Effective Safety Management

Upstream Oil Industry in Pakistan

Naeem Ahmad Subhani Muhammad Mehmood Khan

KUFPEC Pakistan

Location of Pakistan

Strategic Importance of Pakistan

• Pakistan is situated in South East Asia surrounded by India, China, Afghanistan and Iran. Geographic location of Pakistan is very important for China, Central Asian states and Russia because of two sea ports of Pakistan on Arabian Sea. China has planned to connect with outside world through Pakistan using these ports to reduce distance, time and cost of transportation. Road and railway network known as China Pakistan Economic Corridor shall be constructed to reach sea ports. Central Asian states will also benefit from this corridor.

• Gas pipelines planned to be constructed from Iran and Tajikistan to India passing through Pakistan.

Economy of Pakistan

• Economy of Pakistan mostly depends on agricultural products and country remains under debt having more imports and less exports. Population is around 185 Million, GDP $ 247 Billion, GDP Growth rate 4 %, Inflation 7 % and per Capita Income $ 2500 compared with USA $ 53000. Industry could not be developed for multiple reasons. Pakistan is energy deficient country and mostly imports Oil to meet its energy demand.

• There is big shortfall of electric power in the country due to limited funds available to build potential hydropower dams. China has committed to invest in power sector of Pakistan in coming years which will positively impact the economy.

Oil/Gas Resources of Pakistan• Oil and Gas Exploration started in 1885 therefore Pakistanis are

skilled in oil & gas technology and may be found working in oil industry around the globe.

• Existing production of Oil 110,000 B/Day against demand of 473,000 B/Day

• Gas production is 4 Billion Cubic feet/Day with shortfall of 4 BCFD • Available potential in oil and gas exploration needs large

investment which could not be invited due to poor security situation in Pakistan which has improved in recent years and likely to attract investment.

Upstream Petroleum Activities in Pakistan

History of Petroleum Exploration Activities in Pakistan

• Attock Oil Company started work in1885

• First success in 1904 in Khuar, Attock

• Pakistan meets 25% of demand from domestic production

• Import of 75% oil has large burden on economy

• Gas reserves are depleting

• Gas pipeline from Iran and Central Asia planned

• LNG import agreement signed with Qatar

• Offshore activity did not show results so far

Environmental Sensitivities in Pakistan

• UN Declared National Parks

• Endangered species

• Diverse Environment

• Mountains, Rives, Deserts, Forests, Lakes, Sea

• 3 % forests (US & Canada 30%)

• CO2 emissions 1.8 MT/Capita (US 17 MT/Capita)

Rare Species in Pakistan

Ibex

Migratory Birds

Blind Dolphin

Brown Bear

Protected National Parks in Pakistan

Exploration Companies Operating in Pakistan

Oil & Gas Development Company Limited Eni Pakistan

Pakistan Petroleum Company OMV Pakistan

Mari Petroleum Company Limited BHP Billiton

Pakistan Oilfields Limited MOL Pakistan

Ocean Petroleum Limited United Energy Pakistan

Pakistan Exploration Limited Polish Oil & Gas Company

Dewan Petroleum KUFPEC Pakistan

Exploration Companies Operating in Pakistan

• Oil and Gas Exploration and Production (E & P) Companies in Pakistan are not reactive to regulatory compliance, they rather are thinking and acting beyond. Applicable regulations and guidelines in Pakistan pertaining to Health, Safety and Environment (HSE) are quite stringent and being followed. Management commitment and defined responsibilities in HSE among E & P companies of Pakistan is evident that ensures compliance. International standards certifications further improve compliance level implementing management systems. Higher HSE standards set by the Multinational Companies (MNCs) surpass regulatory compliance which National Companies (NCs) follow to some extent. Self-regulatory culture has fostered with time.

Private Organizations in Pakistan Contributing in HSE

State Organizations in Pakistan Regulating HSE

• Directorate General Petroleum Concessions

• Petroleum Concession Agreements

• Chief Inspectorate Of Mines (Ministry Of Petroleum)

• Environment Protection Agency

• PEPA 1997, IEE/EIA Regulations 2000, NEQS 2000, EPA 2014

• Provincial Departments Of Explosives

• Pakistan Nuclear Regulatory Authority

Evolution of Safety in Pakistan

• Evolution of HSE culture in Pakistan has history of more than three decades. Standard practices in Health, Safety & Environment started in late 80’s in Pakistan when MNC’s started operations in Pakistan. This instigated international drilling service companies to establish their offices in Pakistan. Service companies have also contributed in compliance culture.

• AMOCO, Union Texas, Shell, Occidental, Premier, BP, LASMO, TULLOW introduced HSE culture in Pakistan.

Safety - Reporting & Monitoring Mechanism

•  Submission of annual returns on prescribed forms to CIM

• Incidents reported within specified period on prescribed forms

• Well commencement, abandonment, and testing notices served to CIM

• CIM may intervene for the investigation of major accidents.

• No citations issued and penalties imposed in past many years.

• Regulators are rarely able to visit the sites due to lack of resources

Environment - Reporting & Monitoring Mechanism

• Environmental reporting is on monthly basis during project phase to verify site monitoring of Environmental Management plan. Project initiation and close out reports are also submitted to keep regulators in picture.

• Reporting of emissions is required on quarterly/biannual basis

when production phase starts. “Polluter pays” principle applies on large production units. Small units are usually ignored to keep them running.

• CSR reporting to DGPC on quarterly basis.

• District administration involved in execution of CSR projects

Indigenous Resources Development in Pakistan• Indigenous resources have been developed in HSE profession during

last three decades including subject experts, training institutions, manufacturing facilities and consultancy services.

• Having more than twenty five years E & P industry experience and subject knowledge, the author is leading the team of representatives from oil industry to review the safety regulations and submit proposal to the Government through PPEPCA.

• Being first CSP, pioneer member and VP of ASSE chapter, author is working to gather safety practitioners of Pakistan on a platform for knowledge sharing, professional development and networking. He is also representing the country in HSE professional’s development conferences in USA for a decade and succeeded opening ASSE chapter in Pakistan.

Effective Safety Management By E & P Companies

QHSE Management System

• Most of the upstream oil companies and service companies in Pakistan have Quality, Health, Safety and Environment (QHSE) certifications including ISO 9001, OHSAS 18001, and ISO 14001. This shows management commitment towards continual improvement process.

HSE Staffing

• Pakistan onshore Petroleum (Exploration & Production) Rules 2013 bound companies to hire competent HSE professionals before applying for leasing of exploration block. Oil & Gas (Drilling & Production) Regulations 1974 also require companies to appoint safety and medical staff along with the commencement notice before field operations start

Effective Safety Management By E & P Companies

Benchmarking

• International Association of Oil & Gas Producers (OGP) guidelines are being followed in upstream oil industry of Pakistan. This reflects management vision to follow global standards.

Risk Assessments

• HAZOP study of new facilities and before modifications is common practice in oil industry of Pakistan for years.

• Environmental Impact Assessment studies are conducted for new projects being a regulatory requirement.

• Safety risk assessments are conducted for high risk projects by companies which is not regulatory requirement.

Contractor’s management

• Effective Contractor’s Management has helped companies prevent injuries, accidents and losses. Oil companies mostly depend upon contractors and out- source the high risk activities. Contractors are mostly reactive to client/customer expectations and standards.

• Large contractors have been developed in past many years capable to cater needs of constructing large size oil & gas projects.

• Service companies have developed capacity & performing well

HSE Education & Training

HSE is not being taught as subject in colleges and universities except as optional subject for engineering degree. University degree qualified people are very few in the field of OHS. Most of safety professionals have learned through experience and have no technical background. There are number of local companies successfully imparting training in field of HSE for many years. Certificate level programs are also available.

The National Examination Board in Occupational Safety and Health (NEBOSH) has contributed in HSE profession of Pakistan through their international certification and diploma program. Value addition of HSE professionals has made them work in the middle-eastern countries.

Board of Certified Safety Professionals of USA awards prestigious certifications to HSE professionals. Certified Safety Professional (CSP) is considered highest level qualification in safety profession.

MOU has recently been signed between BCSP and NEBOSH which will facilitate people get their certifications recognized globally.

Fire & Rescue Services

Fire remained a major cause of fatalities in Pakistan. Fire and emergency rescue services working in major cities only.

National Institute of Fire Technology is one institute that trains

the fire fighters. Building codes have been revised to include earthquake prone

design and provisions for fire emergencies.

Oil companies invest reasonable funds on fire prevention and protection

Road Safety Deaths, disabilities and injuries are reported during road

accidents and considered the eight leading cause of deaths.

Proper road design, repair/maintenance, warning and safety signs, Speed control, use of seat belts has reduced number of accidents in recent years.

Motorway Police has contributed a lot for traffic safety

Oil companies ensure defensive driving training of drivers, 3rd party inspection certification of vehicles and installation of speed monitoring devices to prevent accidents. Journey management is also practiced.

Contribution of Non Governmental Organizations International Labor Organization (ILO)

International Labor Organization (ILO) office in Pakistan has substantial contribution in educating the industrial organizations in Pakistan for last four decades in safety and health at work to prevent accidental losses. Workers in National Oil Companies have labor Unions which benefit from periodicals and publications issued by ILO on OHS. In economic terms, the ILO has estimated that more than 4% of the world's annual GDP is lost as a consequence of occupational accidents and diseases. Training programs and seminar are organized by ILO to achieve the targets.

International Finance Corporation (World Bank)

Private organizations are required to comply with local HSE regulations and EHS guidelines of the World Bank Group against project funding

Contribution of Professional Societies Society of Petroleum Engineers (SPE)

SPE has been active in Pakistan for decades. SPE invites research papers in technical disciplines including HSE which is commendable. SPE has played an important role promoting knowledge sharing by holding annual technical conferences. This motivates companies participate and share their experience with others and eventually assists in adopting good industry practices and promote HSE culture. Author himself presented papers at SPE annual conferences in Pakistan.

American Society of Safety Engineers (ASSE)

Local chapter of the Society is working in Pakistan to promote HSE profession. There are more than one hundred ASSE members in Pakistan. Safety Summit organized in Dec. 2015 was well attended. Organized one event with the ILO.

THANKS