te year in review

International Association of Oil & Gas Producers

Highlights of 2010
Upbeat about upstream
A
s in previous years, OGP represented
members interests before a wide range
of important audiences.
In Brussels, the Association hosted a series
of events setting out upstream issues and
priorities. Underlying them all were key
themes including upstream innovation,
security of supply, access to the Arctic, the
industrys proven success in expanding
reserves and the importance of gas in
a low carbon future. Workshops held in
conjunction with EUROPIA and EUROGAS
set the stage for a later parliamentary
display opened by Herbert Reul, Chair of
the Industry, Research & Energy Committee.
The opening attracted members of the
European Parliament, their staffs and
guests from the European Commission and
Brussels diplomatic corps.
At a EUROMARES workshop in Gijn,
Spain, OGP Technical Director John
Campbell presented the work of the Joint
Industry Programme on Sound & Marine
Life. At the event, OGP was lauded as an
exemplar stakeholder that took the initiative
to work with the Commission on key
research issues. And at the related Venice
Platform, the meeting concluded with an
invitation for OGP to participate in the
Intergroup on Climate Change, Biodiversity
and Sustainable development in the
European Parliament.
Post-Macondo
Following the Deepwater Horizon incident,
engagements with key stakeholders across
the globe increased signicantly.
On 11
th
May OGP brought together
members and EU Energy Commissioner
Oettinger, who sought assurances that
industry was managing on a continuous
and complete basis the risks associated
with oil & gas operations. On 14
th

July, OGP and Members met with the
Commissioners for Energy; International
Co-operation, Humanitarian Aid &
Crisis Response; Environment; and
Maritime Affairs & Fisheries, and on
that occasion announced the formation
of the Global Industry Response Group
(GIRG). Three months later on 13
th

October, the Commission announced its
ofcial Communication on the safety of
offshore oil & gas activities which urged a
precautionary approach to the licensing
of new complex oil or gas exploration
operations and called for both regulatory
and liability reform. No moratorium on
deepwater drilling was suggested.
Liaison with other industry bodies
One of OGPs most important roles is to
work with other industry bodies that share
our aims and objectives around the world.
As part of this effort, the Arctic Co-
ordination Task Force met in Washington
in January. The event attracted participants
from several important players: the
American Petroleum Institute, the Canadian
Raphael Vermeir,
March 2011
M
y note in last years Annual Highlights began with an expression of cautious
optimism. It really seemed as though the worst was behind our industry. We had,
after all, come through the global recession more or less unscathed. I wont say we were
complacent. But we were certainly relieved.
Then, a week after our AGM in Rio de Janeiro, came reports of a tragic blowout in the
Gulf of Mexico. Initial news rightly concentrated on the 11 fatalities and 17 people injured.
Soon, it became clear that, despite the best efforts of all concerned, the spill remained out
of control a situation that was to last for three months.
As a result, what happened at Macondo has become the focus of regulators, legislators,
journalists and NGOs around the world. Not since Piper Alpha in 1988 has a single
incident had such a major impact on the upstream industry.
Inevitably, dealing with the aftermath of Macondo has been among OGPs top priorities.
The establishment of the Global Industry Response Group (GIRG) was a game-changer for
OGP, and the scale of work involved made it a budget-changer as well.
But we did not neglect other issues. In 2010 the Association achieved a great deal across
the wide range of our global remit. This year, we continue to make progress on current
priorities. These include work on training, asset integrity, decommissioning, upstream
security, Arctic issues and communicating the importance of oil & gas in the energy mix for
decades to come.
This last priority has assumed even greater signicance due to recent events in the Middle
East and Japan which have altered the energy debate.
So now is the time to advance upstream arguments and promote the upstream industrys
achievements.
Working together through OGP, we can ensure that our industry will continue its key role
in providing safely and sustainably produced oil & gas for an energy-hungry world.
An introduction from the Chair:
Association of Petroleum Producers, the US
Minerals Management Service through
Arctic Oil Spill Response Research and
the Arctic Councils Emergency Prevention,
Preparedness and Response Working
Group and the US Navy. Other
events brought OGP together with the
US Environmental Protection Agency,
the Petroleum Association of Japan, the
International Standards Organization and
CONCAWE.
During the course of the year, OGP also
intervened at the World Banks stakeholder
consultancy meeting on energy projects
in developing countries and continued
its engagement with Transparency
International as it embarked upon its
second report on oil & gas industry
corruption.
A new Executive Director and new
approaches to important issues
M
ichael Engell-Jensen took the helm as
OGPs new Executive Director in June.
First on the agenda was establishing OGPs
role in responding to the Gulf of Mexico
spill and facing the immediate challenge of
recovering the upstream sectors reputation.
Michael explained, Society is expected
to be dependent on secure supplies of oil
& gas for decades to come. However, in
order to gain access to the acreage that our
industry needs to deliver these supplies, we
have to be publicly acceptable.
And the strength of OGP, as a
technologically-based organisation Michael
noted, means that, OGP is ideally placed
to work with legislators and regulators and
provide a voice of reason on subjects such
as acreage accessibility, decommissioning,
sound and marine life, Arctic E&P and
security of supply.
Asked about his vision for the organisation
over the coming years, Michael said, OGP
has to move with the times so that we can
do what our members need from us. And
that includes helping the upstream industry
get to grips with the business implications of
climate change and other issues.
And thats why in December 2010, OGPs
Management Committee endorsed a
new vision, mission and objectives for the
Association which Michael stated reect
the needs and priorities of our members
and will help focus the associations
activities in the months and years to come.
To read the new vision, mission and
objectives, visit OGPs website:
www.ogp.org.uk.
Gearing up for a global
industry response
F
ollowing the tragedy in the Gulf of
Mexico, on 14
th
July 2010, OGP
announced the formation of the Global
Industry Response Group (GIRG).
Its purpose: to identify, gather and
co-ordinate work being done by the
Associations member companies and
national regulators in response to the
event. Since its inception the GIRG has
been concentrating on three areas to help
industry prevent any similar incidents from
happening again: well engineering design
and operations management; capping
and containment capability and oil spill
response.
Over 100 experts and management
members have contributed to this
work which has been carried out in
collaboration with industry bodies and
service providers across the globe as well
as regional and national regulators who
have been briefed on GIRG activities.
Promoting natural gas
A
central focus for the Association in
2010 has been to promote the better
understanding and importance of natural
gas in the current and future energy
mix. As part of this effort, OGP and
EUROGAS organised a workshop for key
parliamentary staff in Brussels. The agenda
covered exploration and production of
natural gas reserves, security of gas supply,
natural gas and sustainability.
A newly-formed Gas Communications
Task Force, under the auspices of the EU
Committee, developed gas messages
centring on the sustainability, affordability
and reliability of natural gas.
Looking to the last frontier
T
o help acquaint regulators, legislators
and other stakeholders with the history
and potential of Arctic exploration, the
Arctic Co-ordination Communications
Working Group published the rst ve in a
planned series of fact sheets.
Demonstrating how the upstream industry
is already meeting the challenges of Arctic
operations, these fact sheets focus on
technology & standards, climate change,
sound & marine life, indigenous peoples,
and natural resources management &
development. Work will continue in 2011
to broaden the series.
Extending the work of OGP into the Arctic,
a new Joint Industry Programme (JIP) to
oversee participation in the Barents 2020
Phase 4 Project was formed. This followed
the agreement between Norway and
Russia after 40 years of negotiation to
delineate the Barents Sea Border, opening
up formerly disputed acreage for oil & gas
exploration.
Started by the Norwegian Foreign
Ministry to harmonise health, safety and
environmental protection standards for
Europes northernmost sea, the Barents
2020 Project will now see direct funding
from the JIP.
The return of decommissioning
S
peaking at IP Week in March,
Chair Raphael Vermeir remarked
that among the industrys greatest
vulnerabilities are its ageing assets.
For this reason, and to ensure safe
operations, OGPs Management
Committee reinstated the
Decommissioning Committee under
the leadership of Gunther Newcombe
of BP. During 2011, the Committee
aims to establish programmes to study
the environmental consequences
of decommissioning and examine
technology development, best practices
and benchmarking.
Providing valuable benchmarks
O
ne of OGPs most important
responsibilities is to collect, analyse
and publish data on upstream safety
and environmental performance. These
indicators allow members to compare
their companies performance against
that of their industry peers.
Forty-three operating companies
participated in the safety survey
published in 2010 (covering 2009
data). Based on an analysis of 3.59
billion work hours 9% more hours
than were reported the previous
year the data showed a 12% drop in
the fatal accident rate (FAR), making it
the lowest on record. The report also
recorded a 16% improvement in the total
recordable injury rate (TRIR) and an 18%
discharged per unit of hydrocarbon
decreased by 12%. And as the global
upstream industry moves increasingly
towards the use of water based drilling
uid, the reporting companies recorded
no use of non-aqueous drilling uids
(NADF) containing either diesel or
conventional mineral oil as a primary
component.
Other 27%
Water related,
drowning 5%
Struck by
23%
Pressure
release 6%
Falls from
height 8%
Exposure
electrical 4%
Explosion/
burn 4%
Conned
space 6%
Caught in, under
or between 14%
Assault or violent act 2%
0
5
10
15
20
25
2009
2008
2007
2006
2005
2004
2003
Overall Offshore Onshore
12
14
13
Oil discharged per unit of water discharged - milligrammes oil per litre of produced water discharged
Fatality causes 2009 - % fatalities
associated with each reporting category
improvement in the overall lost time injury
frequency (LTIF).
The number of deaths attributed to land
transport previously one of the largest
single causes of fatalities dropped from
25% of the total to 10%. Commenting on
the report, Michael Engell-Jensen stated,
OGPs aim after having collected safety
data for 25 years, is to help companies
to continually improve their safety
performance, the drop in land transport
incidents which followed a series of
OGP workshops and guidelines does
suggest that the Associations efforts can
make a difference.
OGPs report on environmental
performance indicators was the
Associations most comprehensive ever,
recording data supplied by 35 member
companies working in 66 countries.
Key results demonstrated oil in water
concentrations were down 9% from
2008 and the average quantity of oil
Sound & Marine Life JIP supports biggest
research since the JIPs inception
F
ollowing the decision in 2009 to
extend the funding of the Sound and
Marine Life Joint Industry Programme
(JIP), its Executive Committee elected to
support major research to determine the
reactions of migrating humpbacks to
exposure to sound generated by a
range of airgun resources. Tackling
an issue which can have a direct
impact on upstream industry operations,
the $10 million Behavioural Response
Study (BRS) will focus on the migration of
humpback whales on the east and west
coasts of Australia.
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www.ogp.org.uk
Coating standards and committees for the
international oil & gas industry
Safety performance indicators 2009
data
Alien invasive species and the oil &
gas industry guidance for prevention &
management
Regulators use of standards
Position paper on the development and
use of international standards
Oil and gas for Europe its about time
and innovation
Health & safety incident reporting system
users guide 2009 data
The risk assessment data directory,
incorporating 21 separate datasheets
Two full revisions were also issued:
Response to demonstrations at offshore
facilities
Firearms and the use of force
Reports
In 2010, OGP produced a total of 17
reports:
Co-ordinate transformation in the Gulf
of Mexico
Calibration of action factors for ISO
19906 Arctic offshore structures
Oil and gas industry guidance on
voluntary sustainability 2010 update
Value of standards
Environmental performance in the E&P
industry 2009 data
Global standards used locally
worldwide
Establishing an ergonomics programme
for computer usage in an ofce
environment
Instrument & automation standards and
committees for the international oil &
gas industry
HSE management guidelines for
working together in a contract
environment
Events
In 2010 OGP staged or actively
participated in a wide range of events.
These included:
Fatality Review workshop, the
Netherlands
Metocean week
IP week in London
SPE International HSE Conference 2010
in Rio de Janeiro
Standards workshops in Thailand and
Mexico
European Space Agency workshop
on Innovative Applications of Earth
Observation for the Oil & Gas Industry
The International Regulators Forum (IRF)
in Washington
The International Whaling Commission
(IWC) in Agadir, Morocco
Reaching out
A
highpoint of the year was a visit by
the EU Affairs team to the Hammerfest
landfall site of Statoils Snhvit Arctic
facility. The subsea project, the rst
offshore development of its kind in
Europe, brings natural gas to land for
liquefaction and export. It is a successful
precursor of how the Arctic can contribute
signicantly to the longer term security of
energy supply for Europe.
In Beijing, CNOOC hosted a successful
meeting of the Diving Operations
Subcommittee (DOSC). A key
achievement was the formation of the
OGP Diving Industry Working Group.
Several OGP committees, subcommittees
and task forces took advantage of the
SPE International HSE Conference 2010
in Rio de Janeiro to schedule a number
of their biannual meetings, including the
Associations AGM. OGP presenters were
prominent on the SPE rostrum.
And in their own time, three members of
OGPs secretariat Annabel Holroyd,
Christine Glorieux and Llewellyn St David
completed a gruelling 500 kilometre
cycle ride taking them through the steamy
landscape of Vietnam and Cambodia
to raise a total of 33,000 for Engineers
Against Poverty.
An expanding membership
O
GP continues to attract members.
In 2010 PEMEX returned to the fold
after a 4 year absence and Mubadala
Oil & Gas and Faireld Energy plc also
joined the roster, bringing the total to 69
at year-end.
Farewells and new faces
I
n 2010, the Association bid goodbye to
Charles Bowen who, after being in post
for ve years, was one of the Associations
longest-serving leaders.
In Brussels, the Secretariat welcomed
two new EU Affairs Managers, Rachel
Bonfante and Sam Phillips who are
respectively focusing on energy policy
and gas market issues. And taking over
from Oonagh Hurley, Mariana Carvalho
assumed the role of receptionist, with
additional responsibilities supporting the
Safety and Security Committees.
The OGP/IPIECA Biodiversity Working
Group saw a change both in its
management and leadership. Ruth Romer
became the new Project Manager of
the group and Paula Pedroni of eni
succeeded Steinar Eldy of Statoil as
Chair.
Mike Surkein, ExxonMobil, accepted
the Chairmanship of the Materials
Subcommittee combining these
responsibilities with his position as Vice-
Chair of the Coatings Work Group and
Alain Loppinet of CEN, long serving Chair
of the Standards Committee, stood down.
Rachel Bonfante Sam Phillips