Risk Analysis and Management

CHAPTER 1 2 DIFFERENT APPROACHES TO RISK MANAGEMENT After reading this chapter you should be able to: Differentiate between the hard and soft approaches to risk management Analyse the benefits and drawbacks of both the hard and soft approaches to risk management Analyse the threats to effective risk management process Introduction Project Risk Management aims to identify and prioritize risks in advance of their occurrence, and provide action-oriented information to project managers. This orientation requires consideration of events that may or may not occur and are therefore described in terms of likelihood or probability of occurrence in addition to other dimensions such as their impact on objectives. Hard and Soft Approaches to Risk Management Hard benefits – that is contingencies, decisions, control, statistics etc. It is relatively easy to express hard benefits and with enough effort, it is possible to measure them Soft benefits – that is, people issues which are implicit in some of the hard benefits but which are not usually expressed as benefits in their own right. They are much less easy to quantify but like so many people issues, can give rise to dramatic improvements in performance Hard benefits of risk management It enables better informed and more believable plans, schedules and budgets The use of risk management to identify risk factors and to allocate tolerances or contingency in respect of those risks helps create a more objective description of the tasks and the related budgets and schedules giving more credibility to the plans. It increases the likelihood of a project adhering to its schedules and budgets The more realistic the project’s plans such as schedules and budgets, the more likely it is that the outcome will reflect those plans. Proactive management of risk will remove some of the threats that would otherwise impact on the project and also realize some of the opportunities to improve the project’s outcome. It leads to the use of the most suitable types of contracts Risk analysis can expose possible areas of conflict between the contractor and client. These can then be addressed early in the project life cycle thus reducing the likelihood of disagreement or litigation as a result of misunderstanding. It allows a more meaningful assessment and justification of contingencies Risk management can identify and quantify the amount of contingency required to give a particular acceptable confidence level, and the risk budget can be effectively managed as the project proceeds. It discourages the acceptance of financially unsound projects Risk analysis may reveal that a project cannot meet its objectives, is not feasible, or is a potential threat. The organization may then decide not to bid or to pull out before resources are committed. It contributes to the build-up of statistical information to assist in better management of future projects Formal risk analysis, together with post-project reviews can provide a wealth of information in a form that can be used as a reference for staff and managers. It enables objective comparison of alternatives Risk management allows the relative opportunities and threats to be evaluated and compared on a common basis, supporting project decision makers. This also applies to the bid process where trade-offs of alternative solutions can be performed. It identifies and allocates responsibility to the best risk owner Where problem ownership is ambiguous, risk management can enable each risk to be uniquely allocated. It enables compliance with corporate governance requirements It enables a greater potential for future business with existing customers The achievement of objectives on current projects often leads directly to follow-on business or preferred supplier status with existing customers as trust and confidence increases It leads to reduced cost base Soft benefits of risk management It improves corporate experience and general communication Risk management provides a framework for identifying and discussing project issues in a neutral, blame-free environment, with the emphasis on positive action rather than recrimination. The routine use of risk management techniques can also have a beneficial companywide effect because it facilitates good communication by encouraging full feedback from projects that have failed. It leads to a common understanding and improved team spirit The risk management process brings the whole project team together with a single purpose. Differences in understanding are exposed and can be reconciled. Threats are seen as a common enemy and opportunities regarded as a shared objective. This stimulates people to see the project’s objectives as a common goal and work together to achieve them. It helps distinguish between good management and bad management An understanding of the inherent risk in a project provides a basis for assessing the project manager’s effectiveness, allowing a distinction between good management and bad management. It helps develop the ability of staff to assess risks The simple fact that risk analysis is being undertaken is enough to make people more aware that risks may, and do, exist in their areas of influence. A benefit of risk management to the individual is that it allocates the responsibility for a failure in a demonstrably unbiased way, as it is an objective consideration. It focuses project management attention on the real and most important issues It facilitates greater risk taking, thus increasing the benefits gained Through the application of formal management techniques, with appropriate mitigation and fallback plans, an organization can take greater levels of risk with lower levels of contingency. It demonstrates a responsible approach to customers This involves the careful and systematic analysis of customer requirements thus encouraging the contractor to bear this in mind at all times. The use of risk management also encourages a better judged approach to planning objectives and timescales which then benefits the overall quality of output It provides a fresh view of the personnel issues in a project Risk management helps in making informed decisions about appointing project managers. For example, a less experienced project manager would be appointed to manage a less risky project. Risk analysis also reveals to senior management those areas of a project which the project manager might otherwise choose not to expose. By being required to quantify and justify decisions, project managers are discouraged from giving a wrong “perception” of the risks involved in a project. It leads to better reputation as a result of fewer project failures It leads to better customer relations due to improved performance on current projects It facilitates a less stressful project environment Risk management reduces stresses associated with projects by enabling not only the planning of fallback activities before foreseeable crisis arises, but also the execution of proactive steps to prevent or reduce the impact of the crisis in advance and to improve the likelihood and benefits of opportunities Threats to effective risk management The following list contains some of the more common issues with, and objections to the risk management process: Risk analysis can be garbage in, gospel out The results of the risk process are only good as the information supplied. The information that is inputted must be verified and biases identified and eliminated. Project risk management process should be explicit about testing the contingency of the expert judgements of those involved in order to make the best possible decision. Output from the formal risk process has to be evaluated and interpreted. There is a danger that results will be accepted uncritically, leading to decisions being made without a real understanding of the underlying issues. Ownership may be transferred to the risk facilitator or risk process owner Sometimes organizations often use specialist staff with particular expertise, either internal or external in the application of risk techniques. There is a danger of viewing risk as the responsibility of the risk specialist rather than as an integral part of the project management task. The validity of risk analysis can become stale As a result of changing circumstances in most projects and the external business environment, there is a possibility that the results and recommendations of the risk process have limited lifetime. This means that the risk report will quickly become out dated and its recommendations must be quickly acted upon if they are to be effective. The effectiveness of the risk management process is difficult to prove It is difficult to measure and demonstrate the effectiveness of the overall risk management process since it deals with issues that are intrinsically uncertain. The process can antagonise staff When people within the team are not committed to the risk management process there is a danger that the risk practitioner may ‘oversell’ the benefits without balancing these downside issues. This may lead to lack of credibility in the process and demotivation of staff. CHAPTER 2 2 PRINCIPLES OF RISK MANAGEMENT After reading this chapter you should be able to: Explain what is meant by project risk Evaluate the importance of risk management Give an account on the risk management process Project Risk The word “risk” is used in many ways in everyday language and in various specialist disciplines. The definition of project risk given in the PMBOK ® Guide – Fourth Edition is as follows: Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project’s objectives. This definition includes two key dimensions of risk: uncertainty and effect on a project’s objectives. When assessing the importance of a project risk, these two dimensions must both be considered. The uncertainty dimension may be described using the term “probability” and the effect may be called “impact” (though other descriptors are possible, such as “likelihood” and “consequence”). The definition of risk includes both distinct events which are uncertain but can be clearly described, and more general conditions which are less specific but also may give risk to uncertainty. The definition of project risk also encompasses uncertain events which could have a negative effect on a project’s objectives, as well as those which could have a positive effect. These two types of risk are called, respectively, threats and opportunities. It is important to address both threats and opportunities within a unified Project Risk Management process. This allows for the gain of synergies and efficiencies such as addressing both in the same analyses and coordinating the responses to both if they overlap or can reinforce each other. The Risk Management Process The level of risk management process implementation may depend on the degree of maturity of organizational risk management capability. An assessment of organizational risk management maturity may assist an organization in understanding how to improve risk management effectiveness and may form the basis for development of improved capability. The simplest description of the risk management process has 5 phases together with a ‘Manage Process’ activity. The risk management process is iterative (repetitive) within itself so the output from each phase might require the previous phase to be revisited. The risk management process must be fully integrated with other project management processes. Risk information must be used to inform other parts of the project process, including project planning, estimating, resource planning etc. Initiate The purpose of this phase is to set the scope, objectives and context for the risk management process. It may be further divided into 2 sub phases: - Define Project: This aims to ensure common understanding of the project to which the risk management process is to be applied. This means that the: The project should have well-defined objectives There should be a well-defined scope of the project There should be a well-defined strategy and an outline of plans for the execution of the project. - Focus Risk Management Process: This fits the details of the risk management process to the specific requirements of the project. Key points to note include: The objectives of the risk management process should be well understood and documented prior to its application to a project. The defined objectives of each particular application of the risk management process should be reviewed periodically throughout implementation and updated appropriately The risk management process should be applied immediately at the outset of the project and should continue in an appropriate form throughout the project life cycle. The depth or level at which the risk management process should be applied at each stage of the project life cycle should be commensurate with project circumstance. Identify The purpose of this phase is to enable the risk events relevant to a project to be identified as comprehensively as possible, practical and cost effective. An approach should be adopted to risk identification that gives confidence in the project’s ability to compile a list of risk events which is as complete as possible, embracing all relevant types and sources of risk event. Stakeholder and external consultation should be encouraged where practical and appropriate. Assess The aim of this phase is to increase the understanding of each identified risk event to a level where appropriate and effective decisions can be taken. The assessment of individual risk events and or the combined effect of risks on the project may be undertaken using a qualitative and/or a quantitative approach as appropriate. Plan Responses The aim of this phase is to determine appropriate responses to individual risk events and to ensure that the assessment of the level of overall project risk is used to set or modify project strategy. Implement responses This phase ensures that effective actions are taken based on the decisions made during the Plan Response phase. This includes both actions to implement risk responses targeting individual risk events and actions affecting the overall strategic planning and direction of the project based on assessment of project risk. The following must be considered: Responsibilities for implementing the planned risk responses should be well defined. Responses should be verifiable and response owners should be accountable for the outcome The developing circumstances of each risk event should be monitored so that the risk response and contingency may be adjusted or acted on appropriately. Project stakeholders should be provided with current and accurate risk information at a level and frequency appropriate to their interests and needs. The Implement Response phase should also address the effectiveness of the risk management process, determining whether it fulfils the scope and objectives set during the Initial phase. Manage Process The aim of this phase is to ensure that the risk management process remains effective in addressing identified risk events and project risk. It takes input from each phase of the risk management process and reviews the approach adopted for each phase as well as the process as a whole. This activity is the responsibility of the project manager. It might be performed through formal and regular risk management process reviews, or may be conducted informally throughout the project. CHAPTER 3 2 CONTROL AND GOVERNANCE IN RISK MANAGEMENT After reading this chapter you should be able to: Analyse the influence of organizational structure on risk management Examine how functional roles affect the way in which project risks are managed Examine the roles of the following people in risk management Give an account on project life cycle and risk management Examine how the risk management process will be resourced Organization and Control Risk management plan This makes it quite clear how risk is going to be tackled for the project and refers to the risk management process and the risk management organization. It may be held as a template in a standard project methodology. However it will always to be specific to a particular project. Let’s consider the contents of a suggested risk management plan Functional roles The role of the project manager includes: Agreeing and promoting the risk management process for the project Clarifying the acceptable level of risk for the project Reporting risk status to the client/senior management on regular basis Escalating risks that are above the risk threshold or risks with a significant impact outside of the project Sanctioning the validity of the risk data Chairing risk review meetings Approving risk response actions Monitoring the effectiveness of risk management in the project team The role of the risk process manager: Reporting to the project manager, the role of the risk process manager is to facilitate the whole risk management process including: Development of the risk management plan Facilitating the identification and response of project risk Collecting and normalizing risk information from project staff Mentoring project staff on aspects of the risk management process Ensuring that the risk register contains data in a consistent format Analyzing risk data and directing the production of risk reports Facilitating risk assessment reviews and workshops Advising the project manager on risk response actions Contributing to the presentation of risk for senior management The role of the risk owner: The project manager assigns risk owners to be accountable for one or more identified risks. Risk owners are selected according to their affinity with particular risk types. Risk owners: Liaise with people who are raising a risk to ensure that it is properly expressed and sufficiently understood Ensure that expertise is provided to effectively assess a risk and develop suitable responses The role of the action owner: Like that of the risk owner, an action owner’s role is a temporary one that may be performed by any member of the project team or by a specialist from outside the project. They are responsible for carrying out actions in response to one or more risks. Risk management and the project life cycle As a project moves through its lifespan, risk should be formally assessed at each stage, although the scope for influencing the overall outcome reduces as the project progresses. The general principle is to maintain a level of risk management effort throughout the project commensurate with the needs of the current phase and to focus this effort prior to project milestones where the level of commitment changes significantly (usually at the end of each project stahe or phase). The decision on whether or not to proceed to a new level of commitment should be based on an in-depth understanding of the associated risks. Some methodologies specify formal gateway reviews, where risk is formally reviews at particular stage gates (such as feasibility or award of contract). However it is important not to be complacent about risk between project phases or gates; risk management is an ongoing activity and the project team needs to think about risk in its daily activity. Whilst phase-ends are clearly targets for formal risk assessments, reviews and lessons-learned activities, they should not be the sole risk activity. In terms of project life cycle, risk management begins at the conception stage during which the idea for the project will be thought in commercial, as well as technical, terms. This stage usually results in a number of possible alternatives, and these should be assessed for their risks, costs and benefits. The commercial viability of the project and its implications in terms of cost, timescale or performance are established during the feasibility stage. This is where risk management is at its most significant. Where high levels of uncertainty and impact exist, demonstration and prototyping may be undertaken as part of the risk management strategy. Thus, at the end of the feasibility stage a clearer understanding of, and in some cases a reduction of, the project risks clarifies the parameters of the decision-making process, allowing the project to proceed to the next stage, if the level of risk is acceptable to the organisation. Risk management is particularly appropriate to contract tendering and bidding. A risk assessment can be made showing both unmitigated risk exposure (that is, without the effect of mitigating actions) and a mitigated risk exposure, for comparison. During the execution of the project work, regular risk assessments may be made, together with risk reviews targeted at phase or milestone ends. Before any formal testing or piloting phase, risk assessment activity is particularly relevant. Testing itself will confirm or dispel risks associated with the product. Prior to project handover or implementation, any outstanding risks need to be reassessed, especially in terms of any ongoing support or maintenance work after the project has gone live. Resourcing the risk management process The level of resource commitment for risk management activities needs to be decided and specified in the risk management plan. The perceived level of risk activity will depend on the type of project. For example, projects that are concerned with highly innovative products or development work would need to give more emphasis to risk management. Also projects with high health and safety considerations such as the Exploration and Production (E&P) would need to give more emphasis to the reduction of the occurrence of such risks and minimizing their impact should they occur. Resourcing risk responses actions After risks have been identified and assessed, it is vitally important that actions are raised and that owners are assigned to carry them out. The actions themselves must be able to demonstrate an effect on reducing the threat or increasing the opportunity. Risk owners are responsible for ensuring that actions are properly expressed, that owners are assigned to carryout actions, that each action has a due date and is costed, and that probability and impact changes are estimated. Action owners should ensure that they have the time and skill required to carry out actions assigned to them and report progress against each action Behavioural Influences The behaviour of individuals involved in the project will have an impact throughout project risk management and will contribute directly to its success or failure. The project manager should bear in mind that: The input to the project risk management process arises from the opinions of individual human beings Much of the variances in performance in project risk management arises from the different views that people have when they identify and respond to risk The constituents of the individual Perception Perception of risk is derived from a comparative view. An individual will select, reject and compare information against experience, and will tend to consider a risk event as either greater or less than another risk event. Individual perceptions can lead to the denial of risks and a delay in managing them. There is a danger of risk being suppressed or inflated achieving undeserved credibility. Attitude This describes the persistent tendency to feel and behave in a particular way. It is influenced by emotions, information and previous behaviour. It is linked to belief, values and motivation. How do you think an individual’s attitude affects risk management? Personality This impacts on how we see ourselves and on how others see us, and the relationship - perhaps even conflict - that may arise if these perceptions are different. In risk terms we have risk takers and risk averse. How do you think an individual’s perception affects risk management? Motivation This can be described as an internal driving force that impels individuals to achieve some goal in order to fulfil some need or expectation. Fulfilling this goal leads to a state of rest or satisfaction which may be only temporary. The ability to motivate a project team to carryout risk management in a proactive manner is the key to success for every project manager who wishes to deliver his/her project within the planned time, cost and performance objectives. Constituents of the situation Group influences An individual’s behaviour is highly likely to be influenced by the collective attitude of the group such as the project team. For example group think or peer pressure within a risk-negative group will tend to suppress any individual who is prepared to operate in an open risk environment. Also a risk aware group will tend to encourage the individual to take an open attitude toward risk. Organization influences The influence of organization on individuals is similar to that of the group. Environmental influences The political, economic, social and technological status of a nation will influence the project risk management process from identification to management and control. For example, when a project starts, the government may be risk taking, relishing the risks associated with investment overseas, encouraging international prospecting and project seeking, and rewarding individuals and businesses who do so. In such as culture the project team may be likely to ignore, scantily review or positively take risks if the rewards are significant. The situation may however be different with a government that is risk averse. Interpersonal approaches Below are specific people skills that contribute to effective and successful project risk management. Discuss in your own words. Preparation Education Facilitation Early participation Encouragement Relationships Interviews Reporting Group activities CHAPTER 4 2 HOW THE RISK MANAGEMENT PROCESS CAN BE CONTROLLED After reading this chapter you should be able to: Evaluate the importance of risk documentation in the risk management process Evaluate the importance of risk reporting Examine the importance of risk reviews, risk governance and risk reserves Analyse how generic and project specific risks may be controlled Risk documentation The risk documentation forms part of the project documentation and should be subject to both the project’s configuration management system and audit under the project’s quality management activities. The main elements in risk documentation are summarized below: Risk management plan: This describes how risk will be addressed for the project Risk register: This records identified risks, probabilities, impacts, costs and priorities, together with risk reduction actions Risk analysis: This analyses risk data Risk reports: This documents the status of risks, actions progress etc. Risk reviews: This is formal risk review outcomes Risk workshop output: This documents the proceedings of risk identification or assessment group sessions Risk lessons learned: This is produced at major stage ends at project closeout. Risk reporting Risk information needs to flow through the project team so that it can be integrated into the organization’s overall reporting cycle. It will provide the main input for risk reviews that take place at critical decision points in the project. It is good practice to include risk progress in the project's regular progress reports. This helps to maintain focus within the team and prevent risk management from becoming a once-a-quarter exercise. Where there is an external client, it may be desirable (in some cases mandatory) to pass the risk information to this organisation. This would normally be required in a predefined format, particularly if risk information from a number of suppliers must be combined. If this is the case, it is essential to ensure that the data has been derived consistently and according to the ratings specified in the risk management plan. Risk reviews They provide a formal opportunity to examine and discuss the risk status of the project and to agree actions that will move the project towards meeting its overall aims and objectives. A risk review meeting agenda should include: A report by the risk process manager giving an overview of the major risk issues A review of the status of existing actions in place to reduce risk and the need for any new actions, a review of changes in risk status that is new risks, changes in risk level, risks that have materialized and those that have expired. A review of achievement at past milestones and predictions of future achievement. Risk governance Risk governance is the ability to review and control the results of risk management activities in relation to a project, a programme of projects or the business as a whole. Any risk governance activity should therefore form part of an organisation's project governance. Risk reserves These fall into two categories namely project reserves and contingency reserves. Project reserves are those made by the project for project exceptions. Contingency reserves are those made specifically for funding risk contingency situations. Control of generic and project-specific risks The control of risk requires the implementation of appropriate actions or measures. Project-specific actions can be carried out locally within the project, and periodic reviews provide the opportunity to check that these actions have been effectively implemented. Risks with actions that have a wider applicability than any one project should be communicated more widely. Initially, these risks and actions should form part of a library of generic risks and actions. In addition, the actions should be incorporated in procedures that apply to the whole organisation and will, over time, become part of normal business activities. CHAPTER 5 2 TOOLS AND TECHNIQUES USED IN PROJECT RISK MANAGEMENT After reading this chapter you should be able to: Analyse the key considerations in selecting tools and techniques for risk management Examine the advantages and disadvantages of the different types of risk identification techniques that may be used Differentiate between qualitative and quantitative risk assessment Analyse the advantages and disadvantages of quantitative risk assessment techniques Analyse the advantages and disadvantages of quantitative risk assessment techniques Compare the various risk response techniques that may be used in project risk management Tools and Techniques in Risk Management Selecting tools and techniques Project teams must choose the combination of tools and techniques that is most appropriate to their circumstances. The following must be considered: The selected techniques should encompass all the key elements of the risk management cycle from risk identification through to the implementation of risk management actions. Some techniques are suitable for risk management in the earliest phases of a project whilst others are more applicable to later phases. Employing any risk management technique costs time and money, so its use should be justified by the potential benefits When selecting techniques the project team should bear in mind the benefits it is aiming to deliver through its risk management process. Techniques conducive to openness of communication are likely to be successful in achieving both hard and soft benefits Where qualitative and quantitative assessment techniques are used, risk management should be an internally coherent process and project teams should ensure that there are connections between the two. Risk management should be integrated with other project disciplines, particularly those associated with leadership, planning and review. Techniques that are complementary to such disciplines are more likely to succeed. Risk Identification techniques Assumption and constraint analysis Project definition and planning processes make use of a large number of assumptions. When these assumptions are recorded, they can be used to identify threats by assessing the probability that each assumption will be met and the impact on the project should the assumption be violated. Constraints can be assessed in a similar way. Checklists This is a detailed document (aide-memoire) for the identification of potential risks. They are usually generated by organizations to reflect the key issues that affect their environment. A weakness of checklists is that they can become too exhaustive or too project specific to be of practical use. Prompt lists This uses headings, usually related to generic sources of risk. It is another form of risk identification aide-memoire. It is used to stimulate proactive and lateral thinking. Prompt lists are a resource that can be used to support other techniques such as brainstorming. They can also be included in plans or procedures to indicate the breath of issues that risk management is concerned with. Brainstorming Brainstorming captures risks quickly, and offers a means of raising enthusiasm for risk management across a team. It can be used to engage project stakeholders in the risk identiification process. An independent facilitator is normally used to ensure that the session is sufficiently well structures and maintains a good pace. Typically the output of a brainstorm in a list of risks, each described by a phrase or sentence indicative of the risk source. Interviews Interviews are often used for risk identification when it is not practicable to commit a team to a single meeting. Interviews have many advantages of brainstorming and require semi-structures approach, with the interviewer assuming the facilitator's role. The disadvantages are that the process consumes more of the facilitator's time and that opportunities afforded by the cross-fertilisation of ideas are more limited. However, some people are more comfortable with expressing themselves openly in one-to-one situation, particularly if the interviewer is perceived to be independent. SWOT Analysis This identifies four characteristics of a given situation: strengths, weaknesses, opportunities and threats. The technique is commonly used in strategic decision making. It can be adapted for risk identification by changing the interpretation of the four perspectives, such that strengths and weaknesses relate to the characteristics of the organization conducting the project, and opportunities and threats identify the project risks. The technique is particularly useful for identifying internally-generated risks arising from within the organization. Stakeholder analysis The project or organization must identify the stakeholders, determine their requirements and expectations, and identify and evaluate the levels of risks of each one of them and successfully manage the risk factors. A stakeholder risk analysis is essential so that each stakeholder – be it an individual or organization - is aware of the risk perception. Stakeholder risk analysis means identifying the stakeholders, types of risks, extent of risks, levels of stakeholder commitment, and degree of influence. Project monitoring Nominal group technique (NGT) NGT is a development of the standard brainstorming technique that is designed to offset the threat of group dominance by individuals. Participants are asked to record their perceptions of risk privately. The facilitator then asks each member of the group, in turn, to nominate a unique risk. In this way, everyone has to contribute and the potential for intimidation is reduced. Delphi Technique This operates by using a qualified group to gather and respond to opinion. An advantage is that it can be carried out remotely and/or anonymously for example by email. The technique however is time consuming. Technology readiness levels (TRLs) These are an approach to the assessment of technological maturity. A project’s technical solution can be assessed for its exposure to risks by determining the TRL for each system and subsystem. System components characterized by a relatively low TRL and an uncertain maturity plan can be identified as technology risks. Peer reviews This involves the engagement of an independent expert to review project plans and risks especially if the assessment founded on the identified risks is to be provided as evidence at a major project decision point. It may help to provide a final check for consistency in the risk identification process. Risk Response Techniques Risk response is the process of translating risk assessment information into actions. The processes of risk identification and assessment provide data that improve the predictability of project outcome and identify key areas for management attention. However, unless such data are acted upon, much of the opportunity to add value through risk management will be lost. Identified risk response techniques are presented below: Threat avoidance* Opportunity exploitation Reduction of threat probability Enhancement of opportunity probability Reduction of the negative impact of threats Enhancement of the positive impact of opportunities Responses that affect both risk probability and impact Fallbacks Opportunity realization Risk transfer and share* Insurance and other financial products* Pooling risk* Risk acceptance* CHAPTER 6 2 PRACTICAL ISSUES WITH RESPECT TO ENVIRONMENTAL, HEALTH AND SAFETY MANAGEMENT IN THE OIL AND GAS INDUSTRY After reading this chapter you should be able to: Discuss the various management practices that can be applied to the following environmental issues Discuss how to effectively manage occupational health and safety Air Emissions The main sources of air emissions (continuous or noncontinuous) resulting from offshore activities include: combustion sources from power and heat generation, and the use of compressors, pumps, and reciprocating engines (boilers, turbines, and other engines) on offshore facilities including support and supply vessels and helicopters; emissions resulting from flaring and venting of hydrocarbons; and fugitive emissions. Principal pollutants from these sources include nitrogen oxides (NOx), sulfur oxides (SOx), carbon monoxide (CO), and particulates. Additional pollutants can include: hydrogen sulfide (H2S); volatile organic compounds (VOC) methane and ethane; benzene, ethyl benzene, toluene, and xylenes (BTEX); glycols; and polycyclic aromatic hydrocarbons (PAHs). Significant (>100,000 tons CO2 equivalent per year) greenhouse gas (GHG) emissions from all facilities and offshore support activities should be quantified annually as aggregate emissions in accordance with internationally recognized methodologies and reporting procedures. All reasonable attempts should be made to maximize energy efficiency and design facilities for lowest energy use. The overall objective should be to reduce air emissions and evaluate cost-effective options for reducing emissions that are technically feasible. Exhaust Gases Exhaust gas emissions produced by the combustion of gas or liquid fuels in turbines, boilers, compressors, pumps and other engines for power and heat generation, or for water injection or oil and gas export, can be the most significant source of air emissions from offshore facilities. During equipment selection, air emission specifications should be considered. Venting and Flaring Associated gas brought to the surface with crude oil during oil production is sometimes disposed of at offshore facilities by venting or flaring to the atmosphere. This practice is now widely recognized to be a waste of a valuable resource, as well as a significant source of GHG emissions. However, flaring or venting is also an important safety measure used on offshore oil and gas facilities to ensure gas and other hydrocarbons is safely disposed of in the event of an emergency, power or equipment failure, or other plant upset condition. Measures consistent with the Global Gas Flaring and Venting Reduction Voluntary Standard (part of the World Bank Group’s Global Gas Flaring Reduction Public-Private Partnership (GGFR program2) should be adopted when considering venting and flaring options for offshore activities. The standard provides guidance on how to eliminate or achieve reductions in the flaring and venting of natural gas. Continuous venting of associated gas is not considered current good practice and should be avoided. The associated gas stream should be routed to an efficient flare system, although continuous flaring of gas should be avoided if alternatives are available. Before flaring is adopted, feasible alternatives for the use of the gas should be evaluated to the maximum extent possible and integrated into production design. Alternative options may include gas utilization for on-site energy needs, gas injection for reservoir pressure maintenance, enhanced recovery using gas lift, gas for instrumentation, or export of the gas to a neighboring facility or to market. An assessment of alternatives should be adequately documented and recorded. If none of the options are feasible for the use of associated gas, measures to minimize flare volumes should be evaluated and flaring should be considered as an interim solution, with the elimination of continuous production associated gas flaring as the preferred goal. If flaring is necessary, continuous improvement of flaring through implementation of best practices and new technologies should be demonstrated. The following pollution prevention and control measures should be considered for gas flaring: Implementation of source gas reduction measures to the extent possible; Use of efficient flare tips, and optimizing the size and number of burning nozzles; Maximizing flare combustion efficiency by controlling and optimizing flare fuel/air/steam flow rates to ensure the correct ratio of assist stream to flare stream; Minimizing flaring from purges and pilots, without compromising safety, through measures including installation of purge gas reduction devices, flare gas recovery units, inert purge gas, soft seat valve technology where appropriate, and installation of conservation pilots; Minimizing risk of pilot blow-out by ensuring sufficient exit velocity and providing wind guards; Use of a reliable pilot ignition system; Installation of high integrity instrument pressure protection systems, where appropriate, to reduce over pressure events and avoid or reduce flaring situations; Minimizing liquid carry over and entrainment in the gas flare stream with a suitable liquid separation system; Minimizing flame lift off and/or flame lick; Operating flare to control odor and visible smoke emissions (no visible black smoke); Locating flare at a safe distance from accommodation units; Implementation of burner maintenance and replacement programs to ensure continuous maximum flare efficiency; Metering flare gas. In the event of an emergency or equipment breakdown, or plant upset conditions, excess gas should not be vented but should be sent to an efficient flare gas system. Emergency venting may be necessary under specific field conditions where flaring of the gas stream is not possible, or where a flare gas system is not available, such as a lack of sufficient hydrocarbon content in the gas stream to support combustion or a lack of sufficient gas pressure to allow it to enter the flare system. Justification for excluding a gas flaring system on offshore facilities should be fully documented before an emergency gas venting facility is considered. To minimize flaring events as a result of equipment breakdowns and plant upsets, plant reliability should be high (>95 percent) and provision should be made for equipment sparing and plant turn down protocols. Flaring volumes for new facilities should be estimated during the initial commissioning period so that fixed volume flaring targets can be developed. The volumes of gas flared for all flaring events should be recorded and reported Well Testing During well testing, flaring of produced hydrocarbons should be avoided, especially in environmentally sensitive areas. Feasible alternatives should be evaluated for the recovery of these test fluids, while considering the safety of handling volatile hydrocarbons, for transfer to a processing facility or other alternative disposal options. An evaluation of alternatives for produced hydrocarbons should be adequately documented and recorded. If flaring is the only option available for the disposal of test fluids, only the minimum volume of hydrocarbons required for the test should be flowed and well test durations should be reduced to the extent practical. An efficient test flare burner head equipped with an appropriate combustion enhancement system should be selected to minimize incomplete combustion, black smoke, and hydrocarbon fallout to the sea. Volumes of hydrocarbons flared should be recorded. Fugitive Emissions Fugitive emissions in offshore facilities may be associated with cold vents, leaking tubing, valves, connections, flanges, packings, open-ended lines, pump seals, compressor seals, pressure relief valves, tanks or open pits / containments, and hydrocarbon loading and unloading operations. Methods for controlling and reducing fugitive emissions should be considered and implemented in the design, operation, and maintenance of offshore facilities. The selection of appropriate valves, flanges, fittings, seals, and packings should consider safety and suitability requirements as well as their capacity to reduce gas leaks and fugitive emissions. Additionally, leak detection and repair programs should be implemented. Wastewaters Produced Water Oil and gas reservoirs contain water (formation water) that becomes produced water when brought to the surface during hydrocarbon production. Oil reservoirs can contain large volumes of this water whereas gas reservoirs typically produce smaller quantities. In many fields, water is injected into the reservoir to maintain pressure and / or maximize production. The total produced water stream can be one of the largest waste products, by volume, disposed of by the offshore oil and gas industry. Produced water contains a complex mixture of inorganic (dissolved salts, trace metals, suspended particles) and organic (dispersed and dissolved hydrocarbons, organic acids) compounds, and in many cases, residual chemical additives (e.g. scale and corrosion inhibitors) that are added into the hydrocarbon production process. Feasible alternatives for the management and disposal of produced water should be evaluated and integrated into production design. These alternatives may include injection along with seawater for reservoir pressure maintenance, injection into a suitable offshore disposal well, or export to shore with produced hydrocarbons for treatment and disposal. Treatment technologies to consider include combinations of gravity and / or mechanical separation and chemical treatment, and may include a multistage system, typically including a skim tank or a parallel plate separator, followed by a gas flotation cell or hydrocyclone. There are also a number of treatment package technologies available that should be considered depending on the application and particular field conditions. Sufficient treatment system backup capability should be in place to ensure continual operation and for use in the event of failure of an alternative disposal method, for example, produced water injection system failure. Where disposal to sea is necessary, all means to reduce the volume of produced water should be considered, including: Adequate well management during well completion activities to minimize water production; Recompletion of high water producing wells to minimize water production; Use of downhole fluid separation techniques, where possible, and water shutoff techniques, when technically and economically feasible; Shutting in high water producing wells. To minimize environmental hazards related to residual chemical additives in the produced water stream, where surface disposal methods are used, production chemicals should be selected carefully by taking into account their volume, toxicity, bioavailability, and bioaccumulation potential. Hydrostatic Testing Water Hydrostatic testing of offshore equipment and marine pipelines involves pressure testing with water (typically filtered seawater, unless equipment specifications do not allow it) to verify equipment and pipeline integrity. Chemical additives (corrosion inhibitors, oxygen scavengers, and dyes) may be added to the water to prevent internal corrosion or to identify leaks. In managing hydrotest waters, the following pollution prevention and control measures should be considered: Minimizing the volume of hydrotest water offshore by testing equipment at an onshore site before the equipment is loaded onto the offshore facilities; Using the same water for multiple tests; Reducing the need for chemicals by minimizing the time that test water remains in the equipment or pipeline; Careful selection of chemical additives in terms of dose concentration, toxicity, biodegradability, bioavailability, and bioaccumulation potential; Sending offshore pipeline hydrotest water to shore facilities for treatment and disposal, where practical. If discharge of hydrotest waters to the sea is the only feasible alternative for disposal, a hydrotest water disposal plan should be prepared that considers points of discharge, rate of discharge, chemical use and dispersion, environmental risk, and monitoring. Hydrotest water disposal into shallow coastal waters should be avoided. Cooling Water Antifoulant chemical dosing to prevent marine fouling of offshore facility cooling water systems should be carefully considered. Available alternatives should be evaluated and, where practical, the seawater intake depth should be optimized to reduce the need for use of chemicals. Appropriate screens should be fitted to the seawater intake if safe and practical. The cooling water discharge depth should be selected to maximize mixing and cooling of the thermal plume to ensure that the temperature is within 3 degrees Celsius of ambient seawater temperature at the edge of the defined mixing zone or within 100 meters of the discharge point. Desalination Brine Operators should consider mixing desalination brine from the potable water system with the cooling water or sewage water discharge. If mixing with other discharge waste streams is not feasible, the discharge location should be carefully selected with respect to potential environmental impacts. Other Waste Waters Other waste waters routinely generated at offshore facilities are listed below, along with appropriate treatment measures: Sewage: Gray and black water from showers, toilets, and kitchen facilities should be treated in an appropriate on-site marine sanitary treatment unit in compliance with MARPOL 73/78 requirements. Food waste: Organic (food) waste from the kitchen should, at a minimum, be macerated to acceptable levels and discharged to sea, in compliance with MARPOL 73/78 requirements. Storage displacement water: Water pumped into and out of storage during loading and off-loading operations should be contained and treated before discharge. Bilge waters: Bilge waters from machinery spaces in offshore facilities and support vessels should be routed to the facility closed drainage system, or contained and treated before discharge. If treatment to this standard is not possible, these waters should be contained and shipped to shore for disposal. Deck drainage water: Drainage water generated from precipitation, sea spray, or routine operations, such as deck and equipment cleaning and fire drills, should be routed to separate drainage systems on offshore facilities. This includes drainage water from process areas that could be contaminated with oil (closed drains) and drainage water from non-process areas (open drains). All process areas should be bunded to ensure drainage water flows into the closed drainage system. Drip trays should be used to collect run-off from equipment that is not contained within a bunded area and the contents routed to the closed drainage system. Contaminated drainage waters should be treated before discharge. Waste Management Typical non-hazardous and hazardous wastes routinely generated at offshore facilities include general office and packaging wastes, waste oils, oil contaminated rags, hydraulic fluids, used batteries, empty paint cans, waste chemicals and used chemical containers, used filters, fluorescent tubes, scrap metals, and medical waste, among others. These waste materials should be segregated offshore into nonhazardous and hazardous wastes at a minimum, and shipped to shore for re-use, recycling, or disposal. A waste management plan for the offshore facility should be developed that contains a clear waste tracking mechanism to track waste consignments from the originating location offshore to the final waste treatment and disposal location onshore. Efforts should be made to eliminate, reduce, or recycle wastes at all times. Significant additional waste streams specific to offshore development activities include: Drilling fluids and drilled cuttings Produced sand Completion and well work-over fluids Naturally occurring radioactive materials (NORM) Drilling Fluids and Drilled Cuttings The primary functions of drilling fluids used in oil and gas field drilling operations include removal of drilled cuttings (rock chippings) from the wellbore and control of formation pressures. Other important functions include sealing permeable formations, maintaining wellbore stability, cooling and lubricating the drill bit, and transmitting hydraulic energy to the drilling tools and bit. Drilled cuttings removed from the wellbore and spent drilling fluids are typically the largest waste streams generated during oil and gas drilling activities. Various drilling fluids are available, but they can generally be categorized into one of two fluid systems: · Water-Based Drilling Fluids (WBDF): Fluids where the continuous phase and suspending medium for solids is seawater or a water miscible fluid. There are many WBDF variations, including gel, salt-polymer, salt-glycol and salt-silicate fluids; · Non-Aqueous Drilling Fluids (NADF): The continuous phase and suspending medium for solids is a water immiscible fluid that is oil-based, enhanced mineral oil-based, or synthetic-based. Diesel-based fluids are also available, but the use of systems that contain diesel as the principal component of the liquid phase is not considered current good practice for offshore drilling programs and should be avoided. Typically, the solid medium used in most drilling fluids is barite (barium sulfate) for weight, with bentonite clays as a thickener. Drilling fluids also contain a number of chemicals that are added depending on the downhole formation conditions. Drilling fluids are either circulated downhole with direct loss to the seabed along with displaced cuttings, particularly while drilling well sections nearest to the surface of the seabed, or are recirculated to the offshore facility where they are routed to a solids control system. In the solids control system, the drilling fluids are separated from the cuttings so that they may be recirculated downhole leaving the cuttings behind for disposal. These cuttings contain a proportion of residual drilling fluid. The volume of cuttings produced will depend on the depth of the well and the diameter of the hole sections drilled. The drilling fluid is replaced when its rheological properties or density of the fluid can no longer be maintained or at the end of the drilling program. These spent fluids are then contained for reuse or disposal. Disposal of spent NADF by discharge to the sea must be avoided. Instead, they should be transferred to shore for recycling or treatment and disposal. Feasible alternatives for the disposal of spent WBDF and drilled cuttings from well sections drilled with either WBDF or NADF should be evaluated. Options include injection into a dedicated disposal well offshore, injection into the annular space of a well, containment and transfer to shore for treatment and disposal and, when there is no other option available, discharge to sea. When discharge to sea is the only alternative, a drilled cuttings and fluid disposal plan should be prepared taking into account cuttings and fluid dispersion, chemical use, environmental risk, and necessary monitoring. Discharge of cuttings to sea from wells drilled with NADF should be avoided. If discharge is necessary cuttings should be treated before discharge. Pollution prevention and control measures to consider prior to the discharge of spent drilling fluids and drilled cuttings should include: Minimizing environmental hazards related to residual chemicals additives on discharged cuttings by careful selection of the fluid system. WBDFs should be selected whenever appropriate; Careful selection of fluid additives taking into account their concentration, toxicity, bioavailability and bioaccumulation potential; Use of high efficiency solids control equipment to reduce the need for fluid change out and minimizing the amount of residual fluid on drilled cuttings; Use directional drilling (horizontal and extended reach) techniques to avoid sensitive surface areas and to gain access to the reservoir from less sensitive surface areas; Use of slim-hole multilateral wells and coiled tubing drilling techniques, when feasible, to reduce the amount of fluids and cuttings. Produced Sand Produced sand originating from the reservoir is separated from the formation fluids during hydrocarbon processing. The produced sand can be contaminated with hydrocarbons, but the oil content can vary substantially depending on location, depth, and reservoir characteristics. Well completion should aim to reduce the production of sand at source using effective downhole sand control measures. Whenever practical, produced sand removed from process equipment should be transported to shore for treatment and disposal, or routed to an offshore injection disposal well if available. Discharge to sea is not considered to be current good practice. If discharge to sea is the only demonstrable feasible option then the discharge should meet guideline values. Completion and Well Work-over Fluids Completion and well work-over fluids (including intervention fluids and service fluids) can typically include weighted brines or acids, methanol and glycols, and many other chemical systems. These fluids are used to clean the wellbore and stimulate the flow of hydrocarbons, or simply used to maintain downhole pressure. Once used these fluids may contain contaminants including solid material, oil, and chemical additives. Feasible disposal options should be considered, where practical, including: Collection of the fluids if handled in closed systems and shipping to shore to the original vendors for recycling; Injection in an available injection disposal well, where available; Shipping to shore for treatment and disposal; If discharge to sea is the only demonstrated feasible option: Chemical systems should be selected in terms of their concentration, toxicity, bioavailability and bioaccumulation potential; Consideration should be given to routing these fluids to the produced water stream for treatment and disposal, if available; Spent acids should be neutralized before treatment and disposal; The fluids should meet the discharge levels in Table 1. Naturally Occurring Radioactive Materials Depending on the field reservoir characteristics, naturally occurring radioactive material (NORM) may precipitate as scale or sludges in process piping and production vessels. Where NORM is present, a NORM management program should be developed so that appropriate handling procedures are followed. If removal of NORM is required for occupational health reasons, disposal options may include: canister disposal during well abandonment; injection into the annular space of a well; shipping to shore for disposal to landfill in sealed containers; and, depending on the type of NORM and when there is no other option available, discharge to sea with the facility drainage. Sludge, scale, or NORM-impacted equipment should be treated, processed, or isolated so that potential future human exposures to the treated waste would be within internationally accepted risk-based limits. Recognized industrial practices should be used for disposal. If waste is sent to an external onshore facility for disposal, the facility must be licensed to receive such waste. Hazardous Materials Management There are many hazardous materials used in offshore oil and gas operations. The following additional principles should be followed for offshore chemicals: Use of chemical hazard assessment and risk management techniques to evaluate chemicals and their effects; Selected chemicals should be previously tested for environmental hazards; Offshore drilling and production chemicals should be selected based on the OSPAR4 Harmonised Offshore Chemical Notification Format (HOCNF) or similar internationally recognized system; Chemicals with least hazard and lowest potential environmental impact, and lowest potential health impact, should be selected, whenever possible; Use of chemicals suspected to cause taint or known endocrine disruptors should be avoided; Use of Ozone Depleting Substances5 should be avoided; Chemicals known to contain heavy metals, other than in trace quantities, should be avoided. Noise Oil and gas development activities generating marine noise include seismic operations, drilling and production activities, offshore and nearshore structural installation (especially pile driving) and construction activities, and marine traffic. Noise from offshore activities (especially from seismic operations) can temporarily affect fish and marine mammals. Recommended measures to reduce the risk of noise impact to marine species include: Identifying areas sensitive for marine life such as feeding, breeding, calving, and spawning areas; Planning seismic surveys and offshore construction activities to avoid sensitive times of the year; Identifying fishing areas and reducing disturbance by planning seismic surveys and construction activities at less productive times of the year, where possible; Maximize the efficiency of seismic surveys to reduce operation times, where possible; If sensitive species are anticipated in the area, monitor their presence before the onset of noise creating activities, and throughout the seismic program or construction. In areas where significant impacts to sensitive species are anticipated, experienced observers should be used; When marine mammals are observed congregating close to the area of planned activities, seismic start-up or construction should begin at least 500 meters away; If marine mammals are sighted within 500 meters of the proposed seismic array or construction area, start-up of seismic activities or construction should be postponed until they have moved away, allowing adequate time after the last sighting; Soft-start procedures, also called ramp-up or slow buildup, should be used in areas of known marine mammal activity. This involves a gradual increase in sound pressure to full operational levels; The lowest practicable power levels should be used throughout the seismic surveys, and their use should be documented; Methods to reduce and/or baffle unnecessary high frequency noise produced by air guns or other acoustic energy sources should be used, where possible. Spills Spills from offshore facilities can occur due to leaks, equipment failure, accidents, or human error. Guidelines for release prevention and control planning are provided in the General EHS Guidelines, including the requirement to develop a spill prevention and control plan. Additional spill prevention and control measures specific to offshore oil and gas facilities include: Conducting a spill risk assessment for offshore facilities and support vessels; Design of process, utility, and drilling systems to reduce the risk of major uncontained spills; Install valves, including subsea shutdown valves, to allow early shutdown or isolation in the event of an emergency; Ensure adequate corrosion allowance for the lifetime of the facilities and / or installation of corrosion control and prevention systems in all pipelines, process equipment, and tanks; Develop maintenance and monitoring programs to ensure the integrity of well field equipment. For export pipelines, maintenance programs should include regular pigging to clean the pipeline, and intelligent pigging should also be considered as required; Install leak detection systems. Use of sub-sea pipelines measures, such as telemetry systems, SCADA6 systems, pressure sensors, shut-in valves, and pump-off systems, as well as normally unattended installations (unmanned) facilities to ensure rapid detection of loss of containment; For facilities with potentially significant releases, install an Emergency Shutdown System that initiates automatic shutdown actions to bring the offshore facility to a safe condition; Adequate personnel training in oil spill prevention, containment and response; Ensure spill response and containment equipment is deployed or available as necessary for response; All spills should be documented and reported. Following a spill, a root cause investigation should be carried out and corrective action taken. A Spill Response Plan is required, along with the capability to implement the plan. The Spill Response Plan should address potential oil, chemical, and fuel spills from offshore facilities, support vessels including tankers, and pipeline ruptures. The plan should also include: A description of operations, site conditions, current and wind data, sea conditions and water depth, and logistical support; Identification of persons responsible for managing spill response efforts, their responsibility, authority, roles and contact details; Cooperative measures with government agencies, if appropriate; Spill risk assessment, defining expected frequency and size of spills from different potential release sources, including assessment of foreseeable scenarios; Oil spill trajectory modeling with oil fate and environmental impact prediction for a number of spill simulations (including worst case scenario, such as blowout from an oil well) using an adequate and internationally recognized computer model with the ability to input local current and wind data; Clear demarcation of spill severity, according to the size of the spill using a clearly defined Tier I, Tier II and Tier III approach; Strategies for managing Tier I spills at a minimum, from the offshore installation and support vessels; Arrangements and procedures to mobilize external resources for responding to larger spills and strategies for deployment; Full list, description, location, and use of on-site and off-site response equipment, and the response times for deployment; Strategies for containment and recovery of floating oil, including use (and limitations) of chemical dispersants; Maps identifying sensitive ecological areas (seasonal /monthly) prepared using sensitivity mapping of the environment at risk; Identified priorities for response (with input from potentially affected or concerned parties); Shoreline cleanup strategies; Handling instructions for spilled oil, chemicals, fuels or other recovered contaminated materials, including their transportation, temporarily storage, and disposal. Decommissioning Internationally-recognized guidelines and standards issued by the International Maritime Organization (IMO) and decisions issued by OSPAR should be followed for the decommissioning of offshore facilities. IMO standards state that installations or structures of less than 4,000 tonnes, excluding the deck and superstructure, and in less than 75 meters of water should be removed entirely at decommissioning. Additionally, no installation or structure should be installed after January 1, 1998 unless the facility is designed to be entirely removed. The standards indicate that exceptions will be considered on a case-by-case basis for installations or structures installed before 1998 that cannot be fully removed for demonstrable reasons of technical or financial feasibility, but these facilities must be partially removed to provide a clear water column depth of 55 meters. An OSPAR decision recognizes entire removal of the facility from the offshore locations for re-use, recycling, or final disposal on land as the preferred option for the decommissioning of offshore facilities. Alternative disposal options may be considered if justified on the basis of an alternative options assessment. This assessment should consider facility type, disposal methods, disposal sites, and environmental and social impact, including interference with other sea users, impacts on safety, energy and raw material consumption, and emissions. A preliminary decommissioning plan for offshore facilities should be developed that considers well abandonment, removal of oil from flowlines, facility removal, and sub-sea pipeline decommissioning along with disposal options for all equipment and materials. This plan can be further developed during field operations and fully defined in advance of the end of field life. Occupational Health and Safety Occupational health and safety issues should be considered as part of a comprehensive hazard or risk assessment, for example, a hazard identification study [HAZID], hazard and operability study [HAZOP], or other risk assessment studies. The results should be used for health and safety management planning, in the design of the facility and safe working systems, and in the preparation of safe working procedures. Health and safety management planning should demonstrate that a systematic and structured approach to managing offshore health and safety will be adopted and that controls are in place to reduce risks to as low as reasonably practical. Offshore facilities should be designed to eliminate or reduce the potential for injury or risk of accident. General facility design measures and requirements are provided in the General EHS Guidelines. In addition, the following issues should be considered in the design of offshore facilities: Environmental conditions at the offshore location (e.g. seismicity, extreme wind and wave events, currents, ice formations); Adequate living accommodation appropriate to outside environmental conditions; Temporary refuge or safe havens located in a protected area at the facility for use by personnel in the event of an emergency; A sufficient number of escape routes leading to designated personnel muster points, and escape from the facility; Handrails, toeboards, and non-slip surfaces on elevated platforms and walkways, stairways and ramps to prevent man overboard incidents; Crane and equipment laydown area positioning to avoid moving loads over critical areas and reducing the impacts from dropped objects. Alternatively, structural protection measures should be provided. A formal Permit to Work (PTW) system should be developed for offshore facilities. The PTW will ensure that all potentially hazardous work is carried out safely and ensures effective authorization of designated work, effective communication of the work to be carried out including hazards involved, and safe isolation procedures to be followed before commencing work. A lockout / tagout procedure for equipment should be implemented to ensure all equipment is isolated from energy sources before servicing or removal. Offshore facilities should be equipped, at a minimum, with specialized first aid providers (industrial pre-hospital care personnel) and the means to provide short-term remote patient care. Depending on the number of personnel present and complexity of the facility, provision of an on-site medical unit and doctor should be considered. In specific cases, telemedicine facilities may be an alternative option. An alarm system should be installed which can to be heard throughout the offshore facility. Alarms for fire, gas leak and man overboard should be provided. The formation of a health and safety committee for the facility is recommended. Health and safety inductions should be provided to the entire workforce prior to mobilization to the offshore facilities. Guidance for the management of physical hazards common to all industries and specifically relating to hazards from rotating and moving equipment, exposure to noise and vibration, electrical hazards, hot work, working with heavy equipment, working at heights, and the general working environment is provided in the General EHS Guidelines. These guidelines also provide guidance on Personal Protective Equipment (PPE) required for the workforce. Occupational health and safety issues for further consideration in offshore oil and gas operations include: Fire and explosion prevention and control Air quality Hazardous materials Personnel transfer and vessels Well blowouts Ship collision Emergency preparedness and response Community Health and Safety Impacts to community health and safety from typical offshore oil and gas facility operations relate to potential interaction with other sea users, primarily ship operators and fishermen. Activities such as offshore drilling and construction, pipeline installation, seismic operations, and decommissioning may result in temporary impacts to other users of the sea. Permanent installations and structures, including production and drilling facilities and sub-sea pipelines, have a potential long-term impact, at least until the end of the life of the field. Notification of the location of offshore facilities (including sub-sea hazards) and timing of offshore activities should be provided to local and regional maritime authorities, including fishery groups. The position of fixed facilities and safety exclusion zones should be marked on nautical charts. Clear instructions regarding access limitations to exclusion zones should be communicated to other sea users. Sub-sea pipeline routes should be regularly monitored for the presence of pipeline spans and identified spans repaired. In areas where significant impacts to fishermen are anticipated, a fisheries liaison officer should be appointed to provide a direct link with the fishing community. Arrangements for the management of potential community or amenity impacts resulting from shoreline impacts caused by oil, chemical, or fuel spills are to be included in the spill response plans. Security Unauthorized access to offshore facilities should be avoided by means of gates located in the stairs from the boat landings to the deck level. Means for detecting intrusion (for example, closed-circuit television) may be considered, allowing the control room to verify the conditions of the facility. A facility standby vessel should be considered for all offshore facilities. This vessel should support security operations, management of supply vessel approach to the facility, and the intrusion of third party vessels into the exclusion zone, as well as supporting operations during emergency situations. Risk Analysis and Management @ K&A Consulting 0244649562Page 29