Shell safety record in North Sea takes a hammering

· Oil group given repeated warnings about rigs
· Critics fear neglect as end of commercial life nears

Terry Macalister
Monday March 5, 2007
The Guardian

Shell has been repeatedly warned by the Health and Safety Executive about the poor state of its North Sea platforms, according to information obtained by the Guardian.

The company's dismal record undermines Shell's public commitment to improve its performance after a fatal explosion on the Brent field in the North Sea in 2003 and raises further concerns about Britain's ageing oil and gas equipment.

As recently as November 13, Shell - one of Britain's largest companies - was served with a rebuke and a legal notice that it was failing to operate safely.

"Shell have failed to implement a suitably resourced maintenance regime to achieve compliance with their maintenance strategy. This has led to an excessive backlog of maintenance activities for safety critical equipment," says the HSE's improvement notice number 300463514, covering the Clipper 48 platform in the southern North Sea.

Critics fear that some of the long-established oil infrastructure in the North Sea is being neglected because it is coming to the end of its commercial life.

Shell was served with a similar notice, on September 1, about the state of facilities on the Leman A platform in the central North Sea. The HSE notice 300331067, said: "Lifting equipment was not being adequately maintained through the rigging loft. The AK gantry cranes were inadequately maintained. On-site control of lifting operations was seen to be inadequate." And on July 27 last year, Shell was told by the North Sea safety regulator it had "failed to ensure the health and safety of your employees and others by failing to ensure that the 12-inch oil export pipework P-137-1106Y, so far as is reasonably practicable, has been maintained in an efficient state, in efficient working order, and in good repair." This notice - 300319346 - is particularly damaging because it relates to a platform on the large Brent field.

Just eight days before this notice was served, an Aberdeen sheriff's court had ruled in a fatal accident inquiry that Shell could have prevented the two deaths if it had properly repaired a hole in a corroding pipe on a Brent platform. Shell had earlier admitted responsibility for this accident but on the day of the sheriff's report, the Offshore Industry Liaison Committee complained that the Brent Bravo platform still had leaks, dangerous stairs, and lifts left broken for six months.

Last summer Shell insisted it was in the middle of a $1bn (£515m) programme to upgrade its platforms, saying: "Safety is and will remain our first priority."

But the HSE website shows Shell was issued with 10 improvement notices during 2006, although one referred to an onshore facility at St Fergus in Scotland. Notices are served where the HSE considers a company is operating unlawfully with unacceptable risks, according to industry experts. The regulator's website suggests that Shell has been served with 42 notices since 1999, while BP, a company of similar size, has received 25. From 2002 to the end of last year among other North Sea operators, Total had been served with four notices, Chevron one and Amerada Hess two. Despite these high numbers, a Shell spokesman said at the weekend the company had been working hard and successfully to improve its track record. "Improving our performance is an important priority and we have set ourselves tough targets to do this," he said.

Sources close to the company denied that Shell's record was worse than others. There had been a sixfold decrease in "total reportable case [accident] frequency" between 1999 and 2006, added the source. Last year, Shell was embarrassed when Bill Campbell, one of its senior safety consultants, claimed the company was operating a weak safety regime and said some employees had been falsifying documents. Shell denied the charges, but Mr Campbell has been threatening the company with a defamation case.

Backstory

North Sea operators are investing less in offshore oil platforms at a time when production is falling much faster than expected, according to a recent report from the UK Offshore Operators Association. As the North Sea nears the end of its natural life as an oil province, many large groups are looking for much bigger finds elsewhere. North Sea production fell 9% to 2.9m barrels of oil equivalent last year and UKOOA expects it to be 250,000 barrels lower on average over the remainder of the decade. UKOOA is also predicting investment will fall to as little as £4bn this year compared with £5.6bn last year, at a time when costs are rocketing due to equipment shortages.