1. Valery Lesnykh and Børre Paaske 09 December 2010 RN3 - Risk Management of Major Hazards Phase 4 - Status report to Steering Committee

2. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 2 Contents  Objectiv for RN 3 - Phase 4  Status  Feedback from Risk Assessment Seminar delivered 7.December  Further work in Phase 4 - Risk Management Seminar

3. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 3 The key challenge identify assess manage risk

4. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 4 Barents 2020 Phase 4 – Working Group 3 Members Russian teamNorwegian/OGP team V.V. Lesnykh, Gasprom VNIIGAZ - coordinator Andrey.A. Petrulevich, Gazprom VNIIGAZ Mikahil.V. Yaroshevich, Giprospetsgaz Vladimir.S. Safonov, Gazprom Dobycha Shelf Mikhail.V. Lisanov (S.N. Mokrousov), Industrial Safety Institute Dennis.V. Gordienko, FGU VNIIPO Emercom. Viktoria Smirnova, Gazprom Ekaterina Srebnyak, RF Maritime Rescue Service Sergey Gubkin, GNII Vladimir Nekrasov, EMERCOM Jerome Frindel, TOTAL Dmitry Kazakovtsev, BP Mark Young, Cairn Energy Odd Thomassen (observer),Norwegian Petroleume Safety Authority Børre Paaske, DNV - coordinator

5. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 5 Scope of RN03 work in Phase 4  Task 1 – Outline and plan two risk management seminars  Task 2 – Prepare and carry out risk assessment seminar in arctic conditions/ workshop with focus on - experience exchange - comparative analysis of efficiency of methods and software - required databases to increase safety of offshore operations - practical application of risk assessment in the design process for offshore activities - 30 participants, technical experts, risk analysts, authorities  Task 3 – Prepare and carry out risk management seminar for offshore activites in the Barents Sea. - Emphasis on concrete cases typical for installations in the Barents Sea. - Cases reflecting both the usage of risk management and risk assessment in the development process. - Actual recent accidental events (e.g. Mexican Gulf) will be used to illustrate the risk management process. - 100 partcipants, authorities, oil and gas company managers, designers  Task 4 – Proceedings/Position paper to document the contents of the seminar and the discussions that take place.

6. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 6 What Can Go Wrong? Hazard Identification How Big? Consequence Analysis How Often? Frequency Analysis So What? Risk Assessment What Do I Do? Risk Mitigation What Do I Do? Risk Mitigation Risk Assessment Seminar – technical focus

7. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 7 Risk Management Seminar – work processes and responsibilities Planning Improvements  HSE plan  Goals  Hazard identification  Risk assessment Execution Risk Management Monitoring  Operational control  Emergency preparedness  Performance measurement  Inspections  Audits  Management reviews  Mitigating measures HSE legal requirements

8. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 8 Risk Management Seminar – work processes and responsibilities Planning Improvements  HSE plan  Goals  Hazard identification  Risk assessment Execution Risk Management Monitoring  Operational control  Emergency preparedness  Performance measurement  Inspections  Audits  Management reviews  Mitigating measures HSE legal requirements What Can Go Wrong? Hazard Identification How Big? Consequence Analysis How Often? Frequency Analysis So What? Risk Assessment What Do I Do? Risk Mitigation What Do I Do? Risk Mitigation

9. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 9 Status and schedule  Status  Risk Assessment seminar and Risk Management seminar scoped  Risk Assessment seminar prepared and delivered (7.12)  Risk Managment seminar proposed scheduled for Dec 2011.  Schedule  Dec.2010 – May 2011: Draft Proceedings/position paper  Dec. 2010 – Dec 2011: Plan and develop Risk Management Seminar  Dec. 2011: Deliver Risk Management Seminar  Jan. 2012: Final Proceedings/Position paper

10. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 10 Topics for Seminar on Risk assessment of offshore activities in the Arctic, 7. December  Introductory lecture on risk assessment in arctic areas  Modelling and influence of safety barriers in risk assessments  North Sea databases on incidents, accidents, failure and reliability data for use in risk assessments.  Impact Criteria for personnel, safety functions and structures  Escape, Evacuation and rescue  Emergency preparedness and response  Reception at VNIIGAZ; informal dinner and continue discussion

11. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 11 Safety Barriers A safety barrier is safety critical elements which shall prevent, control or mitigate a major accident. The product of technical, operational, and organizational conditions describe the barrier’s integrity.

12. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 12 Risk Assessment Seminar - Summary  The importance of assessing the functionality of the safety barrieres and their influence onf the risk level, reflecting operational, technical, and organizational conditions  Use the risk assessment to improve and qualify the functionality of the safety barriers during the design process

13. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 13 Focus areas in risk assessment seminar  Knowledge of QRA context; the main elements and deliverables for design phase  QRA is related to major accident risk.  Difference between onshore and offshore QRA  Specfic issues that an arctic QRA should reflect  How safety barriers are included in an offshore QRA  Main principles for managing explosion risk for arctic offshore installations  Risk Assessment of Escape, Evacuation and rescue  The link between Risk Assessment and Emergency response planning  How the QRA and related studies can be used to develop/enhance and qualify the design.

14. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 14 Practicalities  Target group: Dedicated authority/industry/technical expert groups showing different perspective on the application of risk assessment - ”How vs. Why”  ”Buzz-groups” short discussions at tables to trigger questions  30 min break morning&afternoon  Course lecturers - Jo Hulbækdal, DNV - Inger Elise Bjørkedal, DNV - Børre Paaske, DNV

15. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 15 Feedback and experience from Risk assessment seminar  Very good facilities and support from VNIIGAZ  Partcipants were active; a lot of questions and discussions  Ambitious cope – ran out of time; needed to cut some topics short  Positive feedback on the level of technical detail (need to keep technical focus)  30 participants  3 lecturers from DNV, one Russian speaking  Course material handed out in Russian and English

16. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 16 Discussions during the day  Role of authotities; approval versus consent  Acceptance criteria for risk; own/defined by operators or authorities ?  Integrity and failure probabilities of safety barriers  Integrity and test criteria of fire walls and how to model this in risk assessment  Use of fault trees to define failure probabilities  Modelling of gas detector failures  Probability of failure of fire walls  How to transfer knowledge attained from risk assessment to the operations phase  Time limits for assessing hazardous impacts on personell  Comparison of risk modelling software applied in Russia and Norway  Etc…

17. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 17 Next seminar – Risk Management  Technical excellence in risk assessment is not sufficient to ensure that risks are properly managed – need to implement the full management cycle to follow up and mitigate indentified risk.  Intention of the seminar is to anchor this understanding of the importance of risk management, and what risk management is.  This relies on examples from industry and authorities, to give the complete picture on ”how and why” to do risk management.  Need active contribution from B2020 sponsors, authorities and stakeholders in the next seminar to ensure real experience sharing. Findings from recent accidents in the offshore industry: Lack of risk understanding Insufficient learning from past/simialar incidents

18. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 18 Next seminar – Risk Management Planning Improvements  HSE plan  Goals  Hazard identification  Risk assessment Execution Risk Management Monitoring  Operational control  Emergency preparedness  Performance measurement  Inspections  Audits  Management reviews  Mitigating measures HSE legal requirements  Technical excellence in risk assessment is not sufficient to ensure that risks are properly managed – need to implement the full risk management cycle to follow up and manage identified risk.  Intention of the seminar is to anchor this understanding of the importance of risk management, and what risk management is.  This relies on examples from industry and authorities, to give the complete picture on ”how and why” to do risk management.  Need active contribution from B2020 sponsors, authorities and stakeholders in the next seminar to ensure real experience sharing.

19. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 19 Main topics for the Risk Management Seminar  Risk Management Cases from Russian and Norwegian offshore/arctic oil and gas industry - Application of the risk management principles - Risk Management as basis for decision making, definition and application of acceptance criteria and performance standards. - Risk Assessment as part of engineering/design process and development of platform lay-out and requirements to safety barriers  Interfaces between Risk Management and Regulatory regimes in the Barents Sea - NOR Operator and Safety Authority case to present: - Process of giving consent for operations - Internal control regime - Risk Tolerance criteria - Risk Based and functional regulations - Learnings from the Macondo blow out (GoM) wrt. regulative regimes  Learning from Cases studies/accident investigation reports

20. © Det Norske Veritas AS. All rights reserved. RN3 - Risk Management of Major Hazards 09 December 2010 20 Safeguarding life, property and the environment www.dnv.com