Implementation of HSE Management System on EPC Projects in E&P Environment

Valentine Maritime Limited is one of the leading offshore contracting companies in the Gulf region offering a full range of services to the oil and gas industry including onshore and offshore construction and supply of marine units. Established in 1990, Valentine Maritime has emerged from the backstage to become a strong competitive force in the Gulf region. With projects in places as far-flung as India, Iran, the Mediterranean and Black Sea, Valentine Maritime continues to grow.

In June 2008, Valentine Maritime was awarded a $500million EPC contract by oil giant, Saudi ARAMCO to install submarine rigid and flexible pipelines, power and communication cables, riser bridge structures, subsea valve skids, HPU's and ancillary facilities in Manifa. This project is an integral part of the Manifa Development Program which is expected to support Saudi Arabia's strategy of increasing crude oil production and Maximum Sustained Capacity (MSC) rates by 900 MBCD of Arabian Heavy (AH) crude oil from the offshore Manifa field. While the award of the project ushered Valentine Maritime into the league of the big players in the offshore contracting sector, it also brought new HSE challenges. This paper discusses various safety issues encountered and how these were tackled to achieve consistent excellent ratings in ARAMCO's monthly Project Safety Index (PSI) audit. Lessons learned from the E&P environment are presented with useful suggestions for new entrants.

In the exploration and production industry, the pattern of use of contractors has changed significantly over the last twenty years. Figure 1 shows the pattern of company and contractor hours reported to E&P Forum for the period 1985–2010. Prior to 1985 the work force was predominantly company employees. Since 1990 there has been a significant increase in the use of contractor staff, with a resulting shift in responsibility and risk from the company to the contractor population. However, there have been significant improvements in the safety performance of both the Companies and their contractors during this period.

Historically the contractor Fatality Incident rate (FIR) and Lost Time Injury Frequency (LTIF) have not been as good as that of companies, though the gap is narrowing. The trend is encouraging, since contractor personnel generally have a higher exposure to risk, and it is important this trend continues, particularly as the use of contractors in the E&P industry increases.

Valentine Maritime's HSE Management System is based on and reflects the true spirit of the company's HSE policy. It is in line with ADNOC guidelines and meets all the relevant international HSE management requirements such as ISM, SOLAS, MARPOL, etc. The basis of Valentine Maritime's HSE Management System is depicted graphically in Figure 2.

Valentine Maritime's HSE Management System is proactive in approach and is intended for a healthy HSE culture. Valentine Maritime's efforts are focused towards continual improvement in line with the HSE Management System. It has all the essential elements of a standard HSE Management System viz: HSE policy, planning, implementation, monitoring and review leading to continuous improvement. The system is set out in 3 basic manuals: • HSE Management System Manual

• HSE & Loss Prevention Practices

• Safety Management Manual (ISM)

The construction industry is inherently a high risk sector with a tendency for the risk to become amplified when construction activities interface directly with oil and gas exploration and producing activities-another high risk profile industry. While the oil and gas industry already has a high HSE performance standard, ARAMCO HSE standards in particular placed a higher demand on contractors.

Valentine Maritime HSE Management System and practices are fully compliant with marine industry and ADNOC guidelines but ARAMCO HSE Management System and practices on the other hand were based on API and OSHA recommendations. Thus aligning Valentine Maritime HSE Management System and practices with those of the oil and gas industry was an issue that needed to be addressed.

Since this was Valentine Maritime's biggest project to date, it was necessary to expand the manpower base to adequately support the project. Being a major project with a prestigious client and with very stringent requirements, it was essential that additional competent manpower be recruited, trained and oriented for the project.

One of the major challenges of the project was the number of interfaces that Valentine Maritime had to manage. Some of these interfaces involved simultaneous operations with exploration and drilling besides construction activities by other contractors. Added to this was the complex onshore and marine logistics coordination that was dictated by the project environment. The presence of H2S in the field also compounded the challenge.

Legal requirements arising out of local laws, which were stringent in Saudi, had to be taken into account particularly with regards to waste disposal, medical emergencies and labour engagement.

With so many challenges, Valentine Maritime had to work very hard to prove its mettle as a competent large scale EPC contractor

Though Valentine Maritime Safety Management System was already in line with international standards, it was still necessary to upgrade it to meet ARAMCO and the oil industry systems especially with regards to objectives and expectations. Nevertheless, it was at the initial stage of the project where most of the teething problems were encountered but once these were resolved, the execution went smoothly.

In spite of the initial hiccups, Valentine Maritime applied corrective measures to achieve compliance in a timely manner and HSE performance progressed from average to ‘excellent’. The thrust was on proactive measures and lesson learnt techniques backed up by responsive and responsible management. The focus areas can be briefly listed as:

• Competent Safety professionals: Employment and deployment of competent safety professionals was one of the critical components of Valentine Maritime's safety management approach as the project required meticulous execution of HSE policies and programs.

• Hazard identification on continuous basis through daily observations, internal audits, weekly management walkthroughs and inspections, Task Risk Assessment / Job Safety Analysis.

• Senior management site visits: In order to demonstrate the commitment of top and senior management to safety, site visits were planned and made. This did not only improve the morale of work force but also their attitude towards safety.

• Management reviews at all levels were implemented to keep the safety system effective through daily worksite meetings chaired by the person in charge of the location and the client representative, Operations meetings at head office chaired by the President, weekly progress meetings chaired by the client and monthly management meetings at the head office chaired by President besides other departmental meetings.

• Development of close monitoring and review system: Corrective and Preventive Action Report (CAPAR) mechanism was developed to cope with HSE issues requiring timely close out in line with system requirement. This was periodically reviewed at different levels.

• Documents Monitoring: A document matrix was developed to monitor the approvals of manpower, procedures and plans.

• Supervisors Training: Based on the lessons learnt from a few incidents, Valentine Maritime supervisors were trained in supervisory techniques, roles and responsibilities and behavioral safety. At the same time, they were primarily made accountable for any safety violation of job in their work groups.

• Safety promotion measures onboard Valentine Maritime offshore vessels including:

  • o

    Suggestion / incident/hazard box

  • o

    Monthly safety awards

  • o

    Senior Management visit

These measures helped to widen the worker participation network on safety issues.

• Subcontractors HSE Management: It was observed that safety performance scores were generally lower on subcontractors’ work sites. Accordingly, a more focused approach to subcontractors’ management was adopted resulting in better performance.

As per the contract and ARAMCO Marine regulations, mobilization inspection of all construction spread vessels must be completed in Saudi Arabia before the vessels can work on ARAMCO project. The barge spread for the shore pull operation was the test case for Valentine Maritime. There were stringent requirements to be met and Valentine Maritime accordingly mobilized required resources to upgrade the vessels to ARAMCO standard. A third party inspection company was invited to Valentine Maritime yard in Abu Dhabi to inspect the vessels and assure they were fit for ARAMCO inspection. At the end of the inspection, the inspection company generated a deficiencies list to be cleared by Valentine Maritime before the vessels could be considered fit for ARAMCO inspection. This caused some schedule delay but Valentine Maritime worked extra hard and deployed more resources to clear the deficiencies list. After clearing all the items on the list, a confirmation inspection was conducted and the vessels sailed for Saudi Arabia. Expectations were high when the vessels left Abu Dhabi but the inspections in Ras Tannura, Saudi Arabia proved even more stringent than expected as residual punch lists were still generated. These punch lists were managed in reasonable time yet Valentine Maritime learnt its lessons from this test case and subsequent spread vessel inspections were completed in good time.

At the core of Manifa project environment is the central processing facility and a network of twenty five (25) artificial drilling islands in the open sea connected by arterial roads to a main causeway which leads to the mainland. The entire network of drilling islands and roads in the open sea form a peninsula which is simply referred to as "the causeway". The causeway provides vehicle and services access and allows land rigs to get to the drilling islands to drill oil wells. In

addition to the oil wells being drilled on the causeway, additional oil and water injection wells were also being drilled from isolated offshore platforms. Valentine Maritime is installing offshore pipelines to connect the oil and water injection wells to the Manifa central processing facility in addition to the subsea valves, power cables and umbilical to control the wells when completed. Apart from Valentine Maritime, there were other contractors in the same field working on different aspects of the field development. These include seismic survey contractor, drilling contractor, platform installation contractor, onshore pipeline contractor, electrical contractor, dredging contractor and piling contractor to mention a few. Working in the same field alongside so many contractors places a heavy demand on Valentine Maritime to coordinate interfaces. Interface coordination in a congested field brings its own challenges. Valentine Maritime maintained a small onshore construction team in Manifa to manage the activities of onshore contractors and to provide shore support to offshore barge spreads. There were two offshore barge spreads with some twenty (20) vessels and over four hundred (400) crew members on board. Onshore, there were four (4) subcontractors working on different sites and aspects of the project. Dedicated safety officers were assigned to the work sites as well as the barge spreads to ensure compliance with ARAMCO and Valentine Maritime Loss Prevention Programs. ARAMCO Loss Prevention Program is an over-arching program which governs construction safety on all ARAMCO projects. The provisions of the Loss Prevention Program were detailed in the Construction Safety Manual and several General Instructions (GI's) and Standards for easy reference and use by contractors. In addition to the comprehensive documentation on construction safety, Company Representatives were attached to individual work sites to monitor compliance with ARAMCO safety requirements and report to the Company.

In this section, key safety issues encountered by Valentine Maritime during project execution as well as the strategies adopted for tackling the issues, are discussed. From Valentine Maritime's experience, there is no simple formula for addressing all the issues that confront an EPC contractor in an E&P environment. Each issue needs to be considered on its own merit and appropriate solution worked out. The key issues are discussed under different section headings.

Valentine Maritime was able to reduce the cycle time for in-kingdom inspection of its vessels by applying the key lessons learned from the inspection of the first barge spread. During subsequent vessel mobilization inspections, Valentine Maritime reviewed and gained full understanding of ARAMCO requirements relating to vessel inspections, performed a more thorough out-of-kingdom inspection of construction spread vessels and meticulously closed out deficiencies list. It is worthy of note that only minor delays were experienced in subsequent inspections.

The review cycle for some of the safety documents, Curriculum Vitae of critical personnel and equipment operators submitted for ARAMCO approval was longer than normal. This was due partly to ARAMCO officials being assigned to multiple projects and to the stringent safety requirements imposed by ARAMCO. Furthermore, while ARAMCO reviewed and commented on all personnel CV's that were submitted by Valentine Maritime, it was obvious that ARAMCO had preference for personnel who had worked on ARAMCO projects in the past. This was to become Valentine Maritime's guiding principle in subsequent submissions to ARAMCO.

A combination of strategies were adopted to improve the cycle time for document review including: (i) diligent study

and understanding of ARAMCO requirements and standards to ensure that documents are approved during the first pass; (ii) face-to-face meetings between document authors and ARAMCO reviewers; (iii) early submission of documents and (iv) use of an expediting engineer to follow up on pending approvals. With regards to approval of CV's of safety personnel and certificates of equipment operators, the strategies used include: (i) screening of CV's and certificates by HSE department before submitting them to ARAMCO; (ii) interview of candidates by Valentine Maritime HSE department before presenting them to ARAMCO for interview; (iii) ensuring that candidates presented to ARAMCO have worked on ARAMCO projects in the past.

With a number of rigs drilling for oil in the same field where Valentine Maritime was laying pipelines, it was only a matter of time before interference would occur. Valentine Maritime schedule was developed with input from ARAMCO drilling schedule but this schedule changed frequently. SIMOPS were allowed in the 30 ppm zone but for safety reasons, no work was allowed in the 100 ppm zone. To enable the Company take full advantage of the SIMOPS, Valentine Maritime interfaced directly with the drilling contractors. Valentine Maritime's SIMOPS bridging document had significant input from the drilling contractor. During construction, Valentine Maritime's barge crew coordinated their activities directly with the rig crew. This close coordination aided Valentine Maritime's operations considerably. There were a few instances, however when the rig, with very little advance warning went into the hydrocarbon zone and Valentine Maritime had to vacate the 100 ppm zone. Significant changes had to be made to Valentine Maritime's schedule at these times but such incidents only underscored the importance of close coordination. To ensure that Valentine Maritime operation was not impacted by rig operations, the following strategies were adopted: (i) close coordination with the drilling contractors and ARAMCO scheduler and ARAMCO PMT; (ii) direct contact between Valentine Maritime's barge crew and rig crew; (iii) development of SIMOPS and bridging document in conjunction with drilling contractor and (iv) flexible approach to project scheduling.

At one point of time, the project witnessed a spate of incidents requiring extensive investigation and reporting. In one instance, a pile toppled over while Valentine Maritime's subcontractor was erecting it in the guide frame. The job was stopped for one full month until all procedures were revised, TRA's developed and corrective actions taken to ARAMCO's satisfaction. Needless to say, this was a setback for Valentine Maritime but fortunately, the piling job and subsequent activities were not on the critical path. On analysis, it was found that subcontractors were the weak link in HSE performance. While near misses cannot be completely eliminated and do, in fact, act as pointers for improvement, Valentine Maritime made adjustments by increased control over subcontractors’ activities. At the same time, an Action Plan was devised to encompass the HSE performance improvement strategies for the whole project activities. These strategies helped to ease off the initial tension between Valentine Maritime and ARAMCO as well as build mutual trust between the two parties.

Since Manifa field is an H2S containing hydrocarbon field, it is a mandatory requirement for all personnel working in the field to attend H2S training. By communicating this special requirement to all subcontractors and assisting them in booking slots for the training, Valentine Maritime was able to avoid major issues. There were a few instances however

when H2S training was required at very short notice and no training slot was available. In such instances, the training was arranged at alternative locations for a fee.

One major area of conflict between Valentine Maritime's safety officers and ARAMCO was incident reporting. While VML safety officers were accustomed to incident reporting to client representative on board for further transmission to ARAMCO channel, ARAMCO Safety Advisor insisted for direct and instant communication to him on any incident. There were several instances of lapses on this stringent requirement initially due mostly to communication system in offshore rather than intentional; the issue took serious turn at times. Actions were taken to reinforce the communication infrastructure as well as guidelines to safety officers on the requirements.

One particularly volatile situation was encountered on one of Valentine Maritime's pipelay barges when welders for their own convenience did not completely follow the approved pipe entry procedure. This did not go down well with ARAMCO and the barge safety officers were reprimanded. A study was subsequently conducted by Valentine Maritime to fully understand why some aspects of the pipe entry procedure were not followed by the welders. The procedure was revised based on the outcome of the study and the violation did not recur after issuing the revised procedure. Internal trouble-shooting was the main strategy adopted by Valentine Maritime to curb the problem of not completely following approved procedures. Tackling the problem from its root proved to be the best solution.

Some onshore project and subcontractors’ drivers got traffic violation tickets for parking in wrong places or exceeding the speed limit in certain areas. Offending drivers and their supervisors or manager were invited before ARAMCO panel. The penalties were stiff and as a rule, warning letters were issued to offending drivers. Multiple violations earned stiffer penalties up to and including dismissal but fortunately, none of Valentine Maritime's drivers was involved in multiple violations. A series of presentations were made to all drivers to sensitize them to the high premium placed on driving safety by ARAMCO. This strategy was effective and traffic violations were considerably reduced.

As a direct consequence of the implementation of Valentine Maritime's HSE Safety Management System and booster ‘Action Plan’ on the Manifa Offshore Pipelines Project, HSE performance took a leap as evidenced by the following reports:

PSI audit is conducted by ARAMCO based on exhaustive 28 elements related to safety, health and environment hazards on the project including subcontractor work. This rating went up from average to excellent over the period as shown in

This rating does, not only signify a safe workplace but also continuous improvement for Valentine Maritime.

A few lessons from the Manifa Offshore Pipeline Project are documented in this section for the benefit of other contractors:

• Not fully complying with client's requirements can lead to considerable lost time for a contractor;

• Not properly coordinating activities with client and client's other contractors can lead to undesired interference or consequences;

• Not reporting incidents in a timely manner can cause disaffection between client and contractor;

• Deviating from approved work procedure or regulation can lead to undesirable outcomes and earn the contractor a poor rating from the client;

• Not aligning contractor's safety systems and practices with client's system and practices could create friction between client and contractor.

The following recommendations are based on Valentine Maritime's experience on its first major EPC project in an E&P environment. It is the belief of the authors that the recommendations will be of considerable benefit to small and medium size contractors working on their first major EPC project in an E&P environment. The recommendations are:

• Read and understand client requirements and expectations and strive to meet or exceed those expectations. Deploy additional resources (expeditors, consultants etc) where ever necessary, to achieve desired results;

• Coordinate very closely with the client and the client's other contractors to ensure a hitch-free operation;

• As a rule, report all incidents on a timely basis and be prepared to make changes to own system and procedures to meet client requirements;

• Tailor safety training to the needs of the client and be sure to share special requirements with subcontractors;

• Proactively trouble-shoot own safety system and practices to fix any deficiencies or deviations from client standards or requirements;

• Indoctrinate own employees on the high safety performance standards required by the client;

• Be flexible in dealing with the client.

• Focus on subcontractors HSE performance and strive to achieve synergy.

• Adopt/practice lessons learned techniques extensively so that irritations arising out of repeated mistakes can be avoided.

• Make project specific objectives and targets and closely monitor them.

An attempt has been made in this paper to share Valentine Maritime's experience on a major EPC project for an oil giant. Key lessons from the experience have been distilled out and recommendations made for new entrants into the E&P environment. It is the belief of the authors that the discussions, lessons and recommendations would prove invaluable to new and veteran contractors who are keen on learning from the experiences of others and getting it right the first time. In one project life cycle, no contractor can afford to repeat the mistakes of others all over again. The authors would be gratified if one contractor would find the material in this paper useful.