The low oil price has impacted safety in the oil industry. Even though a higher oil price in the wake of OPEC’s production cuts will hopefully slow this trend, the industry will need to learn to do more than just cut costs to weather future price decreases.
The oil industry is currently downsizing. Many of the cuts are being made in HSE and HR divisions, which are responsible for safety training, disaster-management training and safety-critical competence. Both Norway´s Petroleum Safety Authority and Statoil’s own indicators reveal a rise in the number of serious incidents. The trade union SAFE is concerned, as is Norwegian Confederation of Trade Unions member; Industri Energi. A few days ago, Norwegian Minister of Labour and Social Inclusion Anniken Hauglie announced that the government is appointing a committee to examine safety in the oil industry in the wake of the current wave of cost cuts.
The Offshore Co-ordinating Group (OCG), consisting of UNITE, RMT, GMB, Nautilus International and BALPA, have expressed similar concerns, stating that “The implications of the current price of oil for the offshore workforce are profound … and there are growing fears over the impact of new working practices on the health and safety regime. ” (State of the Industry Report 2016).
Caution is required in establishing causal relationships that are not properly documented; when it comes to people’s lives and well-being. At the same time, it cannot be denied that the low oil price has had consequences for investments in safety training in the oil sector. Each day brings new cuts in any training or activities that are not legally required or essential and “best practice” is being replaced by “good enough”.
In the short term, cuts are an effective and visible measure in efforts to reduce costs. However, in the long term, this approach is unlikely to secure existing and new revenue flows or the industry’s skills levels and innovation requirements.
The alternative to cost-cutting is to think laterally; regarding technology use, processes, the way activities are organised and collaboration with partners. In particular, knowledge management, HR and safety training offer major potential. This applies across the world, in the oil sector and the maritime sector generally, and specifically in Norway, where we have much to gain from adopting new technology and new solutions.
The traditional, often classroom-based, way of holding courses and performing certification is time-consuming and cost-intensive. However, not all training activities relate to extinguishing fires or evacuating using lifeboats which do require some classroom-based training. Knowledge, training, certification and instructions on how to use equipment are well suited to e-learning.
A growing number of advanced HR solutions now cover everything from course administration and implementation to skills reporting in connection with tenders or verifications. Functionality is available that checks course participants’ skills levels before they start a course, so that training is only provided when necessary. This is making it possible to focus more on verifying skills and less on certificates and diplomas.
To realize this potential, the oil industry and maritime sector must get used to the fact that the oil price will be low for some time to come. While OPEC’s production cuts have provided some breathing space, and boosted industry sentiment, a strategy of sitting back and waiting for the price to continue an upward trend is neither sustainable nor future-proof.
The requirement to operate safely in tough conditions in the North Sea, with equipment that can withstand major stresses and challenging assignments, has made Norway the leader in health, safety and the environment.
“Good enough” is not enough when it comes to safeguarding people’s lives and well-being and multi-million dollar installations.
Cutting costs in a way that threatens accepted standards is neither necessary nor justified – whether in financial or human terms.