The Wall Street Journal: Safety Issues Loom for Norwegian Oil

Safety Issues Loom for Norwegian Oil
Updates for Lifeboats
And Offshore-Rig Rules
Snag Global Market
By IAN TALLEY
November 2, 2006

OSLO — A workplace-safety controversy in the Norwegian oil industry that has roiled global oil markets may continue to do so in the months ahead.

During the past 18 months, problems with lifeboats have caused closures and reduced production from some of the biggest fields in Norway, the world’s third-largest crude-oil exporter after Saudi Arabia and Russia.

Industry experts say tests on existing lifeboats may provide the country with more lifeboat-and-production woes and fuel a change in lifeboat standards on oil-and-gas platforms world-wide.

During the past two weeks, weaknesses discovered in the structure of free-fall lifeboats on Norway’s offshore infrastructure shut nearly 500,000 barrels a day of crude-oil-production capacity and helped push prices up nearly $1.50 a barrel. Production has since returned to normal. Free-fall lifeboats are dropped from oil platforms of 25 to 30 meters.

Currently, lifeboat standards are set by the London-based International Maritime Organization, and adopted by countries around the globe. The standards were primarily developed for lifeboats on ships, not for use on oil-and-gas platforms.

Platform lifeboats are sealed, motorized vessels designed to carry 40 to 80 people. Depending on the size of an oil platform, there are generally four-to-eight emergency vessels a platform. Lifeboats have emergency supplies, but each platform has standby boats available, engines idling, to assist in rescue operations. In an emergency, evacuees’ lifeboats wouldn’t be at sea very long, but would be picked up by the standby boats and coast-guard ships.

Umoe Schat-Harding Group and Norsafe AS, both based in Norway, make most of the 1,000-plus lifeboats in Norway, including the 211 free-fall boats. Regulators say the companies are cooperating.

Boat problems last year forced Statoil ASA’s Vestlefrikk field in the North Sea to close temporarily, compounding delays to the firm’s 230,000 barrel of oil equivalent flagship gas project at the Kristin field in the Norwegian Sea.

Following last year’s incidents, Norway began an industrywide review of its lifeboats. As the results of the tests of different types of boats on the oil-and-gas platforms, some were given the all-clear while others were ordered modified by the Petroleum Safety Authority, based in Norway’s de facto oil capitol, Stavanger.

During the past three weeks, Statoil’s Heidrun, Snorre-A and Vigdis fields and Royal Dutch Shell PLC’s Draugen field had to be temporarily closed for lifeboat changes.

They have since returned to service, but Statoil said at its third-quarter-earnings presentation Monday that lifeboat problems may, among other production difficulties, mean the company undershoots its 2006 output target.

The problem has been the roofs of the boats being susceptible to waves as they are launched from platform decks. Studies showed waves could crush the roofs, potentially injuring those on the top row of the boats. Kjetil Hjertvik, a spokesman for the Norwegian Oil Industry Association leading the tests, said 134 lifeboats have had their roofs reinforced. The industry, he said, is awaiting the final set of results for around 20 more platform lifeboats. So far, the modifications have cost the industry around $40 million.

Mr. Hjertvik says it is too early to say if the latest test results will mean more shutdowns or decreased production.

Inger Anda, a spokeswoman for the Petroleum Safety Authority, said many modifications have been conducted while platforms are in operation, though at lower output levels because of reduced staffing. Under PSA regulations, there have to be sufficient lifeboats for staffing levels.

The Norwegian Oil Industry Association — known as the OLF because of its Norwegian initials — has begun a new set of tests that could cause another round of lifeboat modifications and force the change of international regulations.

Regulations have been based on those developed for ships. Because of the greater heights the platform lifeboats are launched from, investigators are finding old regulations inadequate.

The OLF has hired auto-industry experts to use crash-test dummies to measure the impact on bodies when free-falling lifeboats hit the water. “We don’t know the effect G-force [gravity-force] has on the body,” Mr. Hjertvik said.

Ms. Anda of the PSA says although the results of G-force tests are yet unknown, “The most important is safety, and if we find that people are in danger, and the boats aren’t safe enough, we will do whatever is necessary to protect them.”

Ms. Anda added that because many of the boats could be manually lowered, rather than launched into a free fall, there is less likelihood for complete shutdowns.

Mr. Hjertvik said they were so far only testing one out of 15 types of free-fall lifeboats, but the OLF may also begin testing others.

Halvor Erikstein, head of safety at the Federation of Oil Workers Trade Unions within the Energy Sector, or SAFE as it is known in Norway, said, “If they use this test on different types of lifeboats, I’m sure they’ll find a lot of them all over the Norwegian Continental Shelf that aren’t suitable.”

Mr. Erikstein said a report from Sweden’s School of Marine Studies found neck and back injuries were symptomatic of the G-force injuries sustained from free-fall boats. The U.K.’s Health and Safety Executive also recommended more studies be conducted to measure the impact on the body for lifeboats launched from platforms.

Ms. Anda, Mr. Hjertvik and Torid Stemre, a safety expert at the Norwegian Maritime Organization said they would push for the International Maritime Organization to adopt a new set of regulations for lifeboats on offshore oil-and-gas platforms. Heike Hoppe, senior technical officer in the IMO’s Marine Safety division, said it was highly likely Norway’s recommendations would ultimately be adopted by the IMO. Although the IMO has standards for mobile-rig lifeboats, there are none for fixed platforms. If the IMO adopts Norway’s recommendations, member countries will be required to adopt the standards as national rules. It is up to the countries to decide whether, like Norway, they make the rules required for old installations as well as new.

Write to Ian Talley at [email protected]