In today’s complex world, managing risk has become increasingly challenging. Companies working in the oil, gas and process industries must meet all the various stakeholders' Safety, Health and Environment (SHE) goals and expectations. As an industry leader, Kuwait National Petroleum Company (KNPC) is working with DNV to manage these new risk realities effectively.
In June, 2000 six oil workers were killed and 27 injured in a blast at Kuwait's biggest refinery Mina Al-Ahmadi forcing a shutdown in production. This was caused by a gas leak and a fire that was extinguished some nine hours later. Apart from the tragic loss of life, two of the plant’s gasoline units were destroyed and 2 crude distillation units (CDUs) suffered significant damage. In all, the disaster cost an estimated USD 400 million.
Worse, in an unrelated incident that same month, two Kuwaitis were killed at Shuaiba refinery during operations to resume production from a jet-fuel unit for the first time since the 1990-91 Iraqi occupation. The accidents triggered an investigation by the Kuwaiti Parliament and the Ministry of Oil. Both organisations concluded that KNPC had to develop robust safety systems.
Revolutionising risk management
Since the accidents, KNPC has moved swiftly to improve health and safety, revolutionising its approach to risk management. KNPC commissioned DNV Consulting to help optimise SHE management systems on its three refineries and a gas processing plant. The work includes behavioural analysis, risk assessment, change management, training, environmental support and management systems development
In October 2000 KNPC invited DNV Consulting to assess the status of their management of safety, health and environment aspects and to plan appropriate enhancements. The assessment was needed promptly to allow planning to start, and work to proceed. A five-man assessment team was assembled.
The team developed a special protocol, visited each refinery, the marketing company and the head office. The team interviewed a vertical slice of the personnel, reviewed critical documents and observed behaviour. The team found that HSE in KNPC was driven by a compliance culture to a set of prescriptive SHE rules.
There were 79 recommendations related to Safety and Health, and 25 recommendations relating to environmental management. DNV also concluded that while KNPC was good at setting policies and planning, it lacked robust auditing and reviewing mechanisms. This meant that implementation was not consistently applied throughout the organisation, and improvement was more sporadic than purposeful.
Setting a clear direction
The first phase of the risk management solution was to ensure the executive management team agreed the priority of this initiative and took ownership for it. This was done through the exemplary behaviour of the Chairman and Executive Assistant Managing Director for Manufacturing, who clearly signalled that the (safety, health and environment) SHE management system (MS) was their top priority and that they expected no less from their colleagues. The top team worked with DNV to create the policy, having reviewed a series of policies by leaders in the global process industry.
From the policy a series of expectations were developed, and these formed the basis for a series of workshops held with teams leading each of the elements of the management system. They defined the system that existed and the gaps that needed filling. Once the gaps were identified a risk-based system was deployed to identify priority actions. One highlight of these priority actions was the introduction of a mandatory system of management tours. Each tour took 1-2 hours and all resulted in 3 priority actions that the organisation tracked until closure. For the first time, the work force was seeing Executive managers in their own area to observe acts and conditions, to talk about SHE issues and to encourage the workforce in their SHE actions.
The development of the SHE Management System was supported by a parallel activity to assessment risks associated with the process units from a flammable & toxic events point of view, with a further emphasis on the technical integrity of the equipment. To this end, a coarse Quantitative Risk Assessment (QRA) was carried out covering all of KNPC’s operations to focus particularly on offsite risks, and with a detailed QRA and Risk Based Inspection project implemented at the Mina Abdullah Refinery. The output from these assessments showed the impact of the SHE Management System made on risk reduction.
Seeing results
SHEMS implementation so far, has shown results in a downward trend of lagging indicators, including accidents and near misses. KNPC is also seeing active engagement in the SHEMS initiative by their contractors who naturally wish to align their objectives with KNPC’s changing culture. Positive effects are ALSO being felt in the operations. For DNV, the process has been a good test of their skills and ability to manage complex and comprehensive risk management solutions. And while the SHEMS will not be fully completed until 2006, KNPC has already learned that the ability to handle risk effectively pays dividends in terms of improved SHE performance, direct savings and enhanced public confidence.