A newly released survey from Petrotechnics reveals the low oil price is impacting operational risk and process safety management in hazardous industries
Insights from more than 100 senior industry leaders globally reveal 72 per cent believe oil price has had a moderate or significant impact on process safety risk, characterised by major job cuts, loss of corporate memory, cost-cutting and overall belt-tightening brought on by the downturn.
However 83 per cent of survey respondents agree safety is part of their corporate value structures and is supported by the highest levels of management, including the company president or CEO. However, more than half of industry leaders admit there is resource tension between safety-related projects and other capital allocation.
The budgetary squeeze is directly impacting operations, maintenance and safety performance. Seventy-five per cent say conflicting priorities are a top reason for shortfall in scheduled maintenance completion, 72 per cent agreed it was due to limited resources, and another 40 per cent said it was due to limited budget.
Simon Jones, head of professional services at Petrotechnics, said, “With less budget and staff available, firms are facing difficult decisions about which tasks to complete and when. The risk here is that maintenance and upkeep of essential safety systems may get lost in the budgetary squeeze, leaving firms vulnerable.”
Industry leaders suggest the gap between process safety intent and reality is widening. In 2017, 70 per cent of survey participants said there were gaps between how process safety was intended and what actually happens at the plant or asset. In 2018, the number has risen to 86 per cent. In addition, they suspect only 38 per cent are proactively managing process safety risk.
When asked about the challenges of delivering effective process safety management, respondents identify their top three challenges as ‘developing safety culture’ (46 per cent) followed by training and competency (34 per cent) and leadership support (30 per cent).
Jones added, “While the majority of respondents agree safety is integral to their corporate values, there is clearly room for leadership teams to do more to empower decision-making throughout the organisation and enable better risk management. Following a very tumultuous period for the industry, this could do much to improve safety culture.”