Investment in HSE is an imperative
Market studies indicate that, despite oil and gas sector players earning lower revenues, the industry's spending on the improvement of workers' health and safety has not fallen by the wayside
There is no doubt that the sustained low oil price has had an effect on the industry, but it is hoped that cost-cutting regimes have not had a negative effect on safety.
Analysts point out a range of other negative – and some positive – effects that the current trends are having. For those who work in the oil and gas industry, the negative effects of the market are apparent. However, the industry and the culture that has developed may be more resilient than we give it credit for.
Xodus recently completed a safety climate survey as part of a safety culture programme on behalf of an oil and gas operator in the Middle East (the operator does not wish to be named for confidentiality reasons). The results of this survey indicated that the situation was not as bleak as we might have imagined. In fact, the results were very positive, showing both an improved safety culture over a five year period, and a favourable benchmark against international good practice.
The survey was completed using an online survey platform and was, therefore, able to be shared with staff in various locations, so long as they had access to a computer with internet facilities. The survey consisted of 25 questions that were completed by over 800 personnel, and resulted in a completion rate of approximately 97%. The completion rate alone was very impressive, indicating that those who were invited to participate, did so gladly.
A range of demographic questions were used, such as length of service, age, nationality and employment status (contractor or staff). The survey did not identify any significant demographic influences on culture.
Survey data identified two features: firstly, that the operator compared positively to an international benchmark and, secondly, that there was a noted improvement since the last study was carried out (2010).
The benchmark data used was the safety climate and risk on offshore oil platforms on the Norwegian continental shelf. When results were analysed across four categories, the analysis demonstrated that the Middle East operator performed favourably when compared against the international benchmark. Results are displayed in the diagram (right).
This operator also completed a study in 2010 and despite that, the results compared very favourably with the 2015 study. Nine questions were asked in the 2010 survey and were repeated in the 2015 exercise. There was an overall improvement in the safety culture in the five-year period, assuming that the last survey was undertaken by a similar group of respondents.
The industry can take satisfaction from the results of the safety climate survey. Although culture is a long and enduring state, the economic climate at the time of the study appears very positive. Although this is just an isolated study, it demonstrates that the values that have developed in this organisation over a substantial period of time will not be eroded easily and are capable of enduring the current challenge posed by low oil prices that the industry is coping with.
It is no wonder that the present downturn in the global oil and gas industry, caused by below-par crude oil prices, has impacted companies across the board. Major producers, especially in the Middle East, have been cutting down on operational costs in a bid to stay afloat, as they continue to pump hard. The NOCs have reportedly been hacking the budgets allocated to any and every aspect of their operation that does not help them produce more oil or gas for less.
“Historically, skills and training budgets are a soft target for cost reduction, however, the smart employers do not follow this path. Failing to invest in skills development and the safety of the workforce is a very short-term gain that will bring significant pain in the medium and long term,” David Doig, group chief executive at OPITO, tells Oil & Gas Middle East.
“The oil and gas industry will exist for generations to come, and a lack of investment [...] now will, without a doubt, lead to an imbalance in supply and demand of skilled people in the future,” he says.