te year in review

International Association of Oil & Gas Producers

Highlights of 2009
Engaging & informing
decision-makers
A
t a time of global economic uncertainty,
uctuating levels of oil & gas demand
and concerns over future supplies, OGP
was active in presenting members views.
Key audiences included international
legislators, civil servants, non-governmental
organisations and others whose views and
actions can have a bearing on upstream
success.
As the Arctic became an area of greater
upstream attention in 2009, OGPs links
with relevant Arctic bodies strengthened.
In May, for the rst time, an Association
delegation attended a Ministerial Meeting
of the Arctic Council in Troms, Norway.
Former US Vice President Al Gore was
the keynote speaker. As ofcial observers,
the OGP team joined 300 delegates from
the eight Arctic Council member countries
and also met with representatives of the six
native peoples in the region.
In July, members of OGPs Arctic Co-
ordination Task Force (ACTF) participated
in the rst meeting of Barents 2020, a
Russia/Norway cooperation project aiming
to harmonise petroleum industry standards
for health, safety and the environment in
Europes northernmost waters. As Task
Force member Mitch Winkler of Shell
described it, the session was a tremendous
opportunity to learn from and to help
inuence a leading projectbringing an
external mindset to bear
On the other side of the world, OGP Ex-
ecutive Director Charles Bowen addressed
a conference run by Australias national
association, APPEA, in Darwin. Speaking
before industry leaders from around the
world and the region, he updated the
meeting on developments in asset integrity
and aviation safety, with special emphasis
on a recent spate of helicopter incidents.
It was important to y the OGP ag at this
event, one of the most signicant meetings
of its sort in the region and organised by
one of our most active national association
members, he says.
Raphael Vermeir,
March 2010
I
last wrote the introduction to OGPs annual review during a time of great uncertainty. The
world economy was heading downwards and no one could tell how far it would fall. Nor
could anyone predict precisely what impact this would have on our industry.
Times indeed proved difcult. But we have come through. And OGP rose to the challenges of
constrained budgets, tighter travel restrictions and limitations on members sweat equity.
We did this, in large part, by getting our priorities right; by concentrating on those issues
that mattered most. Our focus in 2009 on asset integrity and helicopter safety are good
examples. The extension of the ground-breaking joint industry programme on sound and
marine life was a particular triumph, since it is now enabling more valuable research on an
issue that can have a direct impact on upstream operations.
In 2009 we succeeded in widening our contacts with national and regional associations,
building on foundations laid in 2008. Although aforementioned travel restrictions precluded a
planned meeting in Australia, we still strengthened our relationships with a number of industry
bodies including APPEA, API, ARPEL, ASSOMINERARIA, Energy Institute, IADC, IAGC,
IPIECA, NOGEPA, Oil & Gas UK, OLF and WEG. We also worked closely with Brussels-
based organisations such as EUROPIA and EUROGAS.
Another noteworthy achievement during the past year has been the expansion of the
Associations membership base. We are now bigger and more globally diverse than ever.
Given our growing focus on existing Arctic operations and the potential for growth in that
region, its particularly important that in 2009 OGP welcomed new members from Greenland
and Russia.
Which brings me to another success in 2009 a year that saw the transformation of the
European Union with new European Commission members and a newly-elected European
Parliament. OGPs Brussels team did an excellent job in keeping members on top of the
situation and laid the groundwork for an upstream display in the European Parliament. This
took place during the week of 22 March, 2010. Among the leading gures it attracted was
Energy Commissioner Gnther Oettinger.
Of course, we also had our own ballot in OGP, with members re-electing the entire Manage-
ment Committee slate. This provided welcome continuity during times of uncertainty. So I look
forward to continuing my role with the able support of my fellow Management Committee
ofcers and colleagues.
One thing that becomes apparent in such difcult times is the dynamism of OGP. Ours is an
organisation that constantly adapts to the upstream industrys needs. For that, we should give
thanks to both our members and OGPs secretariat.
Due to their efforts, and despite the downturn, OGP enters 2010 in a strong position both
operationally and nancially.
An introduction from the Chair:
One of OGPs most signicant engage-
ments with a non-governmental organisa-
tion in 2009 was a response on behalf of
members to Transparency Internationals
(TI) plans to undertake a new report
promoting revenue transparency in the oil
and gas sector.
In a letter to TIs Head of Private Sector
Programmes, Charles Bowen expressed
concern that the proposed methodology
went well beyond the framework of the
authoritative Extractive Industries Transpar-
ency Initiative (EITI). He also cautioned that
the additional information proposed for TIs
industry questionnaire was not germane
to reporting payments as part of the EITI
process. Nor does it hold governments
accountable for their use of revenues. It
also fails to shed light on a companys anti-
corruption policies. In response to these
and other issues raised by OGP, TI said
that distribution of the nal methodology
for the survey would be delayed to reect
the Associations helpful comments.
Resolving dispute
The European Union was also an area of
particular focus in 2009.
OGP, as a member of the European Gas
Coordination Group, was involved in
talks to help resolve the headline-making
dispute between Russia and the Ukraine
that jeopardised European gas supplies.
The Associations input centred on the
technical measures that the industry was
taking to maximise indigenous production
in Europe. OGP also stressed the potential
for additional LNG cargoes to Europe to
supplement EU supplies.
Indigenous production
Indigenous production was
also the topic when OGP
staged a dinner debate at the
European Parliament during one of
its Strasbourg sessions. At this event, par-
liamentarians were reminded that Europe
remains the worlds fourth largest oil and
gas producer. However, to maintain the
associated benets of improved security
supply, tax revenues and employment there
needs to be a favourable environment in
terms of legislation and regulation, OGP
said.
European leaders also came to OGP. In
March the Management Committee held
a Brussels dinner that included guests from
the European Commission, the diplomatic
corps and European industry associations.
The event took the form of a symposium.
Discussion topics included the global
economic crisis and its impact on energy
investment, security of supply, the future of
carbon capture and storage (CCS), major
obstacles to gas infrastructure projects
and the need to recruit young talent to the
upstream industry.
Later that month, OGP Chair Raphael Ver-
meir led a brieng session for EU Energy
Commissoner Andris Piebalgs. In response
to the Commissioners question about
why indigenous production seemed more
advanced in the US, the OGP delegation
referred to greater efciencies in the
American way of granting E&P permits.
Brieng the Commissioner
At midyear, EU Committee Chair Barry
King led an OGP delegation to meet
with DG TREN Director-General Matthias
Ruete and Jan Panek, Head of the Coal
&Oil Unit. Discussion focused on the EUs
Strategic Energy Review in general, with
particular emphasis on European produc-
tion, external relations, security of gas
supply and CCS. Although the potential of
CCS excited particular interest, EU Affairs
Director Beate Raabe cautioned that mak-
ing the necessary alterations to existing
infrastructure would have to be reviewed
on a case-by-case basis.
OGPs advocacy activities extended
beyond Europe as well. For example, at
the OSPAR Convention the Association suc-
cessfully argued the case for a self-standing
text that addressed a new risk-based
assessment on managing produced
water from upstream operations. OSPAR
has previously gone for a broader-brush
approach. The issue will be resolved at
the 2010 OSPAR ministerial meeting in
September.
Spreading best practice
H
ow is an upstream company to know
where it stands on safety and environ-
mental performance? And in what areas
might it consider ways to improve?
For OGP members, the answer continues
to be straightforward. They look to the
Associations annual publications on
global, regional and company indicators.
The 2009 edition of OGPs Safety perform-
ance indicators 2008 data was compiled
using the largest data base ever, covering
3.3 billion hours worked around the world.
The report showed mixed results.
While lost time injury frequency (0.55 per
million hours worked) and total record-
able injury rates (2.08 per million hours
worked) were at all time lows, the severity
of incidents being reported showed an
increase. There was a 4% rise in the fatal
accident rate.
Data showed that the most prevalent type
of fatal incidents remained associated with
vehicle operations, being struck by moving
objects or falling victim to released energy
collectively accounting for almost half of
all upstream fatalities.
OGPs report on Environmental perform-
ance in the E&P industry 2008 data
covered upstream activities in 62 countries.
It showed improvements in each of the
ve categories covered: gaseous emis-
sions, aqueous discharges, non-aqueous
drilling uids on cuttings, spills and energy
consumption and aring.
Fatalities 2008
Vehicle
incidents
25%
Struck by
23%
Other 5%
Fall 9%
Explosion/
burn 18%
Electrical
3%
Drowning 6%
Caught between 5%
Air Transport 6%
T
he majority of participants in the OGP-
managed joint industry programme
(JIP) on sound and marine life voted to
extend their funding of what had been
a three-year undertaking due to end in
2009.
Now worth up to $35 million, the pro-
gramme involves leading scientists and
academic institutions around the world
in helping to determine the potential
impacts that upstream activities might
have on marine life. All researchers have
complete independence for their JIP
projects, which are fully peer-reviewed
in line with best research practice.
By the end of 2009, the JIP had funded
64 scientically robust projects, many
of which have been co-funded by
various government groups and in-
volved regulatory agencies in their
design. Thanks to the extension, JIP
research continues to address sound and
marine life issues in ve categories:
Sound source characterisation and
propagation in the ocean
Physical, physiological and hearing
effects of sound on marine life
Behavioural reactions to sound in
the marine environment and their
biological signicance
Mitigation, monitoring, data analysis
and management
New research tools
The US Navy, which undertakes its own
investigations in sound and marine life,
has praised the JIP for working inde-
pendently as well as co-operatively with
various agencies in the US Government
to support the worlds leading research-
ers in the eld of marine mammal
science. The work these scientists have
performed has been critical to helping
establish current mitigation strategies
and criteria, and continues to sup-
ply the basic information needed to
improve upon established policies.
Updates on the JIP are available
at http://www.soundandmarinelife.org.
Sound & marine life research extended
A broader membership base
B
y the end of 2009 OGPs membership
had expanded to include 72 production
companies, major service providers and
national associations. This was an increase
of 9% over the previous year.
Expanded membership also extended the
Associations geographic reach: among
the new companies in 2009 were Nunaoil,
the rst member from Greenland and
Shtokman from Russia.
Promoting asset integrity
O
ne of the years dominant issues was
asset integrity and determining the
best ways to achieve it. A September work-
shop, organised by the Safety Committees
Asset Integrity KPI Task Force, focused on
key performance indicators. The two-day
session in London involved some 60 par-
ticipants drawn from both operational and
corporate levels of upstream companies.
Attendees also included regulators and
experts from other associations including
the Center for Chemical Process Safety
(CCPS) and API.
Recommendations included:
Adopting existing KPIs and measures on
the two most severe levels of incident
Producing guidance on additional KPIs,
building on OGPs 2008 report Asset
integrity the key to managing major
incident risks
Identifying additional recommended
metrics to apply at specic asset levels
rather than industry-wide
These recommendations form the rst step
of a ve-year plan that will see upstream
companies and their service providers use
common KPIs and enable benchmarking
against industry asset integrity
performance.
Well met
I
n addition to a solid calendar of
committee, sub-committee and task force
meetings dedicated to specic issues
and opportunities, twice a year OGP
gathers for global meetings. These provide
welcome opportunities for members to
share fresh ideas, raise areas of concern
and network with their peers.
In May, for the rst time, the Association
gathered in Tokyo for its Annual Gen-
eral Meeting. INPEX, which is based
in the city, hosted the visit, which also
attracted a broad cross-section of
Japanese companies with upstream
interests.
Timely topics covered during the
meeting included asset integrity,
aviation safety, piracy, climate
change, Arctic issues, sound
and marine life and LNG best
practices.
Six months later, the venue for
the Associations regular EGM
was Paris. The day- and-
a-half session, sponsored
by Total, drew delegates
from 27 countries across
six continents. EU Energy
Commissioner Andris
Piebalgs was a guest
at the EGM dinner and spoke about how
climate change and security of energy
supply could be the rallying points for an
EU-wide coherent energy policy.
Other outside speakers included Didier
Houssin, the International Energy Agencys
Director of Energy Markets and Security,
who gave insights into that organisations
newly published World Energy Outlook.
Didier Houssin of the World Bank
Asset integrity
the key to m
anaging m
ajor incident risks
Report No. 415
December 2008
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www.ogp.org.uk
Comings and goings 2009
A
n organisation is only as effective as
the people who run it. In 2009 OGP
welcomed new committee ofcers at every
level. The Association also said goodbye to
some of its most dedicated supporters.
At the top, the year saw the re-election of
the previous Management Committee. As a
result, the companies leading the Associa-
tion remain as BP, Chevron, ConocoPhilips,
ExxonMobil, Petrobras, Shell, Statoil, Total
and Baker Hughes. Within that roster,
however, there were changes to the MCs
list of ofcers. Brad Corson of ExxonMobil
succeeded Rob Franklin as First Vice Chair
and Joep Coppes of Shell followed John
Hollowell to become Second Vice Chair.
At the committee level, Ross Smith of BP
succeeded Neil Reeve of Shell to become
Chair of the Standards Committee. Mike
Denkl of Schlumberger became Vice Chair
of the Safety Committee following the
resignation of Lee Turner of M-I SWACO
(latterly SMITH International).
The Asset Integrity KPI Task Force elected
Ron Murray of BG Group as Chair and
then Brett Doherty of RasGas as his
replacement with Andy Robertson of
Nexen as Vice Chair. The Environment Task
Force chose Jim Parker of Shell as Chair,
with Heide Mairs of ExxonMobil serving
as Vice-Chair. Iain Chadwick of Chevron
became the new Chair of the Marine
Safety Subcommittee, supported by Alex
Hammond of Shell as Vice Chair.
The new addition to the Brussels secretariat
was Annabel Holroyd, a familiar face
since she had served as an intern in 2008.
Annabel is now EU Affairs Ofcer.
Helicopter guidelines for land seismic &
helirig operations
Managing HSE in a geophysical contract
Material standards and committees for the
international oil & gas industry
Registry developers guide
Safety performance indicators 2008
data
Safety performance of helicopter opera-
tions in the oil & gas industry 2007 data
Standards bulletin 10
Most of these, along with more than 200
other reports published since 1974, are freely
downloadable from the publications section
of www.ogp.org.uk.
Reports
OGP produced a total of 14 reports in
2009:
Health performance indicators
A guide to food and water safety
Diving recommended practice (Chinese
translation)
Diving worksite representative roles,
responsibilities & training
Drilling uids and health risk manage-
ment
Environmental performance of the E&P
industry 2008 data
Geohazards from seaoor instability
Events
In 2009 OGP staged or actively par-
ticipated in a wide range of events. These
included:
Produced water workshop
Metocean week
Fish behaviour workshop
Asset integrity KPI workshop
Standards workshops in Kuala Lumpur,
Perth and Kazan
Top of the world
O
GPs Arctic Co-ordination Task Force
(ACTF), which uniquely reports directly
to the Management Committee, held its rst
full scale meeting during a record-breaking
cold snap in London.
The two-day session gave the ACTF
the opportunity to nalise draft terms of
reference that are now enabling the group
to become the technical and advocacy
focal point for the exploration & production
industry on a wide range of issues related
to upstream Arctic activities.
During the course of the year, the ACTF
engaged with a number of national oil
industry associations and established solid
links with Barents 2020 (see page 1). In
line with its remit, the ACTF identied issues
as yet uncovered by other organisations
and produced six brieng papers for
members use, which will form the
basis for the rst in a series of
fact sheets. The Task Force
also laid the groundwork
for joint work on oil spills
with IPIECA and API.
In the third quarter, the
Environment Commit-
tee launched its own
Arctic Environment
Task Force (AETF). Its
rst task: to update ex-
isting OGP guidelines
on the Arctic environ-
ment, which originally
date back to 1993. To
avoid duplication, the AET
will work closely with the
ACTF.
A global presence
O
GP is a dynamic organisation in the
issues tackled as well as in places they
are discussed. In 2009 the Associations
committees, subcommittees and task forces
held meetings and workshops around the
world.
The Standards Committee, for example,
held workshops on the importance of
international standards in Perth, Australia;
Kuala Lumpur, Malaysia, and Kazan,
Tartarstan. These events, which involved
close liaison with national associations,
governments, standards ofcials and pro-
ducers, attracted hundreds of participants.
Another Standards workshop coincided
with the Associations Paris EGM.
In April the joint OGP/IPIECA Biodiversity
Working Group sought to foster learning
about the context for environmental
impact assets and to share experiences on
developing biodiversity with a cross section
of sectors in the Asia/Pacic region. To
that end, a workshop in Beijing drew 100
delegates from Mongolia, Cambodia,
Myanmar, Thailand, Australia, India, the
US and the UK as well as China.