Key Programme 4 (KP4) Report

Health and Safety Executive Executive

Key Programme 4 (KP4) Ageing and life extension programme A report by the Energy Division of HSE’s Hazardous Installations Directorate

Contents

Preface 4 Glossary 5 Executive summary 7 KP4 findings 8 KP4 recommendations 10 Introduction 12 Topic findings 15 Safety management systems 15 Structural integrity 17 Process integrity 18 Fire and explosion 20 Mechanical integrity 21 Electrical, control and instrumentation 22 Marine integrity 24 Pipelines 25 Corrosion 26 Human factors 27 Discussion 28 Leadership 28 Industry readiness for ALE 29 Asset integrity management 29 Obsolescence management 30 ALE audit and review 31 Key performance indicators 31 Data management and trending 32 ALE guidance 32 Skills, training and competence 33 Workforce involvement 34 Decommissioning 34 Recommendations 35 ALE guidance 35 Obsolescence 35 Information management 35

Preparation for life extension 35 Workforce involvement and training 35 For industry 36 For HSE 36 Appendix: Case studies 37 Case Study 1: Structural integrity 37 Case Study 2: Process safety 39 Case Study 3: Integrity management 41 Case Study 4: Electrical, control and instrumentation 43 Case Study 5: Hydrocarbon leak reduction 45 Further information 47

Preface

This report communicates the results and recommendations of the Ageing and Life Extension Key Programme (KP4) carried out between 2011 and 2013 by the Health and Safety Executive’s Energy Division.

The report is available on HSE’s Offshore Oil and Gas website at www.hse.gov.uk/offshore/ageing.htm.

Glossary

AIM asset integrity management

ALARP as low as reasonably practicable

ALE ageing and life extension

COMAH Control of Major Accident Hazards

CoP cessation of production

DECC Department of Energy and Climate Change

EC&I electrical, control and instrumentation

ESDV emergency shutdown valve

ED Energy Division

FPI floating production installations

HCR hydrocarbon release

HP/LP high pressure/low pressure

HSE Health and Safety Executive

HVAC heating, ventilation and air conditioning

ISO International Standards Organization

KP4 Key Programme 4

KPI key performance indicator

MODU mobile offshore drilling unit

OEM original equipment manufacturer

OGRE oil and gas release elimination

OGUK Oil & Gas UK

ORA operational risk assessment

PMR planned maintenance routine

RACI responsibility, accountability, consultation and information

RIDDOR Reporting of Injuries Diseases and Dangerous Occurrences Regulations

SCE safety-critical element (as defined in the Offshore Installations (Safety Case) Regulations 2005)

SMS safety management system

SRE safety-related equipment (equipment supporting SCEs)

TR temporary refuge

UKCS United Kingdom Continental Shelf

Executive summary

This is a report of the inspection findings of the Health and Safety Executive’s (HSE’s) Energy Division’s (ED’s) Key Programme 4 (KP4) covering the ageing and life extension (ALE) challenges facing hydrocarbon exploration and production installations on the UK’s Continental Shelf (UKCS). The programme investigated the impact of ALE on the risk of major accidents involving the death or serious personal injury to people on an offshore installation.

The UKCS is a mature oil and gas producing province, with about half the fixed platforms approaching or exceeding their originally anticipated field life. There are potentially significant future challenges to be met associated with the prospect of some installations operating beyond their original cessation of production date, plus the likelihood of a further five years for decommissioning.

Management of ageing requires a good understanding of the condition of safety- critical elements (SCEs), how that condition is changing over time, and carrying out maintenance in a timely manner to minimise risk of major accidents. There is evidence that installation age is not necessarily a reliable indicator of condition or likelihood of hydrocarbon leak frequency.

Management of life extension requires the advanced, and continuing, assessment of SCEs to ensure they are fit for purpose, and safe to use when required to operate longer than their anticipated service, with particular consideration for primary structures.

HSE’s KP4 Ageing and Life Extension (ALE) programme was initiated in 2010 and followed the KP3 Asset Integrity Management (AIM) programme which reported in 2007 (www.hse.gov.uk/offshore/kp3.pdf).

KP4 was a forward-looking programme of work. Its purpose was to:

■■ raise awareness of ALE in the offshore industry of the need for specific consideration of ageing issues as a distinct activity within the AIM process; ■■ undertake a programme of inspections of dutyholder approaches to ALE management; ■■ identify areas for the improvement of ALE management; ■■ encourage the development and sharing of good practices.

During KP4, HSE undertook 33 onshore and offshore inspections covering all major dutyholders using structured templates across 10 topics:

■■ Safety management systems; ■■ Structural integrity; ■■ Process integrity; ■■ Fire and explosion; ■■ Mechanical integrity; ■■ Electrical, control and instrumentation;

■■ Marine integrity; ■■ Pipelines; ■■ Corrosion; ■■ Human factors.

KP4 engaged with industry using several approaches:

■■ developing an HSE website portal for disseminating information (www.hse.gov.uk/offshore/ageing.htm); ■■ encouraging workforce involvement through Step Change in Safety (www.stepchangeinsafety.net/); ■■ promoting ALE understanding with workers on their installations; ■■ initiating the development of guidance through Oil & Gas UK (OGUK) (www.oilandgasuk.co.uk/); ■■ raising the profile of ALE by presenting at technical seminars and conferences.

Industry has welcomed and responded positively to the KP4 initiative, with HSE acting as a catalyst for improvements on the UKCS and worldwide through its KP4 website (www.hse.gov.uk/offshore/ageing.htm).

There is good evidence that industry leaders have recognised the importance of ALE, but there is much to do to ensure arrangements are implemented in practice, and there is no room for complacency.

KP4 findings

The KP4 programme found a range of areas where ALE management was developing well, and areas where extra focus is required. From the programme, a number of illustrative case studies were developed by dutyholders to elaborate good practices, which can be found in the Appendix.

The findings of KP4 were broken down into a series of strategic issues identified below:

Leadership and preparedness for ALE

■■ Dutyholders’ response to KP4 was very positive. ■■ No mature ALE policies and procedures; however, dutyholders were in the process of developing and integrating them into their AIM systems. ■■ Early uncertainties over distinctions between ALE and AIM were soon resolved. ■■ Good corporate AIM processes and procedures, although the observed physical condition of offshore assets combined with very large backlogs suggests problems implementing them. ■■ Leaders were developing plans for the long-term consideration of AIM, including inserting ALE management into procedures. ■■ Occasional insufficient clarity of responsibilities for safety-related equipment (SRE). ■■ Insufficient plans in place to manage the consequences of creeping changes (‘normalisation of deviance’). ■■ Dutyholders are developing plans to link ALE management to decommissioning. ■■ Creation of ‘life of field manager’ positions to assist ALE management. ■■ Dutyholders expressed concerns over the availability of skilled personnel in the industry now and for the future. ■■ Expenditure on the UKCS in 2013 was the highest ever (www.oilandgasuk.co. uk/forecasts.cfm) indicating positive leadership for offshore assets for the future, and reinforcing the need for sound ALE management.

Asset integrity management

■■ Industry feedback was that KP4 had a positive impact on approaches to asset integrity. ■■ ALE concepts were becoming embedded into AIM programmes. ■■ There was no evidence to suggest that the derogation given to floating production installations (FPIs) to stay on station adversely affects dutyholders’ ability to determine the asset’s integrity. ■■ There were significant plans in place by dutyholders to manage fabric maintenance and external condition of hydrocarbon process equipment, with walk-to-work vessels being brought alongside installations to accommodate extra workers to manage the backlog. ■■ Some SCE and SRE lists, and engineering drawings, needed updating. ■■ Some redundant equipment was not identifiable on site or on drawings. ■■ Some primary structural analyses needed updating. ■■ More focus is needed on forecasting potential long-term future failure mechanisms. ■■ Not enough ALE consideration at the component level. ■■ There is industry awareness of the need to address the potential risks associated with difficult to inspect components of primary structures. ■■ For rotating equipment, there was a reliance on historical performance from original equipment manufacturers (OEMs), but a need for more forward-looking risk-based assessments to revise planned maintenance routines (PMRs) and so improve safety and integrity management.

Obsolescence

■■ Obsolescence is an area of concern, particularly for electrical, control and instrumentation (EC&I), and to a lesser extent for mechanical equipment. ■■ Evidence of missing data, and insufficient data trending – this should be improved to help anticipate potential future failures of SCEs, EC&I degradation and obsolescence management. ■■ Dutyholders and suppliers are working together to anticipate obsolescence and manage the long-term issues.

Audits and KPIs

■■ Insufficient leading ALE key performance indicators (KPIs), which could be used to help forecast potential future problems. ■■ Dutyholders were commencing targeted audits on ALE management. ■■ Developing understanding of the beneficial influence of maintenance management programmes on equipment failure frequencies within an installation’s life cycle. ■■ Approaches to audits were generally to follow what had gone before, rather than addressing what is needed in the future.

Data management

■■ Insufficient use of data trending to enable forecasting of when equipment is likely to fail its criteria of non-conformance. ■■ Insufficient use of data and information, which could lead to a better understanding of the consequences of creeping change.

Development of ALE guidance

■■ The offshore industry recognises the importance of managing ALE better, and engaged well with HSE’s initiative.

■■ New approaches to asset integrity and obsolescence management were being developed. ■■ OGUK published management systems guidance in 2012, and both OGUK and the Energy Institute will publish further ALE guidance in 2014.

KP4 recommendations

The offshore industry is expending significant time, effort and money on offshore asset integrity management, and has responded well to KP4. However, there is a considerable amount of work to be done to implement new ALE processes and procedures to ensure the offshore hydrocarbon installations remain safe to cessation of production, and beyond to decommissioning.

Industry should use the existing high-quality incident root cause analysis processes to make the lessons learned more easily available to new entrants to avoid repetition of past failures; Judith Hackitt (HSE Chair) commented at the Piper 25 conference in 2013: ‘..there are no new accidents. Rather there are old accidents repeated by new people.’

From analysis of the KP4 inspection templates a range of recommendations for the offshore industry and HSE were developed, for which each party will need time to consider and take forward. HSE will need to continue to be involved with the industry, and maintain the positive dialogue which has taken place during the KP4 programme for the long-term safety of offshore workers.

The existing OGUK ALE Steering Group provides a mechanism for reviewing recommendations and developing effective improvement strategies and plans, and could consider becoming the hub for allocating tasks to address the recommendations for industry.

Key recommendations for industry

■■ Continue promoting industry-leading ALE management practices. ■■ Develop and encourage a corporate culture which embeds an ALE philosophy into AIM for the long-term future. ■■ Improve focus on obsolescence management. ■■ Early preparation for life extension, enabling the identification of key issues to be managed to assure continued safe operation. ■■ Incorporate decommissioning into ALE management. ■■ Develop leading ALE KPIs to help prevent future loss of integrity. ■■ Undertake periodic ALE management audits. ■■ Improve data management, eg maintaining complete SCE and SRE lists, and contemporaneous engineering drawings. ■■ Improve data trend analysis. ■■ Further promote workforce involvement through Step Change in Safety. ■■ Further develop approaches to recruit and retain the skilled workforce necessary to sustain the viable long-term future of the offshore oil and gas industry.

Key recommendations for HSE

■■ Continue to recognise the importance of ALE management through interventions. ■■ Continue to work with Step Change in Safety to encourage workforce involvement. ■■ Monitor and review dutyholder ALE performance.

■■ Continue to collaborate and support the offshore industry to identify and share good practices.

Introduction

Between 2011 and 2013, HSE undertook targeted inspections of 33 dutyholders and offshore assets across a range of installation types (www.hse.gov.uk/offshore/ ageing/kp4-programme.htm) to establish how prepared the industry is for the future management of ALE, and to identify and promote good practices. The inspections were undertaken using templates drawn up for the onshore and offshore inspections for each of the topics:

■■ Safety management systems; ■■ Structural integrity; ■■ Process integrity; ■■ Fire and explosion; ■■ Mechanical integrity; ■■ Electrical, control and instrumentation; ■■ Marine integrity; ■■ Pipelines; ■■ Corrosion; ■■ Human factors.

The KP4 programme aimed to ensure the ALE risks to offshore installations are being effectively controlled, supporting HSE’s strategic priority on avoiding catastrophe (www.hse.gov.uk/strategy/strategy09.pdf), and ED’s priority of asset integrity (www.hse.gov.uk/offshore/priorities.htm). KP4 also links with HSE’s Energy Division’s new Offshore oil & gas sector strategy 2014 to 2017 (www.hse.gov.uk/ offshore/strategic-context.pdf), in which Objective 9 requires dutyholders to apply the learnings from KP4.

The objectives of KP4 were to:

■■ raise awareness of ALE in the offshore industry, with specific consideration of ageing issues as a distinct activity within the AIM process; ■■ undertake a programme of inspections of dutyholder approaches to the management of ALE; ■■ identify areas for improvement of ALE management and encourage improvements; ■■ encourage the development of good practices.

Approximately half of the fixed and floating installations on the UKCS have exceeded their originally anticipated service lives, and with continued business and national interest, the majority of UKCS installations are likely to remain operational for many years.

If not managed effectively the consequences of ageing-related deterioration are extremely serious, with the worst case being the loss of an installation and those onboard. Thus, ALE and AIM management are imperatives, with the need to understand asset condition, factors affecting degradation, and mitigation strategies throughout an installation’s life cycle.

Ageing concerns extend to procedures, software, control equipment, and perhaps most importantly to the skills and experience of people working in the offshore industry, and the need to bring new people into the industry to be trained to manage future challenges.

There are significant differences between KP4 and its predecessor KP3, which assessed the condition of assets (AIM) at the time of the inspections. KP4 is forward-looking, inspecting dutyholders’ abilities to anticipate and prepare for the integrity challenges of the future, up to cessation of production (CoP).

An effective ALE AIM system is the principal barrier safeguarding those working offshore. The system is typically risk-based, requiring the dutyholder to have a good understanding of the degradation processes and an accurate knowledge of both the condition of a structure and its response in the aged condition. There is also a need to understand obsolescence issues, and an implementation strategy to deal with the likely increasing risk of failure with time, thereby enhancing predictability of deterioration, its detection and assessment.

The KP4 programme engaged with offshore stakeholders across the industry, and in particular:

■■ dutyholders; ■■ Oil & Gas UK; ■■ Step Change in Safety; ■■ other North Sea regulators; ■■ suppliers to the offshore industry.

KP4 encouraged sharing good practices to deliver improvements in ALE, which led to OGUK setting up an ALE Steering Group.

Previous HSE ALE publications: Plant ageing RR509 (www.hse.gov.uk/research/rrhtm/rr509.htm), and Plant Ageing Study RR823 (www.hse.gov.uk/research/rrpdf/rr823.pdf), defined ageing and ageing plant as:

‘Ageing is not about how old your equipment is; it is about its condition, and how that is changing over time. Ageing is the effect whereby a component suffers some form of material deterioration and damage (usually, but not necessarily, associated with time in service) with an increasing likelihood of failure over the lifetime.

Ageing equipment is equipment for which there is evidence or likelihood of significant deterioration and damage taking place since new, or for which there is insufficient information and knowledge available to know the extent to which this possibility exists. The significance of deterioration and damage relates to the potential effect on the equipment’s functionality, availability, reliability and safety. Just because an item of equipment is old does not necessarily mean that it is significantly deteriorating and damaged. All types of equipment can be susceptible to ageing mechanisms.’

This statement is equally true of the offshore industry, which KP4 supplements with: ‘the need to develop ageing mitigation strategies and implement them’.

Dutyholders should ensure AIM systems include ALE considerations, with the ageing mechanisms identified and the consequences evaluated and monitored to ensure risks are as low as reasonably practicable (ALARP) to ensure safety, and legal compliance, for the life of the asset.

Normalised UKCS data (www.hse.gov.uk/offshore/statistics/hsr1213.pdf) from the Reporting of Injuries Diseases and Dangerous Occurrences Regulations (RIDDOR) system (www.hse.gov.uk/riddor) does not indicate a significant correlation between platform age and increased leak frequency, a finding mirroring a Norwegian study,* and supporting the definition of ageing. The Norwegian study found most leaks (60%) occurred during human interventions.

Recent studies in the Norwegian sector used statistical regression techniques to study leak frequency with platform age;†‡ the studies found no significant correlation, other factors were more important.

The rate of hydrocarbon releases on the UKCS fell after OGUK introduced the Step Change in Safety programme in early 2011. However, comparison of the hydrocarbon release (HCR) data for 2012/13 and 2013/14 shows a 20% increase in leak frequency, meaning much more work needs to be done to resolve the root causes.

Challenges in hydrocarbon containment are likely to grow as plant and equipment age, reinforcing the message of the need for early consideration and management of ALE.

ALE is a global issue, with other offshore regulators active:

■■ Bureau of Safety and Environment Enforcement (www.bsee.gov), and Bureau of Ocean Energy Management (www.boem.gov), USA; ■■ National Offshore Petroleum Safety and Environmental Management Authority (www.nopsema.gov.au), Australia; ■■ Petroleum Safety Authority (www.ptil.no), Norway; ■■ State Supervision of Mines (www.sodm.nl), Netherlands.

ALE is not confined to the offshore industry, but is also experienced in other potentially hazardous industries: onshore COMAH (Control of Major Accident Hazard) sites (www.hse.gov.uk/comah/), nuclear, and aerospace.

* ‘Analysis of Hydrocarbon Leaks on Offshore Installations’ Vinnem JE, Seljelid J, Haugen S and Husebø T Chapter from Risk, Reliability and Societal Risk Aven and Vinnem (eds) Taylor & Francis Group, London

† ‘Analysis of Root Causes of Major Hazard Precursors (Hydrocarbon Leaks) in the Norwegian Offshore Petroleum Industry’ Vinnem JE, Hestad JA, Kvaløy JT and Skogdalen JE Reliability Engineering and System Safety Volume