HSE NOW articles are available to SPE members.
Login Now
Social Responsibility

Morocco Says It Will Follow UN Rules in Disputed Sahara Oil Hunt

Source: Rigzone | 5 February 2014

Morocco has joined France’s Total and US explorer Kosmos to formally pledge that their hunt for oil off the coast of disputed Western Sahara will comply with international rules and that the local population would benefit from discoveries.

Morocco has issued exploration licenses for blocks in Atlantic waters off Western Sahara, a desert tract that it mostly controls but which is also claimed by an Algerian-backed independence movement that deems those contracts illegal.

The Western Sahara dispute has rarely made world headlines since 1991, when a UN-brokered ceasefire ended a 15-year war between Morocco and the Algerian-backed Polisario movement.

But the intentions of Total and Kosmos to step up exploration plans have brought one of Africa’s oldest territorial disputes into focus. Kosmos has said it plans to drill its first exploration well off Western Sahara this year.

Morocco’s two declarations, signed separately with each of the companies, represent the north African state’s clearest commitment yet to respect international rules and seek local involvement in oil and gas exploration activities in an area it considers part of its historic “southern provinces.”

Total Vows Not To Drill at World Heritage Sites

Source: Mongabay | 4 February 2014

One of the world’s largest oil and gas companies, Total, has committed to leave the planet’s UNESCO World Heritage Sites untouched, according to the United Nations. The UN says the French energy giant has sent written confirmation that it will not explore or extract fossil fuels from any of the world’s over 200 natural World Heritage Sites.

“Total’s commitment clearly shows that operating in World Heritage sites is not an option for responsible extractive industries,” Julia Marton-Lefèvre, the director general of the International Union for Conservation of Nature (IUCN). “It gives us hope that the oil and gas, and mining sectors as a whole will fully embrace their shared responsibility towards the conservation of our planet’s most valuable and irreplaceable places.”

As easily accessible fossil fuel reserves run out, more and more companies are pursuing new reserves in formally protected areas, including World Heritage Sites. For example, Soco International is currently undertaking seismic testing in Virunga National Park in the Democratic Republic of the Congo, while Pluspetrol is conducting exploration in an indigenous reserve that serves as a buffer zone to Manu National Park in Peru. Both Virunga and Manu are World Heritage Sites. In fact, data from 2011 found that a quarter of Africa’s World Heritage Sites were threatened by oil, gas, or mining projects.

Nigeria: An Overview Of The Petroleum Industry Bill

Source: Dornim Solicitors And Legal Consultants via Mondaq | 30 January 2014

The Petroleum Industry Bill 2012 (PIB) seeks to ensure that the management and allocation of petroleum resources in Nigeria and their derivatives are conducted in accordance with the principles of good governance, transparency, and sustainable development in Nigeria. The PIB was submitted to the National Assembly on 18 July 2012 and is expected to be deliberated upon and enacted into law in the near future.

Column: European LNG Industry Struggles With ‘Not in My Backyard’

Source: LNG Industry | 9 January 2014

With a demand that is expected to double by 2030, Europe’s liquified natural gas (LNG) industry is currently experiencing rapid growth. Import facilities are now cropping up throughout Europe as LNG creates opportunities for energy security outside of the traditional bounds of pipelines. However, despite the industry’s rapid growth, safety and environmental concerns are driving local opposition forces in communities to take a “Not In My Backyard” (NIMBY) stance against LNG projects. Europe is all too familiar with NIMBY opposition, and while European countries seek to expand their capacities, local activists who oppose LNG seek to exaggerate the negatives to put a stop to LNG proposals in their communities. Industry leaders will need to consider the costly effects of ‘NIMBY-ism’ in Europe during the project planning stages, as they assess the risks associated with an LNG proposal. Failure to do so could cause companies to miss out on the numerous opportunities LNG will offer throughout Europe.

Devon Energy Named One of Most Community-Minded Companies

Source: NewsOK.com | 6 December 2013

Devon Energy remains one of the most community-minded companies in the United States.

The Oklahoma City-based oil and natural gas producer on 5 December was named to The Civic 50, a comprehensive ranking aimed at identifying companies that best use their time, talent, and resources to improve the quality of life in the communities where they do business.

Devon has been part of the list published by Bloomberg since its inception last year.

Dave Hager, the company’s chief operating officer, said Devon is proud of its place on the list.

He said it is important from a business perspective for the company to be part of the community with a strong civic presence.

“As business leaders, we have an important responsibility to help identify problems and pursue opportunities to improve the quality of life in our community,” Hager said. “The values that underpin our corporate culture—doing the right thing, being a good neighbor—are every bit as good for our business as they are for our community.”

North Dakota Launching Website To Notify Public of Spills

Source: Fuel Fix | 6 December 2013

It took nearly two weeks for North Dakota officials to tell the public about an autumn pipeline rupture that caused more than 20,000 bbl of crude to ooze across a northwestern wheat field.

In response to extensive media coverage and criticism from environmental groups, the North Dakota Health Department will launch a website sometime this week that will enable the public to monitor reported oil spills and other hazardous leaks.

Dave Glatt, chief of the department’s environmental health section, said that website visitors will be able to track recent spills and those that happened as far back as 1975.

“All of the historical numbers of the spills we have had will be on there,” Glatt said. “And we will be updating it manually about two times a week.”

Tullow Says It Has Learned Its Lesson After Having “Messed Up” in Kenya

Source: Rigzone | 6 December 2013

Africa-focused Tullow Oil learned its lesson after messing up in Kenya, where community protests over local jobs and contracts halted exploration last month, a senior company official said.

Tullow and partner Africa Oil resumed drilling in Blocks 10BB and 13T earlier in November after reaching an agreement with leaders to prevent a repeat of protests.

“Tullow is no cowboy operator, no short-cutter. We were born, remember, onshore Africa and know full well that the head of the village can shut you down no matter what the head of state does,” Tim O’Hanlon, vice president of Tullow’s African business, told delegates at an oil and gas conference organized by Global Pacific & Partners.

He said the company, which has operations across the continent, prided itself on getting “stakeholder issues” right from the start—industry speak for getting buy-in from local communities.

“And yet, we messed up. We must have messed up. We mustn’t have been communicating our good messages properly,” O’Hanlon said in an unusually contrite admission. The company had learned its lesson, he said, without elaborating.

Three Reasons Why We Should, Why We Aren’t, And How We Can Reduce Gas Flaring

Source: Oil and Gas iQ | 8 November 2013

Natural Gas flaring has been a constant since the oil business began, but now the tables are turning on this common practice. Find out why and how we can cut flaring to a bare minimum and exactly why we’re only broaching the subject now.

Shale Energy Moves Toward Balance of Industry, Community Concerns

Source: Fuel Fix | 8 November 2013

A thoughtful middle ground on issues of air and water is taking hold as shale oil and gas operations mature, speakers said on 6 November at a Houston conference.

Some companies have been able to bring new drilling operations to communities with a minimum of conflict, often by facing community concerns head-on, said panelists at the World Shale Oil & Gas Summit & Exhibition at the Hilton Americas downtown.

Gaining Support Is Key to Overseas Success

Source: 4 November 2013

James Reese, CEO, TigerSwan

The marketplace for natural resources is truly global. As a multinational business traveler in search of new business, you may find yourself investing considerable capital and resources in unfamiliar areas. Ensuring the safety and security of your personnel and property is paramount, and taking steps to establish support from the local community can help you mitigate risk and execute a successful investment project.

It is often the perception of local citizens that multinational businesses arrive in their countries and rob them of natural resources and local revenue without adding any value or contributing to the economy. This type of practice leaves the host nation community with no vested interest in the well-being or success of your project. So, how do you win over the locals and get them to buy into your project emotionally and financially? Demonstrate outwardly that you are excited to be there to assist in the community. If you can do this, you will be less likely to face resistance or opposition.

There are a variety of ways to establish rapport with local communities in order to gain support. Some best practices include:

  • Engage local communities and eliciting their support early in the process of project startup. This will often prevent misunderstanding and provide a channel for communication.
  • Coordinate with local law enforcement before the project team arrives.
  • Hire locals to help with the project and teach them valuable skills and best practices.
  • Invite locals to use commodities within your self-contained facility such as medical clinics and primary schools.
  • Where possible, source food supplies and raw materials locally, thus contributing to the local economy.
  • Establish and execute a plan that transfers some of the business investment, infrastructure, and equipment to the local community upon your exit.

Without the support of the local community, you are likely to spend more on long-term security to combat risks such as protests, attacks, and theft at your project site. At TigerSwan, we often are called in to fix a problem when there is already an issue. Ideally, we would like to provide the tools and support to prevent these issues in the first place. As our best practices suggest, we recommend hiring a consultant such as TigerSwan who has extensive knowledge and knows how to engage local communities to help navigate the diverse cultures across the globe and provide appropriate recommendations for optimal security solutions in foreign regions. Our experience has shown that active, soft security solutions such as community engagement are not only cost effective, they also enhance the corporate reputation of companies working overseas.

By employing these best practices, you can change the perception of foreign business and establish goodwill in new communities. With minimal costs to you and your company, you can effectively establish rapport, support the community, and open the door for future business in the region.

James Reese

CEO and founder James Reese has 31 years of demonstrated success leading, managing, and organizing complex and multifunctional organizations. His leadership roles have spanned international and multicultured organizations and achieved success in areas of stability, instability, and high threat. He led TigerSwan from a two-person business, to an international, multiasset, global stability company with 250 personnel worldwide. Reese previously spent 21 years of his 25-year career in the Army Special Operations and was a decorated combat leader within the discreet Delta Force. He culminated his career after multiple combat tours working with host nation communities and government and business leaders in Iraq and Afghanistan.

Founded in 2007 by former members of the US Army’s elite special operations unit Delta Force, TigerSwan specializes in corporate solutions across the entire spectrum of vulnerability management. TigerSwan’s Guardian Angel membership is an international corporate security program that enables you to travel safely and conduct your business globally. When travels take you to unfamiliar, unstable or even dangerous regions, your safety is paramount. Guardian Angel membership services range from client tracking and monitoring to cultural liaisons and low-profile security details—anytime, anywhere in the world. For more information, please visit www.TigerSwan.com.

 

Chevron Releases NGN 800 Million for Community Projects in Nigeria

Source: AllAfrica | 30 October 2013

Chevron Nigeria said that approximately NGN 800 million (approximately USD 5 million) has been released to the Ilaje Regional Development Council (IRDC) since its inception for the implementation of both infrastructure and noninfrastructure projects.

Chevron’s general manager for policy, government, and public affairs, Deji Haastrup, revealed the numbers at the annual general meeting of the IRDC held at Owena Motel, Akure, Ondo State, Nigeria.

Haastrup expressed delight that the council had managed the process successfully through participatory partnership to achieve measured success in most of its cardinal objectives.

He said the IRDC had expended the NGN 800 million disbursed to it for implementation of projects, most of which he said had been completed and commissioned.

The projects, Haastrup said, include the provision of science laboratory, multipurpose halls, concrete and wooden foot bridges, housing projects, town halls, micro-credit schemes, scholarship awards, and provision of public toilets.

A Social License To Operate: Overcoming the Culture Clash

The takeover of a public park in Turkey to build a shopping mall. The raising of the public bus fare in Brazil. The government closing Greece’s major newspaper. What do these events have in common with the Keystone XL pipeline proposal? The authorities in these situations made a decision to impose a project solution without talking with the people who would be affected by the decision.

The Turkish government decided to take over a small public park to build a shopping mall without seeking input/feedback from the community. In Brazil, raising the bus fares (mostly affecting poor people) seemed to be a reasonable approach to raise revenues for the upcoming 2016 Summer Olympic Games. In Greece, the shutdown of the government newspaper and the firing of a couple of dozen workers were done to demonstrate austerity to the European Union.

In the United States, the route of the Keystone pipeline, proposed to carry tar sand oil from Alberta, Canada, to Houston for refining, was planned to run across Nebraska’s Ogallala aquifer and sandhills, which are sacred cultural icons.

The problem? These decisions were made from the top-down on the basis of internal considerations, revealing a lack of capacity for dealing with emerging social realities across the globe. The decision makers neglected to understand that citizen engagement is a key to business success in today’s volatile world, where people are insisting on managing, predicting, and controlling their environments.

Small acts that seem inconsequential to government and industry can spark revolts and reactions that, in the cases of Turkey, Brazil, and Greece, have the potential to bring down the governments. The Keystone project could be lost because of the groundswell against the project stimulated by the routing mistake.

Ten years ago, in a more formally structured world, these decisions would not have mattered. These days, when citizen resistance and mobilization are becoming routine and global, these decisions matter.

The JKA (James Kent Associates) Group has been tracking this emerging global trend for 30 years and has termed it “citizen-based stewardship.” It refers to citizens who claim ownership of geographic places and take it upon themselves, with or without government or corporate partners, to ensure that their families and communities are healthy and safe.

Transmission line corridors, alternative energy sites, and the proliferation of oil and gas development have improved our energy outlook, but have also affected people across the US. In particular, the hydrofracturing of wells for natural gas production has caused concerns in recent years. It is not difficult for a concerned public to find cause for alarm. The fracturing issue has now fused in national perception and become widespread throughout hydrofracturing areas, while also spreading turmoil to more traditional oil and gas activities.

Resistance has developed because much of the hydrofracturing is being done in geographic areas where citizens are not familiar with fossil fuel development. Their cultural experience and practices have done little to prepare them for the onslaught of drilling activity. When people have no mechanism in their daily lives to deal with intrusive change, their only avenue for relief is reaction and resistance. Studies such as the one cited earlier add fuel to the fire when the development company has no citizen connections or engagements to rely on for interpretation of the findings. With no mechanism for communicating, the company is vulnerable not only to local resistance, but also to national groups that will use these studies to benefit their causes.

The top-down approach to project design is still in place. Projects are designed by engineers from locations miles away from the site. It is common practice to expend extensive engineering effort early in a project during the front-end engineering and design (FEED) phase. This design process leads to only the technical issues being addressed. The engineering culture wants the design firmly in place, with all the technical details worked out, before going public for review.

Companies prefer to hold their cards close to their chests to avoid revealing information to residents who they fear could stimulate conflict. For example, the people who negotiate the rights-of-way for projects have an incentive to keep things quiet while they interact with landowners. Public relations personnel recognize that failure to be transparent invites suspicion and mistrust, yet they are constrained by corporate cultures that emphasize control of the development process.

Such approaches are no longer productive or profitable. Corporate neglect of citizen engagement is a costly affair for everyone.

Clash of Two Cultures

The situations described illustrate cultural clashes between the communities’ horizontally organized systems vs. the corporations’ vertically organized authority—clashes of perceptions and practices. The community is oriented to caretaking and survival, and the industry is oriented to economic gain.

In this article, we show that the cultural clash is not inevitable. The two systems must come into harmony if the oil and gas industry is to remain productive and profitable. When dealing with communities, it is essential to recognize that the adage “one size fits all” is not applicable. Just as each project is technically different, each community is different—with different histories, beliefs, and issues.

In any cultural system, life is predictable through routines and language. As change occurs, people need time to adjust within their cultural settings. People continually deal with emerging issues and solve them. It is when there is intrusion, without recognition of how the culture has previously handled change, that projects are at risk.

The old (traditional) approach is to design in isolation, propose the design, and then defend it against opposition. This approach is depicted as a wedge into the community, fostering disruption and mistrust, and creating local issues. If these issues go unresolved, they offer outside groups the opportunity to take advantage of unresolved citizen issues in the pursuit of their own agendas, leading to formal opposition groups such as occurred with the Keystone XL pipeline project.

The new model gives residents a voice and emotional ownership, which, in turn, gives the company a social license to operate. If intentional efforts are made to resolve legitimate citizen issues early in the design stage and to optimize the local benefits of a project, citizen ownership through absorption will serve as a buffer for the project against outside forces.

Preventing the Escalation of Emerging Issues

The key to understanding culture from a practical point is to learn about the issues that are currently present in the community or that the project may create. Community issues do not begin as uncontrollable events that are guaranteed to stop projects. Instead, they emerge as legitimate questions that citizens have about a proposed project.

It is not the case that the local community has formed a steadfast or universal opinion. Rather, people are simply seeking answers to basic questions, including: What will this project do to my property value? Will it increase traffic? How will it affect air and water quality? How many people will be hired locally? Will the project enhance the growth of local businesses? Will community- based training programs or college curriculums be offered to prepare our citizens and youth for employment and advancement opportunities? Will the company ensure local benefits from the project, such as reduced electric rates? Will there be assistance for establishing businesses to service the project?

When the basic questions are not addressed, emerging issues can easily escalate to actual ones. By this point, people have formed their own opinions, and the community dialogue changes from seeking information to developing positions. The questions turn to negative statements, such as: This project will ruin our property values. The traffic and noise from this project will be unbearable. Children and seniors with asthma will suffer, and the incidence of cancer will increase. They will not be contracting or hiring locally. Local businesses will not benefit from this project and may actually lose revenue. The skills necessary for employment are beyond most of our citizens. The company just wants to exploit our community for profits.

These sentiments may not be based on facts, but, without community engagement, perception becomes reality.

If the actual issues are not addressed effectively, events will only become worse. Community opposition is often joined by opportunistic ideological groups, followed by political positioning. Polarized positions are taken toward the project, and the opposition quickly moves it into a disruption. By this point, the project proponent has virtually lost the ability to resolve the individual and community issues. The issues that could have been resolved, had the citizens been engaged in the early phases, are taken over by outside forces who oppose development at anytime, anywhere.

The Solution: The Social Ecology Approach

The social ecology approach involves attention to the community on three concepts: a descriptive approach for understanding informal networks and their routines; understanding human geography, or the ways that residents relate to their neighborhood and community areas; and issue management, which creates alignment between citizen interests and company interests. Social ecology is a science of community based on cultural processes operating in any geographic area or in any resource company.

The following five rules help in gaining an understanding of local cultural issues:

  1. You, as a project proponent and an outsider and guest of the community, have a responsibility to learn about the community before acting.
  2. People know more about their environment than anyone else. It is the job of the project manager to bring forward this knowledge and perception to make use of it.
  3. The project proponent must ensure that citizens can predict, control, and manage changes in their environment so that the effects of the project are absorbed into the fabric of the community and the benefits are optimized.
  4. People trust day-to-day and face-to-face communication, which is essential if the project is going to fit the community.
  5. Whoever understands the human and physical geography that creates the community’s sense of place controls the project outcome.

Procedures to implement the five rules of culture change are:

  • Contact and engage with citizens early to avoid surprises. Community engagement must be at parity with technical disciplines in tactical and strategic project decision making. For example, extensive technical work during FEED should be accompanied by extensive community engagement.
  • The objective of early engagement with the community should be learning. Learn the informal networks of a community and its communication patterns as the basis for engagement. Learn the language that people use to communicate on a routine basis and use that in project development language.
  • Engage the affected people directly. Do not rely on formal groups or stakeholders in understanding community interests. Do not use public meetings as a means of initial citizen contact. Use the gathering places of a community to foster effective project communication and as a means to become an insider to the culture.
  • Understand human geographic mapping systems that reflect cultural boundaries, or the ways that people identify and relate with their landscape, to foster responsive siting of facility and corridor projects.
  • Deal with citizen issues at the emerging stage of development when the costs of time and resources are lowest, rather than allowing issues to reach the disruptive stages.
  • Make use of local company staff, when possible, at the design and implementation stages and provide management support in assisting them to create an approach from the bottom to the top.

Conclusion

The social risk to project success has become too great for the oil and gas industry not to recognize formally and systematically act upon the underlying causes of how citizens’ participation often moves from support to active opposition. Whether the project is on public or private land, it deserves this level of attention.

Because community relations are now linked to project success, upfront engineering should include upfront community assessment and the establishment of an informal word-of-mouth communication system. Knowing about culture and its influences on citizen behavior presents a creative and successful way for industry leaders to steer their projects around pitfalls and other surprises that cause delays or stop projects altogether.

Understanding the culture of a community facilitates collaboration in a manner that directly benefits the citizens and keeps a project on schedule, saving time and money. The true currency of the present and future is the sustained goodwill that a project creates and maintains with the communities it affects.