Maintenance is still a must
Article published in The Regulator | Issue 2: 2020
Since the onset of the COVID-19 pandemic the offshore oil and gas sector, like many businesses and the community, is also operating under unprecedented and challenging circumstances. As an example of the significant changes, operators reported offshore hours worked in April 2020 as 56 per cent lower than the average monthly total between November 2019 and March 2020.
In addition to managing risks and concerns associated with the COVID-19 pandemic, the offshore sector has been further challenged by the impacts of historically low oil prices.
NOPSEMA was concerned that the effects of reduced cash flow, compounded by operators de-manning facilities to include only essential crew in response to COVID-19, could result in less attention being given to areas of work necessary to control risks. To address these concerns, NOPSEMA conducted broadly scoped COVID-19 “consequence inspections” to monitor how flow-on consequences of the pandemic had influenced management of offshore petroleum activities. This approach considered a range of work streams that may be affected, including planned and corrective maintenance and integrity-related inspections undertaken on offshore facilities.
Ongoing maintenance, particularly for safety-critical equipment, is vitally important in reducing risks to the offshore workforce and the protection of the environment.
Given that more than half of all offshore production facilities in Australian waters currently regulated by NOPSEMA are more than 20 years old, and some exceed 50 years, routine inspection, maintenance and repair are necessary to control risks and ensure asset integrity.
NOPSEMA’s consequence inspections found that about a third of facilities had changed or deferred their routine maintenance processes in response to pressures related to COVID-19 and low oil prices.
NOPSEMA has responded by working with facility operators to closely monitor their application of maintenance management to ensure planned maintenance is carried out within an acceptable timeframe. To this end, NOPSEMA has identified that deferral of maintenance and integrity-related inspections is a key compliance issue.
NOPSEMA considers inspection, maintenance and repair as activities requiring proactive focus to ensure there is no degradation in standards despite current pressures on industry.
Under existing legislation, it is a requirement for offshore petroleum companies to maintain all property and equipment so that it remains in good condition and repair until such time that it is no longer required, and then it must be removed from the offshore environment.
In line with legislation, NOPSEMA’s expectation is that property and equipment will not be permitted to deteriorate to a point where it becomes a risk to the safety of the workforce, hazardous to the environment or becomes degraded to such an extent that it can no longer be safely removed.
To assist petroleum companies in achieving compliance with the long-term, pre-existing legislative requirement to maintain and remove property, NOPSEMA recently released a draft policy – Section 572 maintenance and removal of property – for the review and input of stakeholders.
While NOPSEMA has always required petroleum companies to demonstrate how they will maintain and remove all property and equipment, the then federal Minister for Resources issued NOPSEMA with a Statement of Expectations in late 2019 in which he made clear his expectation that NOPSEMA would heighten its focus on the existing legislative requirement for offshore petroleum companies to maintain and remove all property and equipment.
To ensure maximum reach in awareness and engagement with the petroleum industry, maintenance of property has been the focus of recent assessments and inspections. NOPSEMA has reinforced that investigation and enforcement will be taken where there is a gross violation or failure to comply with the legislative requirements.