BEYOND PERFORMANCE: BP's Assets Focus

Addressing Asset Integrity at BP

The Gulf of Mexico oil spill earlier last year sent shockwaves throughout the world, not only because of the effect on the environment, but also due to the impact it had on BP, the owner of the asset.

More than anything, the incident highlighted how important it is to have appropriate asset integrity management in place to foresee such disasters and hopefully prevent them before they become a reality.

In light of this, oil and gas companies are attempting to find out how to reconcile the competing demands on resources while also ensuring that they are effectively preserving the integrity of assets, which can be a difficult balancing act.

Companies need to ensure that they are involving personnel from all levels of the business to guarantee that they are better prepared to tackle the myriad of potential problems involved in asset operation and maintenance, something which BP addressed by making a number of changes in the wake of the oil spill.

Once the fallout from the incident had begun to settle, the British firm announced that these would include the formation of a senior executive team "to support and oversee process safety, integrity management and operational integrity initiatives within the company".

In addition, BP confirmed the creation of a new safety and operations function reporting directly to the chief executive and the appointment of a retired federal judge to hear, investigate and resolve the safety concerns of workers.

Along with an increase in, and acceleration of, spending on safety, and changes in the way safety audits are conducted, the company had to be seen to be making a major effort to address the issues it faced and prevent further incidents.

Coming so soon after the Texas City disaster in 2005, when a blast at BP's refinery killed 15 people, the organisation realised that it was vital to place a strong emphasis on ensuring the opinions of everyone from board members through to the engineers responsible for implementing the initiatives and enacting the strategies were taken into account.

After the 2005 catastrophe, then BP America chairman Bob Malone commented: "If our approach to process safety and risk management had been more disciplined and comprehensive, this tragedy could have been prevented."

In the fallout from the Gulf of Mexico incident, Tony Hayward left his position of chief executive and made way for Bob Dudley, whose first act was to announce the creation of a new safety division which will have authority to intervene in all aspects of BP's technical activities.

Andy Inglis, former head of the exploration division, has also left his post as that side of the business is divided into three separate operating units, while there will additionally be a review of the performance and reward strategy to "focus on how to deliver better safety and risk management".

Since the Gulf of Mexico incident, BP has seen more than a third wiped off the value of its shares, and the company's own report into what happened highlighted a number of failings which would have been eradicated if all of Mr Malone's reforms had been implemented effectively.

Although the organisation noted that human error can never fully be eradicated, it admitted that its effects can be ameliorated through the implementation of the correct procedures.

The effects of the oil spill may prove to be double-sided, as the severe detrimental impact on the environment and harm to BP's image may be counteracted by an increased recognition among other global firms that more can be done to increase safety and prevent risks in the field of asset integrity management.

Effectively combating corrosion with a risk-based inspection approach and ensuring the safety of staff and the maintenance of assets by championing a system of integrity performance transparency are both now key agendas among the planet's oil and gas suppliers.

In addition, the need to plan an overall integrity strategy with a full assessment of integrity status and increased visibility throughout this process will have to be dealt with if safety concerns are to be addressed.

In January 2007, former BP chief executive Lord Browne said the company intended to "become an industry leader in process safety management and performance" and it is by this ethos which new boss Bob Dudley will aim to run the organisation in the near future and beyond.

Source: http://www.oilandgasiq.com/integrity-hse-maintenance/articles/addressing-asset-integrity-at-bp/

NUTSHELL:

BP has taken up an Asset stripping strategy as one way of dealing with its contemporary financial commitments (Gulf Oil Spill payouts and the recent FYE loss of $19 billion). This strategy is one quick way of returning the company to profitiability however, I have concerns over the return of Bob Dudley to Lord Browne's January 2007 statement. Tony Hayward inherited this ''commission'' and Bob dudley intends returning to it. In my opinion, the mistake Tony Hayward made was to focus, possibly excessively, on the performance charge to the detriment of process safety management. I would like to see BP achieving and maintaining the highest standards in the industry- in this regard. To me, that's the fastest way to SUSTAINABLE performance.