Weak Regulation and Offshore Safety in Nigeria

Stakeholders in the Nigerian oil and gas industry blamed increasing accidents in the oil and gas sector to weak regulation. Ejiofor Alike examines the views of stakeholders at a recent Health, Safety and Environment conference organised by the Department of Petroleum Resources

The issue of Health, Safety and Environment (HSE) is of strategic importance in the global oil and gas industry and international operators have global HSE standards, which they incorporate in their operations to ensure safe workforce and guarantee millions of man-hours without Loss Time Incident (LTI).
Negligence of HSE on the part of oil companies and failure of regulators to enforce safety regulations have caused the global offshore oil industry billions of dollars in replacing damaged equipment and payment of compensation, apart from loss of lives.

For instance, the April 20, 2010 explosion of the Transocean semi-submersible Deepwater Horizon and rupture of BP’s Macondo deepwater well in the United States’ Gulf of Mexico killed 11 people and triggered the largest offshore oil spill in the history of the United States.
United States District Judge, Carl Barbier had ruled that BP was mostly at fault and that two other companies in the incident -Transocean and Halliburton, were not as much to blame.
The ruling eliminated Transocean’s financial risk for the underwater portion of the spill after the judge found BP Plc grossly negligent.
Transocean’s remaining financial risk was for the above-surface discharge of pollutants that occurred during the first two days of the spill.
BP had earlier failed to persuade the judge to require businesses seeking to recover money over the oil spill to provide evidence that their economic losses were caused by the disaster.
However, BP has appealed the ruling, saying that it believes the standard for proving “gross negligence” was not met.
BP had originally projected that its settlement with businesses and individuals affected by the spill would cost around $7.8 billion but later boosted this estimate to $9.2 billion, saying this sum could grow “significantly higher”.
In Nigeria, the House of Representatives Committee Environment recently ordered Shell to pay $3.96 billion as cost of damage to the environment for the December 20, 2011 oil spill at Shell’s offshore Bonga deepwater oilfield.
According to the report of the committee, the oil spillage and harmful chemical pollutants affected over 350 coastal communities and satellite villages in Delta State.

Shell had in its report agreed “to an oil spill estimate at 40,000 barrels into the marine environment in Bonga on December 2011. “The cause of the spill was equipment failure resulting from a snapped loading hose under water,” said the report.
The latest major offshore accident in Nigeria occurred on May 26, 2013 when Anchor Handling Tugboat (AHT) Jascon 4, an oil service tugboat and one of many vessels on the fleet of West Africa Ventures (WAV), a Nigerian subsidiary of Dutch-based marine contractor, Sea Truck Group, sank while working for Chevron Nigeria Limited, killing 11 people.
Before this latest incident, KS Endeavor, a drilling rig, operated by FODE Drilling Nigeria Limited, was drilling a natural gas exploration well in Chevron’s Funiwa Field in Block 86 in Bayelsa State, when it caught fire on January 6, 2012.
Chevron confirmed that 152 workers on the shallow water rig and associated barge were safely evacuated from the incident, which occurred about 10 kilometres, about 6 miles from shore.
Two workers who received medical care for burns were also discharged from the hospital.
However, after three days of intensive search and rescue activities for two other missing workers, Chevron declared them dead, while the oil well continued to burn for several months after the drilling rig had collapsed.

Government’s efforts
To ensure safe operations in the oil and gas industry, the federal government has formulated HSE policies and guidelines for the local and foreign operators.
For instance, the Environmental Guidelines and Standards for the Petroleum Industry in Nigeria (EGASPIN) of 2002 as revised in 2013, provides the guidelines on environmental and pollution management and their enforcement based on the Petroleum Laws and Regulations.
The government had also launched the Offshore Safety Permit (OSP) to track and ensure the safety of offshore workers, in accordance with the Mineral Oil Safety Regulations of 1997, as amended.
In the area of health, Nigeria’s oil and gas industry is not known to have witnessed major incidents of disease outbreak.
There has also been significant improvement in the area of environmental management with coordinated and collaborative approach to oil spill management and response by all the stakeholders.
In fact, before the recent rise in the spate of vandalism and oil theft in the Niger Delta, the number and frequency of oil spills was on the decrease due to the improved response rate of the oil companies and their efforts in replacing aged assets.
A weak regulatory agency
Apparently due to the less difficult operating environment and more accessible terrain, the DPR has been able to police and enforce the HSE activities in the downstream sector more effectively than the upstream activities.
However, the upstream sector, particularly the offshore environment has safety issues that have not been addressed by the regulator.
The issue of safety of offshore workers and installations is increasingly becoming a major cause for concern.
HSE in Nigeria’s oil and gas industry also took a front burner at the recent biennial conference on HSE organised by the Department of Petroleum Resources (DPR), the apex regulator of the industry.
The three-day conference, which witnessed four plenary sessions that brainstormed on the HSE challenges in Nigeria’s oil and gas industry, was enriched with about 40 technical papers in different areas of HSE and compliance by the industry operators.
It was the contention of the stakeholders that the DPR has issued effective HSE policies and guidelines on behalf of government but has not demonstrated sufficient capacity to enforce these safety regulations, especially in the offshore environment.

Stakeholders, who spoke to THISDAY at the HSE conference, alleged that the government pays lip service to the issue of enforcement of offshore regulations, apparently due to DPR’s lack of capacity to regulate the offshore environment, where the technology and operations are increasingly becoming sophisticated.
They cited a new marine safety regulation, which many of the operators are yet to comply with, 21 months after the expiration of the January 1, 2013 deadline set by the DPR, as evidence of the lack of capacity of the regulatory agency to enforce its regulations.
These operators also cited two major offshore accidents in recent times to buttress their claims of vulnerability of offshore environment to fatal incidents due to the failure of regulatory enforcement.
The recent marine regulation, which most of the operators have ignored provides that “the Maritime survivor Locating Device (MLD) shall be incorporated into all existing and new lifejackets used in the Nigerian oil and gas industry”.
“The device must be rugged, have a fully waterproof construction, complete with strobe light to assist visual homing for use in the harshest of marine environment,” according to the regulation.
According to the DPR, the regulation was meant to improve the levels of personnel safety for all workers in the industry, while also reducing the risks associated with man overboard (MOB) incidents, helicopter ditching incidents, marine vessel accidents and platform disasters as well as improving the ability of stakeholders to respond to such incidents in Nigerian waters.
Speaking at the HSE conference, the DPR Director, Mr. George Osahon, who represented both himself and the Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke said that following the recent increase in asset divestment and acquisition (D & A) transactions in the oil and gas industry, the associated hazards and risks, which pose great challenges to the health and safety of the teaming workforce have surfaced in a number of cases.
Without statistics to buttress his claims, Osahon, however, argued that the overall rate of incidents was on the downward trend.
Flouting Regulations
DPR had posited in a previous report that “man overboard (MOB) incidence is the single largest cause of marine fatalities,” adding that “workers in offshore oil and gas and other marine industries face risks of ‘man overboard’”
According to DPR’s previous accident statistics between 2005 and 2011, one-third of the fatalities in the offshore industry resulted from the MOB incidents.
The regulatory agency had also acknowledged that the industry had lost millions of dollars yearly to the incidence of MOB as “the potential cost to an organisation experiencing a single man overboard incident without the MLD (Man onboard Locator Device) in use may be as high as $642,000.”

In June 2012, the regulatory agency in a letter to all exploration and production companies, service companies, and downstream companies expressed concern over the poor compliance by industry operators to the new regulation.
The letter dated, June 6, 2012, with Reference No: DPR/SE/7206/Vol.1/3, noted that “the Department of Petroleum Resources has observed with dismay a high and unacceptable level of incidence of Man overboard in the Nigerian Oil and Gas industry in the past couple of years.”
The agency directed that “all offshore workers (swamp locations inclusive) shall have capability of response in case of incident of man overboard, through assurance and compulsory use of life jackets at all times while within the marine environment,” adding also that “all such life jackets in use in the oil and gas industry in Nigeria shall be equipped with very high frequency (VHF) maritime survivor locating device.”
It also directed the operators to ensure that “all existing life jackets which do not have incorporated in them marine survivor locating devices, shall be retrofitted with the device should any operative wish to continue with the use of such jackets”.

The letter, signed by one D.O. Irrechukwu, who is now retired, also directed that the device must be designed to withstand the rough and demanding situation in the offshore environment, and also incorporate a strobe light to assist visual homing for use in the harshest marine environment.
The DPR also directed the operators to ensure that the device have in-built capability to use VHF radio to automatically transmit distress alert to multiple receivers up to 10 nautical miles away as well as be able to provide a precise Global Position Satellite, GPS that will help in directing rescue at such a distance.

It explained that it introduced the MOB/MLD policy to help operators and service providers to, “Significantly reduce resulting costs in the areas of legal expenses, reputation and productivity and transit time,” in view of the rising operational costs in the industry.
The regulatory body told the industry operators that using the Locator Device will also help to “reduce the likelihood that an MOB event results in a fatality can achieve specific savings in insurance and has the potential to negotiate better ongoing insurance premiums.”
According to DPR, the use of such a technology will limit the negative financial implications to the offshore oil and gas industry in Nigeria, and provide speedy recovery of the MOB casualties from the water.
But nearly two years after the expiration of the deadline on January 1, 2013, only few companies have complied, according to investigations by THISDAY.

However, THISDAY could not ascertain the identities of other companies that may have since complied after the initial five companies.
But operators are worried that the DPR is not wielding the big stick against erring companies that flout offshore safety rules.
Many offshore workers die or suffer permanent disability due to man overboard and other incidents in Nigeria because the oil companies fail to comply with safety rules, without adequate sanction by the DPR.
A United States captain, Wren Thomas, who was taken hostage and tortured in a filthy and mosquito-infested camp in Bayelsa State for 18 days after his supply vessel was hijacked by Nigerian pirates, recently told Harris County Court in the US that Chevron Nigeria Limited was responsible for his travails.
Thomas sued Chevron USA and Edison Chouest Offshore LLC, (ECO) on October 16, 2014 in Harris County Court, accusing the two companies of gross negligence.
The captain, who is being represented by Brian Beckom with Vujasinovic & Beckom of Houston, is seeking punitive damages against Chevron for gross negligence, under the Jones Act, a US federal law that regulates working conditions for US seamen.
In his statement of claims seen by Courthouse News Service of Houston, Thomas said the ordeal left him with post-traumatic stress disorder, insomnia, high blood pressure, an infection, and financial and marital problems.
He told the court that in July 2011 Edison Chouest made him captain of its 200-foot vessel, the C-Retriever, which was supporting the drilling activities of Chevron Nigeria off Nigeria’s coast.
According to him, Chevron and ECO were well aware that Nigerian pirates patrolled the area, because pirates had stormed ECO’s vessel, Fast Servant in 2010, beat two US captains and stole the boat’s equipment.
In the most recent offshore accident where the Anchor Handling Tugboat (AHT) Jascon 4 belonging to West Africa Ventures (WAV), sank and killed 11 people, only one Harrison Okene, the cook, had survived.
The other 11 cabin crew members, including four cadets on industrial training from the Maritime Academy of Nigeria, Oron in Akwa Ibom State and the Ukrainian captain of the vessel, who was the only foreigner onboard, all died.
THISDAY gathered that nobody was sanctioned for the boat mishap, which occurred at 15 nautical miles offshore Escravos.
Some of the operators at the HSE conference told THISDAY that if the accident had occurred in the UK or the US, the people in charge of the vessel would have been arrested and prosecuted.
“If it were in the United Kingdom, the MCA, which is the equivalent of NIMASA, would have arrested the English and the Irish nationals, who were in charge of the vessel. Chevron was aware that the incident would have a backlash and flew the two men out of the country on the following day,” said one of the operators.
One of the operators also argued that the matter was buried under the carpet because 10 out of the 11 victims were all Nigerians.
“If most of the victims were British and American nationals, they would have since released the report of what went wrong on the vessel and ensure that there were appropriate sanctions,” he said.

Source: THIDSAY (09 Dec 2014)