DNV GL’s Santhosh Mony, Eckhard Hinrichsen, and Pedram Fanailoo offer the regulatory perspective on offshore risk management.
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Photo from DNV GL. |
Mexico is recognized as one of the top 10 oil producers of the world. To maximize the potential deepwater reserves several significant technical challenges must first be overcome. Understanding the risk associated with these operations and managing the same for unforeseen challenges is important to help optimize performance, safety, in a cost effective way.
Challenges and measures
During the capital expenditure (CAPEX) phase of deepwater projects there are technological challenges associated with (but not limited to) the environment, water depth, high pressure and temperature, possibly increased fire and explosion loads and hydrocarbon inventories, and reduced accessibility for inspection and maintenance. These contribute to challenges in concept selection and field developments. However, during the operational expenditure (OPEX) phase, the possibility of occurrence of major accidental hazards (MAH) scenarios with severe consequences to people or the environment increase significantly unless appropriate measures are taken. All stake holders (experienced and inexperienced) will need to address:
Proactively manage barriers through shared performance monitoring
Most industrialized countries have well established regulatory regimes with high focus on safety and the environment. These regimes have regulations that define the expectation the stakeholders should assess, understand and mitigate risks in accordance with established requirements (codes, standards, rules, and best practices) which may be prescriptive (as seen in the US sector GoM), goal driven, and performance based (as seen in the UK and Australia) or a hybrid of both (as seen in Norway and Eastern Canada). These regulations also mandate independent verification to a varying degree to ensure that the asset conforms to minimum standards and required performance standards are met.
Interdependency between various performance elements
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Figure 1 explains the performance elements and how their relationships mitigate risks associated with deepwater operations. |
As shown in Figure-1; understanding the interdependencies between the 3 cornerstones – Standards & Rules, Risk Management and Operational Philosophies of an asset and the Regulatory regime is important to implement safe and effective regulatory requirements and controls.
As an example any design standards or codes can increase or decrease the risk profile of an asset by the degree to which it increases or decreases the robustness of barriers, an operational philosophy and its focus is directly correlated with the level of safety achieved. A clear understanding of these interdependencies and a holistic and balanced approach will be essential by the Regulators to ensure safe operations in Mexican Deepwater.
Challenges in Mexican sector of GoM
PEMEX’s capability for development and exploration into deepwater has been limited. Leases could be successfully developed with collaboration from experienced deepwater operators. However, more importantly, the regulatory system needs to undergo a radical change, with key agencies and authorities taking roles and responsibilities and establishing appropriate regulations to proactively influence the safety and integrity of the assets and its operation.
With the opening of the offshore upstream arena in Mexico, international companies are coming in as well as new local operators and support industries with limited or no experience. Strong, state-of-the art regulations are now necessary to manage the risk, avoid major accidents, and facilitate efficient production of hydrocarbon reserves.
The pertinent question is how regulatory authorities like ASEA, CNH, and CRE will establish their role and fulfill their mandate. What kind of regulatory safety regime will be established? How will it be organized and operated? The involvement of international companies in Mexican waters increases the possibility of learning and sharing of experience from other regulatory regimes.
The increased activity level will impose challenges on maintaining a sufficiently large and competent workforce in both the industry and amongst regulators. This challenge is intensified considering targets for local content requirements.
Conclusion
It is important that the new players in the industry and regulators learn from the best practices around the world and understand the strengths, pitfalls, and gaps of the various established regulatory schemes. This will ensure a balanced approach to what is most effective and applicable for the specific challenges of the Mexican market. The technical challenges for deepwater operations are some of the most extreme in the oil and gas industry and the ability to overcome these in a cost efficient way adds a further layer of complexity.
Santhosh Mony is a naval architect with over 25 years’ experience in offshore engineering and project management. In his role at DNV GL, Santhosh is responsible for international bidding and execution of many offshore mega projects as well as the Houston Approvals Center for Classification projects and the VCA Verification Hub in Division Americas.
Eckhard Hinrichse has nearly three decades experience working within offshore, pressure vessels, and plants and pipelines. Today, Eckhard oversees the development of oil and gas throughout Mexico.
Pedram Fanailoo heads DNV GL’s Risk Advisory Services in North America. This team focuses on delivering innovation at the core of every solution. His technical practice focuses on managing risk, quantitative and qualitative safety risk, safety barrier systems, environment risk and navigation risk.
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