O GP is unique. It is the upstream oil & gas industrys only truly worldwide organisation. As such, it is our primary role to help the industry in its mission to meet growing global energy demand over the decades ahead safely and sustainably. As the earths population increases by two billion between now and 2040, its people will need 35% more energy much of it for electricity and transport, with particularly dramatic growth in the non-OECD countries. Progress in renewables notwithstanding, oil will remain the most important fuel, with natural gas overtaking coal as the second-most important source of energy. As we have seen from the transformation of the energy scene in the United States, an increasing percentage of that gas is likely to come from shale. OGPs members look to the Association to help in the constant renewal of the industrys licence to operate; to work with international regulators, legislators and other stakeholders to increase their understanding of what and how the industry does in terms of safety and sustainability. At the same time, OGP enhances the industrys appreciation of concerns in the societies we serve. Equally important is the role of the committees, subcommittees and task forces that are the heart of the Association. Their relentless, fact-based technical work provides the basis for the reports and recommended practices that are improving the industrys performance and providing the platform for OGPs advocacy efforts. As the newly-elected Chair of OGPs Management Committee, I am proud of the Associations extensive achievements in 2012. And as one of my rst responsibilities, I would like to take this opportunity to thank the people responsible for OGPs continuing success: the employees of member companies and organisations who provide the sweat equity on which the Association relies; our highly dedicated secretariat in London and Brussels; and my predecessor as Chair, Brad Corson for his unswerving dedication and inspiring leadership. Highlights of 2012 Advocacy: maintaining the industrys licence to operate E verything that OGP does is driven by one thing: maintaining the upstream industrys licence to operate. That was the message with which the Chair of the Management Committee opened the Associations general meeting in Istanbul in November 2012. A single incident can jeopardise existing and future operations for all, he said, and despite hundreds of billions of dollars in investment, this licence is up for renewal every day by international agencies, regional bodies and their ofcials, and national governments and their regulators all of which are increasingly inuenced by concerns coming from NGOs and the media. OGP is working to address such concerns, he said. As the only global voice for the upstream sector, it provides the key messages, facts and data on which intelligent decisions can be made about the worlds energy future. The EU energy mix In 2012, one of the Associations most important advocacy issues was the EU energy mix. To that end, OGP, in partnership with Europia (representing the oil rening and marketing industry) invited European parliamentarians to learn more about oils vital role in Europes future. It was very successful and attracted a high number of MEPs from different political groups, said Rachel Bonfante, OGPs Deputy Director EU Affairs. We told the MEPs that maintaining indigenous oil production in the EU brings diversity of supply, signicant tax revenues, balance of payments, employment, improved competitiveness, value creation in the economy, and technology leadership. This requires certainty, predictability and a cross-sectoral approach in terms of an EU regulatory framework. Emmanuel Haton, BPs Director of EU Government Affairs, reminded the invited guests that, in order to ensure that the considerable remaining potential of European Economic Area indigenous production is exploited, we need an enduringly competitive and stable regulatory regime. Then, in November, OGP welcomed the European Parliaments recognition of gas from shale as a component part of the energy mix. The full European Parliamentary vote on the 21 st recognised the important potential role of gas from shale in Europe and conrmed that there was no need for an EU-wide moratorium on gas from shale development. The assessment reected the view already provided earlier in the year by the European Commission. OGP had pointed out to both the European Parliament and the Commission that hydraulic fracturing, one of the techniques used for extracting gas from shale, is a thoroughly tested and well-understood technology. UN agency observer status conrmed The Associations role as an ofcial observer with the UNs International Maritime Organization (IMO) was conrmed for a minimum of two years Gordon Birrell, June 2013 An introduction from the Chair: at the IMOs bi-annual assembly in November. The renewal of OGPs observer status with IMO was particularly important for the Association and our industry, said Technical Director John Campbell. In almost 20 years, our presence at IMO has successfully made the distinction between offshore oil and gas operations and shipping activities. By doing that, we have ensured that IMO regulations have been appropriately directed at the maritime industry and not at ours. An expanding role in the Arctic In January, OGP joined representatives from academia, government and industry at the Arctic Frontiers Conference. The focus was on the global energy outlook and the role of, and implications for, both traditional and renewable energy resources in the High North. As OGP Vice Chair, Joep Coppes participated in a session dedicated to energy resources and industrial development to highlight the work of OGPs Arctic Co-ordination Task Force and explained to delegates how the oil and gas industry can contribute to the sustainable development of the High North. Then, at a press conference, OGP announced the formation of the Arctic Oil Spill Response Technology Joint Industry Programme (JIP). Bringing together BP, Chevron, ConocoPhillips, Eni, ExxonMobil, North Caspian Oil Company, Shell, Statoil and Total, the collaborative research endeavour aimed to expand industry knowledge of, and capabilities in, Arctic oil spill prevention and response. Speaking to the audience of Norwegian, French and Italian press delegates JIP Programme Manager Joe Mullin explained prevention of oil spills is a priority for industry, as is the response to any spill that may occur. A strong voice in the EU offshore safety debate I n late January, OGP cautioned against a European Commission proposal to implement an EU-wide regulation to govern policy on offshore oil and gas activities. It would, the Association said, conict with current national rules and lead to duplication, confusion and uncertainty for the industry. While fully supporting the Commissions objectives of further improving safety and environmental performance, these objectives, OGP argued, could be better achieved through a properly worded directive. OGP Executive Director Michael Engell-Jensen conveyed this message at an Offshore Regulation Stakeholder Meeting organised by the European Commission in Brussels. There, addressing some 70 representatives from Member States regulatory bodies, unions, non- governmental organisations and the European Institutions, Michael reminded participants what the proposed Regulation would jeopardise. Under highly-effective Member State regulations, he said, European upstream operations (90% of which are in the North Sea) are among the worlds safest, with the lowest rate of fatalities. Moreover, he added, safe indigenous production currently meets more than 33% of Europes oil and gas demand making a signicant contribution to EU security of supply, employment and trade balance. The debate continued when the OGP EU Committee organised an Offshore Safety Breakfast in the European Parliament in Strasbourg on 12th September. It provided an opportunity for OGP members to meet some of the leading gures in the debate. The following week, Steve Cromar, as Chair of OGPs Wells Expert Committee, participated in a panel debate at EU Commission level. He explained recent industry achievements and learnings to improve offshore safety performance and the signicant progress underway to improve offshore incident prevention, intervention and oil spill response capability. It is worth noting that, in the end, the EU agreed that a directive on offshore safety, rather than a regulation, would be the best way to proceed. Building on technical strengths O GP began life as an organisation devoted to collecting and originating technical data, with emphasis on safety and the environment. Those strengths endure and as output in 2012 conrms continue to grow. Publication on human factors leads to international symposium The Safety Committees Human Factors Subcommittee, in support of its newly- published recommended practice, Human factors in engineering projects, organised a full day symposium on the subject in March. It focused on implementing practical, balanced and cost-effective approaches to human factors engineering (HFE) in upstream projects globally. The report was a key part of Ergonomics & Human Factors 2012, organised by the Institute of Ergonomics & Human factors, in April. Harnessing space technology The usefulness of Earth Observation technology to the oil and gas industry, in both on and offshore settings, led to the creation of the Earth Observation Subcommittee of the Geomatics Committee. It mission: to promote the uptake of this technology within OGP and the broader industry. Also known as remote sensing, earth observation uses earth-orbiting satellites or dedicated survey aircraft to obtain timely access to information about the status of the globes surface. New developments allow the establishment of historic baselines and also help to minimise risk exposure to personnel throughout routine monitoring operations. During an emergency response, timely access to up-to-date data crucially allows effective decision-making by a crisis response team. Collecting essential industry data S afety performance indicators reveal signicant reduction in fatal accident rate The 2011 edition of OGPs Safety and Health performance indicators showed that the fatal accident rate was down by 32 per cent in 2011 when compared with the previous years performance. This was an Human performance People Environment Equipment Work organisation Work Fatal accident rate - company and contractors per 100 million hours worked 0 2 4 6 8 Overall Company FAR Contractor FAR 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 Spin-off successes O ne of OGPs strengths is the ability to establish spin-off organisations that tackle specic tasks and projects on behalf of the upstream industry. These usually take the form of joint industry programmes, known as JIPs. Making progress in emergency intervention The Subsea Well Response Project (SWRP), established as part of OGPs Global Industry Response recommendations, announced the signing of contracts for the construction of internationally-deployable well capping equipment to enhance the industrys capability to respond to a subsea well control incident. Deployment will involve an agreement with Oil Spill Response Ltd (OSRL), ensuring the availability of the new integrated response system to the wider industry. The SWRP project was among the top ve nalists in the Offshore Northern Seas (ONS) Innovation Awards 2012. SWRP had been shortlisted from 56 nominees and was then named as runner up in the awards. Judges praised SWRP for collaborating across the industry to develop international subsea well intervention equipment. US ofcials praise Sound & Marine Life JIP leadership US Marine Mammal Commission Executive Director Timothy Regan thanked the Joint Industry Programme (JIP) on E&P Sound and Marine Life for its leadership in addressing research priorities In a letter dated 8th June 2012, he further noted that the JIP had contributed signicantly towards research to understand the sources, effects and mitigation of underwater sound and strongly encouraged the JIP to enter a third phase of collaborative research efforts. Sound and Marine Life JIP Chair Paul Shone of Chevron responded to the letter by saying to receive such a letter signed by an Executive Director of a [US] federal body is a big complement to everyone who has worked on this project over the past 8 years. actual reduction from 94 reported fatalities in 2010 to 65 reported fatalities in 2011. The number of working hours reported increased by 1% to a total of 3,456 million work hours in 2011. Among operating company members of OGP, 45 out of 59 contributed data for compilation in the report. Submissions covered operations in 98 countries and all but one of the participating companies included contractor data. Analysis of the fatal incident descriptions for 2011 revealed that 80 per cent of the fatal incidents reported are covered by the OGP Life-Saving Rules, OGP Report No. 459. If the OGP Life-Saving rules had been followed, some of the reported fatalities may have been prevented, said OGP Executive Director Michael Engell-Jensen. Environmental performance indicators report increases transparency For the past 13 years, OGPs Environment Committee has been collecting data from member companies and reporting on an annual basis. The aim was to enable benchmarking and increase transparency in the upstream oil and gas industry. The 2012 edition of OGPs Environmental Performance Indicators, covering the year 2011, collated information on the upstream activities of 41 OGP member companies working in 75 countries. Five of these companies were reporting for the rst time. The data was aggregated at both global and regional levels and were expressed within 6 environmental indictor categories. The report showed that, for every thousand tonnes of hydrocarbon production, participating companies reported emissions of 133 tonnes of carbon dioxide and 1.25 tonnes of methane equating to 159 tonnes of greenhouse gas, 0.5 tonnes of non- methane volatile organic compounds , 0.2 tonnes of sulphur dioxide and 0.4 tonnes of nitrogen oxide. These were broadly similar with 2010 gures. Safety Forum lauds OGPs Well Control Incidents Database Participants in a Ministerial Forum on Offshore Safety welcomed and supported the creation of a global database of well control incidents by OGP designed to help members improve well integrity, safety and environmental protection. The gathering, in Trondheim, Norway, took place on 27 June. It was convened by Ola Borten Moe, Norwegian Minister of Petroleum and Energy and Ken Salazar, U.S. Secretary of the Interior, included senior government ofcials from nine oil-producing nations. Within a month of that event, OGP published and distributed its rst Well Control Safety Alert to members. Getting our messages across O ne of OGPs top priorities in 2012 was to improve communications; ensuring that internal and external stakeholders alike would have a better grasp of the Associations work on behalf of the global upstream industry. To that end, the year began with a re- launch of OGPs public website: www.ogp. org.uk Its aim: to raise OGPs prole while explaining the Associations important industry role and describing specic activities to a wide range of audiences, including some not necessarily familiar with the work of OGP committees. Visitors to the new site include regulators and other government ofcials from around the world, academics, students, contractors, potential new members and of course employees of existing member companies and organisations. As with every effective website, work on improving, upgrading and expanding the scope of OGPs main communications channel is on-going. A key player in those efforts is the Communications Committee, which was established in October 2012, as an upgrade from its previous task force status. The chair, Andrew Hogg of Total, was clear on how better communications could help OPG. Increasingly he said, OGP is being asked to act as an advocacy organisation and represent the industry at an international level. This makes it necessary to take the good work being done by committees and explain it in a way that engages stakeholders. The Communications Committee was established to help improve the effectiveness of that engagement. London ofce: 209-215 Blackfriars Road, London SE1 8NL, UK Tel: +44 (0)20 7633 0272 Fax: +44 (0)20 7633 2350 Brussels ofce: 165 Bd du Souverain, B-1160 Brussels, Belgium Tel: +32 (0)2 566 9150 Fax: +32 (0)2 566 9159 Web: www.ogp.org.uk E-mail: reception@ogp.org.uk A company limited by guarantee Registered in England, No. 1832064 VAT No. 241 240 903 www.ogp.org.uk Guidance notes on subcontractor management in geophysical operations (Wells) Standards Bulletin 13 (Standards) Country evacuation planning guidelines (Security) Oxy-arc underwater cutting Recommended Practice (Safety) Managing oil & gas activities in coastal areas - an awareness brieng (Environment) Cognitive issues associated with process safety & environmental incidents (Safety) Guidelines for the use of the Seabed Survey Data Model (Geomatics) Safety performance indicators - 2011 data (Safety) Offshore environmental monitoring for the oil & gas industry (Environment) Fitness to work (Health) Reports In 2012, OGP produced a total of 18 reports (all available to download from www.ogp.org.uk). Standards & guidelines for drilling, well constructins & well operations (Wells) Decommissioning of offshore Concrete Gravity-Based Structures (CGBS) in the OSPAR Maritime Area/other global regions (Decomissioning) P-Formats for the exchange of positioning data (Geomatics) Environmental performance indicators - 2011 data (Environment) Health performance indicators - 2011 data (Health) Recommendations for enhancements to well control training, examination & certication (Wells) Value of Standards (Standards) Catalogue of international standards used in the oil & gas industry (Standards) Events In 2012 OGP staged or actively participated in a number of international events. These included: IP Week in London IADC World Drilling Conference & Exhibition, Barcelona Ministerial Forum on Offshore Energy Safety, Trondheim, Norway SPE/APPEA HSSE Conference, Perth, Australia Gas Regulatory Forum, Madrid Continuing expansion A n organisation such as OGP is only as strong as its membership. In 2012, seven companies joined the Association: E.ON Ruhrgas, Abu Dhabi National Energy Company, better known as TAQA, Afren Plc, Sasol Petroleum International (SPI), Saudi Arabian Oil Company (Saudi Aramco), Canadian Natural Resources International (CNRI) and Noble Energy, Inc. As of year-end, total membership had grown to 79. New ways of working; new people C hairs of OGPs standing committees met for a two-part, full-day session in the Associations Brussels ofce in February. The aim, according to Michael Engell-Jensen, was to break down barriers and encourage people to think creatively about OGP and what we can do to make the Association more effective. The meeting with the Management Committee and the chairs sessions among themselves did exactly that. Among the conclusions: OGPs budget should be on a scale with the Associations primary objectives. If it isnt, there is the option and precedent to ask for an increase in fees. Publications remain at the heart of OGPs work and should be released on a timely basis using the services of external editors as required. There should be greater connectivity between member companies, the Management Committee and the secretariat to ensure that committee chairs and members gain the recognition they deserve within the Association, their companies and the wider industry. OGP should strive to gain a broader geographic, ethnic and gender base to represent its global constituency. Closer links with national oil industry associations could help achieve this. Member representatives and committee chairs should work to greater alignment with OGP activities within their companies and also encourage implementation of Association reports and recommended practices. There should be more rigour in dening and implementing the role of MC committee sponsors. OGPs general meetings should hold dedicated workshops and other events to raise the level of participation. Implementation of these recommendations continues. Nine welcomes and an anniversary A new Committee Chair stepped into position at the Wells Expert Committees Dallas meeting on 28th of November, 2012. Richard Dyve Jones, Statoil, replaced Steve Cromar who became Vice-Chair. Maintaining a good working relationship with the regulating authorities will continue to be a priority for this committee and I believe we are well positioned to meet their expectations, he said. The year also saw eight new members of the secretariat. In the Brussels ofce, OGP welcomed Bernard Vanheule, EU Affairs Manager; Kamila Piotrowska, EU Affairs Ofcer; Caterina De Matteis, Administrative Assistant and Maria Soa Villanueva, intern. The London ofce grew with the appointment of Lucyna Kryla- Straszewka, Metocean and Geomatics Committees Manager; Liz Langstaff, Graphic Designer; Danny Walsh, Assistant Communications Manager (since promoted to full manager status) and Natalia Staina, Safety Co-ordinator. In Brussels, Administrator Christine Glorieux celebrated 20 years with OGP, making her one of the longest-serving members of the Secretariat.