Damning report on handling of near disaster on Norwegian oil platform prompts Bellona to petition a police investigation

Publish date: November 19, 2010

There was a real danger of a gas explosion on the Gullfaks C platform in May, something Statoil did not understand or want to take seriously. That is the conclusion drawn by the Norwegian Petroleum Safety Agency (PSA) in an investigation report, which was presented today. “A complete slaughter of Statoil,” said Bellona President, Frederic Hauge, who will formally petition the police to investigate Statoil.

“The investigation report from PSA (downloadable to right in Norwegian) is a complete slaughter of Statoil, and confirms that the PSA agrees what Bellona has claimed from day one: Statoil has understated the risk of a serious accident on the Gullfaks C [platform], “said Hauge.

He pointed out that the problems on Gullfaks C occurred while the US was working hard to stop the blowout at the Macondo well in the Gulf of Mexico after BP’s Deepwater Horizon exploded, causing the worst oil spill in US history. However, it was difficult to obtain concrete information from Statoil from May19 to July 14 as  the pressure situation at Gullfaks C was out of control and production was brought to a halt.
[picture1 {Gullfaks C platform located in the northern North Sea, and has been in operation since 1989}]


“Statoil has throughout the course of events withheld information and had a communication strategy of secrecy which we have never seen before from the oil industry,” said Hauge.  “Already a few days after the pressure change of May 19, we said that this was a situation with potential for a major accident, but this was categorically denied by Statoil,” said Hauge.

Hauge elaborated that, “Statoil must have known how serious this was. The fact that they refused to confirm that the drill string was stuck for several days, and that they would not disclose how large were the amounts of mud they used to regain control of the well indicates that they understood the gravity of the situation – and that there was talk about the potential for a major accident . But they have not wanted to admit it publicly. Instead, they have been so arrogant that they have sent out press releases that the employees slept well at night.”

Hauge added that, “The amount of warnings that something was wrong was so great that we are no longer talking about a warning light, but a whole flashing disco. This shows an organization that does not take security and the environment seriously.”

Petitioning the police to investigate

PSA also points out in its report that Statoil had not learned or taken in the consequences of serious incidents at Snorre A in 2004 (an imminent danger of gas explosion), Statfjord A in 2008 (an oil leak in the shaft) and leaks from injection wells during 2007-2010.

“How many times will leaders at Statoil promise that they should learn – when in fact they never do? We insist on a police investigation and will therefore petition the police to investigate Statoil by the end of Friday. The charges should be made on account of a great number of systematic violations of governmental safety regulations,” said Hauge.

40 deviations, four orders

PSA points out 40 deviations from regulations in their report, and has issued a warning to fulfil four orders with short deadlines. By January 1, Statoil will have to identify significant deficiencies and why they were not detected, and to improve the work processes.

Before  July 1, 2011, Statoil has to have a clear assessment of why they had not learned from the gas blowout at Snorre A in 2004,  and will implement measures for the entire company. Before December 25, 2011 Statoil is to prepare a binding plan for how work should be implemented and followed up.

Hauge wonders how close they were to an explosion on Gullfaks C in the spring.  “Statoil said itself that there was a 50/50 risk of an underground blowout. When PSA points out that Statoil has underestimated the risk, it is scary to think how close we might actually have been,” said Hauge.

“We also sent 20 questions to Statoil this summer where we called for information on additional conditions at Gullfaks C. We never got a reply,” Hauge said.
[picture2 {Oil film on the surface – Bellona head Frederic Hauge is even present and observe the oil spill after the Deepwater Horizon shipwreck in the Gulf of Mexico.}]

Comparisons to the Deepwater Horizon

Hauge has previously drawn parallels between the Gullfaks C event and Deepwater Horizon accident, and he thinks that the conclusions in the PSA investigation report reinforces the basis for such a comparison:

“Now that both Statoil and PSA have submitted their investigation reports, they strengthen our comparison in that there are several conditions that are similar in the two cases,” said Hauge. “Firstly, there is talk of bad and poor casing cement in both cases. Pressure balanced drilling had also been a challenge for both drilling projects. For its part, Gullfaks C has not been able to keep Statoil within the margins of the drilling window.

Criticism of management

PSA in its report strongly criticizes Statoil management. The report states: “Management at all levels has not sufficiently followed up to ensure that the planning of the operation was carried out according to the company’s requirements, the HSE policy and strategy.”

“[The PSA report] describes a lack of [safety] culture, and that management must take responsibility for and the consequences of that lack,” said Hauge.  “And then Statoil’s board must consider what consequences there must be for management. However, one thing that is particularly important here is that we cannot let Statoil create an impression that the lack of safety culture exists only at Gullfaks C, and that the problem is solved by just cleaning up Gullfaks C. We believe there is a general lack of safety culture within Statoil, which has to been cleaned up as soon as possible,” said Hauge.

Criticism against PSA

Monday drilling was stopped at the Gullfaks A, B and C after a meeting between Statoil and PSA. PSA has even been criticized for their failure to required cessation of drilling at Gullfaks C in the past.

“The criticism from our side was primarily based on the fact that PSA in direct communication with us just directed us to Statoil when we asked questions, and said that Statoil would have to answer those questions itself. PSA was not able to guide Statoil. We believe that PSA needs to be given far more resources than they have today to ensure that they have both the competence and capacity to follow up on the oil industry. A five- or ten-fold increase in the number of employees should be a goal, “said Hauge.

Bellona has also previously commented on PSA’s resource situation in a briefing that was submitted earlier this fall in conjunction with updating the management plan for the Barents Sea and areas off Lofoten and Vesterålen.

There is another aspect of the debate,” said Hauge.  “We believe events such as Gullfaks C and its extremely poor handling by Statoil and the company’s inability to learn from serious incidents emphasizes our argument that we should not allow oil operations in sensitive environments in the north.

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