1. Health and Safety Executive Health and Safety Executive “2 years after Macondo: A Review of the Offshore Industry and its Regulators” IOSH Offshore Branch 12 March 2012 Steve Walker Head of Offshore Division UK Health & Safety Executive (HSE)

2. Agenda Introduction Post - Macondo: what’s been done so far? What remains of the Macondo agenda for industry and the Regulators? IRF Summit 2011 Maitland Review What should be the industry’s other priorities? Update on European legislative proposals Questions

3. Macondo and Montara.

5. Lessons from Macondo & Montara Lots of reports! UK Regulatory regimes fundamentally sound (Select Committee, Maitland Review, European Commission etc) Wide range of lessons - technical weaknesses and softer lessons

6. Industry’s post-Macondo work (1) – embed the lessons Implementing outputs from OSPRAG, including WLCPF »Considerable amount of work due for delivery during next 18 months, especially on competence issues OSRF Implementing other outputs from post-Macondo work e.g. OGP GIRG recommendations, with support for Wells Expert Group and database development

7. Industry’s post-Macondo work (2) – a “public license to operate” Part of wider agenda to give confidence for “public licence to operate” –Better sharing of information –Bringing poor performers up to the standards of good performers –Being open and transparent

8. Industry’s post-Macondo work (3) – the hardware challenges e.g. Draft API Standard 53 –Mandatory requirement of two shear rams on all BOP stacks (cf Select Committee views) –Mandatory requirement for all subsea stacks to have Auto-shear Deadman Developing other approaches – explosive well control techniques etc. Strengthen verification system

9. Industry’s post-Macondo work (4) – the “software” challenges “Control Panel” –Display of data about well/reservoir –Status info on equipment, controls inc Human Factors –Authorisation to shut down –Task aids & decision making –Team working and decision peer monitoring/review Organisational Factors –Management of competence –Training delivery –Audit/Review and learning from events –Safety Leadership to create culture –Major hazard/process safety/SCE awareness within the industry –Issues of intimidation and bullying Company Interface –Interface documents, including escalating/emergency situations –Monitoring/auditing of contractors –Contractual environment which does not negatively affect behaviours

10. Regulators post-Macondo work Response of UK regulators –Inspections of verification schemes for well control equipment –Assessment of BOP integrity management systems –Effectiveness of disconnect and move-off procedures Response of international regulators –Multi-national audit in North Sea, concentrating on human and organisational factors from Macondo –More coordinated approach of IRF in the ISO standards arena

11. But what more for the Regulators? Bringing the safety integrity and environmental protection regimes closer Responding to almost insatiable need for openness and transparency Competency and resourcing Working with industry to respond to Maitland Review Responding to European Commission proposals

12. Maitland Review (1) In 2010 DECC announced a formal review to consider the consequences of the Macondo accident for the UK regulatory regime. “To carry out a review of the UK Oil and Gas regulatory regime against the issues and recommendations emerging from the key investigations into the Deepwater Horizon incident in the Gulf of Mexico and other relevant reviews” “To make any recommendations for improvement to the UK regime in the light of that review”

13. Maitland Review (2) Chaired by Prof. Geoff Maitland (Chair) Covered – Licensing, approval & consent process – Preventative regime (safety and environmental) – Preparedness regime – Liability issues – Liaison between regulators – Co-ordination and responsibility in a drilling activity – Adequacy of industry response Published December 2011: “Offshore Oil & Gas in the UK – an independent review of the regulatory regime”. http://www.decc.gov.uk/assets/decc/11/meeting-energy-demand/oil-gas/3875- offshore-oil-gas-uk-ind-rev.pdf

14. Maitland Review Recommendations (1) Well planning and control Environmental protection Emergency response Learning from incidents and best practice Implementation assurance Competency and training of the workforce Workforce engagement Liability and insurance issues Regulator issues The European dimension Technology development

15. Maitland Review Recommendations (2) Industry is called upon to implement many recommendations (with support in some areas from regulators) Other recommendations fall to the regulators to implement. Report to Ministers by July 2012 Industry/regulator steering group established.

16. But what other priorities should the industry have?

17. IRF 2011 Offshore Summit Held in Stavanger, October 2011 Provided an opportunity for frank dialogue on post Macondo issues Summary of conclusions circulated Should help to form ongoing priorities for industry and regulators alike. Conclusions at http://www.irfoffshoresafety.com/conferences/2011Summit

18. Hydrocarbon releases Achievement of industry target by 2012/13 All operators are delivering effective HCR Action Plans, and building into business plans Continuing intrusive approach by regulator in major and significant HCRS

19. Integrity through life cycle – HSE Ageing and life extension – continuing with KP4 Spotlight of Operational Risk Assessments Spotlight on verification as a key component Safety Case process remains backbone But, not forgetting KP3 agenda – industry to continue benchmarking progress?

20. Leadership and workforce involvement Expectation of process safety leadership –By company individuals, learning from Macondo –By Step Change, delivering existing Strategy Workforce involvement development –Improved Safety Rep training, particularly in process/MH issues –Wider issues of establishing safety culture

21. Update on Europe European Commission offshore proposals based on UK regulations, but with more - “North Sea plus” Current position – with Council and European Parliament Key areas for the drilling industry: –Extends well examination and verification philosophy to other Member States –Introduces Well and Combined Operations notifications –Requires “Acceptance “ of Major Hazard Document Brings offshore safety integrity and environmental protection/response under one umbrella Operators, major contractors and licensees and operators based in the EU shall ‘endeavour’ to follow the Regulations principles when operating outside of Europe. Sets up National Competent Authorities for offshore safety & environmental protection Directive or Regulation – a major concern!

22. QUESTIONS?