Regulatory compliance continues to be a challenge for oil and gas producers. Not only is the oil and gas industry highly regulated, but regulations are evolving and changing on an ongoing basis. However, for NOPSEMA’s Derrick O’Keeffe, challenges associated with staying compliant also present opportunities to “aspire to be world-class.”
"There are many production facilities almost ready to come online in the next three years taking Australia to a world-class position in terms of LNG exportation.
"This is a magnificent position; however, our agency is here to help companies aspire to world-class levels in everything related to oil and gas, not just total exports," said the Head of Division, Safety and Integrity at a recent presentation to members of the Petroleum Club of Western Australia.
Established in 2005, NOPSEMA fulfils its legislative functions by undertaking assessment, inspection, investigation, enforcement, promotion, and advisory activities.
The regulator sits in the space of objective based regulation where operators chose the minimum standard which they wish to work to, as compared with prescriptive regulation, which defines how activities are undertaken.
"An example of a prescriptive based system is driving down Mounts Bay Road. The sign says 60 kilometres per hour. If you drive at that speed you won't get a ticket, if you drive at 62, you might. If it's wet, maybe 58 is too fast.
A prescriptive based system outlines a minimum standard, and maybe you don't move beyond that," said Mr O'Keeffe.
Objective-based regulation is preferred over prescriptive regulation because the focus is on outcomes and understanding of risks, rather than the specific process taken to achieve the result. Objective-based regulation allows interest holders to adopt environmental management practices and technologies best suited to individual company circumstances, activities, and locations, subject to demonstrating that all environmental risks and effects are reduced to a level that is as low as reasonably practical (ALARP) and acceptable.
“Operators send their documents for a safety case along with their well management and environment plans, and we evaluate their application and inspect against those conditions. We say: you were going to do this, you chose the standard that we're now accessing you to and we're here to find out if you’re meeting them.”
The federal regulator which was formed partly in response to the ten-week Montara oil spill in 2009, which saw 300,000 litres of oil and gas spew daily into the Timor Sea about 170km off the Kimberley coast publishes improvement and prohibition notices within 21 days of issuance on its website.
"We post these notices not just because we are legally required to, but also because it’s an opportunity to correct systemic problems, like when inspections by NOPSEMA identified that ten facilities failed to manage safety critical valve locking and CAR sealing systems appropriately.”
On top of reducing regulatory burden through the identification of problems once to fix many, Mr O'Keeffe sees further opportunities in areas of global collaboration, providing access to knowledge and easier application processing with the use of big data.
“We believe that step change to international and then global standards is not just possible, but achievable, likely and can occur faster than expected.
“On top of increases in performance, safety is still our number one concern, and you’ve all got significant parts to play in getting everyone home safely,” summarised O'Keeffe.