The High Price of Cost Cutting (again)

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Shell expects to complete the Brent field plant integrity assurance project later this year. The six and a half-year program launched in 2004 was needed to repair the catalogue of corroded pipe work and clapped out valves on Bravo, Charlie, and Delta — all consequences of cost-cutting and cutbacks in essential maintenance.

The company is coy on costs but the bill is known to stretch to many tens of £millions. However, the real cost was paid by our two colleagues who lost their lives in September 2003, suffocated by escaping gas whilst working halfway down Brent Bravo’s column.

Shell’s negligence came close to destroying the platform that day and killing another 105 souls who were on board. The volume of gas released was sufficient to blow off the topsides, had it ignited.

To its credit the HSE has in the intervening seven years leaned heavily on Shell, perhaps knowing that its own credibility has been on the line. The HSE did know that Shell verification schemes were not working in the way Lord Cullen envisaged when he called for their creation. An Improvement Notice had been issued but offshore workers, knowing the true state of Shell’s installations, were incredulous at HSE pussy footing.

The integrity assurance project involved inspecting around 2,000m of pipework and removing and replacing a further 1,500m. Novel plugging technology and extensive hot-tapping (cutting holes in pipes while fluids inside remained under pressure) were utilised. Much of the work was performed deep inside the platforms’ concrete columns.

Working in the utility shafts required rope access specialists, all of whom underwent a six-month safety and competency training program onshore before heading offshore. According to Shell, the one million man hour project is nearing completion and there have been no lost-time incidents — an achievement for which Shell and the offshore teams deserve to be congratulated.

The company is preparing more of its North Sea platforms for flogging off to whoever can raise enough cash. But the cost of putting things right following long years of inadequate maintenance means that Shell, more or less, is paying buyers to take assets off its hands.

The price of cutting costs can indeed be very high.

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