DOT 2011: Proven Approaches for Catastrophic Risk Management

Managing catastrophic risk is increasingly important for offshore development, and is an area in which offshore operators can learn from leading practices in the broader oil and gas industry and beyond.

The following is an abstract of a presentation that will be featured at the Deep Offshore Technology International Conference & Exhibition in New Orleans, Oct. 11-13:

Neal Walters, A.T. Kearney

Managing catastrophic risk is increasingly important for offshore development, and is an area in which offshore operators can learn from leading practices in the broader oil and gas industry and beyond. While most companies do not suffer catastrophic events, non-catastrophic safety incidents result in more capacity/opportunity loss than planned maintenance and unplanned downtime from all other sources combined. In addition, these lesser events are a predictor of catastrophic events.

When failures do occur, equipment failures and mechanical causes are often the focus of root cause investigation, to the detriment of understanding human factors that may be the true underlying root causes. Yet “human factors” related to operating or maintenance procedures, management of change, or training are often the major underlying root causes. These human factors can be especially difficult when incidents are treated as isolated events.

Most companies measure lagging indicators – the number and severity of incidents – to assess risk. Since incidents are infrequent and highly variable, this may lead to a false conclusion that overall risk is well-managed when leading indicators may, in fact, indicate the opposite. Truly diagnosing overall site risk involves assessing both leading and lagging indicators.

We recommend looking at recent history, current practices, and prevention approaches across four elements: work practice maturity; key risk predictors; incident frequency and impact; and incident follow-up status. Existing programs that don’t look at all four elements, or look at them independently, may result in an incomplete assessment of the current level of safety risk – and increased potential for serious or catastrophic incidents.

The presentation will discuss these underlying root causes and risk measure elements, and will recommend actions that can rapidly decrease and mitigate risk exposure.

This presentation will be featured at theDeep Offshore Technology (DOT) Conference & Exhibition in New Orleans. It is scheduled for 10 a.m., Thursday Oct. 13, in Suite D Room 21 of the Hilton Riverside.

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