aspects of the oil and gas industry’s activities. The panel addressed the challenges facing operators, service companies, and others working to safely explore, develop, and produce oil and gas resources in a manner that is compatible with the balanced environmental and economic needs of the communities in which they operate. A key objective of the panel was to stress how the industry must effectively address the broad HSSE-SR expectations as a means to earn and protect the trust of all public and private stakeholders.

The panel was moderated by Roland Moreau, SPE vice president of finance and former HSSE-SR technical director. The panelists were

  • Charlie Williams, executive director of the Center for Offshore Safety
  • Salwan Ibrahim, technical advisor of offshore medical services for International SOS
  • Brian Sullivan, executive director of IPIECA, a global oil and gas industry association for environmental and social issues
  • Dean Slocum, founder and principal of Acorn International, a leading advisor to the international energy and extractives industries on social and environmental risk management

Highlights from each of the panelists follow. If you wish to delve into more detail about any of the topics discussed, please contact the panelists individually using the noted contact information.

Safety and Environment Management Systems, more frequently referred to as SEMS, is a performance-based approach to building and maintaining a strong culture of safety for oil and gas exploration. Williams addressed the role of data collection and analysis as a cornerstone to continual improvement of a company’s safety management. Based on the idea that the strength of any company’s safety management is the strength and quality of its “barriers,” the Center for Offshore Safety (COS) has developed and implemented a program to collect safety performance indicator (SPI) data related to the strength of COS member barriers. COS uses this SPI data, along with related learning-from-incident (LFI) submissions, to help guide future activities of the COS. This program has already resulted in the publication of guidance for effective leadership site engagements, as well as tools and guidance to assist companies in the execution of an effective audit of their SEMS program.

Duty of care is the basis of all occupational health and wellbeing promotional programs. Understanding that health is not merely the absence of physical disease but also includes social and psychological wellbeing is important, and this concept travels across the boundaries of sites and projects to have an influence on employees’ families and the communities around them. Investment in wellbeing programs, therefore, is a key tool to implement corporate social responsibility in addition to its positive effect on achieving operational goals and critical for business continuity.

Various corporations and companies have evolved through various stages in relation to the integration of a wellness agenda in their overall systems:

  • Fitness for Work Phase. Initial programs are observed in many locations, satisfying the company’s desire to ensure that they have the right workforce from a health point of view and have established a checkpoint for wellbeing review at the start of employment and then on regular intervals.
  • Fitness at Work Phase. This is the next level concept, where the focus has shifted to include the wellbeing of the workforce while performing the job, so the workplace starts to become a center for health promotion. This also leads to a shift in allocating resources for proactive prevention (primary prevention) of health risks at work beyond just being able to respond (reactive or tertiary prevention).
  • Fitness for Life Phase. This is the advanced stage, wherein wellness drive extends to the community and the site or the project becomes part of the bigger picture in serving the upgrade of society wellness.

Examples of wellness programs are many, including weight-reduction and -management programs, diabetes control, smoking cessation, infectious diseases prevention, and travel health. Each one is different in terms of content, target audience, individuals vs. groups, and associated activities for example.

However, in the design of any successful wellness programs, the following criteria are essential:

  • It is employee centered and focused.
  • It is based on the worksite-risk assessment, identifying health threats at work and establishing means of mitigation.
  • It adopts a phased approach that is progressive but made specific to the company’s policies and work environment.
  • It establishes proper communication channels, such as direct employee or group interaction vs. indirect and multimedia tools.
  • It includes rapid and facilitated access to medical services when needed if a health-related concern is identified.

The IPIECA is a forum for the global industry to share knowledge and good practice and respond to emerging issues through collaboration. One topic that highlights a key challenge facing the industry is this challenging market and finding a way to enable the industry to deal with it efficiently.

In this market, the industry can ill-afford downtime resulting from poor environmental and social performance. Collaboration, where it makes sense to do so, are an efficient way forward to enable improvements in performance.

An example of IPIECA’s work is the Biodiversity and Ecosystems Services Fundamentals guidance. The result of collaboration between 31 companies, it provides advice about applying fundamental practices through the asset life cycle.

Symposium participants agreed that getting social responsibility right is critical to the success of E&P ventures. Slocum took us a level deeper to examine why one element of corporate social responsibility (CSR)—human rights—is such an important and challenging emerging issue for the industry. “Every one of you will be far more directly involved in and responsible for human rights issues in your operations in the next 5 years than in the last 5,” he said, “so it’s critical to understand the fundamentals and risks.”

Business risks related to human rights affect decisions about labor, contracting, security, and community impact management. Risk associated with human rights and other nontechnical risks are critical to the industry for three main reasons:

  • Unlike financial, engineering, reservoir, or safety risks, they are extremely sensitive to local community interpretation and require local community involvement in generating solutions.
  • We lack the established models for defining financial and technical risks when it comes to understanding human rights and other nontechnical risks, although an important body of “good international industry practice” guidance is emerging.
  • Management of human rights issues is becoming an increasingly influential determinant in the success or failure of capital investments and operations in the industry, particularly in countries such as Mexico that are opening to new investment in developing their reserves.

Slocum highlighted some key human rights risks facing the oil and gas industry, provided an outlook of how these risks will evolve in influencing projects and operations, and offered a glimpse of what measures the industry should take to better tend to its responsibility for proactively respecting human rights.

If you have additional questions about the panel or wish to discuss specific topics that should be considered in the future, please contact Roland Moreau or Trey Shaffer.

25 Apr 2016

National Content in Mexico: Time Is of the Essence

A Mexico energy reform topic that often takes a back seat in the discussions on bidding rounds and international investors is national content. Referred to as local content in other parts of the world, national content will be an essential policy tool for ensuring that the energy reform benefits the people and businesses of Mexico, as well as the new international investors.

The International Association for Impact Assessment defines local content as the “requirement, expectation, or commitment of a company to ensure that value is retained locally through employment and/or procurement.” Emerging market countries such as Mexico are increasingly establishing local content requirements because of their success and the promise of sustainable economic development and foreign direct investment.

From a social- or public-good perspective, why is local content important?

  • Socioeconomic impact: Oil and gas project spending on local content—including employment, procurement, and infrastructure—is at least as much as and typically more than government earnings through taxes and royalties, according to a recent African Development Bank and Gates Foundation report on Creating Local Content for Human Development (PDF). Considering that approximately 80% of upstream oil and gas spending is on suppliers and local content targets range from 5% to 80% around the world, the potential socioeconomic impact in local content regimes is significant.

    National-Content-Fig1

    Fig. 1—Source: SBC, 2014.

  • Job creation: As clearly evidenced by research findings from Schlumberger Business Consulting (SBC), Fig. 1, and confirmed by various industry experts, the most significant opportunities for job creation are among oil and gas suppliers.
  • Community expectations and social license to operate: Oil and gas companies rate local content among the most significant expectations in the communities where they operate. If companies are able to satisfy community stakeholders’ key expectations around local content, they will be able to earn the sometimes elusive social license to operate.

On 28 and 29 October in Mexico DF, the National Content Congress brought together key stakeholders advocating, designing, and, likely, implementing national content in Mexico’s emerging oil and gas private sector.

Regulatory authorities from the Ministry of Economy explained the policy requirements, including the national content formula, and its role in recommending local content targets to the Ministry of Energy, which includes the targets in licensing contracts. Global operators described their national content priorities and approaches, while service companies explained their focus and local strengths. Global and local professional services firms shared insights and research findings on local content in other markets, while highlighting local implementation opportunities and challenges.

National-Content-Table1

Table 1

Throughout the 2 days, there were some insights and new information shared. For example, the representative from the Ministry of Economy shared the local content targets established in the contracts signed during the first two bidding rounds (Table 1).

To provide guidance to license holders, the Ministry of Economy will be publishing examples of national content compliance plans in the coming weeks. The four types of compliance plan examples to be published are

  • Individual compliance plans for contractors and signatories
  • Supplier development plans for Tier 1 suppliers
  • Supplier development plans for states and municipalities
  • Supplier technology development plans

In order to ensure suppliers have access to funding to develop capacity and competency to serve the oil and gas industry, the Ministry of Economy is establishing a public fund. As of September 2015, the Fund to Promote Supplier Development had just over USD 27 million available in grants or investment for qualifying local companies.

Chevron and Shell representatives spoke about their priorities and efforts related to local content in Mexico. Setting an example for many of its peers, Shell discussed its extensive groundwork in assessing local content opportunities in Mexico over the past several years. Key criteria for selecting local content suppliers that the operator representatives mentioned include compliance with legal requirements; business ethics; health, safety, and environment (HSE) standards and performance; financial capacity; technical capacity; and protection of sensitive client information.

Industrial safety, as a practice in the oil and gas industry in Mexico, is a new regulatory arena. Only recently was a new regulatory entity established (Agencia de Seguridad, Energía y Ambiente) to develop and monitor HSE compliance requirements. Highlighting the importance of HSE for the oil and gas industry, many oil and gas representatives at various conferences over the past several months have noted that, despite forced cutbacks throughout oil and gas companies because of the economic downturn, safety is an area that will not be compromised for any project. Considering the nascence of HSE in Mexico and importance to the industry, it is likely to be a major determinant of whether and how many local content suppliers are contracted by global investors.

The National Hydrocarbons Commission described the global fall in oil prices as beneficial to Mexican oil and gas companies. With fewer international companies bidding, smaller, less-experienced companies are able to enter the market without fierce competition.

Given the history of oil and gas in Mexico, a panelist emphasized the risk and desire to avoid developing an oligarchy of suppliers. Because Pemex, the national oil company, had a long-standing proclivity for selecting suppliers on the basis of relationships and other factors that may not satisfy requirements in laws such as the Foreign Corrupt Practices Act, certain measures should be put in place to help facilitate meritocratic and democratic supplier sourcing and development.

During the last panel session of the conference, Overcoming Barriers To Drive National Content Development, the diverse group of legal, regulatory, and economic panelists all supported the claim that the social risk, impact management, and community engagement, particularly of indigenous groups, will be among the more critical factors to overcoming barriers to national content development. Although not mentioned during this panel, Mexico’s mining sector has many local content implementation lessons learned that could be shared with onshore oil and gas project implementers. Chief among them are the issues of security, including the risk of criminal elements in communities and supplier companies, which can eclipse many of the other local content challenges typically experienced in other countries.

A reporter from El Daily Post who participated in the last panel discussion provides his take-aways and commentary on key risks for global industry operators in the article The Yellow Brick Road to National Content Development.

In general, there was a common opinion among attendees that national content is moving forward slowly in Mexico. According to some insiders, it is moving much more slowly than other aspects of the energy reform.

Additionally, while Mexico has officially established a local content methodology for ensuring compliance, informally, there are on-going discussions about the best way to structure and implement national content in Mexico.  Side discussions and pointed calls for more incentives, as opposed to penalties for noncompliance, highlighted some of the on-going incertitude and the need for even greater collaboration and incentive-based policy-making.

Mexico is at a critical time in establishing a strong foundation for national content. Energy reforms open opportunities to invest not only in the natural resources of Mexico but also in the people, businesses, and future of Mexico. To do so, both the oil and gas industry and government must start early to assess opportunities for local content, evaluate the local content resources available and start to develop local content providers well in advance. Starting late and lack of collaboration across sectors are among the key reasons that local content has not reached its full potential in many other countries around the world.

12 Apr 2016

Seminar Prepares Operators To Meet Mexico’s National Content Requirements

Oil and gas operators planning to operate in Mexico must meet minimum targets for national content, also called local content. While the oil and gas industry has experience complying with local content requirements—and, in some cases, going beyond compliance to create sustainable supply chains and stronger social licenses to operate—for many, Mexico’s national content formula is a new compliance requirement.

To help the industry prepare for these new content requirements, Local Contenect and the Energy Conference Network are holding a 1-day seminar to provide key compliance information and insights. The seminar will be held 18 May in Houston.

Read Mexico’s national content requirement here (PDF in Spanish).

Read more about the seminar here.

12 Apr 2016

IOGP Names Outstanding Young Professional in Oil and Gas HSE

With 8 years of health, safety, and environment (HSE) experience, Muriel Barnier has been awarded the inaugural Outstanding Young Professional Award.

Muriel Barnier

Gordon Ballard, executive director at the International Association of Oil and Gas Producers (IOGP), presented the Schlumberger employee with the award at the biennial SPE international HSE conference in Stavanger.

The Outstanding Young Professional Award is an IOGP initiative in association with the conference. It recognizes the achievements of an individual with fewer than 10 years of professional exploration and production experience. The recipient must have demonstrated professional accomplishments and evidence of outstanding talent, dedication, and leadership in at least one aspect of health, safety, security, the environment, or social responsibility (HSSE-SR).

“Everything about Muriel’s entry indicated that she is already on the way to becoming an industry leader,” Ballard said. “She is eloquent about the importance of the industry, and her presentation provided valuable insights about how to gain grassroots support for our HSE initiatives.”

Barnier’s winning video presentation focused on how the HSE for Youth program, which she developed and manages, helps share the industry’s experience within a wider community to keep people safe and make the oil and gas industry more acceptable and sustainable to the wider world.

In addition to developing the Schlumberger HSE for Youth program, she has coauthored five SPE papers and has two master’s degrees and a bachelor’s degree, all with highest honors, each time graduating as class valedictorian.

In 2015, Barnier was awarded the UK’s National Examination Board in Occupational Safety and Health International General Certificate.

“The response rate and quality of entrants was exceptionally high,” said Jack Hinton, Baker Hughes’s executive vice president of health, safety, and the environment and conference executive committee member. “We received over 70 entries from around the world.”

“I would like to thank all the entrants and their nominators for taking part,” Hinton said, “and hope that, in future years, the award will continue to attract such high-quality applications.”

The other finalists were Yu Chen of the China National Offshore Oil Corporation, Bev Coleman of Chevron, Omar De Leon of ExxonMobil, and Emma Thomson of BP.

12 Apr 2016

HSSE-SR Conference Celebrates 25 Years

This video presents the history behind the health, safety, security, environment, and social responsibility conference from its inception in 1991 to today.

7 Apr 2016

International HSE Conference Kicks Off With Climate Change Discussion

Very few issues evoke the same level of passion and controversy as climate change. Despite multiple viewpoints, the issue is here to stay, and the energy industry has a definitive role to play. The opening session of SPE’s biennial international HSE conference will feature a keynote address by Nathan Meehan, SPE’s 2015–16 president, who will provide a visionary view of what lies ahead for the industry. The opening session, titled Climate Change—The Road Ahead for the Oil and Gas Industry, will focus on the need for collaboration and—in light of the current global business climate—the imperative to maximize HSE programs and help achieve the needs of shareholders and stakeholders alike.

Stavanger

The 2016 SPE International Conference and Exhibition on Health, Safety, Security, Environment, and Social Responsibility will be held 11–13 April in Stavanger. In alignment with the conference’s theme of Sustaining Our Future Through Innovation and Collaboration, the opening session panelists will share their forward-looking perspective on opportunities for the energy industry to innovate and collaborate on the subject of climate change.

The conference will continue with daily plenary sessions, 15 panel sessions, and 41 technical sessions over the 3 days.

Special events during the conference include a Getting to Zero safety workshop designed to further the conversation on eliminating safety incidents in the pursuit of incident-free worksites. The workshop will address two main questions: How do we get to zero? And, what is the next big development in continuing the journey to zero?

Continuing the theme of looking toward the future, several events at the conference will be geared toward students and young professionals.

A student paper contest will give young authors the opportunity to advance to the international student paper contest at SPE’s Annual Technical Conference and Exhibition (ATCE) this year in Dubai.

Also, the first-ever European Health, Safety, Security, and Environmental (HSSE) Student Challenge will take place on the second day of the conference. The objective of this event is to give students interested in the HSSE arena of the oil and gas industry a chance to display knowledge on HSSE topics and interact with industry professionals. The Student Challenge will consist of multiple question‐and‐answer rounds of competition. Questions will include a mix of topics about the oil and gas industry regarding the environment, social performance, sustainability, and health and safety. Each round will have periods of short‐answer and rapid‐succession questions (i.e., multiple choice, one-word answers), as well as a long‐answer period when teams will work together on an answer to be submitted and reviewed by a panel of judges. Prizes will be awarded to the first and second places.

Participants in the HSSE Challenge also will be given access to a young professionals luncheon. The luncheon, with the theme of Building a Culture of Safety, will be held the first day. Paul Schubert, upstream safety, security, health, and environment manager for Exxonmobil will be the keynote speaker.

The conference will also be the site of the European regional qualifier for PetroBowl, the competition after which the HSSE Student Challenge was modeled that is held annually at ATCE.

Read more about the conference here.